Ad and IMC Chapter 4 Notes

Advertising & IMC: Principles & Practice
Eleventh Edition
Chapter 4
Action and Interaction: Direct
Response and Promotions
Copyright © 2019, 2015, 2012 Pearson Education, Inc. All Rights Reserved.
Part 1
Principle: All Communications One Voice
Key Objectives
1. Identify the functions and key elements of direct-
response communication.
2. Explain the importance of promotion.
3. Describe multiplatform promotions and explain how they
are used.
4. Discuss databases and their importance to consumer
and brand interaction.
Chapter Opener: Direct Response Reaches a
Global Market
The Katla Food’s “Message in a Bottle” campaign is an example of an

award-winning idea that reached a global market with a direct-response
and promotion program.
Functions and Elements of Direct-
Response Communication
Direct-Response Communication (DRC) (1 of 2)
• Makes personal interaction between an organization and
its customers or members possible.
• Also referred to as direct-response marketing.
• A multichannel business practice that uses a variety of
media with customers and prospects who deal with each
other directly.
Direct-Response Communication (DRC) (2 of 2)
• DRC is all about action.
• Business and nonprofits use it to reach key audiences and
encourage them to respond in some way.
• NGOs use DRC to generate donations, memberships, and
volunteers.
• DRC opens opportunities for interactivity.
Principle (1 of 3)
Direct-response communication may have higher costs per
impression than mass media, but it is less expensive in the
long run because its messages are tightly targeted to reach
prime prospects.
Who are the Key Players?
• Advertising agencies: department or separate direct-
response company owned by the agency.
• Direct marketing agencies: independent, full-service
agencies specializing in direct response.
• Service firms: printing, mailing, list brokering, data
management.
• Fulfillment houses: ensure that consumer requests are
fulfilled in a timely manner.
Key Elements of DRC (1 of 4)
There are two sides to DRC:
1. It involves communication sent in some form directly to
the prospect.
2. The response comes directly back to the organization.
Like a conversation, the original respondent can also
initiate the conversation as well as respond.
Figure 4.1: The Direct-Response Industry
Direct response begins with research and database development. The

main tools of DRC are catalogs, direct mail, telemarketing, direct-
response advertising, the internet, and other forms of social media.
The offer
• Description of the proposition:
– Terms of sale
– Delivery
– Warranty information
– Membership
– Donation request
– Cost
• Must answer “What’s in it for me?”
The offer
• Message must make it as easy as possible for customers
to respond via online, mail, phone, and text.
• Immediately acknowledge response, thank customer and
advise when the product will arrive.
• The message must make it as easy for customers to
respond.
DRC used in a Tourism Campaign
This envelope is used by
the Billings Chamber of
Commerce/Convention
and Visitors Bureau to
send information about
visitor, tourism, and
relocation opportunities.
It reinforces a new brand
identity campaign and
carries the campaign’s
“Trailhead” logo and
slogan as well as the
“explore” graphics.
Fulfillment
• Respond quickly by getting the product (or membership
card, etc.) to those who respond.
• Includes all back-end activities of processing the
transaction or interaction.
What are the Primary Media of DRC? (1 of 12)
Personal sales
• The earliest and most effective — and also most
expensive — form of direct marketing.
• Salespeople are in stores, make phone calls, and call on
business prospects.
• Home parties such as Mary Kay or Tupperware are the
original form of social networking sales.
Personal Sales: Still the Most Effective Tool
“Dear Fuller Brush Man, I have a

hard time reaching into the shower
to clean it. What do you have that
will make this job easier?”
-- Sara from NC
The popular “Ask the Fuller Brush
Man” feature, which draws on a
century of door-to-door sales,
answers consumer cleaning
questions as an important feature of
the brand’s “Ask” website.
Direct mail
• Communication for a product, service, or nonprofit
organization that is addressable.
• Allows business to be conducted between a firm and a
customer without a middleman, such as a retailer.
• Usually sent with a third-class bulk mail permit, which
requires a minimum of 200 identical pieces.
Direct Mail’s 19th-Century Roots
It wasn’t until 1863 when free postal

delivery to cities began and 1896 when
service was brought to rural areas
such as Ochopee, Florida (above),
which still exists as the smallest post
office in the United States.
• Response is typically 2 to 3 percent.
• It is expensive in terms of cost per impression.
• But it is much easier to calculate the actual payout rate.
• Therefore, direct mail is considered more accountable than
other forms of marketing communication.
Direct Mail
In this brochure created for Microflex, Inc., the intense visuals, the
folding path that leads readers through to the major content, and
targeted copy focusing on establishing the company’s new dedication to
the automotive industry all made this a powerful, effective direct-mail
piece.
The mailing list
1. House list: the marketer’s own customers/members; its
most important target market and most valuable list.
2. Response list: people or households who have
responded to some type of direct-response offer or
promotion.
3. Compiled list: a specific category, such as sports car
owners, new home buyers, or graduating seniors.
Issues and ethics: trees, water, and waste
• Critics of direct mail cite its environmental impact.
• Production of direct mail uses an millions of trees and
billions of gallons of water annually.
• Environmental, business, and citizen concerns must be
weighed carefully.
Catalogs
• A multiple-page direct mail publication showing a variety of
merchandise.
• In the digital media age, catalogs have evolved into online
publications with immense offerings.
• The growth is in specialty catalogs aimed at niche markets
serving every business category, hobby, and interest.
Sears: The King of Catalog Advertising
For most of its life, the Sears

catalog was sent to homes via
the US Postal Service, and
shoppers could order directly
from the “Wish Book” with their
merchandise also delivered to
them by mail.
For more on the history of this
iconic catalog, visit
www.searsarchives.com
Product Advertising as a DRC Medium
This CD cover was designed

by Michael Dattolico for his
client Microflex, a B2B
company in the automotive
industry.
Print media
• Newspaper and magazine ads carry coupons, orders form,
addresses, toll-free numbers, etc.
Broadcast, cable, and digital media

• Direct-response commercials sell clothes, health products,
insurance, and financial services.
• Online or web-based ads use do-it-yourself media:
YouTube, Pinterest, or Instagram.
Telemarketing
• A form of personal sales, but much less expensive.
• Callers work in call centers, rooms with large banks of
phones and computers.
• Occasionally, a cold call is used; here, call center staff are
calling random numbers.
• Predictive dialing makes it possible to call anyone using
random dialing.
• Inbound calls are initiated by a customer.
• Outbound calls originate from the firm.
• The message must be simple, compelling, and short.
• People resent intrusive telephone calls, so there must be a
strong initial benefit to convince prospects.
Telemarketing as a DRC Medium
Call centers are large rooms with multiple stations for staff who make
the calls (outbound) or answer calls from people placing orders
(inbound).
Issues: intrusion and fraud
• Fraudulent behavior has tarnished telemarketing’s image.
• The FTC has enacted regulations to protect consumers.
• The national Do Not Call registry and Caller ID restrict
access by telemarketers.
• Telemarketers subscribe to the registry and check it for
numbers they need to delete.
Internet direct response
• Exciting advances are under way in mobile marketing and
social media.
• Social selling, also known as network marketing, utilizes
the reach and persuasiveness of social media.
• The network can grow exponentially as messages zing
through cyberspace.
Issues and ethics: spam
• Email marketing has received criticism for generating
unwanted email, otherwise known as spam.
• FTC: 90 percent of spam for business, investment, health
products, and travel contains false/misleading information.
• Permission marketing gives recipients the choice to opt
in or opt out.
• Every customer who opts in is a qualified lead.
Principle (2 of 3)
Opt-in and opt-out strategies make email campaigns more
acceptable because customers give permission to marketers
to contact them.
At the heart of permission marketing is the idea that every
customer who opts in to a campaign is a qualified lead.
The Importance of Promotion
The Importance of Promotion (1 of 4)
• Promotion is about the fun, creative, attention-getting ideas
used to spur action and build strong brand relationships.
• Promotions build excitement for charitable causes and
marketing events.
• Similar to direct-response communication, promotions
engage customers and prospects on a personal level and
encourage action.
The Billboard as a Promotional Tool
These three billboards are

from a series of billboards
that celebrate the history of
GM’s iconic Chevrolet
brand.
Their purpose is more
event sponsorship and
brand recognition than
traditional advertising.
• Used in marketing-oriented programs to build demand,
stimulate immediate action.
• Use in public relations programs to create excitement and
participation.
• An organization can increase the value of its brand by
offering something special.
Sales promotion defined:
“Activities and communication programs that build
excitement in the market for a limited period of time to
stimulate trial, increase consumer demand, or improve
product availability.”
Sales Promotion at Best Buy
For a past Best Buy “Hinting Season” Production, the team was asked to
surprise people around the country with gifts they had asked for via
Twitter.
• Sales promotion prompts action by:
– consumers
– Sales representatives
– The trade (distributors, retailers, and dealers)
• Sales promotion affects demand by making the brand
more attractive or interesting.
Marketplace Changes
• Promotion delivers accountability: quick results that are
easy to measure.
• Consumers are less brand loyal and more willing to switch
for a parity product.
• Dominant retailers demand promotional support and
incentives for shelf space.
• Digital and other new, novel media have grown rapidly.
A Social Media Promotion from Heinz
An example of a novel
promotional medium is the
Heinz “personalized bean”
social media promotion.
It was designed by UK-based
We Are Social to launch the
brand’s new five-bean
variety, Five Beanz.
Promotional Big Ideas
• The Big Idea is just as important for sales promotion as it
is for advertising.
• In many cases, the promotion is part of a bigger IMC plan.
• Exciting and interesting promotional ideas must involve
and capture the attention of the target market.
The Functions of Promotion (1 of 3)
• The objective of advertising differs from sales promotion.
• Over time, advertising builds brand equity by establishing a
consistent image or feeling for a brand.
• Sales promotions are more immediate, involving a finite
time period.
• In return for taking action, sales promotions offer the
consumer something more tangible.
• Often used with a new product launch to deliver trial.
• Can make consumers more aware of brand, generate a
trial, and persuade them to buy the product again.
• Can push the product through the distribution channel by
generating positive brand experiences among resellers
and buyers.
• Designed to motivate action among these audiences:
– Consumer
– Trade
– Sales force
• Many campaigns use separate message strategies for
consumers or trade partners.
• Payout planning estimates results and compares them
with projected costs of the effort.
Consumer Promotions (1 of 3)
• Used for such things as membership appeals for nonprofit
organizations.
• Intended to provide an incentive so that when people go
into a store, they will look for a particular brand.
• Primary strengths: variety, flexibility, and accountability.
Billings uses Consumer
Promotions
The Billings “Trailhead” campaign used

weekly drawings, with the winners
receiving caps and the grand prize
winner receiving dinner and two nights at
the Crowne Plaza Hotel.
A price deal is a temporary price reduction, sale price, or
giveaway to create excitement and drive demand.
They include:
1. Cents-off deals
2. Prize-pack deals
3. Bonus packs
4. Banded packs
Other types:
• Refund or rebate
• Sampling
• Premiums
• Coupons
• Contests and sweepstakes
• Specialty advertising
• Swag
Old Navy’s Human Coupon
When Old Navy gathered 5 million fans on Facebook, it celebrated with a coupon
for 30 percent off its products. But to make the coupon idea come alive, Old
Navy’s agency, Crispin Porter + Bogusky, created a 120-foot by 60-foot “human
coupon” using hundreds of Facebook friends and fans.
How are Consumer Promotions Used? (1 of 3)
• Awareness
• Trial
• Market share
• Brand reminder and loyalty
Frontier Airlines Promotes a Sale
This piece is an example of an email price promotion sent to Frontier

Airlines’ frequent flyers. Even though it’s promoting a sale price, it’s still
faithful to the Frontier image and “different kind of animal” slogan.
Trade promotions
• Trade refers to all involved in the distribution channel:
buyers, brokers, distributors, wholesalers, and others.
• Sometimes referred to as channel marketing.
• Provides trade members with information about the new
product and its selling points.
Common tools:
• Retailer (dealer) kits
• Trade incentives and deals
• Contests
• Point-of-purchase promotions
• Trade shows and exhibits
How are Trade Promotions Used?
Two primary roles:
1. Stimulate in-store merchandising or other trade support.
2. Create excitement among those responsible for selling
the product.
Also used to:
• Manipulate wholesalers’ and retailers’ inventory levels.
• Expand product distribution to new areas of the country, or
new markets and trade groups.
Demand: Push and Pull (1 of 2)
• Pull strategy: creating or increasing customer demand so
product is pulled through the channel.
• Push strategy: convince channel members to carry the
product and push its sales.
• Common push strategy incentives:
– Monetary bonuses
– Dealer loader premiums
– Advertising allowances
– Display allowances
Demand: Push and Pull (2 of 2)
Trade promotions are also used for:
• Attention: point-of-purchase displays grab attention of
shoppers in the store and stimulate impulse purchases.
• Motivation: motivate trade members to cooperate with
promotions and create enthusiasm among trade members.
• Information: trade show displays give product information,
and allow trade buyers to gather and compare products.
Multiplatform Promotions
Wheaties uses Multiplatform Promotion
Olympians have graced the

Wheaties “Breakfast of
Champions” box since 1958,
when pole-vaulter Bob
Richards was the first athlete
to be featured on the box.
Multiplatform Promotions
Some promotions blur the lines between promotion,
advertising, and public relations.
• Sponsorships
• Event marketing
• Loyalty programs
• Partnership promotions
Let’s take a look at each one……
Sponsorships
• Here, companies support a sporting event, concert, or
charity, either financially or by donating supplies and
services.
• Can be costly but they generate excitement for both
consumer and trade audiences.
Event Marketing
• Here, marketers link a brand to an event.
• The event showcases the brand, often with sampling,
coupons, other incentives, and attention-getting stunts.
• To succeed, the event must match the brand to the target
market’s lifestyle.
Event Marketing and Special Events
• Connects a sponsor with attendees at concerts, art
exhibits, and sporting events.
• An increasingly important component of integrated
marketing communication.
• Tactics:
– Free samples or logo merchandise
– Tickets and hospitality tents
– Signage
– Logos on tickets or in event ads
Special Events can Promote Movies
To help promote the

opening of the movie
Spider-Man, inflatables
like this one were
placed along buildings
in major cities.
Loyalty Programs (1 of 2)
• Also called continuity or frequency programs, designed
to increase repeat business and customer retention.
• If effective, it leads to a customer retention strategy that
ultimately increases brand loyalty.
• Frequent-flyer and frequent-buyer programs are data-
driven reward programs that help keep customers loyal.
Principle (3 of 3)
Direct-response communication leads to a strengthened
customer relationship and, ultimately, increased brand
loyalty.
Loyalty Programs (2 of 2)
• Lifetime customer value estimates how much purchase
volume companies can expect from various markets.
• Knowing consumers’ past behavior, you can decide what
you want to spend to get them to purchase and
repurchase.
• You can track your investment by measuring the response.
Partnership Programs
• Comarketing involves manufacturers developing
marketing communication programs with their retail
accounts.
• Cobranding occurs when two companies come together
to offer a product. Example: Yoplait and Komen.
• Tie-in and cross-promotion uses associations between
complementary brands.
Billings Cross-Promotes with Pepsi
Another element in the Billings,

Montana, rebranding campaign
was a cross promotion that
enlisted Pepsi-Cola to sponsor
special cans with a premium
offer on a “Trailhead” cap.
Integrated Communication and Promotion
(1 of 2)
• Direct marketing was the first area of marketing

communication to adopt an integrated marketing approach.
• The challenge to direct marketers is to integrate all media
platforms with a consistent brand voice that reflects brand
integrity.
• DRC programs seek precise use of the right media at the
right time, with a measurable return on dollars spent.
Integrated Communication and Promotion
(2 of 2)
• Promotions should work within a mix of brand messages

and experiences to build brand strength and presence.
• When planned strategically, direct marketing and
promotions add impact to an IMC campaign and increase
its efficiency.
Databases and why they are Important
to Interaction
Databases (1 of 2)
• Databases are massive lists that keep track of current
customers and prospects.
• They include contact information as well as characteristics
that predict willingness to respond.
• Organizations that keep track of response behavior are
better able to personalize their messages.
Databases (2 of 2)
• Using behavioral targeting, messages are designed
based on what people have done in the past.
• Messages targeted on behavior are more than twice as
effective as general advertising in converting website
visitors to buyers.
• Databases can be searched, compiled, merged, and
purged to create a list matching the profile of an ideal
prospect.
Database Marketing Aids a Social Cause
The Smile Train organization sends out millions of pieces of direct mail
each year and generates, in addition to donations, reams of data about
which appeals and visuals generate the most money as well as
information about which ZIP codes have the best responses.
Figure 4.2: The Database Marketing Process
Database marketers continually improve the effectiveness of their marketing

communication campaigns. Results feed back into planning, for a continual loop
of improvement.
The Database Marketing Process
• Data mining means sifting through information captured in
a company’s database to maintain customer relationships.
• Information includes profiles based on demographics,
lifestyle, and behavior as well as basic contact information.
• Used for prospecting to find the most interested people.
• Can also be used to spot trends and patterns in behavior.
Issues and Ethics: Privacy (1 of 2)
• On social media, friends and associates can share
information about you on all their online social networks.
• This has generated fierce debate among privacy
advocates, marketing and advertising associations, and
regulators.
• Companies are increasing the amount of data they collect
on customers, often without customers’ awareness.
Issues and Ethics: Privacy (2 of 2)
• Tracking is enabled by “cookies” installed web browsers
without user knowledge to monitor their online behavior.
• The privacy paradox: you can’t do narrow targeting without
collecting personal information.
• At what point is efficiency of targeting compromised by
privacy concerns?
Looking Ahead
• In Chapter 5, we will learn how communication works as a
form of mass communication and interactive
communication.
• We will also explore how the idea of advertising effects
developed, and problems with traditional approaches to
advertising effects.
• Finally, we will examine the Facets Model of Effects, how it
explains how brand communication works, and the key
facets of brand communication effectiveness.
It’s a Wrap (1 of 2)
Hot Leads and Cold Shrimp

• Iceland-based agency H:N developed an integrated
campaign for its Katla client using trackable corks in a
direct-mailed bottle as well as websites, personal sales,
trade shows, and demonstrations of the company’s shrimp
bath product.
• The “Message in a Bottle” campaign initiated traceable
delivery and invited digital contact to tailored micro-
websites.
It’s a Wrap (2 of 2)
Hot Leads and Cold Shrimp

This campaign:
• followed up with personalized ads and phone calls
• invited more conversations at trade shows
• concluded with personalized on-site demonstrations.
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Ad and IMC Chapter 4 Notes

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Advertising & IMC: Principles & Practice

The Katla Food’s “Message in a Bottle” campaign is an example of an

Direct response begins with research and database development. The

“Dear Fuller Brush Man, I have a

It wasn’t until 1863 when free postal

For most of its life, the Sears

This CD cover was designed

Broadcast, cable, and digital media

These three billboards are

The Billings “Trailhead” campaign used

This piece is an example of an email price promotion sent to Frontier

Olympians have graced the

Let’s take a look at each one……

To help promote the

Another element in the Billings,

• Direct marketing was the first area of marketing

• Promotions should work within a mix of brand messages

Database marketers continually improve the effectiveness of their marketing

Hot Leads and Cold Shrimp

Hot Leads and Cold Shrimp

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