Richard E. CaplanThe University of Akron

Advertising

MediaLink 3.0

Advertising

• “Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor”– American Marketing Association

• Consumers pay for media by watching and listening to advertisements – You pay directly for books, movies and recordings– Television, radio, newspapers, magazines and many

web sites are supported by television

• Advertising is not a medium – Advertising carries the messages from people who

pay for media

Ancient Advertising

• Phoenicians painted messages on stones– 1200 BC

• Criers carried signboards to announce the arrival of ships– Sixth century B.C.

• Britain required products to carry trademarks to protect buyers– First trademark was issued for Bass Ale

• Handbills were the first printed advertisements– William Caxton in England, 1478

Early Newspaper Ads in America

• First newspaper ads in America were classified ads– Boston News-Letter -1704

• Mass circulation penny press– New York Sun -1833– Benjamin Day

• Philadelphia Public Ledge– Reported “advertising is our revenue”– Advertising financially support media

Let the Buyer Beware

• Penny press would accept any advertising content– Patent medicines that were mostly alcohol

• Anti-Corpulene pills and Dr. T. Felix Couraud’s Oriental Cream to remove tan and blemishes

• Unscrupulous advertisers prompted consumer complaints • Newspapers established an open advertising policy

– “Our advertising columns are open to the public”– Except what is prohibited by law or immoral

• No one took responsibility for advertising– Everyone deplored advertising

Advertising in Magazines

• Magazines resisted advertising

• Advertising as a way for magazines to succeed – The Ladies’ Home Journal -1887

– Cyrus H. K. Curtis• Success due to advertising

– Hired Edward Bok as edtor

• Campaign against patent medicine– Edward Bok led The Ladies’ Home Journal with Collier’s and the

AMA to oppose adverting of patent medicine• Congress created Federal Trade Commission (FTC)

– Monitor deceptive advertising

– Today the Federal Trade Commission continues to monitor advertising

Advertising in Radio

• First radio advertisement – WEAF New York -1922

• Ad for real-estate development

• Lucky Strike Dance Orchestra premiered on NBC– Sales increased 47%

• Continuous reference to the sponsors’ products– Sir Walter Raleigh Cigarettes

• Sir Walter Raleigh Review– In the Raleigh Theater– With the Raleigh Orchestra– Accompanying the Raleigh Rovers– Performing “The Adventures of Sir Walter Raleigh”

• Squeezed in 70 reference to the product

• Radio advertising earned more than magazines in 1938

Advertising on Television

• Television began as an advertising medium– Commercial radio networks established television

networks

• Direct sponsorship– Sponsors and advertising agencies took over the

responsibility of producing shows • Led to the quiz sandal

• Shows often bore the name of the advertiser – Gratitude factor

• Viewers who liked the program would buy the product

Advertising on the Internet

• Advertisers flocked to the Internet in the late 90’s– Primarily used banner advertisement on major web sites – Pop up ads were also tried

• A window that contained the advertisement would open behind the users browser or on top of it

– More of an annoyance to the web user

• Advertising on the Internet didn’t necessarily bring increased sales – Click through rate is less than 1 percent

• Rate at which web browsers click on ads to get more information

• In 2000 online ads reached $8 billion– Declined in 2001

• Online ads are attempting to use multimedia to interest web surfers

How Advertising Works

• A change in the meaning of the word advertise – From “to take note” to “to persuade”

• Advertising is the rhetoric of democracy – Daniel J. Boorstin

• Common characteristics of advertising– Repetition

• Repeating message for effect

– Advertising style• Hyperbole, fantastic claims

– Ubiquity• To catch consumers attention

Advertising Appeals

• Grabbing your attention– Get you to read, listen to, or watch an ad

• Appeal to consumers– Advertising goal is to “tug at our psychological shirt

sleeves”– According to Jib Fowles in Mass Advertising as Social

Forecast

• Fifteen appeals commonly are used according to Fowles – Sex, affiliation, nurture, guidance, aggression,

achievement, dominance, prominence, attention, autonomy, escape, safety, aesthetic sensations, satisfy curiosity, physiological

Audience

• Demography – Consumer characteristics

• Age, gender, income, marital status, occupation, education

• Target audience – Design messages to reach specific elements of the

audience – Match the product with the audience

• Advertise low calorie food in Weight Watchers Magazine not Gourmet – Advertising agencies try to match a client’s product to

an audience

Criticism of Advertising

• According to Louis C. Kaufman in Essentials of Advertising – Three main Criticisms

• Advertising adds to the cost of products– Consumers pays the cost of advertising– Advertising helps make goods available and lowers prices

• Advertising causes people to buy products they do not need– Dangerous goods like cigarettes– Advertising may stimulate the purchase of a new product but

consumers will not continue to buy an unsatisfactory product

• Advertising reduces competition and thereby fosters monopolies– High cost of advertising limits entry into the market place – Less expense then other forms of sales

Does Advertising Work?

• Advertising is simply information – Simply telling the consumer about new

products – Consumers are always looking for a

better way to meet their needs

• Overwhelming power to deceive consumers – Making people buy what they don’t

want

• Evaluating is more difficult – A middle ground exists between the

two arguments

Working in Advertising

• 6,000 advertising agencies in the United States– Most bill under $1 million a year

• Advertising agencies are paid through a commission on advertising time and space sold – Commonly 15%

• Agencies also produce television, radio and print ads for their clients– Will bill clients for additional production

services

Jobs in Advertising Agencies

• Market research– Establish target audience based

on product

• Media selection– Suggest media for client

• Creative activities– Create copy and design

• Account management – Liaison between agency and client

• Administration– Business management

• Public relations– Extra service

Advertising Agencies Organization• Account executive • Creative department

– Creative director • Copy platform

– Art director– Client reviews

• Media department – Media buyer – Media representative

• CPM - cost per thousand

• Market (audience) research – Media research

Business of Advertising

• Media and advertising are interdependent • Advertising business is dependent on the national

economy– If the economy is healthy advertising industry will grow – During recession advertisers cut their budgets

• Advertising business declines

• During recession advertisers may change media strategy– Choose radio over television

• Radio costs much less

Television Commercials

• Television adverting is expensive– Average 30 second ad on network television could cost $100,000

– 30 second ad on the Super Bowl would cost $2 million

• Networks and stations sells 10, 15 and 30 second ads • National advertising on network programs is handled by national

advertising agencies – The country’s biggest advertisers use agencies

• Proctor and Gamble, Ford, GM, and McDonald’s for example

• National agencies buy advertising based on CPM– Cost-per-thousand

• Cost of reaching 1000 people

• Television adds are expensive to produce– As much as a $1 million per minute

• Using other media may be more cost effective

Print and Radio Advertising

• Local television, radio and print are less expensive than television – Allows targeting of a specific audience

• Based on demographics – Age, education, gender, income

• Target audiences – Women who travel read Cosmopolitan but don’t watch daytime

television – Newsweek delivers to more people for less money than Time

• Audience information for broadcasting – Radio

• Arbitron

– Television• A. C. Nielsen

Local Advertising

• Small local business– Many advertise in local newspapers, handbills

• Susan’s Coffee and Tea – Coupon published in neighborhood weekly

• Large local business– Many use local newspaper, television and radio

• Bud Kennedy’s Ford Dealership– 30 second announcement during sports each night

» Co-op with Ford Motor

– Half page display ad on Saturdays

• Most local advertising expenditures go to newspapers• Local advertising agencies

– Design campaign, produce and place ads

Local Media Includes Services For Clients

• Newspapers– Prepare ads using clip art

• Radio stations– Produce ads

• Write copy• Talent services and limited production

– Barter • Trade airtime for advertiser’s product

– Give a product as a contest prize

• Television stations – Produce ads

• Write copy• Limited production

– May only shoot slides and graphics

National Sales Representatives

• Manufacturers desire to sell product nationally • Hire a local advertising agency

– Recommends a market strategy

• Agency contacts a national sales representatives– Rep firm

• Negotiates the purchase of air time and advertising space in local market to firms outside the market

• Takes a 15% commission on sales

• Work of rep firm – Prepares a media package to reach target audience – Based on CPM

• Cost per thousand

Advertising Alcohol

• Television networks– Voluntary self-regulation

• Do not carry liquor ads• Does not show people drinking beer

• Distilled Sprits Council– Voluntary code of good practices

• Ban on television advertising

• Bureau of Alcohol, Tobacco and Firearms and Federal Trade Commission– Do not have authority to regulate liquor commercials

Challenging the Ban

• Seagram’s Advertised Royal Crown whiskey on local Texas television station

• Television networks aired late night ads sponsored by liquor companies for two months in 2002– Ads promoted the responsible use of alcohol

Regulating Advertising

• Federal Trade Commission– Established 1914– Stop businesses that restrict competition,

injure or deceive consumers• If FTC determines an ad to be deceptive it stops the

ad

– Can require corrective ad

• Food and Drug Administration– Oversees claims that appear on food labels

• The claim of fresh orange juice means it cannot have been frozen

Other Regulatory Bodies

• Federal Communication Commission– Enforces rules that govern broadcast media

• Rules against misleading demonstrations of products

• Environmental Protection Agency

• Consumer Product Safety Agency

• National Advertising Review Board – Self-regulation

International Advertising

• Globe products – Advertising to a world – wide audience

• Coca-Cola• McDonald’s

• Global media – CNN Worldwide– Internet

• Advertising agency billing outside the U.S. is increasing

• Changing demographics– Addition of Spanish dialog to television commercials