Major Advertising Decisions

We define advertising as any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Such presentation and promotion are done through a message called advertisement, which is disseminated through one or more media. The definition of advertising provides us with some important considerations.

• First, advertising differs from an advertisement. The advertisement is the message, while advertising is a process that consists of a program or a series of activities necessary to prepare the message and send it to the target market.
• Second, the public understands who is behind the advertising because the sponsor is openly identified in the advertisement.
• Third, the cost of media is paid for the message by its sponsor. These last two considerations distinguish advertising from propaganda and publicity.

Although advertising is done mostly by business enterprises, it is also used by various nonprofit organizations, professionals, and social organizations that promote their objectives to various target people.

Organizations vary in the task of handling advertising. Small companies handle advertising by someone in the sales department.

In large companies, advertising is handled by a separate department. This department performs functions like setting advertising budget, working with the agency, handling direct-mail advertising, dealer displays, and other advertising.

Most large firms employ outside advertising agencies to implement their advertising programs because these agencies offer several advantages.

5 Major Decisions in Advertising

In developing an advertising program, marketing managers must take five important decisions.

1. Objectives Setting
2. Budget Decisions
3. Message Decisions
4. Media Decisions
5. Campaign Evaluation

The following figure shows major advertising decisions.

1. Objectives Setting

Developing an advertising program begins with setting advertising objectives. These objectives should be determined based on earlier decisions about the target market, positioning, and marketing mix. The marketing positioning and mix strategy dictate the role that advertising must play in the whole marketing program.

An advertising objective is a particular communication task directed towards a definite target audience within a specific time period. Advertising objectives can be classified by basic purpose-to inform, persuade, or remind.

Examples of each of these objectives are shown in the table given below:

Informative advertising is used to inform consumers about a new product or feature and to build primary demand.

For example, producers of compact-disc players first informed consumers of the sound and convenience benefits of CDs.

Persuasive advertising is used to build selective demand for a brand by persuading consumers that it offers the best quality.

For example, when compact-disc players became established, Sony began trying to persuade consumers that its brand offered the best quality for their money.

Some persuasive advertising has turned into comparison advertising, in which a company directly or indirectly compares its brand with one or more other brands.

For example, Procter & Gamble positioned Scope mouthwash against Listerine, claiming that minty-fresh Scope “fights bad breath and doesn’t give medicine breath.”

Comparison advertising has also been used for soft drinks, computers, automobiles, deodorants, toothpaste, and pain relievers.

Reminder advertising is especially important for mature products. Reminder advertising is used to keep consumers thinking about a product. Coca-Cola ads on television are designed primarily to remind people about Coca-Cola, not inform or persuade them.

2. Budget Decisions

After outlining its advertising objectives, the company moves on setting its advertising budget for each product. Adverting aims at manipulating demand for a product. The company tries to spend the amount required to achieve the sales goal.

We will discuss some specific factors that should be considered when setting the advertising budget; these factors can be stated as under :

• Stage in the Product Life-Cycle: A product in the introduction stage needs large advertising budgets to create awareness and gain consumer trial. In contrast, products in the maturity stage usually require lower budgets as a ratio to sales.
• Market Share: Brands that enjoy high-market share need more advertising budget as a percent of sales than low-share brands. Building the market or taking share from competitors requires larger advertising budgets than simply maintaining the current share.
• Competition and Clutter: In a highly competitive market where advertising spending is also large, a brand should be advertised heavily to attract buyers.
• Advertising Frequency: The advertising budget must be larger in a situation where advertising frequency is higher.
• Product Differentiation: A brand that closely resembles other brands in its product class requires heavy advertising to maintain its distinctive image. If the product differs significantly from competitors, advertising can be used to project the differences to consumers.

3. Message Decisions – Advertising Strategy

Advertising strategy has two important components; creating advertising messages and selecting advertising media.

Traditionally, most companies developed messages and media plans separately. Media planning often was considered secondary to the message creation process. The creative department first created quality advertisements.

Then the media department selected the most appropriate media for carrying these advertisements to target audiences. This, in many cases, resulted in conflict between creatives and media planners.

Today, media fragmentation, increasing media costs, and more concentrated target marketing strategies have recognized the importance of the media planning function. An advertising campaign might begin with a great message idea, followed by choice of appropriate media.

Reversely, a campaign might begin with good media potential, followed by advertisements designed to take advantage of that potential. Companies increasingly realize the benefits of planning these two important elements simultaneously.

Messages and media should blend properly so that the overall advertising campaign can be made most effective.

Creating the advertising message

A big advertising budget does not necessarily ensure the success of an advertising campaign. The same amount of spending on advertisement by more than one advertisers might produce varying results.

Studies reveal that creative advertising messages are more important than the money spent on advertising for advertising success.

Regardless of the size of the advertising budget, the success of advertising depends on the advertisement’s capacity to gain attention and communicate well.

The changing message environment

With the increase in the number and availability of media due to amazing technological advancements, the environment in which advertising message is given is also changing.

In mind, advertising messages must be better planned, more imaginative, more entertaining, more appealing, and more rewarding to the target consumers.

It goes without saying that creative advertising will assume an increasingly important role in the success of advertising.

Message strategy

Creating an advertising message starts with deciding what general message will be communicated to consumers. This requires planning a message strategy. Advertising aims at getting consumers to think about or react to the product or company in a particular way. Consumers will react only if they feel that they will benefit from doing so.

Therefore, what customer benefits can be used as advertising appeals should be identified first to develop an effective message strategy.

One approach to identify customer benefits is to talk directly to dealers, experts, and competitors. Another approach is to try to imagine consumers buying or using the product to figure out the benefits they seek. Ideally, the advertising message strategy will star directly from the company’s broader positioning strategy.

Message strategy statements should highlight the benefits and positioning points simply and directly. These strategy statements must be transformed into advertisements capable of persuading consumers to buy a product or accept some idea.

The advertiser must now develop a convincing and creative concept that will transform message strategy into distinct and appealing advertisements. Thus, simple message ideas take the shape of big ad campaigns.

The creative concept will guide the selection of specific appeals to be used in an advertising campaign. A good advertising appeal should have three characteristics.

First, it should be meaningful- indicating benefits that make the product more desirable or interesting.

Second, an appeal must be believable; consumers must believe that the product or service will give the benefits that have been claimed. However, the most meaningful and believable benefits may not be considered the best ones to feature.

Third, appeals should also be distinctive. They should clearly indicate how the product is better than the competing brands.

For example, owning a wristwatch is the most meaningful benefit because it keeps accurate time, yet few watch ads feature this benefit. Instead, watch advertisers select any of several advertising themes based on the distinctive benefits they offer.

For years, Timex has been the affordable watch that “Took a licking and kept on ticking.” In contrast, Swatch has featured style and fashion, whereas Rolex stresses luxury and status.

Message execution

The impact of the message depends on two things – what is said and how it is said. The advertiser now has to transform the creative concept into an actual ad execution that will attract the target market’s attention and interest.

The advertiser must find the style, tone, words, and format for executing the message. Different execution styles may be adopted for presenting any message, such as the following:

• Slice of life: This style shows one or more “typical” people using the product in a normal setting. For example, two mothers at a picnic discuss the nutritional benefits of Jif peanut butter.
• Life-style: This style shows how a product fits in with a particular life-style. For example, a National Dairy Board ad shows women exercising and talks about how milk adds to a healthy, active life­style.
• Fantasy: This style creates a fantasy around the product or its use. For instance, Revlon’s first ad for Jontue showed a barefoot woman in a chiffon dress coming out of an old French barn, crossing a meadow, meeting a handsome young man on a white horse, and riding away with him.
• Mood or image: This style builds a mood or image around the product, such as beauty, love, or serenity. No claim is made about the product except through suggestion. Bermuda tourism ads create such moods.
• Musical: This style shows one or more people or cartoon characters singing a song about the product. Sears intones, “Come see the softer side of Sears.”
• Personality symbol: This style creates a character that represents the product. The character might be animated (the Jolly Green Giant, Cap’s Crunch, Garfield the Cat) or real (the Marlboro man, Betty Crocker, Morris the I-Lives Cat).
• Technical expertise: This style shows the company’s expertise in making the product. Thus, Maxwell House shows one of its buyers carefully selecting the coffee beans, and Gallo tells about its many years of wine-making experience.
• Scientific evidence: This style presents a survey or scientific evidence that the brand is better or better liked than one or more other brands. For years, Crest toothpaste has used scientific evidence to convince buyers that Crest is better than other brands at fighting cavities.
• Testimonial evidence: This style features a highly believable or likable source that endorses the product. It could be a celebrity like Bill Cosby (Jell-O Pudding or Kodak film) or ordinary people saying how much they like a given product (“My doctor saidMylanta”).

4. Media Decisions – Selecting Advertising Media

The advertiser also must choose a tone for the ad. Procter & Gamble always use a positive tone. Its ads say something very positive about its products. P&G also avoids humor that might take attention away from the message. In contrast, Little Caesar’s “pizza, pizza” ads use humor- in the form of the comical Little Caesar character – to drive home the advertiser’s “Two for the price of one” message.

The advertiser must use memorable and attention-getting words in the ad. For example, the following themes on the left would have much less impact without the creative phrasing on the right:

Conclusively, format elements of an ad account for a difference in its impact and cost.

A minor change in ad design can have a major influence on its effects. The reader of an advertisement first notices its illustration.

So, the illustration must be powerful enough to draw the readers’ attention. The headline must effectively allure the reader to go through the copy.

The copy, which is the main block text in the ad, must be clear, lucid, powerful, and convincing. In the end, these three elements must go together to ensure maximum effectiveness.

Media selection involves four major steps which are:

1. deciding on reach, frequency, and impact;
2. Choosing among major media types;
3. selecting specific media vehicles; and
4. deciding on media timing.

These four steps can be stared elaborately as under:

Deciding on reach, frequency, and impact

For media selection, the advertiser must decide on the reach and frequency needed to accomplish advertising objectives. Reach is a measure of the percentage of people in the target market exposed to the ad campaign during a given span of time.

For instance, the advertiser might try to reach 80 percent of the target market during the first four months of the campaign. Frequency is the number of times the average person in the target market is exposed to an advertising message during a given period.

For example, the advertiser might expect an average exposure frequency of four. The advertiser must also decide on the expected media impact. The qualitative value of a message exposure through a given medium has to be assessed.

For example, for products needing demonstration, advertisements on television will have more impact than advertisements on the radio because television is an audio-visual medium. The same advertisement in one newspaper may be more believable than in another.

Suppose that the advertiser’s product might appeal to a market of 100,000 consumers. The goal is to reach 80,000 consumers (80 percent of 100,000).

Because the average consumer will receive four exposures, i.e., 320,000 exposures (80,000 x 4) must be bought.

If the advertiser wants 1.5 impacts (assuming 1.0 impact is the average), a rated number of exposures of 480,000 (320,000 x 1.5) must be bought.

If a thousand exposures with this impact cost $100, the advertising budget will have to be;

= (480,00 / 1000) X 100 =$48,000. The more the reach, frequency, and impact the advertiser wants, the higher the advertising budget will have to be.

Choosing among major media types

The advertiser needs to know the reach, frequency, and impact of each of the major media types for media planning. The major media types are newspapers, television, direct mail, radio, magazines, and outdoor.

In making media choices, media planners take into account many factors. The media habits of target consumers will influence media choice. For example, radio is the best media for reaching the rural population. The nature of the product also affects media choice. Detergents are best advertised on television.

Different types of media are suitable for different types of messages. A message announcing a major sale tomorrow should go through radio or newspapers. A message containing a lot of technical data might require magazines or direct mailings. Cost is also an important factor in media choice.

For example, newspaper advertising is cheaper than television advertising. The media planner considers both the total cost of using a medium and the cost per thousand exposures (the cost of reaching 1,000 people using the medium). Media impact and cost must be reviewed regularly.

This will enable the advertiser to switch over to more cost-effective media. After considering the various media characteristics, the media planner will decide how much of each medium type to use.

For example, in launching a new biscuit product, Nabisco may spend $5 lacs advertising on radio, $3 million on television, and $2 million in newspapers.

Selecting specific media vehicles

At this stage, the media planner must select the best media vehicles. Media vehicle is the specific media within each general media type, such as specific magazines, television programs, or radio programs

For example, television vehicles include “Drama Serial.”

If the advertisement is given in magazines, the media planner must consider circulation figures and the costs of different ad sizes, color options, ad positions, and frequencies for specific magazines.

The planner must then evaluate each magazine based on credibility, status, reproduction quality, editorial focus, and advertising submission deadlines. The media planner finally decides which vehicles give the maximum reach, frequency, and impact of the money.

Media planners also calculate the cost per thousand persons reached by a vehicle.

For example, if a full-page advertisement in a magazine-A cost $5,000 and a magazine-A’s readership is 40,000 people, the cost of reaching each group of 1000 persons is %125.

The same advertisement in magazine-B may cost only $3,000 but reach only 15,000 persons, the cost of reaching each group of 1000 persons is $200.

The media planner would rank each magazine by cost per thousand and prefer those magazines with a lower cost per thousand for reaching target consumers.

The media planner must consider the costs of producing ads for various media. Newspaper ads may cost hundreds, while television ads may cost thousands.

So, intelligent media planners should balance media cost measures against several media impact factors such as vehicle quality, audience attention, and vehicle’s editorial quality.

Media timing

The advertiser must also make decisions on scheduling the advertising over a specific time period – generally one year. Suppose a product’s sale reaches the maximum in October and the minimum in February.

The seller can make variations in his advertising. Advertising can be done to follow the seasonal pattern, oppose the seasonal pattern, or be the same all over the year. Most firms do some seasonal advertising while some do only yearly advertising. Bombay Sweets advertises its vermicelli only before Eids.

Finally, the advertiser has to decide on the pattern of advertisements. The advertiser may go for either ‘continuity’ or ‘pulsing.’ Scheduling ads evenly within a given period means continuity.

Scheduling ads unevenly over a given time period means pulsing. Thus 104 ads could either be scheduled at two per week during the year or pulsed in several bursts.

The objective is to advertise heavily for a short period to create awareness that carries over to the next advertising period. Advocates of pulsing maintain that it can be used to achieve the same impact as a steady schedule at a lower cost.

5. Campaign Evaluation – Advertising Effectiveness Evaluation

To ensure the maximum effectiveness of advertising, the advertiser should regularly evaluate both the communication effects and sales. This can be discussed in the following sections:

Measuring the Communication Effect

The communication effect of an ad is measured through copy testing, which tells whether the ad communicates well. Copy testing can be conducted either before or after an ad is released. There are three major ways of advertising – direct rating, portfolio tests, and laboratory tests.

1. Direct Rating: Indirect rating, the advertiser exposes a consumer panel to alternative ads and asks them to rate the ads. These direct ratings indicate two things; how well the ads get attention and how they affect consumers. Although this is not a perfect measure of an ad’s actual impact, a high rating indicates a potentially more effective ad.
2. Portfolio Test: In portfolio tests, consumers view or listen to a portfolio of advertisements taking sufficient time. They then are asked to recall all the ads and their content. In this process, they can be aided or unaided by the interviewer. Their recall level indicates an ad’s ability to be distinctive and its message to be understood and remembered.
3. Laboratory Test: In laboratory tests, equipment is used to measure consumers’ physiological reactions to an ad such as heartbeat, blood pressure, pupil dilation, perspiration. Advertising pretests measure an ad’s attention-drawing ability. But these tests can not tell anything about the ad’s impact on beliefs, attitudes, or intentions.

Methods of post-testing ads are of two types; recall-tests and recognition tests.

1. In recall tests, the advertiser asks people who have been exposed to newspapers or television programs to recall everything they can about the advertisers and products they watched. Recall scores indicate the ad’s power to be noticed and memorized.
2. In recognition tests, readers are given a particular issue of a magazine. Then they are asked to point out what they recognize as having seen before. Recognition scores can be accepted as indicators of an ad’s impact in different market segments and can also compare the company’s ads with those of competitors.

Measures the Sales Effect

In reality, measuring the sales effect of advertising is harder than doing the same for communication. Advertising is not the only factor that affects sales. Product features, price, and availability are other factors that have a significant influence on sales.

One method of measuring the sales effect of advertising is to compare past sales with past advertising expenditures. This can be done by correlation analysis. Another method is through experiments.

For example, to test the effects of different advertising spending levels, “Keya” could vary the amount it spends on advertising in different market areas and measures the resulting sales levels’ differences.

It could spend the normal amount in one market area, half the normal amount in another area, and twice the normal amount in a third area.

If the three market areas are similar, and if all other marketing efforts in the area are the same, then differences in sales in the three market areas could be related to the advertising level.

Other variables, such as differences in the ads or media used, could be included to design more complex experiments.