In the next five sections of the Principles of Marketing Tutorials we begin an in-depth look at each promotional mix item. In this tutorial we present the first of a two-part examination of advertising with a discussion of basic concepts and trends. Our coverage of advertising continues in our next tutorial, Managing the Advertising Campaign, where we look at what decisions are needed to carryout a successful advertising campaign.
In this tutorial we cover several fundamental issues in advertising including examining what advertising is and why it is important to the marketing organization. We also look at managing the advertising effort by comparing in-house management to that offered by advertising professionals, such as advertising agencies. Finally, the tutorial identifies different types of advertising and addresses trends facing the advertising industry.
What is Advertising?
Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement. Advertising has long been viewed as a method of mass promotion in that a single message can reach a large number of people. But, this mass promotion approach presents problems since many exposed to an advertising message may not be within the marketer’s target market, and thus, may be an inefficient use of promotional funds. However, this is changing as new advertising technologies and the emergence of new media outlets offer more options for targeted advertising.
Advertising also has a history of being considered a one-way form of marketing communication where the message receiver (i.e., target market) is not in position to immediately respond to the message (e.g., seek more information). This too is changing. For example, in the next few years technologies will be readily available to enable a television viewer to click a button to request more details on a product seen on their favorite TV program. In fact, it is expected that over the next 10-20 years advertising will move away from a one-way communication model and become one that is highly interactive.
Another characteristic that may change as advertising evolves is the view that advertising does not stimulate immediate demand for the product advertised. That is, customers cannot quickly purchase a product they see advertised. But as more media outlets allow customers to interact with the messages being delivered the ability of advertising to quickly stimulate demand will improve.
Managing Advertising Decisions
Delivering an effective marketing message through advertising requires many different decisions as the marketer develops their advertising campaign. For small campaigns, that involve little creative effort, one or a few people may handle the bulk of the work. In fact, the Internet has made do-it-yourself advertising an easy to manage process and has especially empowered small businesses to manage their advertising decisions. As we will see, not only can small firms handle the creation and placement of advertisements that appear on the Internet, new services have even made it possible for a single person to create advertisements that run on local television. For instance, a company called SpotRunner allows users to select from a list of high-quality television ads that can be customized and then placed within local cable television programming.
For larger campaigns the skills needed to make sound advertising decisions can be quite varied and may not be easily handled by a single person. While larger companies manage some advertising activities within the company, they are more likely to rely on the assistance of advertising professionals, such as those found at advertising agencies, to help bring their advertising campaign to market.
Importance of Advertising
Spending on advertising is huge. One often quoted statistic by market research firm ZenithOptimedia estimates that worldwide spending on advertising exceeds (US) $400 billion. This level of spending supports thousands of companies and millions of jobs. In fact, in many countries most media outlets, such as television, radio and newspapers, would not be in business without revenue generated through the sale of advertising.
While worldwide advertising is an important contributor to economic growth, individual marketing organizations differ on the role advertising plays. For some organizations little advertising may be done, instead promotional money is spent on other promotion options such a personal selling through a sales team. For some smaller companies advertising may consist of occasional advertisement and on a very small scale, such as placing small ads in the classified section of a local newspaper.
But most organizations, large and small, that rely on marketing to create customer interest are engaged in consistent use of advertising to help meet marketing objectives. This includes regularly developing advertising campaigns, which involve a series of decisions for planning, creating, delivering and evaluating an advertising effort. We will cover advertising campaigns in greater detail in our next tutorial.
Advertising Agency Functions
Professionals at advertising agencies and other advertising organizations offer a number of functions including:
- Account Management – Within an advertising agency the account manager or account executive is tasked with handling all major decisions related to a specific client. These responsibilities include locating and negotiating to acquire clients. Once the client has agreed to work with the agency, the account manager works closely with the client to develop an advertising strategy. For very large clients, such as large consumer products companies, an advertising agency may assign an account manager to work full-time with only one client and, possibly, with only one of the client’s product lines. For smaller accounts an account manager may simultaneously manage several different, though non-competing, accounts.
- Creative Team –The principle role of account managers is to manage the overall advertising campaign for a client, which often includes delegating selective tasks to specialists. For large accounts one task account managers routinely delegate involves generating ideas, designing concepts and creating the final advertisement, which generally becomes the responsibility of the agency’s creative team. An agency’s creative team consists of specialists in graphic design, film and audio production, copywriting, computer programming, and much more.
- Researchers – Full-service advertising agencies employ market researchers who assess a client’s market situation, including understanding customers and competitors, and also are used to test creative ideas. For instance, in the early stages of an advertising campaign researchers may run focus group sessions with selected members of the client’s target market in order to get their reaction to several advertising concepts. Researchers are also used following the completion of an advertising campaign to measure whether the campaign reached its objectives.
- Media Planners – Once an advertisement is created, it must be placed through an appropriate advertising media. Each advertising media, of which there are thousands, has its own unique methods for accepting advertisements, such as different advertising cost structures (i.e., what it costs marketers to place an ad), different requirements for accepting ad designs (e.g., size of ad), different ways placements can be purchased (e.g., direct contact with media or through third-party seller), and different time schedules (i.e., when ad will be run). Understanding the nuances of different media is the role of a media planner, who looks for the best media match for a client and also negotiates the best deals.
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