What is Advertising ?

Advertising is any paid-for communication overtly intended to inform and/or influence one or more people. Advertising says to people, 'Here's what we've got. Here's what it will do for you. Here's how to get it. Advertising 1. Identifies a current problem / opportunity for the product, service or corporate brand 2. Identifies the customers who can best solve / create that problem / opportunity 3. Creates the most relevant and distinctive way of communicating to them in creative & media terms

Hence, Advertising is.

Anything that calls attention to a product or service

Advertising in Context
Who engages in advertising? Businesses, governments, and individuals.

Role of Advertising
Simply put: Advertising exists to help to sell things. It is mainly about brands It is mainly designed to create and strengthen consumer impressions of the brand Exception is public service advertising

Role of advertising
Marketing Communication Economic Societal
The process a business uses to satisfy consumer needs by providing goods and services
Product category Target market Marketing mix Brand

Role of advertising
Marketing Communication Economic Societal
Can reach a mass audience Introduces products Explains important changes Reminds and reinforces Persuades

Role of advertising
Marketing Communication Economic Societal
Moves from being informational to creating demand Advertising is an objective means for providing price-value information, thereby creating a more rational and transparent economy

Role of advertising
Marketing Communication Economic Societal
Informs consumers about innovations and issues Mirrors fashion and design trends Teaches consumers about new products Helps shape consumer self-image Perpetuates selfexpression

The importance of advertising

Involves a huge amount of money Work is done by relatively few people Major expense is for media time/space

Companies now spend a significant percentage of sales on advertising

Types of advertising
Product advertisingTries to sell a specific product to final users or channel members Services advertising Tries to sell specific services of specific industry to the consumers. Corporate/institutional advertisingTries to promote an organisation's image, reputation or ideasrather than a specific product

The Functions of Advertising

Builds awareness of products and brands Creates a brand image Provides product and brand information Persuades people Provides incentives to take action Provides brand reminders Reinforces past purchases and brand experiences

The Key Players

Advertiser (client) Agency Media Supplier Audience
Uses advertising to send out a message about its products Initiates the advertising effort by identifying a marketing problem Approves audience, plan and budget Hires the advertising agency

The Key Players Advertiser (client) Agency Media Supplier Audience

Has strategic and creative expertise, media knowledge, workforce talent, and negotiating abilities
Advertising department In-house agency External Agency

The Key Players

Advertiser (client) Agency Media Supplier Audience
The channels of communication that carry the message to the audience Are also companies or huge conglomerates Mass media advertising can be cost effective because the costs are spread over the large number of people the ad reaches

The Key Players Advertiser (client) Agency Media Supplier Audience

Assist advertisers, agencies, and the media in creating and placing the ads Vendor services are often cheaper than those in-house

The Key Players

Advertiser (client) Agency Media Supplier Audience
The desired audience for the advertising message Data-gathering technology improves accuracy of information about customers Advertisers must recognize the various target audiences they are talking to and know as much about them as possible

Types of Advertising
Brand advertising Retail or Local advertising Direct-Response advertising (Instant translation into sales like coupons, toll free numbers etc) Business-to-Business advertising (e.g Naukri, Xerox machines etc) Institutional advertising (more than a product, helps in promoting the image of the institution) Nonprofit advertising (e.g NGOs, political parties advertising their agendas etc.) Public Service advertising

What Makes an Ad Effective?

1. If it creates an impression for a product or brand 2. If it influences people to respond in some way 3. If it separates the product or brand from the competition in the mind of the consumer

7 primary services of an Ad Agency

complete a marketing analysis develop an advertising plan prepare a creative strategy create advertising executions develop and implement a media plan handle billing and payments integrate other marketing communications

4 functions of full-service agencies

account management creative media planning and placement research

Ad Agency organization structure

Broadly there are 5 departments in any advertising agency Account Servicing / Planning Media Creative Production Finance and Accounting

Account service department

This department is the link between the ad agency and its clients. The account executive is mainly responsible to gain knowledge about the clients business, profit goals, marketing problems and advertising objectives.

He is responsible for getting approved the media schedules, budgets and rough ads or story boards from the client. The next task is to make sure that the agency personnel produce the advertising to the clients satisfaction. The biggest role of the account executive is continuous follow-up and communication.

Media department
The responsibility of this department is to develop a media plan to reach the target audience effectively in a cost effective manner. The staff analyses, selects and contracts for media time or space that will be used to deliver the ad message. This is one of the most important decisions since a significantly large part of the clients money is spent on the media time and/or space.

Creative department
The success of an ad agency depends upon the creative department responsible for the creation and execution of the advertisements. The creative specialists are known as copywriters. They are the ones who conceive ideas for the ads and write the headlines, subheads and the body copy. They are also involved in deciding the basic theme of the advertising campaign, and prepare the rough layout of the print ad or the visual ad or commercial. Creation of an ad is the responsibility of the copywriters and the art department decides how the ad should look.

Production department
After the completion and approval of the copy and the illustrations the ad is sent to the production department. Generally agencies do not actually produce the finished ads; instead they hire printers, photographers, engravers, typographers and others to complete the finished ad. For the production of the TV commercial, the production department may supervise the casting of actors to appear in the ad, the setting for scenes and selecting an independent production studio. The production department sometimes hires an outside director to transform the creative concept to a commercial.

Finance and accounting department

An advertising agency is in the business of providing services and must be managed that way. It has to have a specific department for finance and accounting. This department is important since bulk of the agencys income approx. 65% goes as salary and benefits to the employees. It has to keep track of the payments receivable, received and the resource allocation.

Branding
Branding means A name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller, and to differentiate them from those of competitors

How brands add value for the consumer

Brands simplify the decision-making process:
by identifying the product as from a reliable company, by recalling advertising messages at the point of sale by remembering previous experience

Brands as risk-reducers
Brands convey Guarantee of consistent quality. They allow the customer to choose the best or most suitable product for his/her needs. They can act as symbols of his/her status or self- image.

Brands as a source of pleasure

Continuity the satisfaction of familiarity and intimacy with the brand from consuming it regularly over a long period of time Hedonism the satisfaction of using a stylish, fashionable, well-made and well-advertised brand Ethical responsibility the satisfaction of making a responsible, caring choice, showing concern for their environment or the conditions of the companys workers.

LIFE CYCLE OF A BRAND

BRAND RECOGNITION- They know your name but do not prefer it over competition.
BRAND PREFERENCE- They pick your brand based on previous experience with it. BRAND INSISTANCE- Will not accept alternatives. GENERIFICATION- Brand becomes synonymous with the category .

POSITIVE IMPACT OF BRANDING

Recognition and Loyalty - The main benefit of branding is that customers are much more likely to remember your business. A strong brand name and logo/image helps to keep your company image in the mind of your potential customers. Image of Size - A strong brand will project an image of a large and established business to your potential customers. E.g.- The Coca Cola Company uses the brand name Coca Cola and BBC is the brand name for the British Broadcasting Corporation. Image of Quality- A strong brand projects an image of quality in your business, many people see the brand as a symbol of quality and value. Image of Experience and Reliability- A strong brand creates an image of an established business that has been around for long enough to become well known. This induces a sense of security in the consumer.

SOME NEGATIVE ASPECTS OFBRANDING

Cost - If you wish to create and maintain a strong brand presence, it can involve a lot of design and marketing costs. Impersonal - One of the main problems with many branded businesses is that they lose their personal image.

Fixed Image - Every brand has a certain image to potential customers, and part of that image is about what products or services you sell. Time scale - The process of creating a brand will usually take a long period of time.

4 Dimensions of Effective Branding

Effective branding basically includes four dimensions. Lets demonstrate this using the example of Airtel The Functional Dimension - Airtel says, "Your world of communication just got simpler. This implies that even the simplest of the consumer can use their products and services.

The Social Dimension - Airtel is a recognized brand to be associated with. It is associated with a high level of social value.
The Spiritual Dimension - "Building telecom, building relationships." Airtel encourages everyone to be more involved in building relationships and spreading happiness. The Mental Dimension - Airtel gives me the opportunity to "Express Myself."

HOW DO WE BRAND A PRODUCT

Associate your brand with a key customer promise Keep in mind precisely whom you are targeting Differentiate your brand Keep your brand focused Repeat, repeat, repeat your message

Sales Promotion

Whereas advertising gives a reason to buy, SP gives an incentive to buy

It is a part of the Marketing spend of all companies. In the present times, SP spends in many companies exceed that of the ad-spends

Why Sales Promotion - Internal reasons

Top management is more conducive to spending on promotions Line managers under greater pressure to achieve targets

Justification of expenditure is easy

Why Sales Promotion - External reasons

Increase in number of brands Consumer is more price savvy

Greater pressure to liquidate stocks Ad-effectiveness declining owing to rising costs, media clutter and legal constraints

SP is a push strategy
Since it is at the last point where the consumer is often at the point of buying, the additional incentive makes a last ditch effort to convert the customer on to the incentivized brand

SP is of two types
Trade Consumer

Trade promotion
Liquidating heavy inventories Persuade retailers to carry stock, carry more than usual stock, promote brand franchise

Consumer promotion
Stimulate purchase Induce trial Create new users Increase repurchase from occasional customers Reward loyal customers

Forms of trade promotion

Bulk discounts Free materials Display windows Shelf hiring Lucky draws Shop salesmen incentives

Forms of consumer promotion

Free samples Free gifts Coupons Price packs Discounts Lucky draws Bundling offers (combination of related products of same company)

SP spurs action because they are supposed to run for a limited time

The more the products quality and its advertising persuasiveness fail to meet competition, the greater is the need for promotion.

Promotion at different stages of the PLC

Introduction wise to use heavy promotion to induce trials and promote brand franchise Growth promotion should be limited ,if any

Maturity Higher promotions required since the brand is under attack from competitors or product quality or advertising effectiveness is tapering off Decline Heavy promotions. Used only to retain a set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock clearance from the trade

Branded Entertainment
Branded entertainment is also called as ADVERTAINMENT. Combination of an audio-visual program and a brand. Initiated either by the brand or by the broadcaster.

Briefly, branded entertainment is

It is the integration of a product or a brand into a film or televised series. Simply advertisements in entertainment. Film ,Tele series , play , novel , song, stageshow, videogame etc.

PURPOSE
Promotes brand image to their target audience by creating positive links between the brand and the program for viewers. Branded Entertainment is not simply product advertising or product placement - branded entertainment is a piece of entertainment that perfectly aligns with the brand attributes, and is a reflection of the advertiser's brand personality

Some examples
Don - TagHuer ,Motorola, Garnier, Citibank. Dhoom 2 - Coke, Pepe , Sony, Disney. Krrish Singapore Tourism Board , Sony , John Players , Bournvita , Tide, Boroplus, HP. Indian Idol Garnier, Nokia, Coke

Fear factor Thums up

Star voice of India Amul

ETHICAL ISSUES OF ADVERTISING

DETERMINE WHAT IS ETHICAL WHO SHOULD AND SHOULD NOT BE TARGET MARKET WHAT SHOULD OR NOT BE ADVERTISED

Common criticism of advertising

Deception in advertising (Puffery) Impact on value systems(artificial demand) Advertising controversial products( tobacco, alcohol, prescription drugs etc.) Use of stereotypes in advertising Creating a wrong perception (being fair means being successful) Offensiveness in advertising(vulgarity)

Social benefits of advertising

creates employment acceptance of new products and technology provides choices keep prices down create healthy competition

Government regulations for advertisements

freedom of commercial speech (should not be misused) privacy rights-online advertising advertising to children(children advertising review unit) tobacco advertising

Advertising regulatory agencies

Federal Trade/Communication Commission Food and Drug Administration Patent and Trademark Office State Government Offices National Advertising Review Council Regulation by media itself Consumer Advocates