Chapter Fifteen
Advertising and Public
Relations
Copyright © 2009 Pearson Education, Inc.
Chapter 15 - slide 1
Publishing as Prentice Hall
Advertising and Public
Relations
Topic Outline
– Advertising
– Setting Advertising Objectives
– Setting the Advertising Budget
– Developing Advertising Strategy
– Evaluating Advertising Effectiveness and Return
on Advertising Investment
– Public Relations
– The Role and Impact of Public Relations
– Major Public Relations Tools
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 2
Publishing as Prentice Hall
Advertising
• Advertising is any paid form of non-personal presentation
and promotion of ideas, goods, or services by an identified
sponsor.
• It is important. Global advertising industry is worth
approximately $600 billion with the largest global
advertiser spending around $9.7 billion per year.
• Successful advertising increases brand perception of a
product and customer loyalty. It contributes towards
greater sales and thus enhanced market share. It is used
not only by business by even by non-profit entities.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 3
Publishing as Prentice Hall
Major Advertising Decisions
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 4
Publishing as Prentice Hall
Setting Advertising Objectives
• In general, the objective of advertisements is to build
customer relationships.
• However, specific advertising objectives must also
be set. An advertising objective is a specific
communication task to be accomplished with a
specific target audience during a specific time
• Advertising objectives are classified by primary
purpose and can be of three types
– Inform
– Persuade
– Remind
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 5
Publishing as Prentice Hall
Advertising
Setting Advertising Objectives
• Informative advertising is used when introducing a
new product category; the objective is to build
primary demand
• Persuasive advertising is important with increased
competition to build selective demand
• Comparative advertising directly or indirectly compares the brand with one
or more other brands
• Reminder advertising is important with mature
products to help maintain customer relationships and
keep customers thinking about the product
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 6
Publishing as Prentice Hall
Advertising
Setting Advertising Objectives
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 7
Publishing as Prentice Hall
Setting the Advertising Budget
Factors to consider when setting the budget
1. Product life-cycle stage
2. Market share
3. Level of competition and advertising clutter
in the market
4. Level of differentiation among products
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 8
Publishing as Prentice Hall
Advertising
Setting the Advertising Budget
1. Product life-cycle stage
• New products require larger budgets
• Mature brands require lower budgets
2. Market share
• Building or taking market share requires larger
budgets
3. Markets with heavy competition or high advertising
clutter require larger budgets
4. Undifferentiated brands require larger budgets
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 9
Publishing as Prentice Hall
Developing Advertising Strategy
Advertising strategy is the strategy by
which the company accomplishes its
advertising objectives and consists of:
• Creating advertising messages
• Selecting advertising media
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 10
Publishing as Prentice Hall
Developing Advertising Strategy
Creating the Advertising Message
• A regular consumer is exposed to almost 3000 to 5000
commercial messages everyday. Thus, there is a huge clutter
of advertisements. Consequently, consumers nowadays
switch channels when Ad comes on or record shows and
watch it later (whilst fast forwarding the ads). As a result, the
effectiveness of expensive ads has greatly reduced.
• Thus, it has become important for firms to develop
advertisements that can break through the clutter. The
advertising message needs to be better planned, more
imaginative, more entertaining and more rewarding to
consumers.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 11
Publishing as Prentice Hall
Developing Advertising Strategy
Creating the Advertising Message
Madison & Vine—the intersection of Madison
Avenue and Hollywood—represents the
merging of advertising and entertainment. This
term signifies the need to develop engaging
advertising message that attracts consumers.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 12
Publishing as Prentice Hall
Developing Advertising Strategy
Steps of Creating the Advertising
Message
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 13
Publishing as Prentice Hall
Developing Advertising Strategy
Creating the Advertising Message
• The first step is to develop the message strategy. Message
strategy is the general message that will be communicated to
consumers
• The message strategy/general message is usually a customer
benefit provided by the product that is used as an advertising
appeal.
• It is influenced by the broader positioning and value strategies of
the company.
• Message strategy statements tend to be plain, straight forward
outlines of benefits and positioning points that the advertiser
wants to stress.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 14
Publishing as Prentice Hall
Developing Advertising Strategy
Creating the Advertising Message
• The second step is to develop the Creative concept
which is the idea that will bring the message strategy
to life in a distinctive and memorable way and
guide specific appeals to be used in an advertising
campaign
• Characteristics of the advertising appeals include:
– Meaningful
– Believable
– Distinctive
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 15
Publishing as Prentice Hall
Developing Advertising
Strategy
Creating the Advertising Message
• Third step is Message execution. Message
execution is when the advertiser turns the big
idea into an actual ad execution that will
capture the target market’s attention and
interest.
• The creative team must find the best
approach, style, tone, words, and format for
executing the message.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 16
Publishing as Prentice Hall
Developing Advertising Strategy
Execution Styles
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 17
Publishing as Prentice Hall
Developing Advertising Strategy
Execution Styles
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 18
Publishing as Prentice Hall
Developing Advertising Strategy
Creating the Advertising Message
Message execution also includes:
• Tone
– Positive, negative, humorous, sarcastic
• Attention-getting words
– (BMW’s Well engineered automobile vs The ultimate
driving machine)
• Format (for print media ads)
– Illustration
– Headline
– Copy
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 19
Publishing as Prentice Hall
Developing Advertising Strategy
Selecting Advertising Media
Major steps include:
• Deciding on reach—frequency—impact
• Choosing major media types
• Selecting media vehicles
• Deciding on media timing
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 20
Publishing as Prentice Hall
Developing Advertising Strategy
Deciding on reach—frequency—impact
• Reach is a measure of the percentage of
people in the target market who are exposed
to the ad campaign during a given period of
time
• Frequency is a measure of how many times
the average person in the target market is
exposed to the message
• Impact is the qualitative value of a message
exposure through a given medium.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 21
Publishing as Prentice Hall
Developing Advertising Strategy
Choosing major media types
• The company must carefully evaluate the advantages and
disadvantages of the media types while choosing one.
Moreover, it must consider the overall media mix.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 22
Publishing as Prentice Hall
Developing Advertising Strategy
Selecting media vehicles
• Selecting media vehicles involves selecting
specific media within each general media
type. i.e (Which channel for TV ads?)
• While selecting the media vehicle, the firm
must consider:
– Impact of the Ad
– Effectiveness
– Cost of producing Ad for the different medias
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 23
Publishing as Prentice Hall
Developing Advertising Strategy
Deciding Media Timing
• Media timing refers to deciding on how to schedule
the advertisements over the course of a year. When
deciding on media timing, the planner must
consider the impact of seasonality. The firm can
either schedule its ads to oppose seasonal pattern, to
follow seasonal pattern or to be same for all year.
• A firm might follow two patterns of the advertising
– Continuity—scheduling evenly within a given period
– Pulsing—scheduling unevenly within a given period
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 24
Publishing as Prentice Hall
Evaluating Advertising Effectiveness
and Return on Advertising Investment
• The effectiveness of advertisements must be carefully assessed to
justify the huge amount spent on advertising. The effectiveness of Ads
are measured from two perspectives.
1. Communication effects indicate whether the ad and media are
communicating the ad message well and should be tested
before or after the ad runs. This is done through focus group
discussion of consumers, product awareness survey etc.
2. Sales and profit effects indicate whether Ad’s has contributed
to an increase in the sales and profit of a company. This is
difficult to measure. One way to do so is to compare sales and
profits and advertisement expenditures of the past with that of
the present. It can also be calculated through experiments
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 25
Publishing as Prentice Hall
Other Advertising Considerations
• Organizing for advertising
– Agency versus in-house. Usually, small
companies conduct advertising in house. I
• International Advertising Decisions
– Standardization will reduce cost and ensure
consistent message. However, the effectiveness
is lower compared to customized
advertisements.
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 26
Publishing as Prentice Hall
Public Relations
Public relations involves building good
relations with the company’s various
publics by obtaining favorable publicity,
building up a good corporate image, and
handling or heading off unfavorable
rumors, stories, and events
Public relations is used to promote product,
people, ideas, and activities
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 27
Publishing as Prentice Hall
Public Relations
Public relations department functions include:
• Press relations or press agency
• Product publicity
• Public affairs
• Lobbying
• Investor relations
• Development
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 28
Publishing as Prentice Hall
Public Relations
Press relations or press agency involves the
creation and placing of newsworthy
information to attract attention to a person,
product, or service
Product publicity involves publicizing specific
products
Public affairs involves building and maintaining
national or local community relations
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 29
Publishing as Prentice Hall
Public Relations
Lobbying involves building and maintaining
relations with legislators and government
officials to influence legislation and regulation
Investor relations involves maintaining
relationships with shareholders and others in
the financial community
Development involves public relations with
donors or members of nonprofit organizations
to gain financial or volunteer support
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 30
Publishing as Prentice Hall
Public Relations
The Role and Impact of Public Relations
• Stronger impact on public awareness than
advertising
• Lower cost than advertising
• Might have greater credibility than
advertising
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 31
Publishing as Prentice Hall
Public Relations
Major Public Relations Tools
Copyright © 2010 Pearson Education, Inc.
Chapter 15 - slide 32
Publishing as Prentice Hall