INTRODUCTION TO ADVERTISING MANAGEMENT

Module 1
Module 1
Agenda

• Meaning of Advertising

• Importance of Advertising

• History of Advertising

• Classification of Advertising

• Functions of Advertising

• AIDAS

1
Advertising
• Advertising is defined as “any paid form of non- personal presentation of ideas,

goods and services by an identified sponsor”.

2
Features of Advertising

• Advertising is of various forms: It can be a sign or symbol.

It can be an illustration or message or both. It could be
conveyed through any mass media like TV, radio, press or
magazines
• Advertising is non- personal and thus excludes any face-
to- face communication
• Advertising is openly paid for by an identified sponsor.
The message is put by an organization selling products or
services. It could be a commercial or non- commercial
organization
• Advertising just tries to influence the behavior of the
target audience
• It is a silent but forceful salesmanship. It helps to pre- sell
a product
Advertising Management

• Advertising Management consists of all the

activities involved in presenting to a group a
non- personal, oral or visual, openly sponsor
identified message regarding a product,
service or idea. This message, called an
advertisement, is disseminated through one
or more media and is paid for by the
identified sponsor
Merits/ Importance/ Functions of
Advertising
• Informs the buyers about the existence of the
product, its features, its benefits and its availability
• Builds brands, gives an image and personality to the
brand
• Contributes to brand loyalty
• Most cost effective way to reach consumers. It
reduces selling costs
• Persuades people to act
• Delivers the same message consistently in a variety
of contexts
• Reach prospects that cannot be approached by
salesmen
De- merits of Advertising

• Excludes face- to- face communication and

hence objections raised by prospects remain
unanswered
• It is a one- sided communication and hence
cannot obtain quick and accurate feedback
needed to evaluate message effectiveness
• Repetition of advertisements involves
additional cost
• It, many a times, lacks credibility and trust
worthiness
• It creates noise in communication as
newspapers, magazines etc., carry many
messages competing to secure attention of
the audience simultaneously
Objectives of Advertising

• Closing and immediate sale

• Move the prospect step- by- step closer to a sale
• Build a brand image
• Contribute to increased sale
• Aim at some specific steps leading to sale
• To inform the consumers to consummate sales
and build customer satisfaction
• To help the sales force and to help the trade
channels
• To project a corporate image
Factors Responsible for Changing
Concept of Advertising
1. Globalization (Integration of world economy): The marketing in global context is more
complex and hence advertising has also become more challenging
2. Government Regulations: Government regulations and code of conduct for
advertisements is common in almost all the nations. This has also changed the
advertising landscape
3. Increasing Competition: Today ‘s cut- throat competition is forcing the advertisers to
make their presentations creative, innovative and different from others in order to make
uniqueness in the communication
4. Technological Developments: The growth in technology has helped the advertisers to
make advertisements more effective and distinguishable
5. Other Factors: Other factors like educational level and standard of living of the people,
literacy rate, changes in tastes and preferences etc. are also responsible for changes in
advertisements
Major Institutions involved in the Field of
Advertising Management
• Refer diagram on Page 18 of Myers and Aaker text or Page 3 of Gupta Text
• Core Institution:
 The Advertiser
 The advertiser is the core institution in the field of advertising management
 The expenditures of advertisers provide the basis for estimates of the size of the
advertising industry
• Controlling Institutions:
 Government
 Competition
• Facilitating Institutions:
 Advertising Agency
 In most cases, the advertising agency makes the creative and media decisions.
 It also often supplies supportive market research and is even involved in the total
marketing plan
Major Institutions involved in the Field of
Advertising Management

 In some advertiser- agency relationships, the agency acts quite autonomously

in its areas of expertise; in others, the advertiser remains involved in the
creative and media decisions as the campaign progresses
 Examples for ad agencies: Ogilvy & Mather, Lowe Lintas, Mudra
Communications, OOH Media
 Media
• It could be newspaper, magazine, TV or Radio
 Research Suppliers
 It refers to companies that supply research services to advertisers, advertising
agencies and the media
 Examples for Research Suppliers: The Audit Bureau of Circulations (ABC) –
audit of newspaper circulation, A . C. Nielsen- television program rating
services
Advertising as a Communication Process

• Communication is a process of passing information and

understanding from one person to another. It involves
the following elements:
 Sender: Communication begins from the sender
who wants to transmit the message to another person
 Message: The idea or information in the physical
form
 Encoding: Putting the message into appropriate
words, symbols or gestures

6
 Advertising as a Communication Process

 Channel: The method or vehicle used to transmit the message

 Receiver: The person to whom the message is sent and he perceives the message and
attaches some meaning to the message

 Decoding: Attaching meaning to the message sent. The communication will be effective
when sender’s message commensurate with the receiver's understanding

 Feedback: The reversal in communication process is the feedback whereby, the receiver
expresses the response of the sender’s message
 Types of Advertising
I. Geographical Spread

1. National Advertising : Some manufacturers may

think that their target is the entire country. They
select media with a countrywide base. Generally,
large, established firms belong to this category.
Among them are Hindustan Unilever, Marico,
Godrej etc.
2. Local Advertising: Small firms may like to restrict
their business to State or regional level. Some
firms first localize their marketing efforts and
once success has been achieved, they spread out
to wider horizons. A classic example is Nirma
washing powder, which initially was sold only in
Gujarat and subsequently entered the other
markets. Similarly, Fanta Apple was initially sold
only in Chennai
3. Global Advertising: Multinational firms treat the
world as their market. Firms such as IBM, Sony,
Luis Vuitton, Tommy Hilfiger etc. advertise
globally in periodicals like Newsweek, Time,
 Types of Advertising
II. Target Group

a)Consumer Advertising: A substantial portion of total advertising is directed to buyers of

consumer products who purchase them either for their own use or for their household’s. The
fact that buyers of consumer items are generally very large and are widely distributed over a
large geographical area enhances the importance of advertising as a marketing tool. These
advertisements are intended to promote sale of the advertised products by appealing directly
to the buyers. Such advertising is called consumer advertising.
 Types of Advertising

b) Industrial Advertising: Industrial advertising refers to those advertisements which are

issued by the manufacturers/ distributors to the buyers of industrial products. This category
would include machinery and equipment, industrial intermediates, parts and components, etc.
Because of the unique characteristics of industrial buying decision process, the importance of
industrial advertising is comparatively lower than that of consumer advertising
Types of Advertising

c) Trade Advertising: Advertisement s which are

directed by the manufacturers to the distribution
channel members, such as wholesalers or retailers,
are called Trade Advertising. The objective of such
advertising is to promote sales by motivating the
distribution channel members to stock more or to
attract new retail outlets
d) Professional Advertising: There are certain
products for which the consumers themselves are
not responsible for the buying choice. The classic
examples are pharmaceuticals where the decision
is made be the doctors while the consumers are
the patients. Almost similar situation exists in the
field of construction, where architects, civil
engineers and contractors are the decision-
makers. Firms operating in such market segments,
therefore, have to direct their advertising to these
decision- makers, who are professional people.
Such advertising is called Professional Advertising
 Types of Advertising
•We shall now discuss in detail the following
broad categories of advertising:
a.Product Advertising
b.Service Advertising
c.Institutional Advertising (Corporate
Advertising)
d.Public Relations Advertising
e.Public Service Advertising
f.Financial/ Issue Advertising
g.International Advertising
Product Advertising

• Product Advertising conveys information about

a product
• Product is the very heart of any advertising
program
• Product Advertising is of three types:
i. Pioneering Advertising
ii. Competitive Advertising
iii. Retentive Advertising
Pioneering Advertising
• Here, an attempt is made to stimulate the
primary demand for the product category
rather than a specific brand
• Here the product category is first introduced
• It is educative in intent
• It appeals to consumer’s emotions as well as
to his rational motives
• Pioneering Advertising is relevant in the
introductory stage of Product Life Cycle
• The initial advertising of micro- wave ovens,
electric mosquito repellants etc. are of this
type
• Some popular examples are initial
advertisements of Hand wash by Dettol,
Noodles by Maggi and Men’s Fairness Cream
by Emami
 Competitive Advertising
• Here, selective demand of a specific
product brand is stimulated
• By now, the product is established in the
market and has reached the growth or
maturity stage of Product Life Cycle
• Competitive Advertising is of two types:
1. Direct Type: It seeks to stimulate
immediate buying action
2. Indirect Type: Here the benefits of the
product are emphasized in anticipation
of the consumer’s final action of buying
 Retentive Advertising
• The product is now having a firm footing in the market
• Its sales may start declining later
• The buyer must be reminded about the product to sustain his loyalty
 Service Advertising
• Services are activities, benefits, or
satisfactions offered for sale
• They are intangible, inseparable,
variable and perishable
• Service advertising refers to the
advertising of services
• Service advertisements may talk
about the congenial environment,
quickness and promptness of service,
economy, exclusiveness, status,
significance etc.
 Institutional/ Corporate Advertising
• Institutional Advertising aims at building a
positive public image of the firm in the eyes
of the public
• Institutional advertising does not attempt to
sell a particular product; it benefits the
organization as a whole
• It notifies the consumers that the company
is a responsible business entity
• Corporate or Institutional Advertising gives a
face to the company
• Some popular examples are advertisements
of Godrej and Aditya Birla Group
Public Relations Advertising

• Public Relations Advertising

represents the management and
communicates the policies,
problems and performances to the
public
• PR Advertising generally precedes
the share issues these days to
create a favorable climate for the
investing public
• Public Relations Advertising is a
must at the times of crisis . It can
act as an effective damage control
device
• Many areas of Institutional and PR
Advertising may overlap. In fact,
PR Advertising is a part of
Institutional Advertising
 Public Service Advertising

• Public Service Advertising is done as a part of social responsibility

• It seeks to promote important social issues
• It is created to promote greater awareness of public causes
• “Save Tigers” initiative of Aircel, “Jago Re” campaign of Tata Tea, advertisements against
smoking, female foeticides etc. are examples
• National Integration, Ads, Family Planning Ads , PETA Ads etc. are some other examples
 Financial/ Issue Advertising

• These are perception- altering ads broadcasted just weeks before the public issue
• It helps to prepare the general public for a major issue
• It gives the highlights of the project, details of the issue, CRISIL Rating, management’s
perception of risk factors, closing date of the issue, lead manager’s names and addresses,
name of the company and its address
• For example, a mighty wave was created with Petro Gold for Mangalore Refinery
• It resulted in 48 lacs applications for its Convertible Debentures and created a world record
• The dividing line between Corporate/ Institutional Advertising, PR Advertising and Financial /
Issue Advertising is getting thinner
 International Advertising

• Same as Global Advertising which has already been explained

History of Advertising

• The earliest forms of advertising were

in the form of signboards and writing
on the walls of prominent buildings
• Posters and pamphlets were also used
in those days
• The advertisements were more passive
and their scope was very much limited
in those days
• The importance of advertising was
doubled when the hand press was
invented at the end of the 15th century
• The invention of printing machines
further aided for the development of
advertising techniques through
handbills, magazines, newspapers and
handbooks
History of Advertising
• Industrial Revolution in England
led to mass production of goods
which in turn led to mass
advertising in the latter half of the
19th century
• In 1841, the first advertising
agency was founded by Volney
Palmer in Philadelphia, USA
• In 1875, the first modern
advertising agency, N.W.Ayer &
Sons, was set up in Philadelphia,
USA
• In 1882, P&G released its first
national advertisement for its
soap brand ‘Ivory’ in USA
• In 1883, Coca Cola registered its
trademark
History of Advertising

• So we can say that modern advertising has its

roots in England even though the Americans
are the forerunners in modern advertising
• Rosser Reeves of the Ted Bates Agency ( now
part of Backer Spielvogel Bates, itself part of
the Saatchi Group) introduced the concept of
USP (Unique Selling Proposition) to
differentiate a product from its competitive
products
• Advertising was further stimulated by the
increased literacy
• Computers, Satellite Television and Internet
has affected advertising a great deal
 Advertising in India
• Dattaram & Company , the first advertising agency
in India, was founded in 1905 in Mumbai
• The agency released its first ad in 1907 for West
End Watch Co., Mumbai
• In 1926, JWT (James Walter Thomson) started its
operations while O&M came to India in 1928
• In 1939, Lintas entered the scene (In 2000, Lintas
merged with Lowe. It was renamed as Lowe
Worldwide in 2002
• In 1941, Leela Chitnis became the first Indian
movie actress to endorse Lux Soap
 Advertising in India
• The year 1963 saw the launch of ‘Made for
Each Other’ campaign for Wills filter
cigarettes
• In 1978, India’s first TVC (Television
Commercial) goes on air
 Advertising in India
• The introduction of satellite television in 1991 had a big impact on advertising
• The first electronic channel to be beamed in India was CNN
• On March, 1993, India’s very first satellite channel, ATN, was incorporated. Now it is
rechristened as ETC (Entertainment Television Network)
• Try to know more about Prahlad Kakkar- Sundrop Oil Commercial
 AIDAS
• A- Attention
• I- Interest
• D- Desire
• A- Action
• S- Satisfaction
 Reach, Frequency and Impact
• Reach: The number of different persons or households exposed to a particular media
schedule at least once during a specified time period
• Frequency: The number of times within the specified time period that an average person or
household is exposed to the message
• Impact: The qualitative value of an exposure through a given medium (For instance, a food
ad in Good Housekeeping would have a higher impact than in Fortune magazine
 Medium and Vehicle
• Medium: A medium is a channel or a system of communication such as newspapers or radio
• Vehicle: A vehicle is a specific carrier within the channel. For example, Television is a
medium, while Star Plus or HBO is a vehicle. Similarly, in print media, Reader’s Digest or The
New york Times are vehicles
 A few more takeaways…………

• Sonic Branding- Ringtone of

Airtel, “ding ding diding” of
Britannia,
• Cult Branding- Harley Davidson
• Telescopic Marketing- Derived
Demand
• Sequel Advertising
• Private Labels (Store Brands, In-
house brands)
 A few more takeaways…………

• Ambush Marketing (Guerilla Marketing)

 A few more takeaways…………

• Ambush Marketing (Guerilla Marketing)