Creative Advertising Strategy

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Transcript Creative Advertising Strategy

Chapter Nine
Overview of Advertising
Management: Messages,
Media, and Measurement
 2007 Thomson South-Western
Is Advertising Rocket Science?
“The truth is that
advertising is
harder than
rocket science.
It’s news when a
rocket launch
FAILS.
It’s news when an
ad campaign
launch
SUCCEEDS.”
2
Advertising
Advertising is a paid, mediated form of
communication from an identifiable
source, designed to persuade the receiver
to take some action, now or in the future.
Contrast this with a PSA, PR and Product
Placement
3
Magnitude of Advertising
2005
$280 Billion
U.S.
Worldwide
$900 spent on
advertising for
every man,
woman, and child
in the United
States.
$550 Billion
4
Some Top Spenders in U.S. Advertising
http://adage.com/images/random/lna2007.pdf
Company
Advertising Dollars (bn.USD
2006)
Proctor & Gamble
4.89
AT&T
3.34
GM
3.29
Time Warner
3.08
Verizon
2.82
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Advertising-to-Sales Ratios
Average 2 to 10%
Ranging from
1.4%
To 30.7%
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Advertising
Effects
Are Uncertain
7
Advertising Effects Are Uncertain
“If you want your brand to be fit, it’s got to
exercise regularly. When you get the
opportunity to go to the movies or do
something else instead of working out, you
can do that once in a while—that’s
[equivalent to] shifting funds into [sales]
promotion. But it’s not a good thing to do.
If you get off the regimen, you will pay for
it later.”
Jennifer Lawrence, P&G
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“I know that half the amount I spend on
advertising is wasted; The trouble is, I
don’t know which half”
Chairman, Unilever Group
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Advertising Functions
1. Informing
2. Influencing
3. Reminding and Increasing Salience
4. Adding Value
5. Assisting Other Company Efforts
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Informing
• Make consumers aware of new brands.
• Increase TOMA (Top of Mind Awareness)
• Teach new uses for existing brands (called
usage expansion advertising)
– Campbell’s soup for formal family dinners and
for breakfast
– Special K for afternoon or late-night snacking
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Influencing
12
Reminding and Increasing Salience
• Making a brand more salient: enriching the
memory trace for a brand so that the
brand comes to mind in relevant choice
situations.
• Increasing the customer’s interest in
mature brands and the likelihood of
choosing brands that might have
otherwise not been chosen.
13
Adding Value
• Three ways a company can add value to
its offerings:
– Innovating
– Improving quality
– Altering consumer perceptions
14
Assisting Other Company Efforts
• Advertising may be used as a vehicle for
delivering coupons and sweepstakes
• Assisting sales representatives
• Pre-selling a company’s products by
introducing the product and legitimizing
salespeople’s claims.
• Augment the effectiveness of price deals.
15
The
Advertising
Management
Process
16
The Role of Advertising Agencies
• Three alternative ways to perform the
advertising function:
– Use an in-house advertising operation
– Purchase advertising services on an ad-asneeded basis
– Select a full-service advertising agency
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TOP 10 CORE AGENCIES WORLDWIDE
By worldwide revenue from traditional advertising in millions of dollars
RANK
WORLDWIDE REVENUE
200
6
200
5
2006
2005
%
CHG
1
Tokyo
$2,213.
0
$2,165.
9
2.2
BBDO Worldwide* [Omnicom]
New York
1,539.9
1,425.8
8.0
2
McCann Erickson Worldwide*
[Interpublic]
New York
1,479.2
1,461.1
1.2
4
4
JWT* [WPP]
New York
1,286.5
1,245.0
3.3
5
5
DDB Worldwide Communications*
[Omnicom]
New York
1,263.9
1,190.6
6.2
6
6
Publicis* [Publicis]
New York/Paris,
N.Y./France
1,177.8
1,154.2
2.0
7
7
TBWA Worldwide* [Omnicom]
New York
1,135.0
950.2
19.4
8
8
Leo Burnett Worldwide* [Publicis]
Chicago
909.0
889.1
2.2
9
10
Y&R* [WPP]
New York
820.0
788.0
4.1
10
9
Hakuhodo [Hakuhodo DY Holdings]
Tokyo
780.0
788.0
-1.0
AGENCY
HEADQUARTERS
1
Dentsu [Dentsu Inc.]
2
3
3
Notes: Dollars are in millions. (*)Revenue is Ad Age estimate and represents worldwide core-level returns from
advertising only for the global network. Figures exclude revenue from non-advertising operations such as direct
marketing, sales promotion, interactive, media buying and planning.
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Ad Agency Lists
• http://adage.com/datacenter/article?article
_id=116344
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Alternative ways to perform
the advertising function
In-house advertising operation
• Necessitates employing an advertising
staff and absorbing the operation costs
• Unprofitable unless a company does a
large amount of continual advertising
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Alternative ways to perform
the advertising function
Full-service advertising agency
Advantages
Disadvantages
• In-depth knowledge and • Some control is lost
skills
• Larger clients are
• Obtaining negotiating
favored over small
muscle with the media
clients
• Coordinating advertising • Occasionally inefficient
and marketing efforts
in media buying
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Alternative ways to perform
the advertising function
A la carte
Advantages
Disadvantages
• Use services only when • Specialists approach
they are needed
client problems in a
stereotyped fashion
• Availability of highcaliber creative talent
• Lack of cost
accountability
• Potential cost
efficiencies
• Financial instability of
smaller boutiques
22
Advertising Agency Organization
Creative Services
Media Services
• Develop advertising
copy and campaigns
• Copywriters,
production people,
and creative directors
Research Services
Account Management
23
Advertising Agency Organization
Creative Services
Media Services
Research Services
• Selecting the best
advertising media
• Media planners
develop overall
media strategy
• Media buyers
procure the selected
media
Account Management
24
Advertising Agency Organization
Creative Services
Media Services
Research Services
Account Management
• Study clients’
customers’ buying
habits, purchase
preferences, and
responsiveness
• Focus groups, mall
intercepts, acquisition
of syndicated research
data
25
Advertising Agency Organization
Creative Services
Media Services
Research Services
Account Management
• Link the agency with
the client
• Act as liaisons so
that the client does
not need to interact
directly with several
different service
departments and
specialists
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Agency Compensation
•Commissions from media (15%)
•Reduced commission system(<15%)
Three
Sources
•Labor-based fee system
•Outcome-based
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Which Position is More
Acceptable?
• The Case for Investing: • The Case for Disinvesting:
Firms often choose to
the belief that
advertising can increase reduce advertising
expenses either when a
profitability by
brand is performing well or
increasing sales
during economic
volume, enabling higher
recession. The belief is
selling prices, and thus
that an expense reduction,
increasing revenue
with all else held constant,
beyond the incremental
will result in increased
advertising expense.
profits.
28
Elasticity
A measure of how responsive the
demand for a brand is to changes in
marketing variables such as price and
advertising.
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How to Increase Profit
1.
2.
3.
4.
Maintain status quo
Build Image Via Advertising
Grow Volume via Price Discounting
Increase Advertising and/or discount
prices
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