BBA 503 Advertisement & Sales Promotion

Unit-I
Definition of Advertisement
Advertising is the action of calling public attention to an idea, good, or service through paid
announcements by an identified sponsor.

According to Kotler: Advertising is any paid form of non-personal presentation & promotion
of ideas, goods, or services by an identified sponsor.

According to Advertising Association of the UK: Advertising is any communication, usually

paid-for, specifically intended to inform and/or influence one or more people.

A simpler (and modern) definition of advertising can be: A paid communication message
intended to inform people about something or to influence them to buy or try something.

Objectives of Advertisement
There are 3 main objectives of advertising. These are:

To Inform: Advertisements are used to increase the brand awareness and brand exposure in
the target market. Informing the potential customers about the brand and its products is
the first step towards attaining business goals.

To Persuade: Persuading customers to perform a particular task is a prominent objective of

advertising. The tasks may involve buying or trying the products and services offered, to
from a brand image, develop a favourable attitude towards the brand etc.

To Remind: Another objective of advertising is to reinforce the brand message and to

reassure the existing and potential customers about the brand vision. Advertising helps the
brand to maintain top of mind awareness and to avoid competitors stealing the customers.
This also helps in the word of mouth marketing.

Other objectives of advertising are subsets of these three objectives. These subsets are:
Brand Building, Increasing Sales, Creating Demand, Engagement, Expanding Customer Base,
Changing Customers’ attitudes, etc.

Functions of Advertisement
Advertising has become an essential marketing activity in the modern era of large-scale
production and severe competition in the market.
(i) Promotion of Sales: Advertising promotes the sale of goods and services by informing
and persuading the people to buy them. A good advertising campaign helps in winning
customers and generating revenues.
(ii) Introduction of New Products: Advertising helps in the introduction of new products in
the market. A business enterprise can introduce itself and its products to the public through
advertising. Advertising enables quick publicity in the market.
(iii) Support to Production System: Advertising facilitates large-scale production. The
business firm knows that it will be able to sell on a large-scale with the help of advertising.
Mass production will reduce the cost of production per unit by making possible the
economical use of various factors of production.
(iv) Increasing Standard of Living: Advertising educates the people about the products and
their uses. It is advertising which has helped people in adopting new ways of life and giving
up old habits. It has contributed a lot towards the betterment of the standard of living of the
society.
(v) Public Image: Advertising builds up the reputation of the advertiser. Advertising enables
a business firm to communicate its achievements and its efforts to satisfy the customers’
needs to the public. This increases the goodwill and reputation of the firm.
(vi) Support to Media: Advertising sustains press. Advertising provides an important source
of revenue to the publishers of newspapers and magazines and the producers of T.V.
programmes.

Classification of Advertising
1. Print Advertising: The print media has been used for advertising since long. The
newspapers and magazines are quite popular modes of advertising for different
companies all over the world. Using the print media, the companies can also
promote their products through brochures and fliers. The newspaper and magazines
sell the advertising space and the cost depends on several factors. The quantity of
space, the page of the publication, and the type of paper decide the cost of the
advertisement. So an ad on the front page would be costlier than on inside pages.
Similarly an ad in the glossy supplement of the paper would be more expensive than
in a mediocre quality paper.
2. Broadcast Advertising: This type of advertising is very popular all around the world.
It consists of television, radio, or Internet advertising. The ads on the television have
a large audience and are very popular. The cost of the advertisement depends on the
length of the ad and the time at which the ad would be appearing. For example, the
prime time ads would be more costly than the regular ones. Radio advertising is not
what it used to be after the advent of television and Internet, but still there is
specific audience for the radio ads too. The radio jingles are quite popular in sections
of society and help to sell the products.
3. Outdoor Advertising: Outdoor advertising makes use of different tools to gain
customer’s attention. The billboards, kiosks, and events and tradeshows are an
effective way to convey the message of the company. The billboards are present all
around the city but the content should be such that it attracts the attention of the
customer. The kiosks are an easy outlet of the products and serve as information
outlets for the people too. Organizing events such as trade fairs and exhibitions for
promotion of the product or service also in a way advertises the product. Therefore,
outdoor advertising is an effective advertising tool.
4. Covert Advertising: This is a unique way of advertising in which the product or the
message is subtly included in a movie or TV serial. There is no actual ad, just the
mention of the product in the movie. For example, Tom Cruise used the Nokia phone
in the movie Minority Report.
5. Public Service Advertising: As evident from the title itself, such advertising is for the
public causes. There are a host of important matters such as AIDS, political integrity,
energy conservation, illiteracy, poverty and so on all of which need more awareness
as far as general public is concerned. This type of advertising has gained much
importance in recent times and is an effective tool to convey the message.

Advertising Agency Functions

1. Advertising Plan: Advertising agency either prepares or helps in preparing
advertising plans and programmes for its clients. Preparing an advertising plan needs
concerted efforts and investigative information. In performing this function, the
agency should have full information about the products and their markets. It may
pertain to: (a) the product’s positive aspects, (b) past record, (c) its position in the
competitive market, and (d) competitors’ negative aspects, strengths and
weaknesses.
2. Creation and Execution: An advertising plan, prepared by the advertising agency
will be sent to the advertiser for approval. Once approved, its execution is normally
assigned to the agency. The agency enters into contracts with the suitable media and
the stage is set for creating an effective advertisement to suit the advertising media.
Copy will be written, layouts are made, illustrations are drawn or photographed;
commercials are produced, advertising messages are prepared. Billing for service
space is done.
3. Co-ordination: Coordination is another important function of an advertising
agency. It has to ensure a proper coordination between the clients, sales force and
the distribution network to ensure long-run success of the advertising programme.
The goal of the advertising programme must be to assist the efforts of sales persons,
distributors and retailers to maximize sales for the client. Many agencies also render
special services in such areas as market research, publicity, preparation of product
literature, etc.
4. Research: Research may enable them to make stronger presentation to their
clients. It may help the copy and art personnel, to create better advertisements for
their clients.
5. Mechanical production: The function of this department is to transform copy,
illustrations and layout into a satisfactory printed advertisement. Obviously, this
department interacts closely with the copy and art directors.
6. Traffic: In an advertising agency, the term traffic refers to scheduling and control.
This department sets up a work schedule and a routing sequence for each
advertisement, and then supervises its progress through various stages in the
agency. Once an advertisement is prepared, it is forwarded to the media which will
carry it. It can happen only after copy, illustration, mechanical production and
client’s approval are on schedule. Where there is no separate traffic department in
an advertising agency, the duty is assigned to the production manager or the
account executive.
7. Accounting: The common assignments of the accounting department of an agency
include: to check the appearance of advertisements in media, to check media
invoices against release orders; to pay media bills; to bill clients and collect from
them; to look after such matters as records, book-keeping, and other office routines.
8. Public Relations: The fundamental objective of this department is to build and
maintain goodwill with the cross sections of public. The tools used in communicating
with the public are corporate advertising and publicity. The main job of this
department is to build stronger relations with clients and the various sections of the
public: customers, employees, middlemen and shareholders.

Names of Top Advertising Agencies in India (for reference)

1. Crayous Advertsing
Clients: Air India, Delhi Police, Kajaria, J&K Tourism, etc.
2. Havas Worldwide India
Clients: HDFC Securities, Rolta, Torrent Pharma, Dcold, Krack Cream, etc.
3. Fountainhead Digital
Clients: Wipro, Aditya Birla Group, HCL, etc.
4. Fortune Communications
Clients: Southern Railways, UTI Mutual Funds, etc.
5. JWT India
Clients: Apollo Hospital, Hero Honda, Standard Chartered, Ministry of Defence,
Pepsi Foods, 20th Century Fox, Parle, etc.
 Structure of Modern Advertising Agency

Agencies vary greatly in size and shape, but most follow and tried and tested structure that
works well, whether they employ a dozen people, or several hundred. In the smaller
agencies, some people will perform more than one role; one person may actually be the
entire department. In larger agencies, some of these departments are broken out again for
efficacy. But the fundamentals are the same, and it's because this model was born out of
necessity, and it works.

Account Services: The account service department comprises account executives, account
managers, and account directors, and is responsible for liaising with the agency's many
clients. This department is the link between the many departments within the agency and
the clients who pay the bills. In the past they were referred to as "the suits," and there have
been many battles between the account services department and the creative department.
But as most creatives know, a good account services team is essential to a good advertising
campaign.

Account Planning: This department combines research with strategic thinking. Often a mix
of researchers and account managers, the account planning department provides consumer
insights, strategic direction, research, focus groups and assists helps keep advertising
campaigns on target and on brand.

Creative: This is the engine of any advertising agency. It's the lifeblood of the
business because the creative department is responsible for the product. And an ad agency
is only as good as the ads the creative department puts out. The roles within the creative
department are many and varied, and usually include: Copywriters, Art Directors, Designers,
Production Artists, Web Designers, Associate Creative Directors and Creative Director(s).

In many agencies, copywriters and art directors are paired up, working as teams. They will
also bring in the talents of other designers and production artists as and when the job
requires it. Sometimes, traffic is handled by a position within the creative department,
although that is usually part of the production department. Everyone within creative
services reports to the Creative Director. It is his or her role to steer the creative product,
making sure it is on brand, on brief, and on time.

Finance and Accounts: At the end of the day, that's what ad agencies want. And it's what
their clients want, too. At the center of all the money coming into, and going out of, the
agency is the finance and accounts department. This department is responsible for handling
payment of salaries, benefits, vendor costs, travel, day-to-day business costs and everything
else you'd expect from doing business. It's been said that approximately 70 percent of an ad
agency's income pays salary and benefits to employees. However, this figure varies
depending on the size and success of the agency in question.
Media Buying: It is the function of the media buying department to procure the advertising
time and/or space required for a successful advertising campaign. This includes TV and radio
time, outdoor (billboards, posters, guerrilla), magazine and newspaper insertions, internet
banners and takeovers, and, well, anywhere else an ad can be placed for a fee. This usually
involves close collaboration with the creative department who came up with the initial
ideas, as well as the client and the kind of exposure they want.

Production: Ideas are just ideas until they're made real. This is the job of the production
department. During the creative process, the production department will be consulted to
talk about the feasibility of executing certain ideas. Once the ad is sold to the client, the
creative and account teams will collaborate with production to get the campaign produced
on budget. This can be anything from getting original photography or illustration produced,
working with printers, hiring typographers and TV directors, and a myriad of other
disciplines needed to get an ad campaign published.

Human Resources and Facilities: Most businesses, whether they're related to advertising or
not, will have an HR department. This is the department responsible for the nuts and bolts
of hiring and firing employees, dealing with state and federal employment laws, monitoring
vacation and sick time, and the overall wellbeing of the staff. They are often rolled in with
the facilities department, which is responsible for building maintenance, and keeping
everything in the office working, safe, and up to code.

Research: Larger agencies will rely heavily on their own research department to provide a
wealth of data on current and future clients. This is the department responsible for focus
groups and testing, analyzing and interpreting data, and helping the creative and account
teams focus on new market trends.

Online Development: Once relegated to a designer who knew a bit of coding, this is a fast-
growing department and deals with everything from website and mobile design, to apps and
interactive experiences. This department may have its own creative director that specializes
in web and online design, and will have a staff that could rival the size and strength of the
creative department.

I.T. (Information Technology): The I.T. department is no longer just a couple of nerds in a
basement (thank you The IT Crowd). It can be a huge department, especially in agencies that
have a large creative presence. Most I.T. companies in advertising agencies will specialize
more in Mac (Media Access Control) than PC, as most creative departments run on Apple
products.

Traffic: In small to mid-sized agencies, traffic is rolled up into the production department. It
is the job of traffic to get each and every job through the various stages of account
management, creative development, media buying and production in a set timeframe.
Traffic will also ensure that work flows through the agency smoothly, preventing jams that
may overwhelm creative teams and lead to very long hours, missed deadlines and
problematic client relationships. Traffic keeps the agency's heart beating.

Function of Advertising Department & Advertising Manager

Advertising departments play crucial roles in building revenue, profits and market share in small
companies and corporations. Most advertising departments have advertising managers or directors
who create and manage department budgets and oversee all advertising functions. Creative staff
members, including copywriters, artists and graphic designers, provide the written content, images
and graphics for various ads. All advertising department employees are expected to work cohesively
to meet their core responsibilities and accomplish key objectives.

Creating the Right Message: Before ad departments meet any of their objectives, they must create
the right messages for their target audiences. Target audiences are consumers who are most likely
to buy specific products or services. Consumers have primary motives for buying products or
services, and advertisers must appeal to those motives to get consumers to make purchases. For
example, consumers who want to lose weight are likely to respond to an ad that shows how other
satisfied customers have lost weight using certain products.

Building Brand Awareness: Building brand awareness is an important responsibility of corporate

advertising departments. Companies must get the message out to consumers that their brands exist
before people can buy them. Ad departments use characters, slogans, logos and stories in their ads
to build the awareness of their brands. Brand-awareness building is challenging because many
messages get lost amid the glut of commercials and promotions. That’s why many advertisers use
the AIDA principle to get noticed. AIDA stands for attention, interest, desire and action. The most
effective ads get readers’ or listeners’ attention by appealing to their needs. They then interest
consumers by offering viable solutions to those needs. Ad departments may create desire and action
in their advertising by showing how their products work, and offering special deals if people
purchase within particular time frames.

Scheduling Advertising: Advertising managers or coordinators determine when certain ads will
appear, whether they’re using TV commercials, magazines, direct mail or social media. Many work
with ad agencies or media companies when setting advertising schedules. Most advertising is
scheduled months in advance to provide media sources with enough time to create ads, complete
commercial shootings or print their publications. Advertising must be timely to elicit the desired
results. For example, the advertising department of a toy manufacturer may start advertising in early
November for Christmas.

Measuring Advertising Effectiveness: An advertising department usually allocates specific amounts

of money for each type of advertising, but it must ensure that its advertising is effective to maximize
returns on investments. Many companies measure advertising effectiveness through market
research. They conduct surveys among consumers to determine who's heard or seen their
advertising and whether it prompted them to buy their products or services. Generally, the more a
consumer can recall about an ad, the more effective it is, as long as it meets other essential criteria:
reaching the right target audience and increasing sales.

Advertising managers create interest among potential buyers of a product or service for a
department, for an entire organization, or on a project basis (account). They work in advertising
agencies that put together advertising campaigns for clients, in media firms that sell advertising
space or time, and in organizations that advertise heavily.

Advertising managers work with sales staff and others to generate ideas for an advertising
campaign. They oversee the staff that develops the advertising. They work with the finance
department to prepare a budget and cost estimates for the advertising campaign.
Often, advertising managers serve as liaisons between the client requiring the advertising and an
advertising or promotion agency that develops and places the ads. In larger organizations with an
extensive advertising department, different advertising managers may oversee in-house accounts
and creative and media services departments.

In addition, some advertising managers specialize in a particular field or type of advertising. For
example, media directors determine the way in which an advertising campaign reaches customers.
They can use any or all of various media, including radio, television, newspapers, magazines, the
Internet, and outdoor signs.

Advertising managers known as account executives manage clients' accounts, but they are not
responsible for developing or supervising the creation or presentation of the advertising. That task
becomes the work of the creative services department.

Client-Agency Relationship (CAR)

The client-agency relationship starts when a client appoints an advertising agency for making his ad.
It continues till the ad agency provides satisfactory services to him. Such a relation should always be
cordial. There should be a mutual trust, confidence and understanding between the two parties. It is
so, since, the primary objective of both sides is same, i.e. to make a successful advertising campaign.

Lack of mutual trust will be harmful to both parties. It is, therefore, necessary to maintain good
relations between the client and ad agency as follows:

1. Meaningful two-way communication is required to maintain a friendly client-agency

relationship.
2. Both parties should take special efforts to maintain a cordial relationship.
3. The approach of give-and-take is required to keep relations over a longer period.

Mentioned below are some significant guidelines (grouped under three categories) to maintain a
cordial client-agency relationship in advertising:

1. Suggestions for both parties (Client and Ad Agency).

2. Guidelines for the Client (Advertiser), and
3. Advice to the Advertising Agency.
Suggestions for a client and advertising agency to maintain their relations:

1. There should be a mutual understanding between client and agency.

2. 2. Misunderstanding or confusion, if any, between the two parties, should be resolved
quickly through direct talks.
3. The agency should work sincerely and honestly to bring a success to the client's ad
campaign.
4. Both parties should properly follow the terms and conditions of the contract.
5. Good communication must be there between client and agency. Hence, regular meetings
between them shall be arranged.
6. Both should take necessary efforts to maintain their relations friendly.

Guidelines for the client to preserve relationship with advertising agency:

1. Treat the ad agency with courtesy at all times and never hurt its ego.
 2. Provide all possible information about the product to be advertised and the organisation. A
well-informed ad agency will make better ads.
3. Don't unnecessarily bargain for the fees charged by the ad agency as this may affect the
quality of work.
4. Motivate the agency to do a good impactful work. Its charges such as media bills, fees and
other costs must be paid well in time. The client should not wait for the ad agency to remind
him about the payment dues.
5. Don't change the ad agency without a proper reason. If not satisfied, always first
communicate your expectations and then wait for necessary changes to reflect.
6. The client should approve the proposals submitted by the ad agency. He must avoid making
petty arguments and only highlight those crucial relevant matters that needs attention.
7. Give sufficient time to the agency to work on and develop an ad campaign. The client should
not pressurize it to work quickly. He should avoid giving deadlines.
8. Reduce disputes to a minimum.
9. Finalize in advance the charges for a particular ad campaign.

Advice to the advertising agency to maintain good relationship with client:

1. The advertising agency should do a smart and hard work to bring success to the client's ad
campaign.
2. It should make a good advertising plan and must implement it efficiently and effectively.
However, first it must get the approval from the client.
3. It is the duty of the account executive of the agency to keep his customer happy and
satisfied.
4. It should not charge client unreasonably high rates.
5. It should not make ads for client's competitor.
 6. It should get all the information from the market that will help to create better ads.
7. Discuss the ad fees with the client in advance to avoid disputes.
8. Disclose to the client the names of the team members (employees) that are working on his
ad campaign.
9. Inform the client about changes, if any, happening within the agency.
10. Never hurt client's ego. Agency should always provide timely services to him and try its best
to satisfy him.

So keeping a good client-agency relationship in advertising is crucial to the success of both parties.

Some of the world’s most valuable brands with long-term agency

relationship

Brand Age of brand Agency name Years of relationship

General Electric 101 years BBDO Worldwide 77 years
Levi’s 145years Foote, Cone & 67 years
Belding
Pepso-Cola 99 years BBDO Worldwide 37 years
Marlboro 43 years Leo Burnett Co. 43 years
McDonald’s 42 years DDB Needham 27 years
Worldwide

Selection of Advertising Agency

Businesses come to the conclusion of hiring an external ad agency, only when they are certified of
the fact that the agency will help them execute their advertising and promotional campaigns more
effectively. This is because the individuals working in an agency are not just passionate about
advertising, but are also knowledgeable experts in their own field and thrive on the values of unity
and dedication for the project at hand. Most advertisers work in collaboration with the hired agency,
in order to ensure that the work is carried out smoothly and also adheres to industry standards.
With their immense experience and technical know-how of the industry, ad agencies can work
wonders for the promotional activities of any business. But before you decide to hire the services of
an ad agency for your advertising efforts, you must conduct thorough research on the background of
the agency. Here are a few pointers the selector must include in his research:

1.Total extent of the Agency: In most cases, the larger the agency, the better quality of services
offered by the same. When an agency operates on a larger scale, it is pretty obvious that it has the
financial prowess to hire a good amount of ad professionals. Also, smaller agencies do not have the
skill to provide a wide range of services.

2. Number of clients under the Agencies’ belt: Most agencies have their own website or brochure.
You must log on to their website and view the existing clients being handled by the agency, before
hiring them to carry out your own work. If the agency has a client on board that deals in the same
line of products as yours, it is recommended to avoid the agency in order to avoid the occurrence of
repetitive work and exchange of crucial business information with the competitor.
3. Types of services on offer: It is essential to view the types of ad and non-ad based services offered
by the agency. Depending on your promotional needs and size or extent, you can hire a small or a
large ad agency accordingly. Moreover, certain types of agencies specialise in a particular field such
as FMCG advertising while other agencies may specialise in industrial marketing.

4. Creative talent possessed by the Agency: You must always calculate the number and amount of
creative personnel owned by the ad agency, as it forms the basic criteria for selection. Creativity can
be calculated on the basis of factors such as quality of personnel, experience, diversity, specialisation
and so on.

5. Media Contacts possessed by the Agency: With the help of adequate media contacts, the agency
will be able to accommodate the desired place, date and time required for the promotion of your
business. Agencies that closely work with most communication channels such as radio channels, TV
channels, publishers, printers and so on are the ones to consider.

6. Agency location and Proximity: It is important to calculate the location of the agency for better
communication and contact with the agency. The closer the proximity to the agency, the better
convenience, control and involvement with its activities.

7. Methods of payment and compensation: It is good to compare the ad rates demanded by

different agencies before zeroing in on the perfect one. This is because different agencies charge
different amounts and promotional activities are always bound by tight budgets.

8. Total amount of involvement: An agency must show complete respect for the client and allow it
to take part in the activities, give its feedback and work with the same form time-to-time. Moreover,
monthly reports and expenses should be shown by the advertiser on an alternate basis.

9. Endorsement of the Agency: Agencies that are endorsed by television, radio and newspapers are
the ones that are the most recognisable and this credit is eventually passed on to the clients. These
agencies have a specific code of conduct to follow and an image to portray, which makes them the
most reliable in the industry.

10. Agency Ranking: An agency that works hard to provide results and easy to approach, is the one
to consult. Which is why, it is important to research the current market standing held by the agency.
Agencies with a higher ranking are more reliable and provide better returns on investment.