Communications and Advertising Strategy Chapter 9-1 Key Learning Points Basic model of communication and how technology is changing that model Elements of an IMC program Setting advertising goals and selecting target audiences Developing message strategies Key elements of media planning How advertising budgets are set Alternative approaches to evaluating advertising spending 9-2 Product & Service “Forward-looking organizations are Decisions stressing a concept called integrated marketing communications (IMC), in which the marketing manager does not think of all the elements of the marketing mix as communicating separate messages; these messages are coordinated to reinforce what each is saying and to prevent customer confusion from conflicting messages.” - Russell S Winer 9-3 Figure 9-1: Model of the Communication Process 9-4 Communications Senders (sources) encode messages in a way that resonates with the receiver (target audience) when they are decoded Types of message channels: – Personal • Salespeople, opinion leaders, word-of-mouth – Nonpersonal • Mass media: television, newspapers, radio, direct mail, billboards, magazines, Internet 9-5 Communications Figure 9.2 demonstrates the one-tomany aspect of mass communication – Assumes no interaction between customers and firms • In actuality, customer feedback from mass communication exists, but is very slow – Content is not personalized 9-6 Figure 9-2: Traditional Mass Marketing Communications Model 9-7 Communications The new technological environment has impacted communication substantially – E-mail, newsgroups, listservs, web sites, web surveys, and brand communities make communication quick and easy – Customers can also customize or create their own content, as shown in Figure 9.3 – Trade-offs exist between richness and reach as illustrated in Figure 9.4 9-8 Discussion Questions Successfully managing brand communities is a key challenge facing marketers today Generating positive word-of-mouth via a brand community could be very beneficial What actions could you take? Minimizing negative or wrong information is equally important What could you do? Why should brand communities for competitive products be investigated? What are the ethical aspects involved with managing brand communities? 9-9 Figure 9-3: Modified Mass Marketing Communications Model - 10 Product & Service Advertising Management Decisions Creative Execution Approaches Key Decisions Straight-sell or factual message Scientific/technical evidence Comparisons Testimonials Animation Humor Product demonstration Personality symbols Slice of life Fantasy Dramatization - 33 Advertising Management Evaluating Message Copy – Many aspects should be pretested • • • • Message itself Spokesperson Execution approach Media – Laboratory and field testing can be used: • Laboratory tests carefully control the environment and allow for experimental manipulation, but respondents are studied in an unrealistic setting • Field tests occur under natural viewing conditions, but offer no control over extraneous factors which may influence ad response - 34 Figure 9-14: Models of the Advertising Response Process - 35 Advertising Management Evaluating Message Copy Consumer Jury – Used for ad concept testing Portfolio Tests – Evaluates ad recall and liking Laboratory Measures Real-world Measures Readability Tests Physiological Methods – Pupil dilation – GSR/EDR – Eye tracking Theater Tests – Pretests TV commercials Laboratory Stores – Evaluates effect of ads on simulated shopping trip - 36 Advertising Management Evaluating Message Copy Laboratory Measures Real-world Measures Dummy advertising vehicles – Evaluates responses to test ads in dummy magazines Inquiry tests – Tracks inquiries generated from direct-response ads On-the-air/recall tests – Assesses recall of real TV ads inserted in programming Recognition tests – Starch through-the-book method posttests ads Sales/minimarket tests – BehaviorScan tests effect of alternative TV ad executions - 37 Advertising Management Stage 5: Media Planning – Media choices have become more difficult due to the rapid growth of alternative media – Allocations among media are often shifted: • Marketing strategies change • New media categories become available or existing categories gain or lose popularity • Other trends – Three main aspects of media planning: • • • Selecting the appropriate media categories Selecting specific vehicles within each medium Advertising scheduling - 38 Figure 9-15: Ford Media Mix Changes - 39 Advertising Management Media Category Strengths & Weaknesses – Television • • • • • • Reaches large numbers of people quickly Best medium for action and image advertising Enormously costly Difficult to target narrow markets effectively Not a strong choice for informational copy Technology can be used to zap or delete ads – Cable Television • • • • Inexpensive Can be targeted to more specific audiences Offers the creative flexibility of television Reach via certain channels can be low - 40 Advertising Management Media Category Strengths & Weaknesses – Magazines and Newspapers • Print is better for complicated messages • Longer message life; pass-along readership • Magazines are better than newspapers for color reproduction and for targeting more specific targets – Radio • • • • • Very inexpensive Ads can be developed and aired quickly Excellent for targeting specific audiences Creative flexibility Clutter and lack of demonstration are disadvantages - 41 Advertising Management Media Category Strengths & Weaknesses – Outdoor • • • Strong reminder medium; good for image advertising Short message exposure time limits content Legal regulations on location, size, and usage exist – The Web • Banner ad click-through rates are low (less than 1%) • Banner ads impact awareness, attitudes, and brand equity positively • Pop-up ads achieve strong reach, but are annoying to consumers • The web offers interactivity that no other medium can match - 42 Advertising Management Choosing Specific Media Vehicles – Analyzing Media • • • • • Cost per thousand (CPM) Gross rating points (GRPs) Ratings and circulation data Vehicle ratings by product usage Regional differentiation – Contextual Fit • Media fit • Program and ad context – Duplication and Wearout • Duplication (frequency) is useful • Wearout occurs when customers tire of ad - 43 Advertising Management Scheduling Advertising – Patterns of scheduling advertising: • Flighting: in some time periods, no money is invested in advertising • Continuous: advertising expenditures are evenly distributed over time • Pulsing: advertising is always used but the level of advertising fluctuates – Advertising timing is influenced by: • • • • Seasonality of sales Target audience Relevancy Clutter - 44 Advertising Management Stage 5: Budgeting for Advertising – Advertising should be viewed as an investment, rather than as an expense – Commonly used budgeting techniques: • • • • • • Objective and task Percentage of sales Competitive parity Affordability Experimentation Decision Calculus - 45 Figure 9-17: Advertising Spending and Market Share - 46 Advertising Management Stage 6: Measuring Advertising Effects – Tracking studies over time • Top-of-mind awareness (unaided recall) – Awareness of copy points in ad may also be assessed • Aided recall • Possibly sales, inquiries, repeat purchases or other behavioral measures, if appropriate – Experimentation • Advertising spending tests – Linking objectives to incremental contribution – Past sales and advertising - 47 ... the ethical aspects involved with managing brand communities? 9- 9 Figure 9- 3: Modified Mass Marketing Communications Model - 10 Figure 9- 4: Traditional Trade-off Between Richness & Reach - 11 In-Class... communication exists, but is very slow – Content is not personalized 9- 6 Figure 9- 2: Traditional Mass Marketing Communications Model 9- 7 Communications The new technological environment has impacted... Integrated Marketing Communications Mix Elements Advertising Direct Marketing Sales Promotion Publicity/Public Relations Personal Selling Miscellaneous Direct marketing forms: – – – – Telemarketing