Tellis Chapter 1 Evaluating AdvertisingThe estimated number of advertising messages viewed daily can vary from 100- more than 1,000. They impinge on consumers’ awareness and affect thoughts, attitudes, feelings, and decisions. Advertising is vitally important for several reasons 1.) Advertising is a major means of competition among firms. -Firms use brand names to represent a consistent level of quality at particular prices. -Advertising is the primary means by which firms informs consumers about newor improved projects. - Advertising provides major support for the media in the United States and other countries. -Advertising is a huge industry. In 2002- it was a $236 billion industry- The public subsidizes advertising expenditures. The fraction of the cost of a product is actually set aside for advertisingEvaluating Advertising EffectivenessHow an ad for a brand can affect a consumer’s purchase of that brand. 1.) Consumers may buy a product for a variety of reasons- Seeing an ad for the brand, satisfaction with the brand from past purchases, word-of-mouth recommendations, change of taste, prestige attached to the product, an attractive package, a store display, a sales promotion, or an attractive price. 2.) Advertising for a brand may occur in different media- Analysts must deode the partial effects of the ad in each of these media. When media overlap, their effects interact, requiring further disentangling. 3.) Advertising may have not only instantaneous effects but also carryover effects- Instantaneous effects occurs when a consumer sees an ad and responds to it immediately. Example: 800 number call immediately Carryover effect is when a consumer waits for the right moment to buy. 4.) The effectiveness of the ad may also vary over the life of a campaign- the effectof an ad changes over the life of a campaign. Wearin is an initial increase in theeffect of one ad, with repetition during a campaign because of consumers’increasing familiarity with the ad. Wearout is the ultimate decline over time because of consumers’ increasing tedium with the ad. If the effectiveness of the ad is itself changing overtime it is difficult to analyze the full impact of a moving target. 5.) Successive ads have overlapping effects and overlapping decays. Combining wearin, wearout, and carryover causes overlapping decays, which gives different levels of responses. -Each ad exposure may have different effect due to consumers’ familiarity or tedium. 6.) Advertising response varies by segments and individuals within a market. -Segment markets-When analyzing ads, need to take in account segmentsAnalyzing Ad’s Effectiveness can be broken down into three steps of Stages:1.)Key measures of advertising2.) Research designs to evaluate advertising’s effects3.) Models to relate the variables and measure the effects of advertising(The term creative refers to all design aspects of an ad such as copy, visual and sound aspects, appeal, endorsers, etc.) Advertising- any paid message that a firm delivers to consumers in order to make itsoffer more attractive to themFirm- any person or organization of any size that has something to offer anotherConsumer- any person or organization that is the target of a firm’s offerProduct- any good, service, idea, or person that an organization wants to offer a consumerFirm-product- consumer-Soap- maker marketing soap to households-Gardener marketing a day’s labor to a homeownerBrand- a clearly distinguishable name, which a firm uses to uniquely identify its product with consumers and distinguish it from its competitorsPurchase- the key behavior of a consumer desired by the firm- Could be a citizen voting, church attendance, buying a productAdvertiser- the firms that advertise to consumers History of AdsSoap and food ads have always been aroundSince P&G branded Ivory soap in 1870s as a national brand. Ads can be used for everything from canvassing for voters, recruiting worshipers, orgetting employees Chapter 2: Sweet Secret Workings of Advertising Myths about advertising effectiveness1.) Advertising is a powerful force in contemporary marketsa.) because of its persuasivenessb.) because it popularizes brands such as Intel, DeBeers, Marlboroc.) because it launched successful new products such as Microsoft 95d.) Casual observation supports the power of advertising because the heaviest advertising is done by brands with the largest market share or highest prices. 2.) Advertising Creates Consumer Needsa.) People desire or craze items that are heavily advertisedb.) Consumers learn of a new product or brand through advertisements3.) Advertising’s effects persist for decadesa.) This arises from the fact that people can remember old slogansb.) Long- surviving brands have been heavy and consistent advertisers4.) Even if advertising does not work now, repetition will ensure ultimate successa.) Based on the assumption that advertising is unlikely to be fully effective on the very first exposureb.) Consumers need to see it several times, discuss it with friends, consumers need to wait for the appropriate time to buy thus there are carryover effects. c.) Bottom line: advertising takes a long time to wear in with consumersd.) This assumptions means that persistence with the campaign will ultimately bear fruit. 5.) One to three exposures are enough for effective advertisinga.) General Electric researcher Herbert Krugman: 1.) First exposure draws attention to the brand 2.) Second exposure stimulates liking for the brand3.) Third exposure would persuade a consumer to buy the brand. b.) 1970s Colin McDonald- found that advertising peaked at two exposures c.) John Philip Jones argued that one exposure per week was enough for effective advertising 6.) Firms often use subliminal advertising- without explicitly perceived by the audience a.) 1957- James Vicary: His experiment on subliminal advertising is now believed to be fictitious b.) 1974 Federal Trade Commission outlawed this form of advertising c.) Consumers believe that ads work in some subconscious or subtle way7.) Humor in advertising trivializes the message a.) Claude Hopkins- grandfather of modern advertising said “ frivolity has no place in advertising” b.) Often humor is weakly related or unrelated to the brand8.) Sex Sells a.) 2003- Miller Super Bowl “catfight” ad causes controversy b.) the frequency and persistency of sex ads cause people