Chapter 16 – Advertising, Sales Promotion, and Public Relations
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CHAPTER CONTENTS
PAGE
POWERPOINT RESOURCES TO USE WITH LECTURES …………………………………… 16-2
LEARNING OBJECTIVES (LO) ……………………………………………………………………………. 16-3
KEY TERMS ………………………………………………………………………………………………………….. 16-3
LECTURE NOTES
• Chapter Opener: Fantasy is Becoming Reality for Advertisers! …………………………… 16-4
• Types of Advertisements (LO 16-1) …………………………………………………………………. 16-5
APPLYING MARKETING KNOWLEDGE …………………………………………………………… 16-33
BUILDING YOUR MARKETING PLAN ………………………………………………………………. 16-38
VIDEO CASE (VC)
• VC-16: Google, Inc.: The Right Ads at the Right Time ……………………………………… 16-39
IN-CLASS ACTIVITIES (ICA)
• ICA 16-1: What Makes a Memorable TV Commercial? …………………………………….. 16-42
Chapter 16 – Advertising, Sales Promotion, and Public Relations
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Chapter 16 – Advertising, Sales Promotion, and Public Relations
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POWERPOINT RESOURCES TO USE WITH LECTURES
PowerPoint
Textbook Figures Slide
Figure 16-1 U.S. advertising expenditures, by medium ………………………………………………………… 16-12
Figure 16-2 Advertisers must consider the advantages and disadvantages of the many media
alternatives ……………………………………………………….………………………………………….. 16-15
Applying Marketing Metrics
What is the Best Way to Reach 1,000 Customers?: Cost per Thousand (CPM) Impressions
[See UMD16CPM.xls] ………………………………………………………………………………………………………. 16-14
Marketing Matters, Making Responsible Decisions, and/or Marketing Insights
Making Responsible Decisions—Ethics: Who is Responsible for Click Fraud? ………………………… 16-22
Videos
16-1: Virtual Reality Video ………………………………………………………………………………………………… 16-4
16-3: Amazon Super Bowl Video ………………………………………………………………………………………… 16-8
16-5: Beats by Dre ……………………………………………………………………………………………………………. 16-10
ICA 16-1: What Makes an Award-Winning TV Commercial? ……………………………………………….. 16-44
ICA 16-2: Recognizing Advertising Slogans/Taglines …………………………………………………………… 16-48
ICA 16-4: Product Placement in Movies and TV ………………………………………………………………….. 16-54
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LEARNING OBJECTIVES (LO)
After reading this chapter students should be able to:
LO 16-2: Describe the steps used to develop, execute, and evaluate an advertising program.
LO 16-4: Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales
promotions.
LO 16-5: Recognize public relations as an important form of communication.
KEY TERMS
advertising
posttests
consumer-oriented sales promotions
pretests
cooperative advertising
product advertisements
infomercials
product placement
institutional advertisements
publicity tools
mobile marketing
trade-oriented sales promotions
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LECTURE NOTES
FANTASY IS BECOMING REALITY FOR ADVERTISERS!
• A few years ago virtual reality (VR) and augmented reality (AR) were primarily for
video games. Today, more than 20 million people have tried the technologies and
advertisers are thrilled!
• Advertisers face an increasingly challenging environment: ad blocking, media
surplus, and changing viewing behaviors have reduced the effectiveness of traditional
advertising.
• Consumers want less intrusive ads and fewer irrelevant ads. Ads must be personally
relevant and a worthwhile use of time.
• VR and AR offer advertisers a way to provide unique, immersive experiences to
consumers.
• By 2020 more than 154 million people will use these technologies, and media
planners want more VR and AR ads implemented into digital marketing campaigns.
[Video 16-1: Virtual Reality Video]
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I. TYPES OF ADVERTISEMENTS [LO 16–1]
• Advertising is any paid form of nonpersonal communication about an organization,
product, service, or idea by an identified sponsor.
• Advertisements are prepared for different purposes, but they basically consist of two
basic types: product and institutional.
A. Product Advertisements
Product advertisements focus on selling a product or service and take three forms:
• Pioneering (or informational) advertisements.
a. Tell people what a product is, what it can do, and where it can be found.
• Competitive (or persuasive) advertisements.
a. Promote a specific brand’s features and benefits.
b. Persuade the target market to select the firm’s brand over a competitor’s.
c. Comparative advertising.
• Is an increasingly common form of competitive advertising.
• Shows one brand’s strengths relative to those of competitors.
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B. Institutional Advertisements
• Institutional advertisements build goodwill or an image for an organization
rather than promote a specific product or service.
• Objectives are to:
a. Build confidence in the company name.
[Video 16-2: Chevron Video]
b. Pioneering institutional (or informational) advertisements.
• Are like the pioneering ads for consumer products.
• Announce what a company is, what it can do, or where it is located.
c. Competitive institutional advertisements.
• Promote the advantages of one product class over another.
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LEARNING REVIEW
16-1. What is the difference between pioneering and competitive ads?
Answer: Pioneering (or informational) ads, used in the introductory stage of the product
16-2. What is the purpose of an institutional advertisement?
II. DEVELOPING THE ADVERTISING PROGRAM [LO 16–2]
The promotion decision process can be applied to each promotion element (Chapter 17).
A. Identifying the Target Audience
• Advertisers identify the target audience to develop an advertising program.
• The lifestyles, attitudes, and demographics of target consumers influence all
aspects of an advertising program.
• Advertisers use specific advertising techniques to reach their target audiences.
a. Example: Mountain Dew.
b. Example: Kraft’s Crystal Light Liquid.
• Targeted at calorie-conscious women.
• Even scheduling can depend on the audience.
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a. Nike schedules advertising, sponsorships, deals, and endorsements to
correspond with the Olympics to appeal to athletes.
B. Specifying Advertising Objectives
• Helps advertisers with selecting media and evaluating an advertising campaign.
• The Association of Magazine Media:
a. Believes objectives are important that it is developing an awards program to…
• Advertising can have a long-term impact on an organization’s financial value.
C. Setting the Advertising Budget
The Super Bowl delivers a huge audience, if you can afford it.
a. The reason for the escalating cost is the growing number of viewers. Super
Bowl LII cost was $5 million for 103 million viewers.
b. Advertisers find the Super Bowl and its audiences attractive because:
• The audience is equally split between men and women and they look
forward to watching the Super Bowl ads.
[Video 16-3: Amazon Super Bowl Video]
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D. Designing the Advertisement
1. Message Content.
a. Most advertising messages:
• Consist of both informational and persuasive elements that…
• Can be combined in an appeal to…
• Provide consumers with a reason to act.
– Most persuasive advertisements have basic information to convey.
b. Marketers use three common appeals: fear, sex, and humorous.
• Fear appeals.
– Suggest that consumers can avoid some negative experience through:
* The purchase and use of a product or service.
• Sex appeals.
– Suggest to the audience that the use of a product will increase the
attractiveness of the user.
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– Can be found in almost any product category.
– Are successful at gaining the attention of the audience by helping
• Humorous appeals.
– Imply either directly or more subtly that the product is more fun or
exciting than competitors’ offerings.
[ICA 16-1: What Makes a Memorable TV Commercial?]
2. Creating the Actual Message.
a. Copywriters:
• Are responsible for creating the text portion of an ad’s message.
• Translating their ideas into an actual ad is a complex process.
[ICA 16-2: Recognizing Advertising Slogans/Taglines]
d. Designing quality artwork, layout, and production for ads:
• Is costly:
– High-quality 30-second TV ads cost an average of $354,000.
a. Advertising agency Anomaly:
• Named Advertising Age’s U.S. Agency of the Year for its work in data
analytics, intellectual property, and multicultural insights.
• Ex: “Be Heard” campaign for Beats by Dre; “It’s not what we listen to,
it’s who we are” campaign for YouTube Music, and more.
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• Also named by Fast Company magazine as one of World’s Top 10 Most
Innovation Companies in Advertising.
[Video 16-4: Anomaly Agency]
[Video 16-5: Beats by Dre]
LEARNING REVIEW
16-3. Describe three common forms of advertising appeals.
16-4. What _____ are responsible for creating the text portion of the message in
advertising?
E. Selecting the Right Media
• Advertising media.
a. Are the means by which the message is communicated to the target audience.
• The media selection decision is related to the:
a. Target audience. d. Campaign objectives.
• [Figure 16-1] Shows the distribution of the $249 billion spent on advertising
among the many media alternatives.
a. Advertisers use a mix of media forms and vehicles to:
• Maximize the exposure of the message to the target audience.
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c. Reach.
• Is the number of different people or households exposed to an ad.
d. Rating.
• Is the percentage of households in a market that…
f. Frequency.
• Is the average number of times a person in the target audience is exposed
to a message or advertisement.
• Advertisers expose a target audience to messages more than once because:
– People often do not pay close attention to them.
g. Gross rating points (GRPs).
• Is reference number advertisers use that is obtained by multiplying reach
h. Cost per thousand (CPM).
• Is the cost of reaching 1,000 individuals or households with the
advertising message in a given medium. (M = Roman numeral for 1,000.)
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APPLYING MARKETING METRICS
What is the Best Way to Reach 1,000 Customers?
Cost per Thousand (CPM) Impressions
Since there are so many media alternatives and multiple options within each medium,
advertisers monitor the efficiency of advertising expenditures on a marketing dashboard.
Your Challenge.
You are about to introduce a new soft drink into the U.S. market and have observed
[See UMD18CPM.xls]
Your Findings.
Cost, audience size, and CPM data for full-page color ads in Bloomberg
Businessweek, USA Today, and a 30-second television ad during a recent Super Bowl are
shown on the marketing dashboard.
Your Actions. As shown on the marketing dashboard:
• There is a large variation in:
a. The cost of reaching 1,000 potential customers.
c. Whether the type of message is better communicated in print or on television.
F. Different Media Alternatives [LO 16-3]
[Figure 16-2] Each major advertising medium has its advantages and disadvantages.
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1. Television.
a. Is valuable because it communicates with sight, sound, and motion.
b. Reaches 96 percent of the 118.4 million, including households that get video
over the Internet to a TV.
c. Includes which only watch over the Internet.
Streaming services have led to “cord–cutting” among consumers.
• Television technology has changed. Many consumers:
– Have purchased high definition (HD) TVs.
– Will purchase 4K, 8K, OLED, and glass-less 3D TVs that are:
* Are four to eight times as sharp as HDTVs.
Chapter 16 – Advertising, Sales Promotion, and Public Relations
• Are increasingly popular because:
– They can be informative and entertaining.
– The average cost of a 30-minute block of TV time is only $425.
• The industry:
– Generates more than $250 billion in annual sales.
– Has facilitated the long-term success of many products.
2. Radio.
a. In the U.S., there are:
• More than 15,500 radio stations that…
• Include 4,660 AM and 10,860 FM stations.
b. The advantages of using radio are:
• It is a segmented medium.
• Different market segments listen to different formats, such as all-talk,
classic rock, etc.
c. Satellite radio service SiriusXM Radio.
• Can easily tune out a commercial by switching stations.
• Competes for people’s attention as they do other activities such as driving,
working, or relaxing.
• Radio listening time is at its peak during the morning drive time (7 to 8
A.M.), remains high during the day, and begins to decline after 4 P.M.
16–17
3. Magazines.
a. There are about 7,293 magazines in the U.S.
b. Some 237 new magazines were launched last year.
c. Many publishers are adding new digital versions of existing magazines.
4. Newspapers.
a. Newspapers:
• Are an important local medium.
• Have excellent reach potential.
b. Local retailers often use newspapers as their sole advertising medium.
c. Consumers:
• Rarely save newspapers.
d. Firms are limited to ads that call for an immediate customer response.
e. Newspapers do not have as good color reproduction as magazines.
f. National advertising campaigns:
• Rarely include newspapers except in conjunction with local distributors of
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g. Some newspapers:
5. Yellow Pages.
a. Advertisers spend about $8 billion in the U.S. on this medium.
b. 40% of U.S. consumers use print Yellow Pages at least once a year and 25%
6. Internet.
a. Is a relatively new medium for advertisers.
b. Has attracted a wide variety of industries.
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c. An advantage of online advertising is that it provides many of the advantages
and characteristics of other media TV, magazines, newspapers, etc.
• Mobile marketing now includes broad set of interactive messaging
options to engage with consumers through any mobile device.
f. Disadvantages of using online advertising:
• The difficulty of measuring the impact after viewers see an ad on their
computers and other devices.
– Nielsen Online Ratings:
* Measures actual Internet use through…
MAKING RESPONSIBLE DECISIONS
Ethics: Who is Responsible for Preventing Click Fraud?
Spending on Internet advertising is expected to now exceeds $78 billion as many
advertisers shift their budgets from print and TV to the Internet. One advantage of online
advertising is that they only pay when someone clicks on their ad. Unfortunately, the growth
Chapter 16 – Advertising, Sales Promotion, and Public Relations
7. Outdoor.
a. Outdoor advertising is effective for reminding consumers about a product.
b. Billboards are the most common form of outdoor advertising.
• The advantages of using billboards are:
– Has good reach and frequency in a desired geographical area.
– Has been shown to increase purchase rates.
c. Transit advertising.
• Includes messages on the interior and exterior of buses, subways, light-rail
cars, and taxis.
8. Other Media.
a. Advertisers:
• Use nontraditional advertising options called out-of-home advertising.
• Is also referred to as place-based media because…
G. Scheduling the Advertising