Chapter 7 Updated Jan 10 2006 Advertising Advertising

Chapter 7 Updated Jan. 10, 2006 Advertising “Advertising - ‘nonpersonal communication for products, services, or ideas that is paid for by an identified sponsor for the purpose of influencing an audience. ’” - Medoff & Kaye, quoting Vanden Bergh & Katz, p. 142 This multimedia product and its contents are protected under copyright law. The following are prohibited by law: • Any public performance or display, including transmission of any image over a network; • Preparation of any derivative work, including the extraction, in whole or in part, of any images; • Any rental, lease, or lending of the program. www. ablongman. com/medoffkaye 1 e Copyright © 2005 by Allyn & Bacon

Marketing ¡ All the efforts by any person, group, or organization intended to advance the exchange of a particular good or service Advertising: One element of the marketing mix. Copyright © 2005 by Allyn & Bacon

History-3000 B. C to 1900 ¡ 3000 B. C. -Babylon l ¡ ¡ Clay tablets exchanged on which names of merchants were inscribed. 100 A. D. -Rome l Merchants hung stone signs outside their shops, advertising the goods inside 1525 -Germany l ¡ A publisher printed a communication that advertised a book 1841 -Boston l ¡ Volney Palmer sells newspaper space to those who wish to advertise in newspapers 1875 -Philadelphia l l N. W. Ayer starts first full -service advertising agency: Ayer writes & produces ads & places them in newspapers & magazines Copyright © 2005 by Allyn & Bacon

History-1901 to 1923 ¡ 1922 -Long Island, NY l A radio station sells air time to an advertiser ¡ 1923 -New York City-The Browning King Orchestra, a program featuring music by that band, is wholly sponsored by Browning King clothiers ¡ 1923 -General Mills produces a jingle for its Wheaties cereal. Sales zoom. Copyright © 2005 by Allyn & Bacon

History-1924 to Present ¡ ¡ 1940 s- New York City CBS founder William Paley airs first programs sponsored by more than one company ¡ 1970 s- 30 -second (: 30) spot becomes the most popular ad “buy” ¡ 1990 s- 15 -second (: 15) spot becomes common Bulova Watch Co. first to buy commercial (“spot”) time on a “magazine”-style program on both radio and tv Copyright © 2005 by Allyn & Bacon

History-1924 to Present II ¡ ¡ ¡ 2000 s Return of sponsorship being tested (CBS 60 Minutes) Product placement/brand placement increasing…began in films, now a staple in TV narratives. Pay-per-view as an additional revenue stream Advertising specific digital stations and on the web (accessible through broadband) Copyright © 2005 by Allyn & Bacon

Role of Advertising in U. S. Media ¡ ¡ ¡ ¡ Advertising dollars provide foundation of most mass media. Advertising finances most radio, television, cable television. Advertising “model” has dominated since 1920 s. New media are changing mix of financial support Other financial support models: Subscription Pay per view Membership Copyright © 2005 by Allyn & Bacon

Why Advertise? Benefits for advertiser. An ad can: ¡ inform target audiences of a good or service ¡ foster product & brand loyalty ¡ develop product & brand images Benefits for consumer. An ad can: ¡ provide useful product information ¡ reinforce widelyshared cultural values, such as l l capitalism & competition social cohesion Copyright © 2005 by Allyn & Bacon

Why Advertise? Disadvantage for advertiser. ¡ advertising is expensive ¡ difficult to measure direct results Disadvantage for consumer. ¡ annoyance factor ¡ disrupts media consumption ¡ annoyance factor ¡ too much influence over content ¡ …annoyance… Copyright © 2005 by Allyn & Bacon

Radio advertising Benefits for advertiser Radio advertising: ¡ localizes a selling effort to: l l ¡ ¡ ¡ a specific area a specific age, gender, &/or income can cost less to make than ads for other media (range from $10 -20/spot and up) has high reach; three out of four Americans listen to radio every day can be very creative - theater of the mind Copyright © 2005 by Allyn & Bacon

Radio advertising Disadvantages for advertiser ¡ products can’t be seen--yet ¡ radio tends to be used as a background medium ¡ ethereal medium - here and gone (no “shelf life”) Copyright © 2005 by Allyn & Bacon

Why Advertise on Broadcast TV? Benefits for advertiser Broadcast TV advertising: ¡ products can be seen ¡ has high reach ¡ can be tailored to more program types than radio advertising Copyright © 2005 by Allyn & Bacon

Why Advertise on Broadcast TV? Disadvantages for advertiser Broadcast TV advertising: ¡ can be “zipped” through & “zapped” off ¡ is streamed through a medium not yet as portable as radio & print ¡ tends to cost more to produce--& display--than radio & print ads. Copyright © 2005 by Allyn & Bacon

Why Advertise on Cable TV? Benefits for advertiser Market Shares of Top 3 Channels Cable TV advertising: ¡ can reach a greater variety of target audiences than either radio or broadcast TV ¡ can be tailored to more program types than either radio or broadcast TV CNN FNC HBO ¡ is less costly to display at more desirable times of the day than broadcast TV or some radio Copyright © 2005 by Allyn & Bacon

Why Advertise on Cable TV? Disadvantages: Same as for Broadcast TV Plus ¡ ¡ 30% less reach than Broadcast TV Higher audience “turnover” (subscribers who don’t re-subscribe) Copyright © 2005 by Allyn & Bacon

Why Advertise on the Internet? Internet (web) advertising has yet to be fully defined ¡ ¡ A Company Website: Marketing, or public relations--not advertising Buying space on another company’s website-advertising Copyright © 2005 by Allyn & Bacon

Why Advertise on the Internet? Benefits for advertiser Internet advertising can: ¡ reach a global audience ¡ reach a greater variety of target audiences than any other medium ¡ be least costly of all other media to produce & display at more desirable dayparts ¡ prompt immediate sales ¡ detailed consumer data Disadvantages for advertiser Internet advertising: ¡ requires an interactive audience member ¡ resists accurate measurement ¡ is disfavored by some parents Copyright © 2005 by Allyn & Bacon

Spam ¡ ¡ ¡ Unsolicited messages requiring Internet users to actively decline them are activated when a website visitor inadvertently triggers a permission to receive unsolicited emails can prompt displeasure with advertising in general Copyright © 2005 by Allyn & Bacon

Agency Types ¡ ¡ full service creative boutique- specializes in ad production & campaign development media buying servicespecializes in placing an ad in those media outlets where it will most likely achieve advertiser goals agencies work closely w/local media Copyright © 2005 by Allyn & Bacon

Local Ad Sales - TV & Radio ¡ ¡ Sales Manager National Accounts Manager l l ¡ Account Executives l l l ¡ Handles national accounts: Coke, Ford… Buys done strictly ‘by the numbers’ Local sales agents Account lists & cold calling Selling an “intangible” Per spot pricing Run-of-schedule vs. specialized buys Traffic - places ads in schedule Copyright © 2005 by Allyn & Bacon

Local Ad Sales - TV & Radio ¡ ¡ ¡ Station will produce the spot and may provide talent. Some regional/national production companies specialize in producing ads. Competitive business Pay is commission on sales Many local stations have a 40%+ profit margin! Copyright © 2005 by Allyn & Bacon

Criticism of advertising Ads, say critics ¡ promote materialism, consumption ¡ reinforce stereotypes about historically subordinated social groups ¡ can mislead consumers about product benefits ¡ exploit children ¡ invade & pervade Copyright © 2005 by Allyn & Bacon