Integrated Marketing

Communication
Deepening Specialisation
Sugandha Suneja
Advertising
Advertising

The use of paid mass media, by an identified sponsor, to

deliver marketing communications to target audiences.
The difficulty of defining what advertising is and what it
is not is compounded by the fact that frequently it is
combined with other promotional elements. Examples include
sales promotion where a competition or a money-off offer is
included in the advertisement, and direct marketing
activities where a direct response coupon or telephone
number is included.
Advertising

Kotler et al. (1999) define it in a broad way as:

Any paid form of nonpersonal presentation and promotion of
ideas, goods or services by an identified sponsor.
Crosier (1999) highlights the important components of
advertising in his definition. Advertising is:
communication via a recognisable advertisement placed in a
definable advertising medium, guaranteeing delivery of an
unmodified message to a specified audience in return for an
agreed rate for the space or time used.
Advertising
The significance in Crosier’s definition of guaranteeing
delivery of an unmodified message in a recognisable
advertisement for an agreed rate is the fundamental distinction
between advertising and product placement and publicity.
Product placement is the positioning of products in an
editorial environment such as in a television programme or
cinema film (or possibly, in somebody else’s advertising).
Publicity is not guaranteed to run in the media and may be
subject to alteration of the original message by the media
owners. This would not be the case for advertising. Advertising
furthermore, is required to be clearly identifiable as such. In
situations where an advertisement is deliberately made to look
like a publicity item (i.e. it is made to look like editorial),
it is required to carry a statement that it is an advertisement
feature.
Benefits of Advertising
Principal benefits of advertising are:
● it can reach mass audiences(large coverage),
● it,increasingly,is able to reach mass audiences selectively
([Link] targeting),
● it has low unit cost([Link] cost per thousand),
● it is economical,efficient and effective at reaching large
audiences,
● it is successful at brand maintenance(and many argue that it
is successful in brand development).
Advertising
The PIMS (Profit Impact of Market Strategy) study, which for
many years has collated and analysed FMCG marketing
communications data from around the world, has led to a number
of conclusions about how company profits are affected by (among
other things) their use of marketing communications.
Three conclusions are relevant and relate to
(1) the proportion of spend as a function of market standing,
(2) the proportion of spend as a function of market growth, and
(3) the proportion of spend as a function of market
fragmentation.
Advertising
● For brand leaders, PIMS suggest that around 70% of the
advertising and promotions (A&P) budget should be spent on
advertising. The remaining 30% should be devoted to the
other promotional tools in the marketing communications mix
(not including personal selling which they considered, in
line with industry practice, as a separately budgeted
element). Number 2 and 3 brands should spend around 50–60%
of their A&P budget on advertising.
● In declining markets, the proportion of the A&P budget
spent on advertising should increase. In growing markets,
the proportion spent on other promotions should increase.
● As markets concentrate, the proportion of advertising spend
should reduce. In fragmented markets, the optimum profits
were found when advertising was around 85% of the total
marketing communications spend.
What is advertising used for?
● Advertising is most frequently thought of in the context of
consumer display advertising but this is inappropriate. It
is also used widely for industrial and business-to-business
products and for consumer and industrial classified
advertisements. Although advertising can be seen as
expensive in overall cost terms this has to be outweighed
by the fact that many million members of target audiences
can be reached.
Does advertising work?
Researchers have delved into the sociological, psychological and economic
sciences to search for the answers. Their findings have relevance to all the
marketing communications tools and not just advertising.
To the extent that advertising is seen to have a positive effect on awareness,
attention, interests, perceptions, opinions, attitudes and sales, it is
considered to be an exceptionally worthwhile promotional and communication tool.
How it may actually achieve these results, however, remains something of a
mystery.
Three ways of looking at advertising are given below to help us understand how it
may work. The first considers the concepts of advertising as a strong force or a
weak force. Even though it may be described as weak, the value of advertising is
still considered to be invaluable. A second way of looking at advertising is to
consider the concept of salience, which has to do both with the relevance of the
product, as well as its advertising, to the audience. The third approach is based
on studies of attitude and behaviour in which a hierarchy of cognitive, affective
and conative responses are seen to predispose human behaviour.
It is believed that advertising can affect these responses.
Advertising as a strong force
J.P. Jones Jones, who sees advertising as a strong force, would
argue, along with many in the industry, that he has shown
through some sophisticated sales analysis that advertising has
a direct and positive impact on sales. This has confirmed
intuitive views held over many years within the industry that
advertising is a strong promotional element which works by:
● persuading people to buy,
● creating and building brands,
● differentiating between brands and
● increasing sales.
Advertising as a weak force
Ehrenberg and colleagues by contrast, after completing extended
studies across numerous product categories, question this
interpretation. They argue, through empirical investigation,
that advertising, while having a highly significant effect,
does not work through the mechanisms of persuasion and brand
differentiation so typically taken for granted. For them,
advertising is called a weak force. While significant (they are
not suggesting that advertising is in any way inferior or
should be reduced), advertising works through a process of
reinforcing values, maintaining brands and defending market
share.
Salience and USP – survival of the fit enough, not the fittest
Salience
Term given to represent the degree of ‘relevance’ a brand may have
to a customer/ consumer. The concept of salience recognises that it
will vary between customers, and that brand values are not
determined in terms of there being a single best brand.
Salience has to do with customer/consumer relevance. It is the sum
total of brand attributes (some of which are conferred via
advertising), not any single element, that creates a positive
attitude or predisposition towards the brand. It goes beyond simple
aspects of awareness or levels of interest. Although to be salient a
brand has to be distinctive, it does not have to appear to be better
than all the others, let alone ‘best’. Which is just as well
because, in reality, in the vast majority of cases, brands are too
alike. It is on this point that many misconceptions about
advertising are founded.
Salience and USP – survival of the fit enough, not the fittest
Unique selling proposition (or point) (USP)
Term coined by Rosser Reeves to suggest that advertising
strategy (and by implication other marketing communications)
works best if there is a single, clear and unequivocal selling
proposition.
The concept of USP, then, does not rely on unique products, but
rather is about a single, differentiating statement about a
product. The USP concept is seen by some as being founded on
advertising as a strong force. This need not be the case. To
the extent that USPs help distinguish brands, they do not of
themselves have to operate as strong forces, they can simply be
used as reminders and reinforcers of customers’ original
decisions to buy.
Types of advertisements
When most people think about advertisements probably their
thoughts first go to television ads, then to magazine
advertisements or posters, and then to radio and cinema. What
is probably not realised is that there are numerous varieties
of advertisements many of which are taken for granted
Types of advertisements
Full-display ads
Full-display advertisements appear in the printed media. They
allow the greatest amount of creative freedom for the
advertiser to design precisely what is wanted in the
advertisement. Finished artwork is produced from which the
final advertisement is printed. Full-display ads permit the use
of colour, graphics, i.e. photos and drawings, and text. There
is no creative limitation other than that dictated by the
medium. The media charge a higher rate for full-display ads
compared to semi-display and lineage.
Types of advertisements
Full-display ads
Full- display ads will typically, but not solely, be positioned
ROP (run of paper), which means that they will appear in the
main sections of newspapers or magazines. They do not need to
be full page. They can be any size accepted by the media
(measured by single column centimetres or proportions of a
page) or can run over two (DPS – double page spread) or even
more pages. They can be placed in solus, prime and special
positions such as next to a particular feature or on the front
or back page
Types of advertisements
Semi-display ads
Semi-display ads are similar to full-display but have
limitations placed on their design. They may contain no
graphics at all or only limited graphic options. Type faces
used for text would also be limited. The publication may set a
semi-display ad rather than requiring artwork to be produced. A
semi-display insertion costs less than a full-display.
Types of advertisements
Classified advertising – lineage/wordage ads
Classified sections in the press are those sections, typically
towards the end of the publication, in which advertising and notices
are printed under specific headings or classifications. Classified
sections include births, deaths and marriages, public notices,
personal, television, entertainment, holidays, travel,
accommodation, property, situations vacant, motor vehicles, home and
garden, finance, business-to-business, for sale, under a tenner, and
many more. The print is very tightly set.
Classified sections are not designed for their overall appearance
other than typically to look cluttered. Display and semi-display
advertisements are often accepted but frequently space is bought by
the line or by the word. This is known as lineage and wordage. The
back pages of local papers are usually awash with closely packed
classified lineage advertisements set by the newspapers.
Types of advertisements
Advertorials
Advertorials are press advertisements that are made to look like
editorial. Many advertising codes of practice in Europe and elsewhere
require a heading to be included in advertorials identifying them as
advertising features. It is believed that advertisements appearing in this
form may convey a greater sense of credibility.
Infomercials
Infomercials are the TV equivalent to advertorials in the press. There
are, in effect, long commercials usually containing more information than
normal commercials.
Direct response ads
Direct response advertisements contain some ‘call-to-action’ or response
within the advertisement. The ad may contain a coupon return, for example,
or telephone number, postal address or website address.
Types of advertisements
Banner ads and banner links
These are advertisement ‘banners’ which may contain the
advertiser’s name, a graphic and a brief message. They can be
moving, flashing or static, often extend across a full web page
and are carried on other people’s web pages usually for a fee.
The banner is likely to contain a hypertext link to the
advertiser’s website. Clicking on the banner with a computer
mouse activates this.
Intermercial
This is the Internet equivalent to a television commercial.
Like a commercial break between TV programmes, intermercials
appear between content on a website. Using Real-Time Video
eliminates the need for excessive delays in downloading
information. They are considered by many to be unnecessarily
intrusive and unwelcome.
Types of advertisements
Screensavers
Screensavers have been used successfully by companies to
encourage the downloading of their promotional material. A
notable and extremely successful example is the Guinness
screensaver which featured video footage from one of their
advertising campaigns.
Marketing versus Communications Objectives
Marketing objectives are generally stated in the firm’s
marketing plan and are statements of what is to be accomplished
by the overall marketing program within a given time period.
Marketing objectives are usually defined in terms of specific,
measurable outcomes such as sales volume, market share,
profits, or return on investment. Good marketing objectives are
quantifiable; they delineate the target market and note the
time frame for accomplishing the goal (often one year). For
example, a copy machine company may have as its marketing
objective “to increase sales by 10 percent in the small-
business segment of the market during the next 12 months.” To
be effective, objectives must also be realistic and attainable.
Marketing versus Communications Objectives
Marketing goals defined in terms of sales, profit, or market
share increases are usually not appropriate promotional
objectives. They are objectives for the entire marketing
program, and achieving them depends on the proper coordination
and execution of all the marketing-mix elements, including not
just promotion but product planning and production, pricing,
and distribution.
Sales-Oriented Objectives
To many managers, the only meaningful objective for their
promotional program is sales. They take the position that the
basic reason a firm spends money on advertising and promotion
is to sell its product or service. Promotional spending
represents an investment of a firm’s resources that requires an
economic justification. Managers generally compare investment
options on a common financial basis, such as return on
investment (ROI). However, determining the specific return on
advertising and promotional dollars is often quite a difficult
task.
Sales-Oriented Objectives
A study by Webmarketing123 of both business-to-business (B2B)
and business-to-consumer (B2C) marketers indicated that a
majority admit they don’t know which channels make the biggest
impact on revenues. For example, while 87 percent of B2B
marketers used social media, only 17 percent claimed they were
able to measure ROI. Likewise, with B2C marketers, 87 percent
said they used social media with only 27 percent able to
measure ROI.
Problems with Sales Objectives
It appears that increases in advertising expenditures seemed to
work for GEICO and Coke, as both experienced sales increases.
Does this mean that these results can be attributed directly to
the increased advertising budgets?
In the business world, sales results can be due to any of the
other marketing-mix variables, including product design or
quality, packaging, distribution, or pricing. Advertising can
make consumers aware of and interested in the brand, but it
can’t make them buy it, particularly if it is not readily
available or is priced higher than a competing brand.
Problems with Sales Objectives
Problems with Sales Objectives
Another problem with sales objectives is that the effects of
advertising often occur over an extended period. Many experts
recognize that advertising has a lagged or carryover effect;
monies spent on advertising do not necessarily have an
immediate impact on sales
Communications Objectives
Advertising and other promotional efforts are designed to
achieve communications such as brand knowledge and interest,
favorable attitudes and image, and purchase intentions.
Consumers are not expected to respond immediately; rather,
advertisers realize they must provide relevant information and
create favorable predispositions toward the brand before
purchase behavior will occur.
Communications Effects Pyramid
Advertising and promotion perform communications tasks in the
same way that a pyramid is built, by first accomplishing lower-
level objectives such as awareness and knowledge or
comprehension. Subsequent tasks involve moving consumers who
are aware of or knowledgeable about the product or service to
higher levels in the pyramid.
The initial stages, at the base of the pyramid, are easier to
accomplish than are those toward the top, such as trial and
repurchase or regular use. Thus, the percentage of prospective
customers will decline as they move up the pyramid (or down the
funnel).
Communications Effects Pyramid
Problems with Communications Objectives
Not all marketing and advertising managers accept communications
objectives; some say it is too difficult to translate a sales goal into a
specific communications objective. But at some point a sales goal must be
transformed into a communications objective. If the marketing plan for an
established brand has an objective of increasing sales by 10 percent, the
promotional planner will eventually have to think in terms of the message
that will be communicated to the target audience to achieve this. Possible
objectives include the following:
• Increasing the percentage of consumers in the target market who
associate specific features, benefits, or advantages with our brand.
• Increasing the number of consumers in the target audience who prefer our
product over the competition’s.
• Encouraging current users of the product to use it more frequently or in
more situations.
• Encouraging consumers who have never used our brand to try it.
DAGMAR: AN APPROACH TO SETTING OBJECTIVES
Defining Advertising Goals for Measured Advertising Results
(DAGMAR).In it, Russell Colley developed a model for setting
advertising objectives and measuring the results of an ad
campaign. The major thesis of the DAGMAR model is that
communications effects are the logical basis for advertising
goals and objectives against which success or failure should be
measured.
DAGMAR: AN APPROACH TO SETTING OBJECTIVES
Under the DAGMAR approach, an advertising goal involves a
communications task that is specific and measurable. A
communications task, as opposed to a marketing task, can be
performed by, and attributed to, advertising rather than to a
combination of several marketing factors. Colley proposed that
the communications task be based on a hierarchical model of the
communication process with four stages:
• Awareness—making the consumer aware of the existence of the
brand or company.
• Comprehension—developing an understanding of what the product
is and what it will do for the consumer.
• Conviction—developing a mental disposition in the consumer to
buy the product.
• Action—getting the consumer to purchase the product.
Characteristics of Objectives
A second major contribution of DAGMAR to the advertising
planning process was its definition of what constitutes a good
objective.
Concrete, Measurable Tasks:
The communications task specified in the objective should be a
precise statement of what appeal or message the advertiser
wants to communicate to the target audience. Advertisers
generally use a copy platform to describe their basic message.
The objective or copy platform statement should be specific and
clear enough to guide the creative specialists who develop the
advertising message.
Characteristics of Objectives
Target Audience
Another important characteristic of good objectives is a well-
defined target audience. The primary target audience for a
company’s product or service is described in the situation
analysis. It may be based on descriptive variables such as
geography, demographics, and psychographics (on which
advertising media selection decisions are based) as well as on
behavioral variables such as usage rate or benefits sought.
Characteristics of Objectives
Benchmark and Degree of Change Sought
To set objectives, one must know the target audience’s present
status concerning response hierarchy variables such as
awareness, knowledge, image, attitudes, and intentions and then
determine the degree to which consumers must be changed by the
campaign. Determining the target market’s present position
regarding the various response stages requires benchmark
measures. Often a marketing research study must be conducted to
determine prevailing levels of the response hierarchy. In the
case of a new product or service, the starting conditions are
generally at or near zero for all the variables, so no initial
research is needed
Characteristics of Objectives
Specified Time Period
A final consideration in setting advertising objectives is
specifying the time period in which they must be accomplished.
Appropriate time periods can range from a few days to a year or
more. Most ad campaigns specify time periods from a few months
to a year, depending on the situation facing the advertiser and
the type of response being sought. For example, awareness
levels for a brand can be created or increased fairly quickly
through an intensive media schedule of widespread, repetitive
advertising to the target audience. Repositioning of a product
requires a change in consumers’ perceptions and takes much more
time.
ESTABLISHING AND ALLOCATING THE BUDGET
ESTABLISHING AND ALLOCATING THE BUDGET
Establishing the Budget
The size of a firm’s advertising and promotions budget can vary
from a few thousand dollars to more than a billion. When
companies like AT&T and Verizon spend more than $2 billion per
year to promote their products, they expect such expenditures
to accomplish their stated objectives. The budget decision is
no less critical to a firm spending only a few thousand
dollars; its ultimate success or failure may depend on the
monies spent. One of the most critical decisions facing the
marketing manager is how much to spend on the promotional
effort
ESTABLISHING AND ALLOCATING THE BUDGET
■ advertising is strongly related to economic cycles across major world
economies.
■ the single most compelling reason for cutting back advertising during a
recession is that sales during a recession are likely to be lower than
they would be during an expansion.
■ there is strong, consistent evidence that cutting back on advertising
can hurt sales during and after a recession.
■ not cutting back on advertising during a recession could increase sales
during and after the recession.
■ firms that increased advertising during a recession experienced higher
sales, market share, or earnings during or after the recession.
■ Most firms tend to cut back on advertising during a recession, reducing
noise and increasing the effectiveness of advertising of the firm that
advertises.
ESTABLISHING AND ALLOCATING THE BUDGET
Percentage of Sales Method
Perhaps the most commonly used method for budget setting
(particularly in large firms) is the percentage-of-sales
method, in which the advertising and promotions budget is based
on sales of the product. Management determines the amount by
either
(1) taking a percentage of the sales dollars or
(2) assigning a fixed amount of the unit product cost to
promotion and multiplying this amount by the number of units
sold.
A variation on the percentage-of-sales method uses a percentage
of projected future sales as a base. This method also uses
either a straight percentage of projected sales or a unit cost
projection. In the straight-percentage method, sales are
projected for the coming year based on the marketing manager’s
estimates.
Agency
In practice there are three ways in which a company may choose
to handle its marketing communications. The marketing
department might consider using in-house capabilities, or
engage the services of an agency (full service or specialist),
or a combination of both. The latter is now perhaps the most
common choice rather than one or other exclusively, especially
since few companies are in a position to provide the necessary
management and creative skills to develop and maintain all the
activities associated with an integrated communications
campaign without the need for outside expertise.
Agency
Account management
Often called account handlers, executives or directors, account managers
carry out a number of interrelated functions. They are primarily
responsible for the management and administration of the client’s account.
The account manager will be the first level of client contact with the
agency and is responsible for ‘driving’ the account. Account managers in
effect wear two hats as they are at the interface between the client and
the agency. On the one hand they represent the clients’ needs and
aspirations. On the other, they represent the agency’s point of view. The
account manager will communicate to the client what the agency is capable
of doing and will also communicate to the agency team the client’s
requirements. It is the account manager who is responsible for making sure
that the agency team e.g. creatives, media planners and production, work
closely to the client’s brief. They may work in tandem with account
planners and the client in developing an understanding of the client’s
market and determining the final brief with which the agency will then
work
Planning
Not all agencies maintain the account planning function,
preferring it to be dispersed among other staff as a more
collective activity. Where account planners are employed, they
are primarily responsible for handling the research in the
communications planning process. Whereas the account manager is
said to represent the client in the agency, the account planner
represents the client’s market – the customers and consumers.
They are responsible for the marketing communications strategy,
assisting in the development of the creative brief,
customer/consumer research and the evaluation of the campaign
at all stages of the process. They are responsible for
analysing data at the situational analysis stage of the
planning process. They will have to interpret market research
reports for inclusion in the creative brief. Their strategic
analysis is crucial at the objective and target audience
identification stages of the planning process
Creative
Creatives are responsible for writing and designing the message
and the image to communicate to the target audiences. Creatives
will work to a brief that has been set by the client and the
account management team. Creative teams will often work in
pairs and this is particularly so within advertising agencies.
Copywriters are responsible for the words that will be used in
an advertisement and art directors are responsible for the
visuals. The actual completion of finished artwork and
production is likely to be further contracted out via the
production department to other specialists such as commercial
artists, computer animators, film directors, photographers and
printers. Within a PR agency the creative work will typically
be handled by a copywriter but many staff may have multiple
responsibilities of which copywriting will be but one.
Production and traffic
Production is typically handled as a specialist function within the
agency and may be further subdivided into specialisms such as radio,
print and TV/cinema/video depending upon the work of the agency. It
is the responsibility of the production department working with
other members of the agency to ensure completion of the final piece
of work in whatever form in appropriate quantities and to
appropriate quality standards.
Traffic is a project control function that ensures that work in all
its various stages is completed on time so that it is passed forward
within the agency to meet its final deadline. The traffic controller
will be responsible for chasing agency staff to complete their work
in sufficient time for it to be passed on to others to complete
their tasks and finally onto production after client approval. The
use of client contact reports, job numbers and deadline dates
generated by account managers is a mechanism used by agency staff to
facilitate the trafficking process.
Types of Agencies
Agency types can, in essence, be categorised along two
dimensions: the disciplines offered and the services offered,
and can be plotted on a chart
Agencies are present in all shapes and sizes and range from the
à la carte/specialist concentrating, for example, on creative,
media or planning services for a specific marketing
communications discipline, to the full service agency with an
integrated multi-discipline approach. Multi- or full-service
agencies aim to offer their clients a complete range of
services including account management, planning, creative and
media across the major (if not all) marketing communications
elements.
Types of Agencies
Types of Agencies
Above-the-line communications
Term used to generally describe advertising promotions: that is,
promotions that make use of commission-paying mass media – television,
press, cinema, radio and posters. Also called above-the-line promotions
and above-the- line advertising.
Below-the-line communications
Marketing communications that make use of the non- commission-paying media
in all their forms, i.e. all forms of promotions other than advertising.
Sometimes, incorrectly, it is referred to as below-the-line advertising.
Although it remains a popular term, its usefulness is limited as it
encompasses such a broad range of promotional activity.
Through-the-line communications
Marketing communications that span both above- and below-the-line
activities.
.
Types of Agencies
Agency Selection Process
There is a well-defined and logical process of agency selection which, when
followed, enables both clients and agencies to identify those areas which require
clarification in the joint relationship and serves to establish the ground rules
for both parties:
● Define requirements
● Develop pool list
● Select Shortlist Through Ad Credentials Pitch’
● Issue Brief
● The Pitch
● Final Evaluation And Choice.
Each year industry magazines such as Campaign, Marketing Week and Marketing
conduct surveys on choosing and working with the various marketing communications
agencies/consultancies (advertising, sales promotion, direct mail, packaging
design, event management/conferences, PR, sponsorship and so on.
Agency Selection
Process
Credentials shortlist and the brief
The agencies selected are often invited to a ‘credentials presentation’ and the
pool list is then whittled down to a shortlist of usually three or four agencies
who, once they have signed a confidentiality agreement, are invited to a briefing
meeting. The detail of a brief will vary from situation to situation but a good
brief should contain the following elements as a minimum:
● company and product/brand history and background
● marketing objectives
● marketing communications objectives
● target markets/audiences
● product/service specifications
● distribution strategy
● pricing strategy
● budget
● timing.
The pitch
The pitch presentation is in essence a microcosm of the whole
communications cam- paign where the agency presents to the
client a ‘snapshot’ of the campaign as defined by the brief. A
pitch presentation is often preceded by several meetings or
discussions between the client and the agency