Marketing Management II

Pilar Díaz-Usechi

Chapter 15: Advertising and Public Relations

1. Advertising
Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or
services by an identified sponsor. It is a good way to engage, inform, and persuade.
2. Major Advertising Decisions
Marketing management must make four important decisions when developing an advertising
program:

2.1 Setting Advertising Objectives

These objectives should be based on past decisions about the target market, positioning, and
the marketing mix, which define the job that advertising must do in the total marketing
program. The overall advertising objective is to help engage customers and build customer
relationships by communicating customer value.
Advertising objective: A specific communication task to be accomplished with a specific target
audience during a specific period of time.
They can be classified by their primary purpose—to inform, persuade, or remind.

 Informative advertising is used heavily when introducing a new product category. In this
case, the objective is to build primary demand.
 Persuasive advertising becomes more important as competition increases. The
company’s objective is to build selective demand. Some has become comparative
advertising (or attack advertising), in which a company directly or indirectly compares its
brand with one or more other brands. Comparative advertising campaigns often create
controversy.
 Reminder advertising: is important for mature products; it helps to maintain customer
relationships and keep consumers thinking about the product.

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2.2 Setting the Advertising Budget

Advertising budget: The dollars and other resources allocated to a product or a company
advertising program.
Specific factors that should be considered when setting the advertising budget:
Its stage in the product life cycle. For example, new products typically need relatively large
advertising budgets to build awareness and to gain consumer trial. In contrast, mature brands
usually require lower budgets as a ratio to sales.
Also, brands in a market with many competitors and high advertising clutter must be advertised
more heavily to be noticed above the noise in the marketplace.
Undifferentiated brands—those that closely resemble other brands in their product class (soft
drinks, laundry detergents)—may require heavy advertising to set them apart. When the
product differs greatly from those of competitors, advertising can be used to point out the
differences to consumers.
2.2.1 Developing Advertising Strategy
Advertising strategy: The strategy by which the company accomplishes its advertising
objectives. It consists of two major elements: creating advertising messages and selecting
advertising media.
Today, soaring media costs, more-focused target marketing strategies, and the blizzard of new
online, mobile, and social media have promoted the importance of the media-planning
function.
2.2.2 Creating the Advertising Message and Brand Content
Advertising can succeed only if it engages consumers and communicates well. Good advertising
messages and content are especially important in today’s costly and cluttered advertising
environment.

 Breaking Through the Clutter:

If all this clutter bothers some consumers, it also causes huge headaches for marketers. Digital
technology has allowed consumers to choose what and when they watch something, so they
choose not to watch ads. Simply interrupting consumers with ads no longer works. Unless ads
provide content that is engaging, useful, or entertaining, many consumers will simply ignore or
skip them.

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 Merging Advertising and Entertainment:

Madison & Vine: A term that has come to represent the merging of advertising and
entertainment in an effort to break through the clutter and create new avenues for reaching
customers with more engaging messages.
It is a mix of Madison Avenue, the New York City street that houses the headquarters of many
of the nation’s largest advertising agencies, and Hollywood & Vine, the intersection of
Hollywood Avenue and Vine Street in Hollywood, California, long the symbolic heart of the U.S.
entertainment industry. Madison & Vine represents the merging of advertising and
entertainment in an effort to create new avenues for reaching consumers with more engaging
messages.
This merging of advertising and entertainment takes one of two forms: advertainment or brand
integrations.
o Advertainment: make ads and brand content themselves so entertaining or so
useful that people want to watch them. (Example: the ads of the Super Bowl)
o Brand integrations (or branded entertainment): making the brand an inseparable
part of some other form of entertainment or content. The most common form is
product placements—embedding brands as props within other programming.
(Example: showing someone drinking Coca Cola on a TV show)
A related form of brand integration is so-called native advertising (also called
sponsored content).
Native advertising: Advertising or other brand-produced online content that
looks in form and function like the other natural content surrounding it on a web
or social media platform. (Example: Facebook ad on Facebook feed)

 Message and Content Strategy:

The first step in creating effective advertising content is to plan a message strategy—the
general message that will be communicated to consumers. The purpose of advertising is to get
consumers to engage with or react to the product or company in a certain way. Developing an
effective message strategy begins with identifying customer benefits that can be used as
advertising appeals.
Message strategy statements tend to be plain, straightforward outlines of benefits and
positioning points that the advertiser wants to stress. The advertiser must next develop a
compelling creative concept.
Creative concept: The compelling “big idea” that will bring an advertising message strategy to
life in a distinctive and memorable way.

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Advertising appeals should have three characteristics.

o They should be meaningful, pointing out benefits that make the product more desirable
or interesting to consumers.
o They must be believable. Consumers must believe that the product or service will
deliver the promised benefits.
o They should be distinctive. They should tell how the product is better than competing
brands.

 Message Execution:
The advertiser now must turn 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 execution style.
Execution style: The approach, style, tone, words, and format used for executing an advertising
message.
Types of execution style:
o Slice of life: shows one or more “typical” people using the product in a normal
setting.
o Lifestyle: shows how a product fits in with a particular lifestyle.
o Fantasy: creates a fantasy around the product or its use.
o Mood or image: builds a mood or image around the product or service, such as
beauty, love, intrigue, serenity, or pride.
o Musical: shows people or cartoon characters singing about the product.
o Personality symbol: creates a character that represents the product. The character
might be animated (Mr. Clean, the GEICO Gecko, or the Pillsbury Doughboy) or real
(perky Progressive Insurance spokeswoman Flo or Ronald McDonald).
o Technical expertise: shows the company’s expertise in making the product.
o Scientific evidence: presents survey or scientific evidence that the brand is better or
better liked than one or more other brands.
o Testimonial evidence or endorsement: features a highly believable or likable source
endorsing the product. It could be ordinary people saying how much they like a
given product.
The advertiser also must choose a tone for the ad. For example, P&G always uses a positive
tone: Its ads say something very positive about its products. Other advertisers now use edgy
humor to break through the commercial clutter (Example: Doritos commercials). The advertiser
must use memorable and attention-getting words in the ad.
A small change in an ad’s design can make a big difference in its effect. In a print or display ad,
the illustration must be strong enough to draw attention, the headline must effectively entice
the right people to read the copy, and the copy (main block of text in the ad) must be simple

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but strong and convincing. These three elements must effectively work together to engage
customers and persuasively present customer value.

 Consumer-Generated Content: Many companies are tapping consumers for marketing

content, message ideas, or even actual ads and videos. User-generated content can
incorporate the voice of the customer into brand messages and generate greater
customer engagement.
2.2.3 Selecting Advertising Media
Advertising media: The vehicles through which advertising messages are delivered to their
intended audiences.
The major steps in advertising media selection are:

 Determining Reach, Frequency, Impact, and Engagement:

To select media, the advertiser must determine the reach and frequency needed to achieve the
advertising objectives. Reach is a measure of the percentage of people in the target market
who are exposed to an 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 a message. The
advertiser also must determine the desired media impact—the qualitative value of message
exposure through a given medium. Products for which consumers provide input on design or
features might be better promoted at an interactive website or social media page than in a
direct mailing. More generally, an advertiser wants to choose media that will engage
consumers rather than simply reach them.

 Choosing among Major Media Types:

Media planners want to choose a mix of media that will effectively and efficiently present the
advertising message to target customers. Thus, they must consider each medium’s impact,
message effectiveness, and cost.

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 Selecting Specific Media Vehicles:

Media planners must choose the best media vehicles—specific media within each general
media type. For example, television vehicles include Modern Family and ABC World News
Tonight. Magazine vehicles include Time, Real Simple, and ESPN The Magazine. Online and
mobile vehicles include Twitter, Facebook, Instagram, and YouTube.
Media planners must compute the cost per 1,000 persons reached by a vehicle. Media planners
must also consider the costs of producing ads for different media.
In selecting specific media vehicles, media planners must balance media costs against several
media effectiveness factors. First, the planner should evaluate the media vehicle’s audience
quality. Second, the media planner should consider audience engagement. Third, the planner
should assess the vehicle’s editorial quality.

 Deciding on Media Timing:

An advertiser must also decide how to schedule the advertising over time. Suppose sales of a
product peak in December and drop in March (for winter outdoor gear). The firm can vary its
advertising to follow the seasonal pattern, oppose the seasonal pattern, or be the same all
year.

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2.3 Evaluating Advertising Effectiveness and the Return on Advertising Investment

Return on advertising investment: The net return on advertising investment divided by the
costs of the advertising investment.
Measuring advertising effectiveness and the return on advertising investment has become
important for most companies. Advertisers should regularly evaluate two types of advertising
results: the communication effects and the sales and profit effects. Measuring the
communication effects of an ad tells whether the ads and media are communicating the ad
message well. Sales and profits are affected by many factors other than advertising—such as
product features, price, and availability. One way to measure the sales and profit effects of
advertising is to compare past sales and profits with past advertising expenditures. Another
way is through experiments.
2.4 Other Advertising Considerations
In developing advertising strategies and programs, the company must address two additional
questions.

 How will the company organize its advertising and content function—who will perform
which advertising tasks?
 How will the company adapt its advertising strategies and programs to the complexities
of international markets?
2.4.1 Organizing for Advertising
Different companies organize in different ways to handle advertising. In small companies,
advertising might be handled by someone in the sales department. Large companies have
advertising departments whose job it is to set the advertising budget, work with ad agencies,
and handle other advertising not done by an agency.
Advertising agency: A marketing services firm that assists companies in planning, preparing,
implementing, and evaluating all or portions of their advertising programs. Agencies also bring
an outside point of view to solving the company’s problems along with lots of experience from
working with different clients and situations.
2.4.2 International Advertising Decisions
International advertisers face many complexities not encountered by domestic advertisers. The
most basic issue concerns the degree to which global advertising should be adapted to the
unique characteristics of various country markets. Some advertisers have attempted to support
their global brands with highly standardized worldwide advertising, with campaigns that work
everywhere in the world. The increased popularity of online marketing and social media sharing
has boosted the need for advertising standardization for global brands.

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3. Public Relations
Public relations (PR): 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.
PR may include any of the following functions:

 Press relations or press agency: Creating and placing newsworthy information in the
news media to attract attention to a person, product, or service.
 Product and brand publicity: Publicizing specific products and brands.
 Public affairs: Building and maintaining national or local community relationships.
 Lobbying: Building and maintaining relationships with legislators and government
officials to influence legislation and regulation.
 Investor relations: Maintaining relationships with shareholders and others in the
financial community.
 Development: Working with donors or members of nonprofit organizations to gain
financial or volunteer support.
Public relations is used to promote products, people, places, ideas, activities, organizations, and
even nations. Companies use PR to build good relations with consumers, investors, the media,
and their communities. It is often used to build support for newsworthy company events and
actions.
3.1 The Role and Impact of PR
Like other promotional forms, public relations has the power to engage consumers and make a
brand part of their lives and conversations. However, public relations can have a strong impact
at a much lower cost than advertising can. Interesting brand stories, events, videos, or other
content can be picked up by different media or shared virally by consumers, giving it the same
or even greater impact than advertising that would cost millions of dollars.
Despite its potential strengths, public relations has limited and scattered use. The PR
department is often located at corporate headquarters or handled by a third-party agency. Its
staff is so busy dealing with various publics—stockholders, employees, legislators, and the
press—that PR programs to support product marketing objectives may be ignored.
4. Major Public Relation Tools
Public relations uses several tools.

 News: Sometimes news stories occur naturally; other times the PR person can suggest
events or activities that create favorable news about the company and its products or
people.

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 Special events: ranging from news conferences and speeches, brand tours, and
sponsorships to multimedia presentations or educational programs designed to reach
and interest target publics.
 Written materials: These materials include annual reports, brochures, articles, and
company newsletters and magazines.
 Audiovisual materials: videos.
 Corporate identity materials: can help create a corporate identity that the public
immediately recognizes. Logos, stationery, brochures, signs, business forms, business
cards, buildings, uniforms, and company cars and trucks all become marketing tools
when they are attractive, distinctive, and memorable.
 Companies can improve public goodwill by contributing money and time to public
service activities.
 The web and social media are also important PR channels. Websites, blogs, and social
media such as YouTube, Facebook, Instagram, Snapchat, Pinterest, and Twitter are
providing new ways to reach and engage people.
As with the other promotion tools, in considering when and how to use product public
relations, management should set PR objectives, choose the PR messages and vehicles,
implement the PR plan, and evaluate the results. The firm’s PR should be blended smoothly
with other promotion activities within the company’s overall integrated marketing
communications effort.