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Lesson#38
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IMPACT OF ADVERTISING
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IMPACT OF ADVERTISING
Advertising Objectives
Advertising objectives are the communication tasks to be
accomplished with specific customers
that a company is trying to reach during a particular time
frame. A company that advertises usually strives to
achieve one of four 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 re peat 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 convince 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 switchback.
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
time 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
nine 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
millions of dollars on advertising in order to be key players in
their respective industries (e.g., Coca Cola and
General Motors).
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 counterattack
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with their own advertising blitz. 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 is interested
in a number of areas regarding
advertising, such 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
might 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 of each one's
strengths and weaknesses in comparison to the cost. Once the
analysis is done, the company will make the
best decision possible and embark on its advertising campaign.
Media 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 time 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
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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 time 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 time 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.
The impact of advertising has been a matter of considerable
debate and many different claims have been
made in different contexts. During debates about the banning of
cigarette advertising, a common claim
from cigarette manufacturers was that cigarette advertising does
not encourage people to smoke who would
not otherwise. The (eventually successful) opponents of
advertising, on the other hand, claim that
advertising does in fact increase consumption.
According to many media sources, the past experience and state
of mind of the person subjected to
advertising may determine the impact that advertising has.
Children under the age of four may be unable to
distinguish advertising from other television programs, whilst
the ability to determine the truthfulness of the
message may not be developed until the age of 8.
Public perception of the medium
As advertising and marketing efforts become increasingly
ubiquitous in modern Western societies,
the industry has come under criticism of culture jamming which
criticizes the media and consumerism using
advertising's own techniques. The industry is accused of being
one of the engines powering a convoluted
economic mass production system which promotes consumption.
Recognizing the social impact of
advertising, Media-watch-uk, a British special interest group,
works to educate consumers about how they
can register their concerns with advertisers and regulators. It
has developed educational materials for use in
schools. The award-winning book, Made You Look
How Advertising Works and Why You
Should Know, by
former Media-watch (a feminist organisation founded by Ann
Simonton not linked to media-watch-uk)
president Shari Graydon, provides context for these issues for
young readers.
Compensation demanded
Public interest groups are increasingly suggesting that access
to the mental space targeted by
advertisers should be taxed, in that at the present moment that
space is being freely taken advantage of by
advertisers with no compensation paid to the members of the
public who are thus being intruded upon.
This kind of tax would act to reduce what is now increasingly
seen as a public nuisance.
Efforts to that end are gathering momentum, with Arkansas and
Maine considering bills to implement such taxation. Florida
enacted such a tax in 1987 but was forced to repeal it after six
months, as a result of a concerted effort by national commercial
interests, which withdrew planned conventions, causing major
losses to the tourism industry, and cancelled advertising, causing a
loss of 12 million dollars to the broadcast industry alone.
Negative effects on communication media
An extensively documented effect is the control and vetoing of
free information by the advertisers.
Any negative information on a company or its products or
operations often results in pressures from the
company to withdraw such information lines, threatening to cut
their ads. This behavior makes the editors
of the media self-censor content that might upset their ad
payers. The bigger both companies are, the bigger
their relation gets, maximizing control over single information.
Advertisers may try to minimize information about or from
consumer groups, or consumer controlled
purchasing initiatives or consumer controlled quality
information systems.
Another indirect effect of advertising is to modify the very
nature of the communication media where it is
shown. Media that get most of their revenues from publicity try
to make their medium a good place for
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communicating ads before anything else. The clearest example is
television, where this means trying to
make the public stay for a long time and in a mental state that
encourages spectators not to switch the
channel through the ads. Programs that are low in mental
stimulus and require light concentration and are
varied are best for long sitting times. These make for much
easier emotional jumps to ads, which can
become more entertaining than regular shows. A simple way to
understand the objectives in television
programming is to compare contents from channels paid and chosen
by the viewer with channels that get
their income mainly from advertisements.
Future
With the dawn of the Internet have come many new advertising
opportunities. Pop-up, Flash,
banner, adver-gaming, and email advertisements (the last often
being a form of spam) abound.
Each year, greater sums are paid to obtain a commercial spot
during super sporting events like cricket and
football championships. Companies attempt to make these
commercials sufficiently entertaining that
members of the public will actually want to watch them.
Another problem is people recording shows on DVRs (ex. TiVo).
These devices allow users to record the
programs for later viewing enabling them to fast forward through
commercials. Additionally, as more
seasons or “Boxed Sets” come out of Television shows; fewer
people are watching their shows on TV.
However, the fact that these sets are
sold,
means that the company will additionally receive profits from the
sales of these sets. To counter this effect, many advertisers
have opted for product placement (prize during
TV shows).
Particularly since the rise of "entertaining" advertising, some
people may like an advert enough that they
wish to watch it later or show a friend. In general, the
advertising community has not yet made this easy,
although some have used the Internet to widely distribute their
adverts to anyone wishing to see or hear
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