Return on advertising expense (in sales or market share)Money spentBuilding sales/shareMaintaining sales/shareAdvertising Response FunctionChapter 17 – Advertising & Public RelationsAdvertising-effects of advertising:-US advertising are expected to decline in difficult economic times-in recent years, 30 companies spent more than $1B each-850,000 people work in media advertising (newspapers, magazines, TV, radio, & internet media)-more than 100 companies spend over $300M annually-advertising & market share:-new brands with a small market share spend proportionally more for advertising and sales promotion than those with large market share-beyond a certain level of spending  diminishing returns set in-new brands [USED TO] require high spending to reach min level of exposure needed to affect purchase habits-effects of advertising on consumers:-average US citizen is exposed to hundreds of ads daily-advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude-can affect consumer rating of a brand’s attributes Major Types of Advertising-institutional advertising: enhances a company’s image rather thanpromotes a particular product-corporate identity-advocacy advertisingMoney spentDetermine the advertising objectivesMake creative decisionsMake media decisionsEvaluate the campaign-product advertising: touts the benefits of a specific good or service-pioneering:-stimulates primary demand for a new product/category-used in the PLC introductory stage-competitive:-influences demand for brand in the growth phase of the PLC-often uses emotional appeal-comparative:-compares 2+ competing brands product attributes-used if growth is sluggish, or if competition if strongCreative Decisions in Advertising-advertising campaign: a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals1. Setting Objective: the DAGMAR Approacha. Define target audienceb. Define desired percentage changec. Define the time frame for change2. Creative Decisions:-set advertising objectives identify benefitsdevelop appealexecute messageevaluatecampaign resultsset objectives again…a. Identify product benefits:i. “sell the sizzle, not the steak”ii. All product’s benefits, not it’s attributesiii. The benefit should answer “What’s in it for me?”iv. Ask “So?” to determine if it is a benefitProfit HealthLove or romanceFearAdmirationConvenienceFun and pleasureVanity and egotism Environmental ConsciousnessProduct saves, makes, or protects money Appeals to body-conscious or health seekersUsed in selling cosmetics and perfumesSocial embarrassment, old age, losing health Reason for use of celebrity spokespeopleUsed for fast foods and microwave foodsKey to advertising vacations, beer, parksUsed for expensive or conspicuous items Centers around environmental protection-attribute: “Powerade;s new linehas been reformed to combine thescientific benefits of sports drinkswith B vitamins to speed up energymetabolism”-benefit: “So, you’ll satisfy yourthirst with a great-tasting drink thatwill power you throughout theday.”b. Develop & evaluate advertisingappeals-Unique Selling proposition: adesirable, exclusive, & believable advertising appeal selected as the theme for a campaignc. Execute the message-musical, scientific, slice-of-lifestyle, lifestyle, spokes-person/testimonial, fantasy, humorous, real/animated product symbols, mood or image, demonstration-remarkable: find something in your current product, modify or create it to make something desirable to your “sneezers”d. Evaluate the campaign’s effectivenessi. Where they affective?, increase sales?3. Media Decisions in Advertising-monitored media: newspapers, magazines, yellow pages, internet, radio, TV, outdoor media-unmonitored media: direct mail, trade exhibits, cooperative advertising, brochures, coupons,catalogs, special events-newspapers:-advantages: geographic selectivity, shot term advertiser commitments, news value and immediacy, year round readership, high end coverage, coop and local tie in availability, short lead time-disadvantages: limited demographic, limited color, low pass along rate, may be expensive -magazines:-advatanges: good reproduction, demographic selectivity, regional/local selectivity, long advertising life, high pass along rate-disadvantages: long term advertiser commitments, slow audience build-up, limited demonstration capabilities, lack of urgency, long lead time -Radio:-advantages: low cost, immediacy of message, no seasonal audience changes, high portable, short-term advertiser commitments, entertainment carryover-disadvantage: lower costs -TV:-advantages: wide/diverse audience, low cost per thousand, creative opportunites, immediacy of message, entertainment carry over, demographic selectivity-disadvantages: short life of message, consumer skepticism, high campaign cost -outdoor media:-advantages: repetition, moderate costs, flexibility, geographic selectivity-disadvantages: short message, lack of demographic selectivity, high “noise” level -Internet:-advantages: fast growing, ability to reach narrow target audience, short lead time, moderate cost-disadvantages: difficult to measure as effectiveness and ROI, ad exposure erlies on “click through” from banner ads-In-App Advertising: 350,000 apps in the Apple App Store & 150,000 in the Android Marketplace-cooperative advertising: an arrangement in which the manufacturer and the retailer split the cost of advertising the manufacturer’s brand-major advertising media: newspapers, magazines, radio, TV, outdoor media, yellow pages, internet-alternative media: shopping carts, computer screen savers, DVD’s, interactive kiosks, ads in movies, advertainments, floor ads, subway tunnel ads, video game ads, cell phone ads-qualitive factors in Media Selection:-attention to the commercial and the program-program liking-lack of distractions-other audience behaviors-media scheduling:-continuous media schedule: advertising is run steadily throughout the period-flighted media schedule: advertising is run heavily every other month or every 2 weeks-pulsing media schedule: advertising combines continuous scheduling with flighting-seasonal media scheduling: advertising is run only when the product is likely to be usedPublic Relations-the element in the promotional mix that:-evaluates public attitudes-identifies issues of public concern-executes programs to