Managing the Advertising Campaign Tutorial

In this part of our Principles of Marketing Tutorials we continue our discussion of advertising by taking a closer look at the decisions involved in creating an advertising campaign. Whether a marketer employs a professional advertising agency to handle its advertising campaign or chooses to undertake all advertising tasks on its own, a successful campaign requires a number of important decisions including:

  1. Setting the Advertising Objective
  2. Setting the Advertising Budget
  3. Selecting Media for Message Delivery
  4. Creating a Message
  5. Evaluating Campaign Results

For major consumer products companies that spend large sums to promote their products each of these decisions will be intensely evaluated.

On the other hand, smaller companies with limited budgets may be forced to focus what little money they have on only one key decision, such as selecting media, and give less attention to other areas. In either case, knowledge of all advertising campaign decisions is important and should be well understood by all marketers.

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As we noted in the Promotion Decisions tutorial, marketing promotion, which includes advertising, can be used to address several broad objectives including: building product awareness, creating interest, providing information, stimulating demand and reinforcing the brand. To achieve one or more of these objectives, advertising is used to send a message containing information about some element of the marketer’s offerings. For example:

  • Message About Product – Details about the product play a prominent role in advertising for new and existing products. In fact, a very large percentage of product-oriented advertising includes some mention of features and benefits offered by the marketer’s product. Advertising can be used to inform customers of changes that take place in existing products. For instance, if a beverage company has purchased the brands of another company resulting in a brand name change, an advertising message may stress "New Name but Same Great Taste".
  • Message About Price – Companies that regularly engage in price adjustments, such as running short term sales (i.e., price markdown), can use advertising to let the market know of price reductions. Alternatively, advertising can be used to encourage customers to purchase now before a scheduled price increase takes place.
  • Message About Other Promotions – Advertising often works hand-in-hand with other promotional mix items. For instance, special sales promotions, such as contests, may be announced within an advertisement. Also, advertising can help salespeople gain access to new accounts if the advertising precedes the salesperson’s attempt to gain an appointment with a prospective buyer. This may be especially effective for a company entering a new market where advertising may help reduce the uncertainty a buyer has about a new company.
  • Message About Distribution – Within distribution channels, advertising can help expand channel options for a marketer by making distributors aware of the marketer’s offerings. Also, advertising can be used to let customers know locations where a product can be purchased.

With an objective and a budget in place, the advertising campaign will next need to focus on developing the message. However, before effort is placed in developing a message the marketer must first determine which media outlets will be used to deliver their message since the choice of media outlets guides the type of message that can be created and how frequently the message will be delivered.

An advertising message can be delivered via a large number of media outlets. These range from traditional outlets, such as print publications, radio and television, to newly emerging outlets, such as the Internet and mobile devices. However, each media outlet possess different characteristics and, thus, offer marketers different advantages and disadvantages.

The characteristics by which different media outlets can be assessed include the following seven factors:

  1. Creative Options
  2. Creative Cost
  3. Market Reach of Media
  4. Message Placement Cost
  5. Length of Exposure
  6. Advertising Clutter
  7. Response Tracking
Note that a detailed discussion of different media outlets for delivering an advertisements can be found in the Types of Advertising Media tutorial.

Setting an advertising objective is easy, but achieving the objective requires a well-thought out strategy. One key factor affecting the strategy used to achieve advertising objectives is how much money an organization has to spend. The funds designated for advertising make up the advertising budget and it reflects the amount an organization is willing (i.e., approved by high-level management) to commit to achieve its advertising objectives.

Organizations use several methods for determining advertising budgets including:

  • Percentage of Sales – Under this approach advertising spending is set based on either a percentage of previous sales or a percentage of forecasted sales. For example, an organization may set next year’s advertising budget at 10% of this year’s sales level. One problem with this approach is that the budget is based on what has already happened and not what is expected to occur. If the overall market grows rapidly in the following year, the 10% level from the previous year may be well below what is necessary for the company to maintain or increase its market share. Alternatively, companies may consider allocating advertising funds based on a percentage of forecasted sales. In this way advertising is viewed as a driver of future sales and spending on advertising is linked directly to meeting future sales forecasts. However, since future sales are not guaranteed, the actual percentage spent may be considerably higher than expected if the sales forecast is greater than what actually occurs.
  • What is Affordable – Many smaller companies find spending of any kind to be constraining. In this situation, advertising may be just one of several tightly allocated spending areas and, thus, the level spent on advertising may vary over time. For these companies, advertising may only occur when extra funds are available.
  • Best Guess – Companies entering new markets often lack knowledge of how much advertising is needed to achieve their objectives. In cases where the market is not well understood, marketers may rely on their best judgment (i.e., executive’s experience) of what the advertising budget should be.

An advertisement has the potential to appeal to four senses – sight, sound, smell and touch. (It should be noted that promotion can also appeal to the sense of taste but generally these efforts generally fall under the category of sales promotion which we will discuss in a later tutorial.)

However, not all advertising media have the ability to deliver multi-sensory messages. Traditional radio, for example, is limited to delivering audio messages while roadside billboards offer only visual appeal. Additionally, some media may place limits on when particular options can be used. For instance, some search engines or websites may only accept graphical-style ads, such as images, if these conform to certain large dimensions and limit small advertising to text-only ads.