Advertising

-- huge industry – one estimate: $250 billion

-- invades every part of society

-- many see it as mirroring the strengths and weaknesses of society

Functions of advertising

-- selling a product

-- educating people about new products

-- part of economic process, allowing new products to enter market, old products to reposition themselves in market

-- social function

            -- offers opportunities

            -- reflects values

            -- informs

            -- provides major support for media industries

Criticisms of advertising

Before going any further, we should note some of the most common criticisms of advertising. These criticisms have some validity, but they also have some answers. I'll present the criticisms and leave it to you to formulate some of the answers.

• Advertising adds to the cost of products. Part of what we pay for when we buy a bar of soap or a new car is the advertising for that product. What if General Motors stopped spending $2.9 billion a year on advertising and reduced the cost of its vehicles.

• Advertising helps sell inferior products. When you get down to it, this criticism says that advertising lies. It convinces us that products are good when they aren’t. It convinces us to buy an inferior product over a quality product because the inferior product has been advertised more.

• Advertising creates needs and desires that we would not have otherwise. We MUST have certain products that our parents were perfectly happy living without. Advertising, it is argued, often creates these "needs," which aren’t really needs at all.

• Advertising is intrusive. More and more it's getting so that everything has an ad on it – or everything is an advertisement.

            -- sports stadiums

            -- digital placements

            -- movie placements

• Much advertising information is false. Sometimes they are outright lies, sometimes exaggerations, sometimes they leave false impressions, sometimes they don't have anything to do with the product.

Okay, what are the counterpoints to these criticisms?

Organization of the advertising industry

Advertisers – advertising is part of the marketing strategy of any company;

-- no product goes to market without some kind of a marketing strategy

-- this strategy has to include not just advertising by distribution and a plan for sustaining the product in the market

 • National advertisers – see nationwide market for product; this began in modern terms in the 1800s (post Civil War) with growth of mail order catalogues

• Retail or local advertisers – sell to a local (geographic) market

Web is changing local advertising; many finding they can expand their markets – but at what cost?

 

Types of advertising

            -- consumer

            -- business to business

            -- professional

Agencies

-- organizations set up to create and place advertising; sometimes located  in-house and sometimes independent

-- Madison Ave. (national, international); local ad agencies

-- seek clients; very competitive

-- full service; media buying; creative boutiques

-- increasing concentration of ownership

Media – final piece of the puzzle

-- traditional – newspaper, magazine, radio, TV

-- non-traditional – point of purchase, direct mail, telephone, telemarketing, movie placements, digital insertions; web targeting

Evaluation media advertising

-- reach – how large is the audience

-- frequency – how many times the message is delivered

-- selectivity – how many potential customers are in the audience

-- efficiency – cost/thousand customers

Online advertising is developing but still one of the big unknowns of the advertising world; many advertisers prefer traditional (old) media, and so do agencies because that's what they're used to.

 

The advertising campaign

Product

-- product characteristics – what does it do; what's the competition

-- launching

-- positioning and re-positioning

Audience

-- research

-- demographics

Purpose

-- what is the advertising problem

-- what advertising will solve the problem

Medium

-- which medium will bring together the audience and the solution

Follow-up, evaluation

-- did it work?

Advertising regulation

-- First Amendment (can we really say whatever we want? No)

  • false statements, criminal actions are not protected

-- "caveat emptor" – let the buyer beware

-- "caveat venditor" –let the seller beware

-- Federal Trade Commission

  • broad powers

  • political climate          

Questions?