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Chapter 16 - Using Effective Promotions
16-61
Lewis’s Law
People will buy anything that’s one to a customer.
Brook’s Law of Retailing
Security isn’t.
Management can’t.
Sales promotions don’t.
Consumer assistance doesn’t.
Workers won’t.
lecture enhancer 16-2
EFFECTIVE ADVERTISING: CELEBRITY VOICE-OVERS
Good news for the actors who moonlight doing voice-overs for television commercials. Accord-
ing to the Journal of Consumer Research, celebrity voice-overs are effective in reaching consumers. But
voice-overs are most effective when people recognize the voice—but can’t quite put a name to it. Re-
searchers studied reactions to TV commercials with actors Robert Downey Jr., John Krasinski, Julia Rob-
erts, and Jon Hamm doing voice-overs for Nissan, Carnival Cruise Lines, Nationwide Insurance, and
Mercedes-Benz. The commercial watchers’ prior attitudes toward the celebrity influenced how much they
liked or disliked the brand, but the celebrity endorsements created stronger feelings for the brand when
viewers weren’t sure to whom the familiar voice belonged.
According to researcher Mark Forehand, who ran the study, “When they [viewers] recognize the
celebrity, it seems potentially manipulative, and they wind up overcompensating. But when they don’t
recognize the celebrity, they generalize over to the brand.”
lecture enhancer 16-3
MOBILE ADVERTISING OVERTAKES PRINT AND RADIO
By the end of 2014, mobile advertising spending eclipsed the amount of money that companies
spend on old media like radio and newspapers. This historic shift shows just how far smartphones and
tablets have come after less than a decade of existence. In contrast, newspapers have been in circulation
for centuries while radio has been a media fixture for nearly 100 years.
Analysts estimate that companies will invest nearly $18 billion in mobile ads this year while
newspapers and radio stations will earn $17 billion and $15.5 billion respectively. While mobile ad
spending just edges out newspaper marketing, there’s no doubt which form of media holds a firmer grasp
on consumers’ attention. Americans spend 25 percent of their media time using mobile devices and only 2
percent of it reading newspapers. Nevertheless, the broadsheet accounts for 10 percent of overall ad
spending. Experts say that continued reliance on old media marketing is reflective of companies’ unwill-
ingness to change their ways. Still, many marketers claim that advertising in print and radio provides a
unique impact for certain retailers and connects better with purchasers of luxury goods. After all, where
would an expensive Rolex watch look more appealing: in a slick full-page ad in GQ or as a sponsored
Facebook post?
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A growing number of small business owners are questioning the effectiveness of the latter option.
Not only are Facebook ads becoming more expensive, but also the sheer amount of information uploaded
to the site means that ads are also receiving less exposure. The average price per ad on the social network
rose 123 percent last year while the number of ads the site displayed declined by 25 percent. Simply put,
companies are paying Facebook more money to give them less exposure. Not only does this put compa-
nies with limited budgets and staff at a disadvantage, it also defeats the purpose of social media’s original
marketing appeal. Small companies were initially drawn to Facebook because it allowed them to connect
with consumers inexpensively. Now, the social network risks alienating these stakeholders by letting
them get washed away in the site’s sea of information.i
lecture enhancer 16-4
FANS PROPEL THE PORTLAND TIMBERS TO DOMINANCE
Although Americans love sports, they’ve never quite warmed up to soccer the same as with other
pastimes. But interest in the world’s most popular game has been growing steadily as more TV stations
pick up games from top-flight European leagues. However, some Americans are busy building their own
soccer culture. The Portland Timbers, for instance, have sold out every Major League Soccer home game
since their founding four years ago. Thanks to a clever launch and solid marketing, the Timbers became
an instant institution in their hometown and throughout Oregon.
Of course, the team did have some history in the city before they landed in the MLS. The original
Portland Timbers played in the North American Soccer League, a competition started in the 1970s known
mostly for bringing the famous soccer player Pele to the U.S. The Timbers name was resurrected in 2001
as the team played in a number of minor leagues. The rebooted team gained a sizeable following, the most
dedicated of whom organized themselves into a supporters’ group called the Timbers Army. By 2007
membership had swelled as the fans clamored for a grander stage to perform on.
Timbers’ executives knew they had the chance to build something unique as they transformed the
organization into a professional outfit. The company brought in an outside marketing firm to help define
their brand while also selling season tickets. The resulting campaign placed pictures of cheering Timbers
Army members on billboards throughout the city. The ads didn’t even display the Timbers’ name, just the
team’s logo and the words “Spring 2011.” This unconventional strategy struck a chord with Portland’s
offbeat citizenry and developed a mystique around the team that would only intensify after their memora-
ble debut match. Since then, the Timbers have kept the stadium packed and fans happy: the 2013 season
marked the team’s first appearance in the playoffs. Company executives maintain a close relationship
with the Timbers Army as well, who formed as a non-profit with their own board-of-directors. At the urg-
ing of the supporters’ group, the team decided to keep the traditional Timbers Army section of the stadi-
um general admission and low-priced.ii
lecture enhancer 16-5
UNDER ARMOUR WINS OLYMPIC PR GOLD
After 20 years in the athletic apparel business, Under Armour has grown into a respected brand
generating $2 billion in annual revenue. The Baltimore-based company wants to become a direct competi-
tor to Nike, though, and to do that it needs to scale up. But with 90 percent of Under Armour’s sales com-
ing from North America, the brand needs more global reach if it is to take on the Beaverton-based behe-
moth.
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Under Armour got a chance to prove itself on the global stage when it provided high-tech suits
for the U.S. speed skating team at the 2014 Sochi Winter Olympics. The apparel firm partnered with the
aircraft company Lockheed Martin to create the Mach 39, touted as the most dynamic speed skating
“skin” ever. However, when the Americans began to lose, commentators blamed the vents in the back of
the suits for slowing the skaters down. Under Armour sent out technicians to patch up the vents, but that
didn’t end the team’s losing streak. In the end, the U.S. long-track speed skating squad failed to medal in
the Olympics for the first time since 1984.
As critics blasted Under Armour in the press, the company faced a touch choice. Ignoring the
matter entirely would counter the brand’s underdog image, but defending the suits too intensely could
make the company appear like it was blaming the athletes. Under Armour’s communications team ulti-
mately opted for a balanced strategy. Since they believed the Mach 39 truly was the best suit available,
CEO Kevin Plank and global marketing VP Matt Mirchin went on a PR campaign defending the skin.
Under Armour made sure reporters had access to statements made by U.S. Speed Skating that absolved
the company of any blame. It also enlisted the help of brand endorsers like Lindsay Vonn and Michael
Phelps to defend the company’s products on social media (though they did not directly mention the speed
skating controversy). Under Armour’s crisis came to an end when it announced that U.S. Speed Skating
had re-signed the company as a sponsor through 2022. This ordeal might have been difficult for Under
Armour’s PR team to navigate, but the positive outcome will pay dividends for the company’s scrappy
image for years to come.iii
lecture enhancer 16-6
CONAN’S TWITTER TRIUMPH
In the winter of 2010, the future looked dim for late-night TV personality Conan O’Brien. Having
taken over hosting duties on NBC’s Tonight Show just seven months earlier, Conan left the show in a fu-
ror after a scheduling dispute would have pushed his timeslot forward a half-hour. Although his exit
reaped him a cool $32.5 million, a contract stipulation that prohibited him from appearing on television
for months left him depressed. After 17 years as a fixture of late-night television, Conan’s ban from the
airwaves could have destroyed his career completely.
Luckily, Conan had the good fortune to get fired just as Twitter was growing from a niche online
tool to a widespread communication service among young people. As his battle with NBC raged, a devot-
ed fan stayed up all night crafting a triumphant picture of Conan placed in front of an American flag em-
blazoned with the message “I’m with Coco.” A Facebook fan page quickly appeared and used the image
as the standard bearer of its cause, attracting hundreds of thousands of fans in a short time. After seeing
the success of this grassroots social media movement, Conan launched his own Twitter account shortly
after he left the Tonight Show for good. The feed gathered hundreds of fans overnight, which soon turned
into thousands, then hundreds of thousands. Today, Conan’s Twitter boasts more than 13.4 million fol-
lowers and counting.
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Conan’s social media presence ensured that viewers would not forget him during the months they
had to wait before his new talk show on TBS premiered. During this downtime Conan and his producers
realized the potential of his massive online following. Conan’s live act, “The Legally Prohibited from Be-
ing Funny on Television Tour,” was advertised solely through Twitter, with most shows selling out hours
after tickets went on sale. Once his TBS show began, Conan used his newfound creative control to remain
in charge of all his online content. Every video clip posted to the show’s website is owned by his own
Team Coco production company. And as Conan’s ratings have skyrocketed among the coveted 18- to 49-
year-olds, his online presence ensures that people can access his content on their own time, not according
to the will of the TV execs that took Conan off in the first place. With his enormous reach and open ac-
cess, insiders speculate that Conan’s online branding could revolutionize the medium of television.iv
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critical
thinking exercises
Name: ___________________________
Date: ___________________________
critical thinking exercise 16-1
ADVERTISING ON GOOGLE
One of the most popular types of online advertising involves buying an ad-link on search engines
like Google, Yahoo, or Bing.v Advertisers can narrowly target potential customers by buying an ad that
will be placed next to the search results for a specific term. For instance, if you used Yahoo search engine
and typed in “spaghetti,” you would get 13 million results, ranging from spaghetti recipes, to encyclope-
dia references, to a link for the “Church of the Flying Spaghetti Monster.” In the right column are “spon-
sored results”—ads for spaghetti cookbooks, pasta making equipment, and several distributors of spaghet-
ti sauce.
Each search engine’s advertising system is unique, but you can get a basic understanding of the
process by investigating Google’s system called “AdWords.” Go to the AdWords website
(https://adwords.google.com) and then answer the following questions. If the link does not work, you can
start at www.google.com and click on “advertising programs” to get to the AdWords site.
1. Explain how the price of an ad on Google is calculated.
2. When purchasing search term advertising, a critical decision is identifying as many possible key
terms to describe your product as possible. Suppose you were an online organic food store and
you wanted to advertise your vegetarian spaghetti sauce on Google. What specific keywords
would you want to include? (Hint: Use the “keyword tool.”) List the best prospects.
3. Assume your daily advertising budget is $50. What would be the best combination of key terms
and cost per click to reach your target audience?
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Name: ___________________________
Date: ___________________________
critical thinking exercise 16-2
ADVERTISING APPEALS
Advertising is not a collection of homogeneous commercials. Each company and even different
brands within the company use different advertising appeals. Humor works best for some commercials;
honesty for others.
Watch television for several days and identify commercials that use the following appeals. Then
decide what TV commercial shown in the last year you remember best, and which commercial irritated
you the most.
1. Identify television commercials that use the following appeals:
a. Honesty:
b. Fear:
c. Emotion:
d. Sex:
e. Humor:
f. Irritation:
g. Cost-comparison:
2. What TV commercial in the last year do you remember best? Why do you remember it?
3. What is the most obnoxious or irritating or disgusting TV advertisement you have seen recently?
Why do you remember it?
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notes for critical thinking exercise 16-2
1. Identify television commercials that use the following appeals: honesty, fear, emotion, sex, hu-
mor, irritation, and cost-comparison.
Honesty. Ads featuring children are perceived by the public as more honest than those featuring
adults. Children project an innocent, honest image. To an extent, celebrity testimonials try to use honesty
as an appeal, but may not work.
Fear. Fear is a powerful advertising hook. Life insurance companies have used it for decades to
sell their product. Products as varied as smoke detectors, mouthwash, deodorant, and insect sprays use
fear to develop sales.
but gets the message across. Charmin bathroom tissue scored big several decades ago with its “Mr. Whip-
ple” commercials a decade ago. One survey showed that more elementary school kids could identify Mr.
Whipple than could identify the president of the United States.
Cost-comparison. Cost comparison commercials appeal to the logical and rational side of us.
Internet service providers frequently use cost comparisons to differentiate their services.
2. What TV commercial in the last year do you remember best? Why do you remember it?
3. What is the most obnoxious or irritating or disgusting TV advertisement you have seen recently?
Why do you remember it?
This, also, will vary. There are some truly disgusting advertisements on the air at any given time.
deserve a category all their own.
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Name: ___________________________
Date: ___________________________
critical thinking exercise 16-3
IDENTIFYING PRODUCT PLACEMENT
Your assignment is to watch prime-time television. Not a bad assignment, right? Watch at least
two hours of prime-time programming. Try to include one drama, one comedy, and one reality program.
Watch closely and try to identify brand-name products that are featured. Record the name of the program
and the television channel. Then analyze the effect of the product placement and whether the placement is
positive or negative.
Program Name
Network
Products
Featured
Is Placement Ef-
fect Positive or
Negative? Why?
Drama
Comedy
Reality
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Name: ___________________________
Date: ___________________________
critical thinking exercise 16-4
ETHICS IN ADVERTISING
The professional organization representing the major advertising agencies is the American Asso-
ciation of Advertising Agencies (AAAA). The AAAA website explains the organization’s mission and
standards of practice. Go to the AAAA site (www.aaaa.org) and use the information you find there to an-
swer the following questions. (Sometimes the Web address for a location changes. You might need to
search to find the exact location mentioned.)
1. Give a brief summary of the organization’s history, purpose, and membership.
2. What is the mission of the AAAA?
3. Find the AAAA’s Standards of Practice. What does this document say about the basic beliefs or
codes of conduct for advertisers?
4. What advertising practices are specifically excluded on ethical grounds?
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Name: ___________________________
Date: ___________________________
critical thinking exercise 16-5
DESIGNING A WEBSITE
A well-designed website is one of the most important promotional tools for a company. The site
should be designed to present a consistent message in a way that appeals to visitors. The information be-
low is a guide to designing a simple website. The Microsoft Office site has a wealth of information on
creating websites. Follow:
Assistance > FrontPage > Creating web pages > Piecing together the Web page puzzle.
EXERCISE
You are the director of promotion for a new restaurant. Design a simple Web page to promote the
restaurant. Choose one of the restaurant suggestions below or develop your own. Think through the mes-
sage you wish to convey to consumers. Consider the structure of your site—what subpages would be ap-
propriate (for example “menus,” “about us,” etc.) Then use the blank template on the next page to unveil
the website for your company.
a. Shell-Fish Shuck: baked, broiled, and blackened seafood cuisine
b. Very Vegetarian: a vegetarian restaurant
c. The Cajun Platter: specializing in South Louisiana cuisine
d. Blues Bistro: southern cooking with great music
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1. Site identifier—lets visitors know where they are; may include logo, name, or other graphics.
2. Navigation bar—shows visitors the structure of your website; helps them find content
3. Main content—the page title, headings, text, and images are what your visitors actually come to
see.
4. Secondary content—may include advertising, announcements, news, and links.
5. Identification bar—copyright, last updated, contact information, security/privacy links, and
name of Web developer.
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bonus
case1
bonus case 16-1
RETAILERS KEEP TABS ON CUSTOMERS WITH BEACONS
Over the last few years, brick and mortar retailers have come up with some ingenious ways to
gather data about the customers who walk into their stores. We’ve taken a look at many of them in past
issues of this newsletter, including one story about “smart” mannequins that observe consumer patterns
using cameras in the dummies’ eyes. Although that may skew a bit on the creepy side, it’s important to
keep in mind that physical retailers are merely trying to imitate their online rivals. After all, websites like
Amazon don’t need invasive cameras in order to track your every move.
Still, people are understandably wary about being watched while they shop. That’s why the latest
customer-tracking tech doesn’t use cameras or any other equipment that might seem particularly invasive.
Instead, this system relies on determining customers’ locations using small, inexpensive “beacons” dis-
tributed throughout a store. These beacons transmit signals that can be picked up by a smartphone’s Blue-
tooth technology, pinpointing the position of the phone’s holder within 2 centimeters. Once the custom-
er’s location has been determined, they can then receive special offers and coupons if they’ve downloaded
the store’s app.
Retailers like Macy’s, American Eagle, and Safeway have already implemented this tracking
method in some of their stores. Not only are the beacons’ accuracy and effectiveness appealing, but also
the system’s opt-in aspect removes much of the creepiness factor. “People won’t know these beacons are
there,” said one industry expert. “They’ll just know their app has suddenly become smarter.” The beacons
have applications outside the retail world as well. For instance, Major League Baseball and the National
Football League have both tested the method in stadiums in order to direct users to shorter concession
stand lines. The beacons have also been used at museums to give visitors historical information as they
walk through a gallery. vi
discussion questions for bonus case 16-1
1. Are the “beacons” being used by retailers a violation of consumer privacy?
2. Can the “beacons” be considered a benefit to consumers?
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notes on discussion questions for bonus case 16-1
1. Are the “beacons” being used by retailers a violation of consumer privacy?
Contrary to other devices used by retailers to observe consumers, we suggest the “beacons” are
2. Can the “beacons” be considered a benefit to consumers?
It fair to say the “beacons” offer benefits to consumers as well as the stores. As the abstract notes,
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endnotes
i Sources: Steven Perlberg, “Mobile Ads Breach Historic Barrier,” The Wall Street Journal, July 22, 2014; Sa-
rah E. Needleman and Jack Marshall, “Facebook Ads Become ‘Costlier’ Choice for Small Businesses,” The
Wall Street Journal, August 6, 2014.
ii Source: Josh Dean, “Marketing with a Kick,” Fast Company, April 2014.
iii Source: Michael McCarthy, “Under Armour’s Olympic Experience Is Textbook Case For How To Handle a Cri-
sis,” Advertising Age, March 10, 2014.
iv Sources: Douglas Alden Warshaw, “Conan 2.0,” Fortune, February 10, 2011 and Twitter, www.twitter.com, ac-
cessed December 2014.
v The Internet is a dynamic, changing information source. Web links noted in this manual were checked at the time
of publication, but content may change over time. Please review the website before recommending it to your stu-
dents.
vi Source: Harry McCracken, “Nowhere to Hide,” Time, March 31, 2014.
