STUDY GUIDE FOR TEST 1 THIS IS JUST A GUIDE MODULE 1 CHAPTER 1 Effective advertising The 3 characteristics of effective ads o STRATEGY o Creativity o Execution Why is strategy on top o If your ad is not on strategy if it doesn t do what the client needs it to do it doesn t matter how creative or well executed the ad it it is a failure Advertising must be goal driven Functions Effects of advertising as a marketing tool o Identify products differentiate them from others o Communicate info about the product its features its place of sale o Induce consumers to try new products to suggest reuse o Stimulate the distribution of a product o Increase product use o Build value brand preference loyalty o Lower the overall cost of sales Free market economy pg 10 Four fundamental assumptions that a market driven society strives to achieve 1 Self interest Open competition between self interested sellers advertising to selfinterested buyers naturally leads to greater product availability at more competitive prices 2 Complete information What products are available what quantity and what prices leads to greater competition lower prices for all Why attorneys are now allowed to advertise 3 Many buyers and sellers Why we have antitrust laws 4 Absence of externalities social costs Compensate for or eliminate the externalities if they re harmful This is why there are restrictions requirements placed on tobacco advertisers Johannes Gutenberg pg 14 In the 1440s Gutenberg invented the printing press in Germany The printing press is the most important development in the history of advertising because it changed the way people communicated lived and worked Patent Medicine There was no formal regulation of products or advertising during the Industrializing Age As a consequence unscrupulous entrepreneurs produced and marketed questionable and sometimes dangerous products The patent medicine industry in particular drew the attention and wrath of consumers Despite efforts by responsible entities such as the Ladies Home Journal which banned patent medicine advertising in 1892 the industry thrived By 1900 there were 350 000 traveling salesmen Preindustrial Age pg 12 14 Extended from the beginning of recorded history to roughly the 19th century Europe had its first paper mill by 1275 In the 1440s Johannes Gutenberg invented the printing press in Germany The printing press is the most important development in the history of advertising because it changed the way people communicated lived and worked 1472 First ad appeared in English a handbill 1700s The Western world s population had grown and concentration of population in some major cities made volume advertising possible In the American colonies the Boston Newsletter started carrying ads in 1704 In 1729 Benjamin Franklin the father of advertising art made ads more readable by using large headlines and considerable white space Franklin was the first American to use illustrations such as the woodcut above He published the Pennsylvania Gazette in Philadelphia which included pages of new advertisements Reeves Ogilvy Burnett Bernbach pg 13 Reeves o Rosser Reeves of the Ted Bates Agency introduced the idea that every ad must point out the product s USP unique selling proposition which focused on driving home a central selling point Ogilvy o David Oglivy emphasized imagery and story appeal in his advertising reminding his employees The consumer is not a moron She is your wife o He wrote this book with a charming self effacing style and a warm British sense of humor Burnett o Leo Burnett introduced the idea of inherent drama He believed that in every product or service there existed some inherent drama that would make the product stand out o In 1940 he landed the American Meat Institute account o He launched a memorable campaign in 1945 in which red meat was placed on a red background and the copy urged the reader to eat more meat o This red on red campaign became a classic example of Burnett s technique of stressing the inherent drama in the product o The Marlboro Man was another of his creations Bernbach o William Bernbach introduced the creative team approach of combining a copywriter with an art director o He is probably best known for his work for VW The Great Depression pg 16 On October 29 1929 the stock market crashed and the Great Depression began Advertising expenditures plummeted from its high of 3 5 billion to 1 5 billion by 1933 By providing information on all public opinion the performance of ad messages sales of advertised products these companies started a whole new business the marketing research industry Manufacturers followed this strategy of product differentiation vigorously seeking to portray their brands as different from better than the competition by offering consumers quality variety convenience Once again advertising became aggressive in an effort to part struggling consumers from their money o The industry again found itself regarded negatively In an effort to survive several advertising professionals focused on research to improve effectiveness Daniel Starch A C Nielsen and George Gallup founded research groups to study consumer attitudes and preferences In 1941 the US entered WWII and the industry once again provided advertising for the war effort and found a way to reestablish their image Volney Palmer pg 14 For Americans the profession of Advertising began when Volney B Palmer set up business in Philadelphia in 1841 became first newspaper agent He contracted with newspapers for large volumes of advertising space at discount rates then resold the space to advertisers at a higher rate The advertisers usually prepared the ads themselves WW I Advertising pg 14 Manufacturers were principally concerned with production The burden of marketers fell on wholesalers o They used advertising primarily as an information vehicle placing announcements in publications called price currents to let retailers know about the sources of supply and shipping schedules for unbranded commodities Advertising to consumers was the job of local retailer the large mail order catalog companies Advertising agencies wisely offered their services to the war council to aid the war effort Not only was the advertising created for the war effort effective but it also helped the industry regain a positive image with consumers Perhaps the most famous and enduring rendition of Uncle Sam is this well known recruitment image created by James Montgomery Flagg an illustrator and