ADVERTISING PRELIM EXAM REVIEWER
1-ADVERTISING & PROMOTION UNDER
CONVERGENCE
Why study advertising and promotion?
A focus on the work of advertising agencies enables
us to examine not only what advertising and
promotion produce and why, but also how it is
produced.
What is Advertising?
Advertising is defined as any paid form of
nonpersonal communication about an organization,
product, service, or idea by an identified sponsor.
The paid aspect means that an advertising message
must be bought.
Nonpersonal means that advertising involves mass
media that can transmit a message to large groups
of individuals, often at the same time, and that there
is no opportunity for immediate feedback from the
message recipient.
Promotion, more commonly referred to as
promotions, is a method of announcing your
product or service using more dynamic means that
you can easily modify or change. Promotion
involves disseminating information about a product,
product line, brand, or company.
Examples include coupons; sales; celebrity
endorsements; event, team, or league sponsorships;
contests; rebates; free samples; catalogs; social
media; donations; and direct mail.
Note: Advertising is just one of the many types of
promotion along with sales promotion, public
relations, and direct marketing.
4 Types of Promotions
1. Advertising
2. Direct Marketing
3. Sales Promotion
4. Public Relations
Direct Marketing
Organizations communicate directly with customers
to generate a response and/or a transaction.
Ex. Direct selling, database management,
telemarketing, and direct response advertising
through direct mail, online, and various broadcast
and print media.
Companies that do this are: Tupperware, Avon,
Mary Kay, Herbalife, and Amway
Sales Promotion
Marketing activities that provide extra value or
incentives to the sales force, the distributors, or the
ultimate consumer, and can stimulate immediate
sales. It can be consumer-oriented and trade-
oriented.
Consumer-oriented sales promotion is targeted to
the ultimate user of a product or service and
includes couponing, sampling, premiums, rebates,
contests, sweepstakes, and various point-of-
purchase materials. These tools encourage the
customers to make an immediate purchase and thus
can stimulate short-term sales.
Trade-oriented sales promotion is targeted toward
marketing intermediaries such as wholesalers,
distributors, and retailers.
Promotional and merchandising allowances, price
deals, sales contests, and trade shows are some of
the promotional tools used to encourage the trade to
stock and promote a company’s products.
Public Relations
Defined as a strategic communication process that
builds mutually beneficial relationships between
organizations and their public. Its purpose is to
establish and maintain a positive image of the
company among its various public. It involves
managing relationships with a number of important
audiences, including investors, employees,
suppliers, communities, and governments.
Publicity refers to nonpersonal communications
regarding an organization, product, service, or idea
not directly paid for or run under identified
sponsorship.
Ex. News, editorial, announcements, etc.
The Changing Media Landscape for Advertising
and Promotion
Advertising is undergoing a time of change and
disruption as the industry tries to respond to new
media funding models and changing patterns of
media consumption.
DIGITAL = is becoming the biggest category of ad
spend globally today
Today, SOCIAL MEDIA MARKETING is the
top priority.
Variety of media content in social media
campaigns:
• Video
• Blogs
• Viral
• Advergames, etc.
Traditional Media Vehicles: print, radio,
television
What is a Creative Team
Creative teams work in advertising agencies to
dream up and execute advertising campaigns for the
companies that hire advertising agencies. Some
large companies have in-house advertising
departments, so have their own creative teams.
These individuals primarily coordinate and create
the ad copy and the artwork for various media,
including television, radio, Internet, magazine, and
newspaper ads. They also develop direct-mail
campaigns, which usually consist of sales letters,
brochures, and order forms.
Media consumption now often occurs via a mobile
screen since consumers can access information,
news, entertainment, and retail choices via a
smartphone or other internet-enabled mobile device.
This results in a passive audience.
The audience accepts and believes all messages
in any media text that they receive. They accept
the preferred reading and don't question it
Note: Mass Media Advertising remains important
for generating profiles and accessing particular
groups, but a large proportion of under-35s in
developed economies access all their news,
information, and entertainment via the internet.
Mass media is communication—whether written,
broadcast, or spoken—that reaches a large audience.
This includes television, radio, advertising, movies,
the Internet, newspapers, magazines, and so forth.
Mass Communication
Mass communication (or communications) can be
defined as the process of creating, sending,
receiving, and analyzing messages to large
audiences via verbal and written media
Taste Publics
Groups of people bound by little more than an
interest in a given form of media content or have
similar aesthetic standards
Advertising Reach
Reach refers to the number of people in a target
audience that are exposed to a single ad served.
The audience reach of each individual mass media
has shrunk and this trend is evident all over the
world as TV viewing figures and hard-copy
newspaper sales plummet.
Changes in the Media Landscape
Day-and-date Release
Simultaneously releasing a movie to the public in
some combination of theater, video-on-demand,
DVD, and download
The challenge facing the media industry today is
how to capture a mass audience now fragmented
into millions of niches. “An unfamiliar new
entertainment landscape, one in which the old rules
of media consumption no longer apply.” (Bing, J.
2006)
The Fragmentation of Media Audiences
Audience Fragmentation is a phenomenon where
over time the mass audience becomes more diverse
in their overall media consumption as individuals
become more selective and specialized.
Individual segments of the audience are becoming
more narrowly defined; the audience itself is less of
a mass audience
Audience wants more personalized content
Media Multitasking
Simultaneously consuming many different kinds of
media or the concurrent use of multiple digital
media streams.
In many cases, media multitasking is made up of
experiences that are not necessarily intended to be
combined or coordinated. For example, a user may
be browsing the Web, listening to music, playing
video games, using e-mail, and/or talking on the
phone while watching TV
Media Convergence
• The erosion of traditional distinctions
among media
• The interlinking of computing and other
information technologies, media content,
media companies, and communication
networks that have arisen as the result of the
evolution and popularization of the Internet
as well as the activities, products, and
services that have emerged in the digital
media
3 Elements of Media Convergence
1. Digitization
2. High-speed connectivity
3. Seemingly endless advances in technology
Why Converge?
1. Concentration – result in using as many
channels of delivery as possible (synergy)
2. Audience Fragmentation
3. The audience itself (becoming platform
agnostic- having no preference for where we
access our media content)
Concentration of Ownership
Ownership of media companies is increasingly
concentrated in fewer and fewer hands. Through
mergers, acquisitions, buyouts, and hostile
takeovers, a very small number of large
conglomerates are coming to own more and more of
the world’s media outlets.
Also called media consolidation.
Conglomeration
The increase in the ownership of media outlets by
larger, nonmedia companies.
Defense of Conglomeration
1. Companies must maximize their number of
outlets to reach as much of the divided and
far-flung audience as possible (to avoid
financial insecurity).
2. Economies of Scale- bigger is better
because the relative cost of an operation’s
output declines as the size of the endeavor
grows
Product Placement
The integration, for a fee, of specific branded
products into media content
Brand Entertainment
• Response of producers emphasizing that
product placement is not a commercial but a
new form of content
• When brands are in fact part of and essential
to the program
2-THE ADVERTISING INDUSTRY
The Advertising Industry
The advertising industry is composed of three
types of companies and is sometimes described as
a 'tripartite industry' (Fletcher, 2008).
1. The production of advertising starts with
advertisers (also known as 'clients' or
'accounts'). These companies have a
particular problem they want to solve
through advertising.
2. Advertisers hire advertising agencies (also
known as 'shops') to design and produce
effective advertising for them.
3. Agencies, in turn, commission media
producers (also known as 'content
providers') to distribute the ads to a target
market.
So where did agencies come from and how did they How the Agents’ roles evolved over time
come to occupy their position in the middle of the
Agents, later on, gave advice and guidance to
advertising industry?
advertisers, especially on where to advertise.
Agents calculate the CPM (cost per thousand) of a
particular audience by dividing the cost of the
advertising space by the number of people the
newspaper or magazine reached.
agencies increasingly started to advise their clients
on the types of advertising they produced.
Standard Working Practices in Advertising
Agencies

The Direct Era • The pitch - This involves a presentation by

It is possible for advertisers to produce their own
ads and distribute them to potential customers. This
was how advertising started.
The Mediated Era
Media providers would sell space in their
Also called 'chemistry meetings’
newspapers, pamphlets, and magazines to
commercial organizations on an individual basis.
Over time though, this model proved limited. It was
especially constraining for larger companies who
wanted to advertise across multiple markets.
Making deals with numerous publications in each
location was inefficient and ineffective.
The Agency Era
Entrepreneurial individuals started to broker the
relationship between advertisers and media
providers. They purchased space in multiple outlets
and offered advertisers a single point of contact – a
one-stop shop where they could buy lots of
advertising space in different media outlets. As
such, the industry moved into the 'Agency Era’.
These entrepreneurs soon found that they could
negotiate preferential rates from media providers.
They could block buy space from media providers
at a discount and sell it on to advertisers at full cost.
At this early stage, then, agents were essentially
wholesalers. They traded space in the media.
“shops”
“inventories”
key staff about the agency covering its work
and its personnel and its ideas for the client.
The pitch is the chance for an agency to
show that it understands the client and has
the creative capacity to produce effective
solutions to its marketing problems.
• Creative Brief- It sets out the client's needs,
their budget, and some of the constraints that
the agency must work within.
• Agency’s Roster- Agencies typically work
for multiple clients. Managing a roster is not
easy. It is generally accepted that agencies
will not work with multiple clients operating
in the same market
• Clients provide the revenue for the
advertising production chain. Typically,
agencies earn their money from a
commission they charge on any media space
they purchase for their clients.
• Clients occasionally put their accounts
under review. This means the incumbent
agency that holds its account will have to
justify its costs. Often the incumbent agency
will be asked to pitch (or repitch) again for
the business against other agencies.
Common features of advertising agencies 'full such as HR and budgeting. They ensure that
service' agencies’ clients pay their bills and that the agency
pays theirs too.
• Account management. The account
management function manages the Full-Service Agency Structure (adapted from
relationships between clients and agencies. White, 2000)
Account managers listen to a client's
marketing needs and report these back to the
agency. They are sometimes described as
'suits'. They need to have intimate
knowledge of their client's key people,
strategy, objectives, and marketing needs.
White (2000: 13) describes them as
'business associates for the client'. In some
cases, they even help the client to formulate
their marketing strategy.
• The creative department. The creative
department takes information from the
account team and uses it to produce a
'concept' for an ad or campaign that will
help the client to meet their marketing
objectives.
A concept is the key idea behind an ad. It is a
translation of the marketing objectives into a
persuasive message that will appeal to consumers. It
is reported back to the client by the accounts team
and, if the client is happy, they commit to cover the
3- ADVERTISING BASICS
costs of making the concept a reality. The technical
name for these is 'executions'. Features of Advertising

• Account planning. Account planning is 1. Communication: Advertising is means of mass

responsible for ensuring the agency has a
detailed understanding of consumers based
on market research, experience, and
intuition. They feed this to account
managers to help develop client briefs.
• Media planning and buying. Media
planning and buying departments organize
for ads to appear in particular media outlets.
Their job is to ensure that media providers
produce content that will attract the right
audiences to help advertisers meet their
marketing objectives. They also work to
secure the most cost-effective media space
for an advertiser.
• Management and administration.
Management and administration
departments deal with day-to-day affairs
communication reaching the masses. It is a non-
personal communication because it is addressed to
the masses.
2. Information: Advertising informs buyers about
the benefits they would get when they purchase a
particular product. However, the information given
should be complete and true.
3. Persuasion: The advertiser expects to create a
favorable attitude that will lead to favorable actions.
Any advertising process attempts at converting
prospects into customers. It is thus indirect
salesmanship and essentially a persuasion
technique.
4. Profit Maximization: True advertising does not
attempt at maximizing profits by increasing the cost
but by promoting the sales. This way It won’t lead
to an increase in the price of the product. Thus, it
has a higher sales approach rather than the higher-
cost approach.
5. Non-Personal Presentation: Salesmanship is
personal selling whereas advertising is non-personal
in character. Advertising is not meant for anyone
individual but for all. There is an absence of
personal appeal in advertising.
6. Identified Sponsor: A sponsor may be an
individual or a firm that pays for the advertisement.
The name of a reputed company may increase sales
or products. The product gets a good market
because of its identity with the reputed corporate
body.
7. Consumer Choice: Advertising facilitates
consumer choice. It enables consumers to purchase
goods as per their budget requirements and choice.
The right choice makes consumers happy and
satisfied.
8. Art, Science, and Profession: Advertising is an
art because it represents a field of creativity.
Advertising is a science because it has a body of
organized knowledge. Advertising profession is
now treated as a profession with its professional
bodies and code of conduct for members.
9. Element of Marking Mix: Advertising is an
important element of the promotion mix.
Advertising has proved to be of great utility to sell
goods and services. Large manufacturers spend
crores of rupees on advertising.
10. Element of Creativity: A good advertising
campaign involves a lot of creativity and
imagination. When the message of the advertiser
matches the expectations of consumers, such
creativity makes way for a successful campaign.
Objectives of Advertising
1. To introduce a new product by creating
interest for it among prospective customers.
2. To support a personal selling program.
Advertising may be used to open customers'
doors for salesmen.
3. To reach people inaccessible to salesmen.
4. To enter a new market or attract a new
group of customers.
5. To light competition in the market and to
increase sales. Ex. Competition between
Coke and Pepsi.
6. To enhance the goodwill of the enterprise by
promising better quality products and
services.
7. To improve dealer relations. Advertising
supports the dealers in selling the product.
Dealers are attracted to a product that is
advertised effectively.
8. To warn the public against imitation of an
enterprise's products.
Importance of Advertising
Advertising has become an essential marketing
activity in the modern era of large-scale production
and serves competition in the market. It performs
the following functions:
1. Promotion of Sales: It promotes the sale of
goods and services by informing and
persuading people to buy them. A good
advertising campaign helps in winning new
customers in the national as well as in the
international markets.
2. Introduction of New Product: It helps the
introduction of new products in the market.
A business enterprise can introduce itself
and its product to the public through
advertising.
3. Creation of Good Public Image: It builds
up the reputation of the advertiser.
Advertising enables a business firm to
communicate its achievements to satisfy the
customers' needs. This increases the
goodwill and reputation of the firm which is
necessary to fight against the competition in
the market.
4. Mass Production: Advertising facilitates
large-scale production. Advertising
encourages the production of goods on a
large scale because the business firm knows
that it will be able to sell on a large scale
with the help of advertising.
5. Research: Every firm tries to differentiate
its product from the substitutes available in
the market through advertising. This
compels every business firm to do more and
 more research to find new products and their
new uses.
6. Education of People: Advertising educate
people about new products and their uses.
Advertising message about the utility of a
product enables people to widen their
knowledge.
7. Support to Press: Advertising provides an
important source of revenue to publishers,
magazines, newspapers, radio, and
television. It enables them to increase the
circulation of their publication by selling
them at lower rates.
Roles of Advertising in Marketing Mix
Advertising is an element of promotion. However, it
not only assists in promoting the product but also
affects the other variables of the marketing mix.
This can be explained as follows:
1. Advertising and Product: Buyers must be
informed and educated on the various
aspects of the product. This can be
effectively done through advertising.
2. Advertising and Price: The price is the
exchange value of the product. A marketer
may bring out a very high-quality product
with additional features as compared to
competitors. In such a case, the price would
be high. But buyers may not be willing to
pay a high price would be high. Here comes
advertising. Advertising can convince
buyers regarding the superiority of the brand
and thus its value for money.
3. Advertising and Place: Place refers to
physical distribution and the stores where
the goods are available. Marketers should
see to it that the goods are available at a
convenient place and that too at the right
time when the buyers need it. To facilitate
effective distribution and expansion of the
market, advertising is of great significance.
Thus advertising does help in effective
distribution and market expansion.
4. Advertising and Promotion: Promotion
consists of advertising, publicity, personal
selling, and sales promotion techniques.
Advertising can play a significant role to put
forward the claim of the seller and
countering the claims of the competitor.
Through effective advertising, sellers can
face competition and help to develop brand
image and brand loyalty.
5. Advertising and Pace: Pace refers to the
speed of marketing decisions and actions. It
involves among other things the launch of
new products or brand variations at a greater
speed than before. As and when new brands
are launched, advertising plays an important
role in informing, educating, and persuading
customers to buy the product.
6. Advertising and Packaging: The main
purpose of packaging is the protection of the
product during transit and the preservation
of quality and quantity. Nowadays,
marketers take a lot of effort to develop and
design attractive packages as they carry
advertising value. A creative design package
attracts the attention of the customers. It also
carries an assurance of quality and creates
confidence in the minds of customers to buy
the product.
7. Advertising and Positioning: Product
positioning aims at creating and maintaining
a distinct image of the brands in the minds
of the customers. Through advertising, the
marketer can convey the positioning of the
brand and accordingly can influence the
buying decision of the target audience.
Roles of Advertising in the Society
• Encourage Purchasing -Encouraging
people to purchase goods and services is the
main role of advertising.
• Reflect cultural trends -Advertising
bridges the gap among people by
communicating varied cultures through
advertising messages.
• Promotes Economic Growth - Advertising
contributes to bringing about all-round
development of the economy by increasing
demand and by encouraging economic
activities it fuels the desire to shop and, in
turn, shopping stimulates the economy