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:
- Setting the Advertising Objective
- Setting the Advertising Budget
- Selecting Media for Message Delivery
- Creating an Advertising Message
- Evaluating Advertising 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.
Setting the Advertising Objective
As we noted in the Advertising Tutorial, advertising can be used to address several broad promotional 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 is also used to inform customers of changes taking place in existing products. For instance, if a beverage company purchases a brand from 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 markdowns), 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 may have with setting up an appointment with a salesperson from 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.
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Setting the Advertising Budget
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 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 sales. 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
Often small-sized marketers find spending of any kind to be constraining. In this situation, advertising may be just one of several tightly allocated spending areas with the level spent on advertising may vary over time. For these marketers, advertising may only occur when extra funds are available.
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.
Selecting Media for Message Delivery
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 newer outlets, including internet and mobile devices. However, each media outlet possess different characteristics and offers marketers different advantages and disadvantages. The characteristics by which different media outlets can be assessed include the following seven factors:
(Note: a detailed discussion of different media outlets for delivering an advertisements can be found in the Types of Advertising Media Tutorial.)
1. Creative Options
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 websites may only accept certain types of graphical-style ads if these conform to specified minimum size and limit smaller size advertising to text-only ads.
2. Creative Costs
The media type chosen to deliver a marketer’s message also impacts the cost of creating the message. For media outlets that deliver a multi-sensory experience (e.g., television, internet and mobile for sight and sound; print publications for sight, touch and smell), creative cost can be significantly higher than for media targeting a single sensory experience. But cost for creative advertisements are also affected by the expectation of quality for the media that delivers the message. In fact, media outlets may set minimal production standards for advertisements and reject ads that do not meet these standards. Television networks, for example, may set high production quality levels for advertisements they deliver. Achieving these standards requires expensive equipment and high cost labor, which may not be feasible for small organizations. Conversely, creating a simple text-only internet advertisement is inexpensive and easy to create.
3. Market Reach of Media
The number of customers exposed to a single promotional effort within a target market is considered the reach of a promotion. Some forms of advertising, such as national television advertising, offer an extensive reach, while other forms, such as a single roadside billboard on a lightly traveled road, offers very limited reach. Market reach can be measured along two dimensions: 1) channels served and, 2) geographic scope of a media outlet.
This dimension relates to whether a media outlet is effective in reaching the members within the marketer’s channel of distribution. Channels can be classified as:
Consumer Channel – Does the media outlet reach the final consumer market targeted by the marketer?
Trade Channel – Does the media outlet reach a marketer’s channel partners who help distribute their product?
Business-to-Business – Does the media outlet reach customers in the business market targeted by the marketer?
This dimension defines the geographic breadth of the channels served and includes:
International – Does the media outlet have multi-country distribution?
National – Does the media outlet cover an entire country?
Regional – Does the media outlet have distribution across multiple geographic regions such as counties, states, provinces, territories, etc.?
Local – Does the media outlet primarily serve a limited geographic area?
Individual – Does the media outlet offer individual customer targeting?
4. Message Placement Cost
Creative development is one of two principle spending considerations for advertising. The other cost is for media placement, which includes the purchase of time, space, or location from media outlets delivering the message. Advertising placement costs vary widely from very small amounts for certain online advertisements to exorbitant fees for advertising on major television programs. For example, in the United States the highest cost for advertising placement occurs with television ads shown during the National Football League’s Super Bowl championship game, where ad rates for a single 30-second advertisement exceed (US) $5 million. By contrast, ads placed through online search engines may cost less than (US) $5.
Media outlets set advertising rates using several factors, though the most important are determined by audience size, audience type, and an advertisement’s production characteristics:
Audience Size – Refers to the number of people who experience the media outlet during a particular time period. For example, for television outlets audience size is measured in terms of the number of program viewers, for print publications audience is measured by the number of readers, and for websites audience is measured by the number of visitors. In general, the more people who are reached through a media outlet, the more the outlet can charge for ads. However, actual measurement of the popularity of media outlets is complicated by many factors to the point where the media outlets are rarely trusted to give accurate figures reflecting their audience. To help ensure the validity of audience measurements, nearly all leading media outlets have agreed to be audited by third-party organizations and most marketers rely on these auditors to determine whether the cost of ad placement in a specific media outlet is justified given the audited audience size.
Audience TypeAs we have discussed many times in the Principles of Marketing Tutorials, the key to marketing is aligning marketing decisions to satisfy the needs of a target market. A well-defined target market is critical to successful marketing and vital to a successful advertising campaign. When choosing a media outlet, selection is evaluated based on the outlet’s customer profile (i.e., viewers, readers, website visitors, app users) and whether these match the characteristics sought by the marketer’s desired target market. The more selectively targeted the audience, the more valuable this audience is to advertisers. This is because advertisements are being directed to those with the highest potential to respond to the advertiser’s message. The result is that media outlets, whose audience shares very similar characteristics (e.g., age, education level, political views, etc.), are in a position to charge higher advertising rates than media outlets that do not appeal to such a targeted group.
Characteristics of the Advertisement
Media outlet also charge different rates based on creative characteristics of the message. Characteristics that create ad rate differences include:
Run Time – such as a 15-second versus a 30-second television advertisement
Size – such as a few lines of text versus a full-page internet advertisement
Print Style – such as a black-and-white versus a color postcard
Location in Media – such as placement on the back cover versus placement on an inside page of a magazine
5. Length of Exposure
Some products require customers be exposed to just a little bit of information in order to build customer interest. For example, the features and benefits of a new snack food can be explained in a short period of time using television or radio commercials. However, complicated products need to present more information for customers to fully understand the product. Consequently, advertisers of these products will seek media formats that allot more time to deliver the message.
Media outlets vary in how much exposure they offer to their audience. Magazines and other publications provide opportunities for longer exposure times since these media types can be retained by the audience (i.e., keep old print magazines) or are otherwise accessible (i.e., access previous issues online) by the audience, while exposure on television and radio are generally limited to the time the ad was broadcast.
6. Advertising Clutter
In order to increase revenue, media outlets often include a large number of ads within a certain time, space, or location. For instance, television programs may contain many ads inserted during the scheduled run-time of a program, including many presented as 15-second or shorter commercials. A large number of advertisements delivered through a growing number of different media outlets (e.g., smartphones, electronic billboards, etc.) create an environment of advertising clutter, which makes it difficult for those in the targeted market to recognize and remember particular advertisements.
To break through the clutter advertisers may be required to increase the frequency of their advertising efforts (i.e., run more ads). Yet greater advertising frequency increases advertising expense. Alternatively, advertisers may seek opportunities that offer less clutter, where an ad has a better chance of standing out from others. This can be seen with certain news and information websites where online videos are provided. The videos may feature a five-minute story but contain only a single 30-second advertisement. Additionally, some marketers also address clutter by placing ads in venues where placement has not been common, including such public spaces as school buses, parking meters and public restrooms.
7. Response Tracking
As we noted in the Advertising Tutorial, marketers are embracing new technologies that make it easier to track audience response to advertisements. Newer media developed using internet and mobile network technologies offer effective methods for tracking audience response compared to traditional media. But newer media are not alone in providing response tracking. Other advertising outlets, such as advertising by mail and television infomercial programming (i.e., long-form commercials), also provide useful measures of audience reaction.
Creating an Advertising Message
In our discussion of the communication process in the Promotion Decisions Tutorial, effective communication requires the message source to create (encode) a message that can be interpreted (decode) by the intended message receiver. In advertising, the act of creating a message is often considered the creative aspect of carrying out an advertising campaign. And because it is a creative process, the number of different ways a message can be generated is limited only by the imagination of those responsible for developing the message. In doing so, the marketer must take into consideration a number of issues such as:
General Message Creation Factors
When developing the message, the marketer must take into consideration several factors including:
Characteristics of the Target Audience – The makeup of the target audience (e.g., age, location, attitudes, etc.) impacts what is conveyed in the message.
Type of Media Used – The media outlet (e.g., television, digital, print, etc.) used to deliver the message impacts the way a message will be created.
Product Factors – Products that are highly complex require a different message than simpler products. Additionally, the target market’s familiarity with a product affects what is contained in a message. For instance, a new product attempting to gain awareness in the market will have a message that is much different than a product that is well known.
Overall Advertising Objective – As mentioned, the objective of the advertising campaign can affect the type of ad that is designed. For example, an advertisement with the objective of stimulating immediate sales for an existing product will be different than an advertisement seeking to build initial awareness of a new product.
Advertising Message Structure
Most advertising messages share common elements within the message including:
The Appeal – This refers to the underlying idea that captures the attention of a message receiver. Appeals can fall into such categories as emotional, fearful, humorous, and sexual.
Value Proposition – The advertising message often contains a reason for customers to be interested in the product which often means the ad will emphasize the benefits obtained from using the product.
Slogan – To help position the product in a customer’s mind and distinguish it from competitors’ offerings, advertisements will contain a consistent phrase or group of words marketers include within their promotional message that is repeated across several different messages and different media outlets
Advertising Message Testing
Before choosing a specific message, marketers running large advertising campaigns will want to have confidence in their message by having potential members of the targeted audience provide feedback. The most popular method of testing advertising used by marketers (or used by its advertising agency) is to conduct focus groups, where several advertising messages are presented. For digital media outlets, technology allows for testing of ads by randomly exposing website visitors or app users to different ads and then measuring their response.
Evaluating Advertising Campaign Results
The final step in an advertising campaign is to measure the results of carrying out the campaign. In most cases, the results measured relate directly to the objectives the marketer is seeking to achieve. Consequently, whether a campaign is judged as being successful is not always tied to an increase in product sales. Rather, campaign effectiveness may be evaluated on other measures. For example, when the advertising objective is to build product awareness, a key measurement of a successful campaign may be reflected in how many more people are now aware of the product.
In order to evaluate an advertising campaign, it is necessary for two measures to take place. First, there must be a pre-campaign or pre-test measure that evaluates conditions prior to campaign implementation. For instance, prior to an advertising campaign for Product X a random survey may be undertaken of customers within a target market to see what percentage are aware of Product X. Once the campaign has run, a second post-campaign or post-test measure (e.g., another survey) is undertaken to see if there is an increase in awareness.
The time between the pre-test measure and the post-test measure is determined by the marketer and also by the type of campaign being run. For television advertising campaigns, the time frame between measures may be several weeks or months. However, the post-test measure for digital advertising campaigns may occur just a few days after the pre-test measure due to the rapid availability of customer tracking data.
Of course, not all marketers have the resources to carry out in-depth campaign analysis. This is especially the case when the measures require personal contact (e.g., interviewing members of the target market). However, for online marketers there exists a number of relatively inexpensive campaign testing tools offered by online advertising services, such as Google AdWords.