There has been evidence of messages offering goods for sale dating to 5000 B C Modern advertising began in the United States in The mid 1800 s Advertising is a communications tool that functions most efficiently in combination with what 2 primary components 1 centralized exchange 2 an economy in which supply surpasses demand What is the primary purpose of advertising to create demand by introducing new products or suggesting how consumers can solve some problem with existing products Centralized Exchange a system of trade and marketing through specialized intermediaries rather than the direct exchange of goods between buyers and sellers What were 2 elements missing in most advertising during the early years of the 20th century 1 an ethical framework for creating promotional messages 2 valid and reliable research to measure advertising effects Hoarding first printed outdoor signs the forerunner of modern outdoor advertising Premarketing Era the period from prehistoric times to the 18th century during this time buyers and sellers communicated in very primitive ways media clay tablets town criers and tavern signs Mass Communication Era the period form the 1700s to the early decades of the 20th century in which advertisers were able to reach large segments of the population through mass media newspapers magazines radio advertisers also began to differentiate their brands with specific consumer benefits Research Era the period beginning in the 1920 s to present day where advertisers increasingly have been able to identify segments through sophisticated research methods messages are prepared specifically for specific groups or individuals Interactive Era the period where communication will increasingly be controlled by consumers who will determine when and where they can be reached by promotional messages the consumer is an active participant in the communication process and are in control of the media content they consume Behavioral Research J Walter Thompson Market research that attempts to determine the underlying nature of purchase behavior seeking to understand the needs and wants of consumers Planned Obsolescence the idea that products would be discarded not because of lost utility but because of lost status Siquis handwritten posters in 16th and 17th century England forerunners of modern advertising Penny Press Forerunner of the mass newspaper in the United States first appeared in the 1830 s provided inexpensive newspapers to the general population Mass Production a manufacturing technique using specialization and interchangeable parts to achieve production efficiencies Outdoor advertising increased as Americans took to the road in automobiles American Association of Advertising Agencies AAAA the national organization of advertising agencies founded in 1917 Congress moved to protect public health with the passage of The Pure Food and Drug Act 1906 it was one of the earliest attempts by the federal government to protect consumers Federal Trade Commission FTC the agency of the federal government empowered to prevent unfair competition and to prevent fraudulent misleading or deceptive advertising in interstate commerce Council of Better Business Bureaus National organization that coordinates a number of local and national initiatives to protect customers The Printer s Ink Model Statute The act directed at fraudulent advertising prepared and sponsored by Printer s Ink which was the pioneering advertising magazine Audit Bureau of Circulations ABC the organization sponsored by publishers agencies and advertisers for securing accurate circulation statements War Advertising Council Founded in 1942 to promote WWII mobilization it later evolved into the Advertising Council Advertising Council a nonprofit network of agencies media and advertisers dedicated to promoting social programs through advertising Audience Fragmentation the segmenting of mass media audiences into smaller groups because of diversity of media outlets Permission Marketing asking consumers for permission or to opt in before sending them advertising and other forms of marketing communication Advertising s primary roles continues to be to convey truthful information about products services or ideas to a targeted audience Convergence the blending of various facets of marketing functions and communication technology to create more efficient and expanded synergies Citizen Media the relationship between advertisers and consumers Return on investment one measure of the efficiency of a company is the rate of return profits achieved by a certain level of investment on various business functions including advertising how many dollars are produced for every dollar spent Marketing Mix the combination of marketing functions including advertising used to sell a product categories include personal selling sales promotion public relations and advertising Sales Promotion an extra incentive for a customer to make an immediate purchase Public Relations Communication with various internal and external publics to create an image for a product or corporation Advertising Advertising consists of paid notices from identified sponsors normally offered through communication media integrated marketing communication IMC The joint planning execution and coordination of all areas of marketing communication Distribution Channel the various intermediaries such as retailers that control the flow of goods from manufacturers to consumers Brand Name the written or spoken part of a trademark in contrast to the pictorial mark a trademark word Brand Extension these are new product introductions under an existing brand to take advantage of existing brand equity Advantages of brand extension strategy 1 saving money by not needing to build awareness for a new and unknown brand name 2 adding equity to an existing brand name with a successful extension Disadvantages of brand extension strategy 1 Damaging a core brand in the minds of loyal customers with a failed introduction 2 Losing markets focus on your existing brand and or diluting marketing efforts and budget across several brands Conjoint Analysis a research technique designed to determine what consumers perceive as a product s most important benefits product life cycle the process of a brand moving from introduction to maturity and eventually to either adaption or demise Product Differentiation unique product attributes that set off one brand from another Value Gap the perceived difference between the