ADVERTISING

Advertising is often thought of as the paid, nonpersonal promotion of a cause, idea, product, or service by an identified sponsor attempting to inform or persuade a particular target audience. Advertising has taken many different forms since the beginning of time. For instance, archaeologists have uncovered walls painted in Rome announcing gladiator fights as well as rock paintings along Phoenician trade routes used to advertise wares. From this early beginning, advertising has evolved to take a variety of forms and to permeate nearly every aspect of modern society.

The various delivery mechanisms for advertising include banners at sporting events, billboards, Internet Web sites, logos on clothing, magazines, newspapers, radio spots, and television commercials. Advertising has so permeated everyday life that individuals can expect to be exposed to 1,500 to 3,000 different messages each day. While advertising may seem like the perfect way to get a message out, it does have several limitations, the most commonly noted ones being its inability to focus on an individual consumer's specific needs, provide in-depth information about a product, and be cost-effective for small companies.

FORMS OF ADVERTISING

Advertising can take a number of forms, including advocacy, comparative, cooperative, direct mail, informational, institutional, outdoor, persuasive, product, reminder, point-of-purchase, and specialty advertising.

Advocacy Advertising

Advocacy advertising is normally thought of as any advertisement, message, or public communication regarding economic, political, or social issues. The advertising campaign is designed to persuade public opinion regarding a specific issue important in the public arena. The ultimate goal of advocacy advertising usually relates to the passage of pending state or federal legislation. Almost all nonprofit groups use some form of advocacy advertising to influence the public's attitude toward a particular issue.

One of the largest and most powerful nonprofit advocacy groups is the American Association of Retired Persons (AARP). The AARP fights to protect social programs such as Medicare and Social Security for senior citizens by encouraging its members to write their legislators, using television advertisements to appeal to emotions, and publishing a monthly newsletter describing recent state and federal legislative action. Other major nonprofit advocacy groups include the environmental organization Green-peace, Mothers against Drunk Driving, and the National Rifle Association.

Comparative Advertising

Comparative advertising compares one brand directly or indirectly with one or more competing brands. This advertising technique is very common and is used by nearly every major industry,

including airlines and automobile manufacturers. One drawback of comparative advertising is that customers have become more skeptical about claims made by a company about its competitors because accurate information has not always been provided, thus making the effectiveness of comparison advertising questionable. In addition, companies that engage in comparative advertising must be careful not to misinform the public about a competitor's product. Incorrect or misleading information may trigger a lawsuit by the aggrieved company or regulatory action by a governmental agency such as the Federal Trade Commission (FTC; see the FTC's statement of policy regarding comparative advertising at http://www.ftc.gov/bcp/policystmt/ad-compare.htm).

Cooperative Advertising

Cooperative advertising is a system that allows two parties to share advertising costs. Manufacturers and distributors, because of their shared interest in selling the product, usually use this cooperative advertising technique. An example might be when a soft-drink manufacturer and a local grocery store split the cost of advertising the manufacturer's soft drinks; both the manufacturer and the store benefit from increased store traffic and its associated sales. Cooperative advertising is especially appealing to small-store owners who, on their own, could not afford to advertise the product adequately. For examples of cooperative advertising programs, see the John Wiley & Sons, Inc. (http://www.wiley.com/WileyCDA/Section/id-10671.html) and the New Mexico Department of Tourism (http://www.newmexico.org/go/loc/department/page/dept-coop-advertising.html) Web sites.

Direct Mail

Brochures, catalogs, flyers, letters, and postcards are just a few of the direct-mail advertising options. Direct-mail advertising has several advantages, including detail of information, personalization, selectivity, and speed. But while direct mail has advantages, it carries an expensive per-head price, is dependent on the appropriateness of the mailing list, and is resented by some customers, who consider it junk mail.

Informational Advertising

In informational advertising, which is used when a new product is first being introduced, the emphasis is on promoting the product name, benefits, and possible uses. Thus, informational advertising is used early in the product life cycle. Car manufacturers used this strategy when sport-utility vehicles were first introduced.

Institutional Advertising

Institutional advertising takes a broad approach to advertising, concentrating on the benefits, concept, idea, or philosophy of a particular industry. Companies often use it to promote image-building activities, such an environmentally friendly business practices or new community-based programs that it sponsors. Institutional advertising is closely related to public relations, since both are interested in promoting a positive image of the company to the public. As an example, a large lumber company may develop an advertising theme around its practice of planting trees in areas where they have just been harvested. A theme of this nature keeps the company's name in a positive light with the general public because the replanting of trees is viewed positively by most people. For example, the idea that "The Future Is Growing," is noted on the Weyerhaeuser (http://www.weyerhaeuser.com) Web site.

Outdoor Advertising

Billboards and messages painted on the sides of buildings are common forms of outdoor advertising, which is often used when quick, simple ideas are being promoted. Since repetition is the key to successful promotion, outdoor advertising is most effective when located along heavily traveled city streets and when the product being promoted can be purchased locally. Only about 1 percent of advertising is conducted in this manner. For more information on outdoor advertising, see the Lamar Advertising Company Web site at http://www.lamaroutdoor.com/main/home/default.cfm. Lamar Advertising Company is among the largest in the United States.

Persuasive Advertising

Persuasive advertising is used after a product has been introduced to customers. The primary goal is for a company to build selective demand for its product. For example, automobile manufacturers often produce special advertisements promoting the safety features of their vehicles. This type of advertisement could allow automobile manufacturers to charge more for their products because of the perceived higher quality the safety features afford. Both Ford Motor Company (http://www.ford.com) and General Motors Corporation (http://www.gm.com) provide extensive information regarding product safety on their Web sites.

Product Advertising

Product advertising pertains to nonpersonal selling of a specific product. An example is a regular television commercial promoting a soft drink. The primary purpose of the advertisement is to promote the specific soft drink, not the entire soft-drink line of a company.

Reminder Advertising

Reminder advertising is used for products that have entered the mature stage of the product life cycle. The advertisements are simply designed to remind customers about the product and to maintain awareness. For example, detergent producers spend a considerable amount of money each year promoting their products to remind customers that their products are still available and for sale. Reminder advertising is often used during the maturity stage of the product life cycle.

Point-of-Purchase Advertising

Point-of-purchase advertising uses displays or other promotional items near the product that is being sold. The primary motivation is to attract customers to the display so that they will purchase the product. Stores are more likely to use point-of-purchase displays if they have help from the manufacturer in setting them up or if the manufacturer provides easy instructions on how to use the displays. Thus, promotional items from manufacturers who provide the best instructions or help are more likely to be used by the retail stores. For more information regarding point-of-purchase advertising, see the Point-of-Purchase Advertising International Web site (http://www.popai.com//AM/Template. cfm?Section=Home).

Specialty Advertising

Specialty advertising is a form of sales promotion designed to increase public recognition of a company's name. A company can have its name put on a variety of items, such as caps, glassware, gym bags, jackets, key chains, and pens. The value of specialty advertising varies depending on how long the items used in the effort last. Most companies are successful in achieving their goals for increasing public recognition and sales through these efforts. For more information about specialty advertising, see the Specialty Advertising Association of California Web site (http://www.SAAC.net).

ADVERTISING OBJECTIVES

The objectives of advertising are to reach specific customers during a particular time frame and get them to buy a particular product. A company that advertises usually strives to achieve one of four types of advertising objectives: trial, continuity, brand switching, and switchback. Which of the four advertising objectives is selected usually depends on where the product is in its life cycle.

Trial

The purpose of the trial objective is to encourage customers to make an initial purchase of a new product. Companies will typically employ creative advertising strategies in order to cut through other competing advertisements. The reason is simple—without that first trial of a product by customers, there will not be any repeat purchases.

Continuity

Continuity advertising is a strategy to keep current customers using a particular product. Existing customers are targeted and are usually provided new and different information about a product that is designed to build consumer loyalty.

Brand Switching

Companies adopt brand switching as an objective when they want customers to switch from competitors' brands to their brands. A common strategy is for a company to compare product price or quality in order to persuade customers to switch to its product brand.

Switchback

Companies subscribe to this advertising objective when they want to get back former users of their product brand. A company might highlight new product features, price reductions, or other important product information in order to get former customers of its product to switch back.

ADVERTISING BUDGET

Once an advertising objective has been selected, companies must then set an advertising budget for each product. Developing such a budget can be a difficult process because brand managers want to receive a large resource allocation to promote their products. Overall, the advertising budget should be established so as to be congruent with overall company objectives. Before establishing an advertising budget, companies must take into consideration other market factors, such as advertising frequency, competition and clutter, market share, product differentiation, and stage in the product life cycle.

Advertising Frequency

Advertising frequency refers to the number of times an advertisement is repeated during a given period to promote a product's name, message, and other important information. A larger advertising budget is required in order to achieve a high advertising frequency. Estimates have been put forward that a consumer needs to come in contact with an advertising message three times before it will be remembered.

Competition and Clutter

Highly competitive product markets, such as the soft-drink industry, require higher advertising budgets just to stay even with competitors. If a company wants to be a leader in an industry, then a substantial advertising budget must be earmarked every year. Examples abound of companies that spend billions of dollars on advertising in the United States alone in order to be key players in their respective industries (e.g., Ford Motor Company, Johnson & Johnson, and McDonald's Corporation).

Market Share

Desired market share is also an important factor in establishing an advertising budget. Increasing market share normally requires a large advertising budget because a company's competitors frequently counterattack with their own advertising blitz. For example, when General Motors Corporation initiated an employee pricing for everyone campaign, both DaimlerChrysler and Ford Motor Corporation established similar offers. Successfully increasing market share depends on advertisement quality, competitor responses, and product demand and quality.

Product Differentiation

How customers perceive products is also important to the budget-setting process. Product differentiation is often necessary in competitive markets where customers have a hard time differentiating between products. For example, product differentiation might be necessary when a new laundry detergent is advertised. Since so many brands of detergent already exist, an aggressive advertising campaign would be required. Without this aggressive advertising, customers would not be aware of the product's availability and how it differs from other products on the market. The advertising budget is higher in order to pay for the additional advertising.

Stage in the Product Life Cycle

New product offerings require considerably more advertising to make customers aware of their existence. As a product moves through the product life cycle, fewer and fewer advertising resources are needed because the product has become known and has developed an established buyer base. Advertising budgets are typically highest for a particular product during the introduction stage and gradually decline as the product matures.

SELECTING THE RIGHT ADVERTISING APPROACH

Once a company decides what type of specific advertising campaign it wants to use, it must decide what approach should carry the message. A company must decide on such items as frequency, media impact, media timing, and reach.

Frequency

Frequency refers to the average number of times that an average consumer is exposed to the advertising campaign. A company usually establishes frequency goals, which can vary for each advertising campaign. For example, a company might want to have the average consumer exposed to the message at least six times during the advertising campaign. This number may seem high, but in a crowded and competitive market, repetition is one of the best methods to increase the product's visibility and to increase company sales. The more exposure a company desires for its product, the more expensive the advertising campaign. Thus, often only large companies can afford to have high-frequency advertisements during a campaign.

Media Impact

Media impact generally refers to how effective advertising will be through the various media outlets (e.g., television, Internet, print). A company must decide, based on its product, the best method to maximize consumer interest and awareness. For example, a company promoting a new laundry detergent might fare better with television commercials rather than simple print ads because more consumers are likely to see the television commercial. Similarly, a company such as Mercedes-Benz, which markets expensive products, might advertise in specialty car magazines to reach a high percentage of its potential customers. Before any money is spent on any advertising media, a thorough analysis is done for each one's strengths and weaknesses in comparison to the cost. Once the analysis is done, the company will decide which media outlet is best to use and will embark on its advertising campaign.

Timing

Another major consideration for any company engaging in an advertising campaign is when to run the advertisements. For example, some companies run ads during the holidays to promote season-specific products. The other major consideration for a company is whether it wants to employ a continuous or pulsing pattern of advertisements. Continuous refers to advertisements that are run on a scheduled basis for a given period. The advantage of this tactic is that an advertising campaign can run longer and might provide more exposure over time. For example, a company could run an advertising campaign for a particular product that lasts years with the hope of keeping the product in the minds of customers.

Pulsing indicates that advertisements will be scheduled in a disproportionate manner within a given time frame. Thus, a company could run thirty-two television commercials over a three- or six-month period to promote the specific product is wants to sell. The advantage with the pulsing strategy is twofold. The company could spend less money on advertising over a shorter period but still gain the same recognition because the advertising campaign is more intense.

Reach

Reach refers to the percentage of customers in the target market who are exposed to the advertising campaign for a given period. A company might have a goal of reaching at least 80 percent of its target audience during a given time frame. The goal is to be as close to 100 percent as possible, because the more the target audience is exposed to the message, the higher the chance of future sales.

ADVERTISING EVALUATION

Once the advertising campaign is over, companies normally evaluate it compared to the established goals. An effective tactic in measuring the usefulness of the advertising campaign is to measure the pre- and post-sales of the company's product. In order to make this more effective, some companies divide up the country into regions and run the advertising campaigns only in some areas. The different geographic areas are then compared (advertising versus nonadvertising), and a detailed analysis is performed to provide an evaluation of the campaign's effectiveness. Depending on the results, a company will modify future advertising efforts in order to maximize effectiveness.

SUMMARY

Advertising is the paid, nonpersonal promotion of a cause, idea, product, or service by an identified sponsor attempting to inform or persuade a particular target audience. Advertising has evolved to take a variety of forms and has permeated nearly every aspect of modern society. The various delivery mechanisms for advertising include banners at sporting events, billboards, the Internet, logos on clothing, magazines, newspapers, radio spots, and television commercials. While advertising can be successful at getting the message out, it does have several limitations, including its inability to focus on an individual consumer's specific needs, provide in-depth information about a product, and be cost-effective for small companies. Other factors, such as objectives, budgets, approaches, and evaluation methods must all be considered.