Advertising management

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Advertising refers to any paid form of communication designed to create interest in or stimulate sales of products or services. Companies are constantly searching for novel media, such as these human billboards, to get their message out to potential consumers

Advertising management is a planned managerial process designed to communicate with a firm's target market consumers and which is ultimately designed to influence the consumer's purchase decisions. Advertising is just one element in a company's promotional mix and as such, must be integrated with the overall marketing communications program.

There are different types of advertising. Brand advertising is defined as a non-personal communication message placed in a paid, mass medium designed to persuade target consumers of a product or service benefits in an effort to induce them to make a purchase. Corporate advertising refers to advertising messages that communicate the corporation's values in an effort to influence public opinion. Yet other types of advertising such as not-for-profit advertising and political advertising present special challenges that require different strategies and approaches.

Advertising management is a complex process that involves making many layered decisions including the developing the advertising strategy, setting the advertising budget, setting advertising objectives, determining the target market, media strategy, developing the message strategy (which involves media planning, media buying) and evaluating the overall effectiveness of the advertising effort. However, at its simplest level, advertising management can be reduced to four key decision areas:

Target market definition: Who do we want to talk to?
Message strategy: What do we want to say to them?
Media strategy: How will we reach them?
Measuring advertising effectiveness: How do we know our messages were received in the form intended and with the desired outcomes?

Advertising and advertising management: definitions[edit]

Consumers tend to think that all forms of commercial promotion constitute advertising. However, in marketing and advertising, the term 'advertising' has a very special meaning that reflects its status as a distinct type of promotion.[1]

A key characteristic of advertising is that it utilises mass media channels such as newspapers, magazines, radio or TV to reach potential customers

The marketing and advertising literature has many different definitions of advertising, but it is possible to identify common elements or themes within most of these definitions. The American Marketing Association (AMA) defines advertising as "the placement of announcements and persuasive messages in time or space purchased in any of the mass media by business firms, nonprofit organizations, government agencies, and individuals who seek to inform and/ or persuade members of a particular target market or audience about their products, services, organizations, or ideas".[2] The American Heritage Dictionary defines advertising as "the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media." [3] Selected marketing scholars have defined advertising in the following terms: "any non-personal communication that is paid for by an identified sponsor, and involves either mass communication viz newspapers, magazines, radio, television, and other media (e.g., billboards, bus stop signage) or direct to-consumer communication via direct mail" [4] and "the element of the marketing communications mix that is non-personal, paid for by an identified sponsor, and disseminated through mass channels of communication to promote the adoption of goods, services, persons, or ideas.[5] One of the shortest definitions is that advertising is "a paid, mass-mediated attempt to persuade." [6]

Several common themes emerge in the various definitions of advertising:[7]

* Firstly, advertising is a paid form of communication and is therefore commercial in nature.
* Secondly, advertising employs non-personal channels (i.e. commercial mass media) which implies that it is directed at a mass audience rather than at an individual consumer and is a one-way communication mode where the sponsor sends messages, but recipients cannot respond or ask questions about the message content.
* Thirdly, advertising has an identified sponsor .

In summary, given that advertising is paid, it is one of the many controllable elements in the marketing program. Advertising is qualitatively different from publicity where the message sponsor is either not identified or ambiguously defined, and different to personal selling which occurs in real-time and involves some face-to-face contact between message sponsor and recipient allowing for two-way dialogue.

While advertising refers to the advertising message, per se, advertising management refers to the process of planning and executing an advertising campaign or campaigns; that is, it is a series of planned decisions that begins with market research continues through to setting advertising objectives, executing the advertisement and follows up with efforts to measure the extent to which objectives were achieved and evaluates the costs and benefits of the advertising effort.[citation needed]

How does advertising work? Theories of advertising effects[edit]

Advertising messages are all around us, yet the mechanism which leads from exposure to brand advertising through to sales is not entirely clear

Studies have repeatedly demonstrated a clear association between advertising and sales response.[8] Yet the exact process that leads from the consumer being exposed to an advertising message through to a purchase or behavioral response is not entirely clear. The advertising and marketing literature suggests a variety of different models to explain how advertising works. These models are not competing theories but rather explanations of how advertising persuades or influences different types of consumers in different purchase contexts. In a now classic paper, Vankratsas and Ambler surveyed more than 250 papers to develop a typology of advertising models. They identified four broad classes of model: cognitive information models, pure affect models, hierarchy of effect models, integrative models and hierarchy-free models.[9]

Cognitive information models[edit]

Cognitive information models assume that consumers are rational decision-makers and that advertising provides consumers with information utility by reducing the need to search for other information about a brand. For example, an advertisement in the Yellow Pages or an online directory means that the consumer does not have to travel from store to store in search of a product or service. Consumers process this information at a cognitive level before forming an attitude to the brand. A cognition is any thought that surfaces during the elaboration of the information. Certain theoretical works, combined with empirical studies, suggest that advertising information is more useful for experience goods (experiential services) than for search goods (tangible products).[10] Cognitive information models are also known as the central route to persuasion.[11]

In the cognitive information models, the path to persuasion is as follows:

Ad cognition→ Attitude to ad (Aad) → Brand cognition → Attitude to brand(Ab) →Purchase Intention (PI)

Research studies suggest that consumers who are involved in the purchase decision are more likely to actively seek out product information and actively process advertising messages while low-involvement consumers are more likely to respond at an emotional level.[12]

Pure affect models[edit]

Pure affect models suggest that consumers shape their preferences to a brand based on the feelings and attitudes elicited by exposure to an advertising message. When consumers view an advertisement, they not only develop attitudes towards the advertisement and the advertiser, but also develop feelings and beliefs about the brand being advertised.[13]

Pure affect models help to explain the consumer's emotional responses to advertising and brands. These models suggest that simple exposure is to a brand is sufficient to generate purchase intention. Exposure in the form of advertising messages leads to an attitude to the advertisement (Aad) which transfers to the attitude to the brand Ab)without any further cognitive processing. Exposure it not restricted to physical contact; rather it can refer to any brand-related contact such as advertising, promotion or virtual brands on websites.[14]

In pure affect models, the path to communication effectiveness is represented by the following:

Attitude to Ad (Aad) → Attitude to Brand (Ab) → Purchase Intention (PI).

This path is also known as the peripheral route to persuasion.[15] Empirical research in the pure affect sphere suggests that advertising messages does not need to be informative to be effective and that likeable advertising is likely to be more effective. In addition, attitude to the advertisement, especially ad liking and advertiser credibility, may be more important for corporate image advertising than for product-related advertising.[16]

Hierarchy of effects models[edit]

See also DAGMAR and AIDA

Hierarchical models are linear sequential models built on an assumption that consumers move through a series of cognitive and affective stages culminating in the purchase decision. The common theme among these models is that advertising operates as a stimulus and the purchase decision is a response. A number of hierarchical models can be found in the literature including Lavidge's hierarchy of effects, DAGMAR and AIDA and other variants. Some authors have argued that, for advertising purposes, the hierarchical models have dominated advertising theory,[17] and that, of these models, the AIDA model is one of the most widely applied.[18]

The AIDA model proposes that advertising messages need to accomplish a number of tasks that move the consumer through a series of sequential steps from brand awareness through to action (purchase and consumption)

Awareness - The consumer becomes aware of a category, product or brand (usually through advertising)
Interest - The consumer becomes interested by considering the brand's fit with the consumer's lifestyle
Desire - The consumer develops a favorable (or unfavorable) disposition towards the brand
Action - The consumer forms a purchase intention or actually makes a purchase

As consumers move through the hierarchy of effects they pass through both a cognitive processing stage and an affective processing stage before any action occurs. Thus the hierarchy of effects models all include Cognition (C)- Affect (A)- Behaviour (B) as the core steps in the underlying behavioral sequence.[19]

Cognition (Awareness/learning) → Affect (Feeling/ interest/ desire)→ Behavior (Action e.g. purchase/ consumption/ usage/ sharing information)[20]

The literature offers numerous variations on the basic path to persuasion. The basic AIDA model is one of the longest serving models. Contemporary hierarchical models often modify or expand the basic AIDA model, resulting in additional steps, however, all follow the basic sequence which includes Cognition- Affect- Behaviour.[21] Some of these newer models have been adapted to accommodate consumer's digital media habits. Selected hierarchical models follow:

Basic AIDA model: Awareness→ Interest→ Desire→ Action
Modified AIDA model: Awareness→ Interest→ Conviction →Desire→ Action (purchase or consumption)[22]
AISDALSLove model: Awareness→ Interest→ Search →Desire→ Action → Like/dislike→ Share → Love/ Hate [23]
Lavidge et al's Hierarchy of Effects: Awareness→ Knowledge→ Liking→ Preference→ Conviction→ Purchase[24]
DAGMAR Model: Awareness → Comprehension → Attitude/ Conviction → Action [25]

All hierarchical models indicate that brand awareness is a necessary precondition to brand attitude or brand liking, which serves to underscore the importance of creating high levels of awareness as early as possible in a product or brand life-cycle. Hierarchical models provide marketers and advertisers with basic insights about the nature of the target audience, the optimal message and media strategy indicated at different junctures throughout a product's life cycle. For new products, the main advertising objective should be to create awareness with a broad cross-section of the potential market. When the desired levels of awareness have been attained, the advertising effort should shift to stimulating interest, desire or conviction. The size of the audience will diminish as the product moves through its natural life-cyle in what has been likened to a funnel effect. In later stages of the life-cycle, advertisers should consider targeting messages at segments that are more likely to exhibit a genuine interest in the product or brand.

Integrative models[edit]

Integrative models assume that consumers process advertising information via two paths - both cognitive (thinking) and affective (feeling) and seek to combine the type of purchase with the consumer's dominant mode of processing.[26] Integrative models are based on research findings indicating that congruence between personality and the way a persuasive message is framed (i.e., aligning the message framing with the recipient’s personality profile) may play an important role in ensuring the success of that message. In a recent experiment, five advertisements (each designed to target one of the five personality traits) were constructed for a single product. Findings suggest that advertisements were evaluated more positively when they aligned with participants’ motives.[27] Tailoring persuasive messages to the personality traits of the targeted audience can be an effective way of enhancing the message's impact.

There are many integrative frameworks.[28] Two of the more widely used models are the Foote, Cone, Belding (FCB) model and Rossiter and Percy's planning grid which is an extension of the FCB approach.[29] [30]

Foote, Cone, Belding (FCB) planning grid[edit]

The FCB planning grid was developed by Richard Vaughan, who was the Senior Vice President at advertising agency, Foote, Cone and Belding, in the 1980s. The planning grid has two dimensions, involvement and information processing. Each dimension has two values, representing extremes of a continuum, specifically involvement (high/low) and information processing (thinking/feeling). These form a 2 X 2 matrix with four cells representing the different types of advertising effects.[31]

The FCB Planning Grid [32]
Thinking Feeling
High-involvement 1. Learn→Feel→Do 2. Feel→Learn→Do
Low-involvement 3. Do→Learn→Feel 4. Do→Feel→ Learn

The FCB planning grid gives rise to a number of implications for advertising and media strategy:[33]

An expensive car is a high-involvement/ rational purchase

Quadrant 1: High-involvement/ rational purchases: In the first quadrant consumers learn about a product through advertising after which they develop a favourable (or unfavourable) disposition to the product which may or may not culminate in a purchase. This approach is considered optimal for advertising high ticket items such as cars and household furniture. When this is the dominant approach to purchasing, advertising messages should be information-rich and media strategy should be weighted towards media such as magazines and newspapers capable of delivering long-copy advertising.

Quadrant 2: High-involvement/ emotional purchases: In the second quadrant, audiences exhibit an emotional response to advertisements which transfers to products. This approach is used for products such as jewellery, expensive perfumes and designer fashion where consumers are emotionally involved in the purchase. When this mode of purchasing is evident, advertising should be designed to create a strong brand image and media should be selected to support the relevant image. For example, magazines such as Vogue can help to create an up-market image.

Impulse purchases are low-involvement/ emotional purchase items that make consumers feel good

Quadrant 3: Low-involvement/ rational purchases: The third quadrant represents routine low-involvement purchases evident for many packaged goods such as detergents, tissues and other consumable household items. Consumers make habitual purchases, and after consumption the benefit of using the brand is reinforced which ideally results in long-term brand loyalty (re-purchase). Given that this is a rational purchase, consumers need to be informed or reminded of the product's benefits. Advertising messages should encourage repeat purchasing and brand loyalty while media strategy should be weighted towards media that can deliver high frequency required for reminder campaigns such as TV, radio and sales promotion.

Quadrant 4: Low-involvement/ emotional purchases: In the final quadrant, consumers make low-involvement, relatively inexpensive purchases that make them feel good. Impulse purchases and convenience goods fall into this category. The purchase leads to feelings of satisfaction which, in turn, reinforces the purchase behavior. When this approach is the dominant purchase mode, advertising messages should "congratulate" customers on their purchase choice and the media strategy should be weighted towards options that reach customers when they are close to the point-of-purchase such as billboards, sales promotion and point-of-sale displays. Examples of this approach include "McDonald's - You Deserve a Break Today" and "L'Oreal- Because You're Worth It".

Hierarchy-free models[edit]

Hierarchy-free models draw on evidence from psychology and neuroscience which suggest that consumers process information via different pathways simultaneously rather than in any linear/ sequential manner. Thus, hierarchy-free models do not employ any fixed processing sequence. These models treat advertising as part of the brand totality. Some hierarchy-free models treat brands as 'myth' and advertising as 'myth-making' while other models seek to tap into the consumer's memories of pleasant consumption experiences (e.g. the MAC- Memory-Affect-Cognition model).[34] Hierarchy-free models are of increasing interest to academics and practitioners because they are more customer-centric and allow for the possibility of consumer co-creation of value.[35]

Advertising and organisational responsibilities[edit]

Calvin Klein is one of a growing number of companies that uses an in-house agency for its advertising and promotion

In commercial organisations, advertising, along with other marketing communications activities, is the ultimate responsibility of the marketing department. Some companies outsource part or all of the work to specialists such as advertising agencies, creative design teams, web designers, media buyers, events management specialists or other relevant service providers. Another option is for a company to carry out most or all of the advertising functions within the marketing department in what is known as an in-house agency. By definition, an in-house agency is a "an advertising organization that is owned and operated by the corporation it serves".[36] Its mission is to provide advertising services in support of its parent company’s business and marketing objectives. Well-known brands that currently use in-house agencies include Google,[37] Calvin Klein,[38] Adobe, Dell, IBM, Kraft, Marriott and Wendy's.[39]

Both in-house agencies and outsourcing models have advantages and disadvantages. Outsourcing to an external agency allows marketers to obtain highly specialised strategic, research and planning skills, access to top creative talent and provides an independent perspective on marketing or advertising problems.[40] In-house agencies deliver cost advantages, time efficiencies and afford marketers greater control over the advertising effort.[41] In addition, personnel who work within an in-house agency gain considerable creative experience which stays within the company. Recent trends suggest that the number of in-house agencies is rising.[42][43]

Whether a company chooses to outsource advertising functions to an external agency or carry them out within the marketing department, marketers need a strong understanding of advertising principles so that they can prepare effective advertising plans or brief relevant agencies about their needs and expectations.

Advertising and its role in the promotional mix[edit]

The Promotional mix refers to the specific combination of promotional methods used for a brand, product or family of products.[44] The promotional mix includes a variety of tools such as:

Sales promotion includes a variety of activities such as special price offers designed to stimulate sales
Advertising:messages paid for by those who send them and intended to inform or influence people who receive them [45]
Public relations (PR): the practice of maintaining goodwill between an organisation and its publics [46]
Personal selling: Face-to-face selling in which a seller attempts to persuade a buyer to make a purchase.[47]
Direct marketing: Contacting and influencing carefully chosen prospects with means such as telemarketing and direct mail [48]
Sponsorship:the act of providing money for a television or radio program, website, sports event, or other activity usually in exchange for advertising or other form of promotion[49]
Product placement: the practice of supplying a product or service for display in feature films or television programs
Sales promotion / merchandising: Activities designed to stimulate sales normally at the point-of-sale; includes retail displays, product sampling, special price offers, shelf talkers, contests, competitions and other methods[50]
Event marketing: a planned activity of designing or developing a themed activity, occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert) to promote a product, cause, or organization.[51]
Exhibitions/trade shows: events where companies can display their wares
Mounting a display at a trade-fair or exhibition, such as the Hong Kong Food Show, is part of a company's total promotional mix

Advertising is just one of many elements that comprise the promotional mix. When marketers communicate with target markets across a broad range of different promotional types and media, the potential for contradictory or mixed messages is very real. Accordingly, it is important that advertising is treated as part of a total marketing communications program and that steps are taken to ensure that it is integrated with all other marketing communications, so that all communications messages speak with a 'single voice'. The process of ensuring message consistency across the entire marketing communications program is known as integrated marketing communications [52]

Marketers need to be aware of the strengths and weaknesses of each of the elements in the promotional mix in order to select the right blend for a given situation. For instance, public relations allows for high credibility message delivery with relatively low costs, while advertising permits message repetition. The "right" promotional mix should consider both message impact and message consistency.[53]

In terms of integrated communications, the literature identifies different types of integration: (1) Image integration refers to messages that have a consistent look and feel, regardless of the medium; (2) Functional integration refers to capacity of different promotional tools to complement each other and deliver a unified, coherent message; (3) Coordinated integration refers to the ways that different internal and external agencies (e.g web designers, advertising agencies, PR consultants) coordinate to provide a consistent message; (4) Stakeholder integration refers to the way that all stakeholders such as employees, suppliers, customers and others cooperate to communicate a shared understanding of the company's key messages and values and (5) Relationship integration refers to the way that communications professionals contribute to the company's overall corporate goals and quality management.[54]

On the surface, integrated marketing communications appear to be simple common sense. Yet, a survey of brand advertisers carried out by the Association of National Advertisers (ANA) revealed that while 67 per cent of marketers engage in integrated marketing communications, just one third are satisfied with their efforts.[55] In practice, integrating communications messages across a broad range of promotional formats and media channels is very difficult to achieve.

Advertising and the marketing plan[edit]

Advertising does not occur in a vacuum. Instead it is an integral part of the company's overall marketing program or plan. When a marketer embarks on an advertising campaign, the first step is to review to the corporate objectives as set out in the marketing plan. This is designed to ensure that all promotional efforts are working towards achieving both short-term and long-term corporate goals and are in keeping with the company's values and vision.[56]

A review of the marketing plan can a relatively simple process or it can involve a formal review, known as an audit. The audit might consider such issues as prior marketing communications activity, an evaluation of what has been effective in the past, an outline of competitive advertising activity and a review of budgetary considerations.

The marketing plan can be expected to provide information about the company's long and short-term goals, competitive activity, the target market, product(s) offered, pricing strategy, distribution strategy and other promotional programs. All of this information has potential implications for developing the advertising program. The advertiser must study the marketing plan carefully and determine how to translate the marketing objectives into an advertising program.

The target market and target audience[edit]

Relationship between target market and target audience

Marketers and advertisers make a distinction between the target audience for an advertising message and the target market for a product or brand.[57] By definition, the target audience is the intended audience for a given advertisement or message in a publication or broadcast medium, while the target market consists of all existing and potential consumers of a product, service or brand.[58] For example, a company that aims to increase it share of loyalty might target brand switchers and non-loyal consumers with a proposed advertising campaign with messages designed to promote the benefits and rewards of customer loyalty. Thus the target audience for the advertising campaign will comprise only a subset of the total market as defined in the marketing plan. Careful perusal of the marketing plan will assist to define the optimal target audiences for a given advertising campaign.

Advertising strategy and distribution[edit]

The distribution strategy has implications for advertising. The target audience is likely to depend on whether the marketer is using a push or pull strategy. In a push strategy, the marketer advertises intensively with retailers and wholesalers, with the expectation that they will stock the product or brand, and that consumers will purchase it when they see it in stores. In contrast, in a pull strategy, the marketer advertises directly to consumers hoping that they will put pressure on retailers to stock the product or brand, thereby pulling it through the distribution channel.[59] Thus the media options in a push strategy will be weighted towards trade magazines, exhibitions and trade shows while a pull strategy would indicate consumer oriented media.

Setting advertising objectives[edit]

Advertising objectives are derived from marketing objectives. However, advertising objectives must be framed in terms of advertising effects. For example, a company's short-term marketing objective might be to increase sales response for a given brand. However, this objective would require that a large number of consumers are aware of the brand and are favourably disposed towards it. However, to make a final purchase, the consumer may need to inspect or try out the brand at the point-of-sale before making a final purchase decision. Advertising is an excellent tool for creating awareness and interest in a brand, however, it is less effective at turning that awareness and interest into actual sales. To convert interest into sales, different promotional tools such as personal selling or sales promotion may be more useful.

Any statement of advertising objectives must include measurement benchmarks - that is the norms against which advertising effectiveness will be evaluated.[60]

Careers in advertising management[edit]

Advertising management is a career path in the advertising or marketing industries. Advertising and promotions managers may work for an agency, a public relations firm, a media outlet, or may be hired directly by a company to work in their in-house agency where they would take responsibility for communications designed to develop the company's brands or group of brands. In the agency environment, advertising managers are often known as account managers and their role involved work closely with client firms.[61] In a marketing department, the advertising manager's position can include supervising employees, acting as a liaison between multiple agencies working on a project, or creating and implementing promotional campaigns.

See also[edit]

Advertising

AIDA

Brand awareness

Consumer behaviour

DAGMAR

Marketing

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