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Advertisement Management

Course Text Materials


Kathmandu Don Bosco College
Semester VIII
1
Advertisement Management
Semester VIII

Unit I: Introduction to Advertising

Meaning, Types and Functions of Advertising
Advertisers: Who are they, what they do- The Traditional Advertiser Hierarchy
Advertising Agencies: who they are, what they do, the traditional agency hierarchy,
specialized agencies, agency compensation, advertiser-agency relationship
The media: who they are, that they do- Media Sales, Media Measurement


Meaning, Features, Benefits, Types and Functions of Advertising


Definition

Advertising is a paid form of a non-personal message communicated through the various
media by industry, manufacturers, business firms, non-profit organizations, or individuals. It
is a persuasive and informational communication and is designed to influence the
purchasing behavior and/or thought patterns of the audience. Advertising is a marketing tool
and may be used in combination with other marketing tools, such as sales promotions,
personal selling tactics, or publicity.

Advertising is a form of communication used to encourage or persuade an audience
(viewers, readers or listeners; sometimes a specific group of people) to continue or take
some new action. Most commonly, the desired result is to drive consumer behavior with
respect to a commercial offering. Advertising messages are usually paid for by sponsors
and viewed via various traditional media; including mass media such as newspaper,
magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or
new media such as blogs, websites or text messages.

The main features of advertising are as under:
It is directed towards increasing the sales of business.
Advertising is a paid form of publicity
It is non-personal. They are directed at a mass audience and nor at the individual as
is in the case of personal selling.
Advertisement are identifiable with their sponsor of originator which is not always the
case with publicity or propaganda.


Promotion

Promotion keeps the product in the minds of the customer and helps stimulate demand for
the product. Promotion involves ongoing advertising and publicity. The ongoing activities of
advertising, sales and public relations are considered aspects of promotions.

Publicity

Publicity is an act or communication designed to attract public attention, interest or support
carried usually free through mass media. The main objective of publicity is not sales
promotion but creation of an image through editorial or independent source of commentary.
While the advertisers can control the content of the story, they may not have control over its
interpretation by the media.

Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
2
Marketing

Marketing is the wide range of activities involved in making sure that you're continuing to
meet the needs of your customers and getting value in return. Marketing is usually focused
on one product or service. Thus, a marketing plan for one product might be very different
than that for another product. Marketing activities include "inbound marketing," such as
market research to find out, for example, what groups of potential customers exist, what their
needs are, which of those needs you can meet, how you should meet them, etc. Inbound
marketing also includes analyzing the competition, positioning your new product or service
(finding your market niche), and pricing your products and services. "Outbound marketing"
includes promoting a product through continued advertising, promotions, public relations and
sales.

Example
"... if the circus is coming to town and you paint a sign saying 'Circus Coming to the
Fairground Saturday', that's advertising. If you put the sign on the back of an elephant and
walk it into town, that's promotion. If the elephant walks through the mayor's flower bed,
that's publicity. And if you get the mayor to laugh about it, that's public relations." If the
town's citizens go the circus, you show them the many entertainment booths, explain how
much fun they'll have spending money at the booths, answer their questions and ultimately,
they spend a lot at the circus, that's sales.


Marketing vs. Advertising: What's the Difference?

Quite often many people confuse marketing with advertising or vice versa. While both
components are important they are very different. Knowing the difference and doing your
market research can put your company on the path to substantial growth. Let's start off by
reviewing the formal definitions of each and then I'll go into the explanation of how marketing
and advertising differ from one another:

Advertising is the paid, public, non-personal announcement of a persuasive message by an
identified sponsor; the non-personal presentation or promotion by a firm of its products to its
existing and potential customers.

Marketing is the systematic planning, implementation and control of a mix of business
activities intended to bring together buyers and sellers for the mutually advantageous
exchange or transfer of products.

After reading both of the definitions it is easy to understand how the difference can be
confusing to the point that people think of them as one-in-the same, so lets break it down a
bit.

Advertising is a single component of the marketing process. It's the part that involves getting
the word out concerning your business, product, or the services you are offering. It involves
the process of developing strategies such as ad placement, frequency, etc. Advertising
includes the placement of an ad in such mediums as newspapers, direct mail, billboards,
television, radio, and of course the Internet. Advertising is the largest expense of most
marketing plans, with public relations following in a close second and market research not
falling far behind.

The best way to distinguish between advertising and marketing is to think of marketing as a
pie, inside that pie you have slices of advertising, market research, media planning, public
relations, product pricing, distribution, customer support, sales strategy, and community
involvement. Advertising only equals one piece of the pie in the strategy. All of these

Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
3
elements must not only work independently but they also must work together towards the
bigger goal. Marketing is a process that takes time and can involve hours of research for a
marketing plan to be effective. Think of marketing as everything that an organization does to
facilitate an exchange between company and consumer.


More Literature on 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.
It is a method of mass promotion in that a single message can reach a large number of
people.

To the core advertising is providing information, calling attention to, and making known
something that you want to sell or promote.

Advertising is a message designed to promote or sell a product, a service, or an idea.
Advertising reaches people through varied types of mass communication. In everyday life,
people come into contact with many different kinds of advertising. Printed ads are found in
newspapers and magazines. Poster ads are placed in buses, subways, and trains. Neon
signs are scattered along city streets. Billboards dot the landscape along our highways.
Commercials interrupt radio and television programming.

Advertising is nothing but a paid form of non-personal presentation or promotion of ideas,
goods or services by an identified sponsor with a view to disseminate information concerning
an idea, product or service. The message which is presented or disseminated is called
advertisement. In the present day marketing activities hardly is there any business in the
modern world which does not advertise. However, the form of advertisement differs from
business to business.

Essentially advertising is spreading of information about the characteristics of the product to
the prospective customers with a view to sell the product or increase the sales volume.

Commercial advertisers often seek to generate increased consumption of their products or
services through "branding," which involves the repetition of an image or product name in an
effort to associate certain qualities with the brand in the minds of consumers.

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). However this 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.


Types of Advertising

1. Product-Oriented Advertising
2. Image Advertising / Institutional Advertising / Corporate
3. Notice / Public Service Advertising




Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
4
Product-Oriented Advertising

Most advertising spending is directed toward the promotion of a specific good, service or
idea, what we have collectively labeled as an organizations product. In most cases the goal
of product advertising is to clearly promote a specific product to a targeted audience.
Marketers can accomplish this in several ways from a low-key approach that simply provides
basic information about a product (informative advertising) to blatant appeals that try to
convince customers to purchase a product (persuasive advertising) that may include direct
comparisons between the marketers product and its competitors offerings (comparative
advertising).

However, sometimes marketers intentionally produce product advertising where the target
audience cannot readily see a connection to a specific product. Marketers of new products
may follow this "teaser" approach in advance of a new product introduction to prepare the
market for the product. For instance, one week before the launch of a new product a
marketer may air a television advertisement proclaiming "After next week the world will
never be the same" but do so without any mention of a product or even the company behind
the ad. The goal is to create curiosity in the market and interest when the product is
launched.

Product advertising may be further classified as pioneering, competitive, and reminder
advertising.

Pioneering advertising
Pioneering advertising tries to develop primary demand that is demand for a product
category rather than a specific brand. It's needed in the early stages of the adoption process
to inform potential customers about a new product. The first company to introduce a new
technology to its industry doesn't have to worry about a competitive product since they alone
have the technology. They have to sell the industry on the advantages of the new
technology itself. Pioneering advertising is usually done in the early stage of the product life
cycle by the company which introduces an innovation.

Competitive advertising
Competitive advertising tries to develop selective demand; demand for a specific
manufacturers product rather than a product category. An innovating company is usually
forced into competitive advertising as the product life cycle moves along. After pioneering
technology is accepted and most manufacturers are supplying competing products, the
innovator is forced to sell the advantages of his specific design over that of the competition.
This is usually the situation in a mature market.

Reminder advertising
Competitive advertising tries to keep the product's name before the public. It is useful when
the product has achieved market domination. Here, the advertiser may use "soft-sell" ads
that just mention or show the name as a reminder. Reminder advertising may be thought of
as maintenance for a product with the leadership position in the market.

Of course none of the above classifications are exclusive. Some companies combine
elements of the institutional ad with product advertising. The classifications are merely aids
in developing the objectives which the company sets for their ads.






Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
5
Benefits / Importance of Advertisement

Advertising broadens the knowledge of the consumers. With the aid of advertising,
consumers find and buy necessary products without much waste of time. This speeds up the
sales of commodities, increases the efficiency of labor in distribution, and diminishes the
costs of selling. It is an accepted fact that without market stimulus of heavy advertising,
consumers might have waited another sixty years for the product evaluation that took place
in less than ten years - it took after all over sixty years from the invention of the safety razor
before the first acceptable stainless steel blades appeared in the market. These words are
more than enough to testify the potentialities of advertising in the field of modern marketing
system. The main benefits of advertising may be narrated as follows:

Benefits to Manufacturers
It increases sales volume by creating attraction towards the product.
It helps easy introduction of new products into the markets by the same
manufacturer.
It helps to create an image and reputation not only of the products but also of the
producer or advertiser. In this way, it creates goodwill for the manufacturer.
Retail price, maintenance is also possible by advertising where price appeal is the
promotional strategy.
It helps to establish a direct contact between manufacturers and consumers.
It leads to smoothen the demand of the product. It saves the product from seasonal
fluctuations by discovering new and new usage of the product.
It creates a highly responsive market and thereby quickens the turnover that results
in lower inventory.
Selling cost per unit is reduced because of increased sale volume. Consequently,
product overheads are also reduced due to mass production and sale.
Advertising gives the employees a feeling of pride in their jobs and to be in the
service of such a concern of repute. It, thus inspires the executives and worker to
improve their efficiency.
Advertising is necessary to meet the competition in the market and to survive.

Benefits to Wholesalers and Retailers
Easy sale of the products is possible since consumers are aware of the product and
its quality.
It increases the rate of the turn-over of the stock because demand is already created
by advertisement.
It supplements the selling activities.
The reputation created is shared by the wholesalers and retailers alike because they
need not spend anything for the advertising of already a well advertised product.
It ensures more economical selling because selling overheads are reduced.
It enables them to have product information.

Benefits to Consumers
Advertising stresses quality and very often prices. This forms an indirect guarantee to
the consumers of the quality and price. Further large scale production assumed by
advertising enables the seller to seller product at a lower cost.
Advertising helps in eliminating the middlemen by establishing direct contacts
between producers and consumers. It results in cheaper goods.
It helps them to know where and when the products are available. This reduces their
shopping time.
It provides an opportunity to the customers to compare the merits and demerits of
various substitute products.
This is perhaps the only medium through which consumers could know the varied
and new uses of the product.

Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
6
Benefits to Salesmen
Salesmanship is incomplete without advertising. Advertising serves as the forerunner of a
salesman in the distribution of goods. Sales is benefited the advertisement in following ways:
Introducing the product becomes quite easy and convenient because manufacturer
has already advertised the goods informing the consumers about the product and its
quality.
Advertising prepares necessary ground for a salesman to begin his work effectively.
Hence sales efforts are reduced.
The contact established with the customer by a salesman is made permanent
through effective advertising because a customer is assumed of the quality and price
of the product.
The salesman can weigh the effectiveness of advertising when he makes direct
contact with the consumers.

Benefits to Community or Society
Advertising, in general, is educative in nature. In the words of the late President
Roosevelt of the U.S.A., "Advertising brings to the greatest number of people actual
knowledge concerning useful things: it is essentially a form of education and the
progress of civilization depends on education."
Advertising leads to a large-scale production creating more employment
opportunities to the public in various jobs directly or indirectly.
It initiates a process of creating more wants and their satisfaction higher standard of
living. For example, advertising has made more popular and universal the uses of
such inventions as the automobiles, radios, and various household appliances.
Newspapers would not have become so popular and so cheap if there had been no
advertisements. The cheap production of newspapers is possible only through the
publication of advertisements in them. It sustains the press.
It assures employment opportunities for the professional men and artist.
Advertising does provide a glimpse of a country's way of life. It is, in fact, a running
commentary on the way of living and the behavior of the people and is also an
indicator of some of the future in this regard.


Functions of Advertising

1. To communicate product information
2. To differentiate the product
3. Stimulate demand
4. To expand the product distribution
5. To increase brand preference and loyalty
6. To reduce overall sales cost
7. Competitive weapon

1. To communicate product information

Foremost function of advertising is to communicate information about the product, its
attributes, and its location of sale; etc. Product information is communicated to the
customers in manner that meets their information needs. Most consumers tend to discount
the information in advertising because they understand that the purpose of the advertising is
to persuade. Making an advertising message believable is not easy; though often it is
sufficient to make the consumer curious enough to try the product. Such curiosity is often
referred to as interested disbelief. Advertisers use a variety of devices to increase the
believability of their advertising: celebrities or experts who are the spokespersons for the
product, user testimonials, product demonstrations, research results, and endorsements.


Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
7
Advertising supplies the necessary information to consumers so that they know what is
available and where to buy it. It communicates information on products, services and ideas
sold on the open market through a variety of media portals.


2. To differentiate the product

An important function of advertising is the identification function, that is, to identify a product
and differentiate it from others; this creates an awareness of the product and provides a
basis for consumers to choose the advertised product over other products. The identification
function of advertising includes the ability of advertising to differentiate a product so that it
has its own unique identity or personality.

Products, services and ideas are sold through businesses that are differentiated by their
brand identities. Brand identity is communicated to the public via advertising. Consumers
build emotional relationships with certain brands with which they become increasingly
familiar through the years, thanks to advertising.

There are four additional ways to differentiate your offering from the competition:
Leveraging the brand
Innovating your service offering
Designing product
Packaging

None of these methods are expensive and all are ways that can increase your perceived
value to the customer and increase your market share.

Example: Garnier Fruitics shampoo, the bottle have the different color from all other
shampoo available in the shelf. The bottle of the shampoo is unique from all others.

Example: Apple laptops make them different from others as the WHITE color and logo of
APPLE on back of the screen.


3. Stimulate demand

The third function of advertising is to induce consumers to try new products and to suggest
reuse of the product. This is generally the persuasion function. Persuasion is the core
mission of advertising that tells how the product, service or idea you are considering will
improve your life. The basic goal is to provide constant reminders and reinforcements to
generate the desired behavior the advertiser wants from them.

By informing consumers about the availability of a product in the market, advertising
stimulates hidden needs, and reinforces the aroused needs. There is a general agreement
that advertising has some effect on aggregate consumption.

The demand generated by advertising, public relations, and sales promotion "pulls" the
goods or services through channels of distribution. The idea is to generate consumer
demand for specific products, services and ideas through ad campaigns that target the
audiences that are most likely to buy them.


4. To expand the product distribution


Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
8
When the consumer comes to know about the particular product from the advertisement
he/she wants to try that new product. They go to shops to buy the product; if the new product
is not available in a shop then the shopkeeper consults the distributor to make that product
available in his shop. It is basically to provide the product all over market. It is necessary to
make sure that product should be accessible to everyone. Availability of product effects the
distribution and sales.

Previews about the features of new products, services and ideas motivate consumers to
obtain them because they don't want to be left out. Advertising lets consumers on in and
up-coming trends and new markets. They also offer coupons, rebates and trial offers on new
products, services or ideas to recruit new customers and induce existing customers to try
things. Advertisers preview new or improved products, services and ideas to consumers in
order to appeal to their sense of wanting to learn about leading edge trends. Previewing new
trends is a technique employed by advertisers that capitalizes on consumers' desires to
"keep up with the crowd" by owning the latest and greatest product, service or idea.

5. To increase brand preference and loyalty

Marketing is a dynamic thing. As your needs are changed your preferences are changed.
When the product delivers the promised quality, service and value, it creates satisfied
customers who become instrumental in spreading a favorable word-of-mouth. In turn
satisfied customers develop brand preference which gets reinforced by repeated ads.
Consistent quality advertising increases consumer loyalty for a product, service or idea.
Advertising seeks to maintain the current customer base by reinforcing purchasing behavior
with additional information about the benefits of brands. The goal of advertising is to build
and reinforce relationships with customers, prospects, retailers and important stakeholders.
Brand loyalty is a long-term customer preference for a particular product or service. Brand
loyalty can be produced by factors such as customer satisfaction with the performance or
price of a specific product or service, or through identifying with a brand image. It can be
encouraged by advertising. People often make purchasing decisions based on how a brand
makes them feel emotionally rather than based on quality or other objective evaluations. If
"Just Do it" strikes a chord with an athlete, he'll buy Nike; the decision may have little to do
with quality.

Products with strong brand franchise also offer some protection against the competition.
Retailers develop confidence and do not hesitate in stocking strong brands. Brand loyal
customers are an important asset for the company and are less likely to be influenced by
competitive moves.

6. To reduce overall sales cost

When a product is selling you have to teach the people about the product. Like if we would
advertise through newspapers, TV, broachers and internet, it would cater huge sum of
masses and if you do individually it would be more costly and time consuming. Hence
advertising becomes instrumental in cutting down production and selling costs. Increasing
unit sales decrease unit costs. Selling costs also may decrease because there could be
fewer wasted calls and less strain on sales people. In any market based and competitive
economy, when unit cost of a product goes down, there are external and internal pressures
which compel companies to lower prices to the advantage of consumers. This often leads to
deeper market penetration.


7. Competitive weapon


Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
9
Advertising by itself and coupled with other promotion mix elements, may prove to be an
extremely potent weapon to counter competitive moves. Advertising has an established role
in creating brand personality and image. It helps differentiate a companys offer in a manner
that the product may be considered as something with unique value having a definite identity
of its own. Advertising is unavoidable to complete with or neutralize competitor's advertising.
When competitors are adopting intensive advertising as their promotional strategy, it is
reasonable to follow similar practices to neutralize their effects. In such cases, it is essential
for the manufacturer to create a different image of his product.


Advertisers: Who are they, what they do- The Traditional Advertiser Hierarchy

Advertisers: Who they are, what they do

An advertiser is a company or an individual that spends money to convey a persuasive
advertising message to the public.

The advertiser is the puppeteer in the puppet show that is advertising. The entire business
starts with the advertiser. The rise and fall of advertising business depends solely on the
expenditure incurred by the advertiser. It is the advertiser that maintains the total complex of
services and organizations that constitute the advertising business.

The major advertisers are the manufacturers of consumer products, particularly FMCG,
consumer durables and elitist consumer services. Though the largest spenders are big
manufacturers, the buyers of advertising are numerous and diverse. Not all of them use the
services of advertising agencies, nor do all use the wide range of media available. Buyers of
advertising extend from the individual to the massive conglomerate of a wide range of
industries and services with production facilities and markets dispersed in different
continents.

The advertisers may directly approach the media or approach an agency to accomplish its
objective. When an advertiser solicits the help of an agency it is often referred to as the
client.


The Traditional Advertiser Hierarchy

Structure of advertiser varies according to size, type and functions of the
organization.
However advertising always comes within marketing department.
One of the sub-departments or units under marketing department. Other units are
like sales, distribution, promotion, branding, research and creative services etc.
Different types of structures of advertisers
The Typical Product Management Structure
A Centralized Organizational Structure
A Decentralized Organizational Structure
Smaller Advertisers

The Typical Product Management Structure

Different units such as Product Management, Marketing Research, Advertising,
Sales & Distribution under marketing head.
Each unit has their team and subordinates and reporting may be vertical and
diagonal.

Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
10
Product manager have the responsibility of success of the brand of line and not all
the units.



A Centralized Organizational Structure

Decisions about advertising made from one central location.
The central authority only deals with advertising agency works and not the branches
and regional office
Cost efficient in terms of budget and human resource
Ensures similarity in marketing communication, branding, positioning
Accomplishes overall corporate marketing goal.

A Decentralized Organization Structure

Appropriate for organization with huge number of products and establishment spread
over a wide geographical location.
Major advertising decisions made by the central authority and day to day activities
handled by product managers or people from regional or branch offices.
Quick adaptation to prevailing market conditions
Product / brand managers directly deal with ad agency.

Smaller Advertisers

No distinct department
May be a part time staff deals with the advertising assignment
Most of the time some department handles the advertising job


Advertising Agencies: Who they are, what they do, the traditional agency
hierarchy, specialized agencies, agency compensation, advertiser-agency
relationship

Advertising Agencies: Who They Are, What They Do

Definition & Meaning

An advertising agency is a business that assists advertisers in all stages of the advertising
process, from account management and planning to message creation, media planning and
research.

An advertising agency or ad agency is an independent service providing firm that creates
new promotional ideas, designs print, radio, television, and internet advertisements, books
advertisement space and time, plans and conducts advertising campaigns, commissions
research and surveys, and provides other such services that help a client in entering and
succeeding in a chosen market.
For example: The work of a tailor is to collect the raw material, find matching threads, cut the
cloth in desired shape, finally stitch the cloth and deliver it to the customer.

Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
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Advertising Agency is just like a tailor. It creates the ads, plans how, when and where it
should be delivered and hands it over to the client. Advertising agencies are mostly not
dependent on any organizations.
These agencies take all the efforts for selling the product of the clients. They have a group of
people expert in their particular fields, thus helping the companies or organizations to reach
their target customer in an easy and simple way.

Role of Advertising Agencies
1. Creating an advertise on the basis of information gathered about product
2. Doing research on the company and the product and reactions of the customers.
3. Planning for type of media to be used, when and where to be used, and for how
much time to be used.
4. Taking the feedbacks from the clients as well as the customers and then deciding the
further line of action
All companies can do this work by themselves. They can make ads, print or advertise them
on televisions or other media places; they can manage the accounts also. Then why do they
need advertising agencies? The reasons behind hiring the advertising agencies by the
companies are:
The agencies are expert in this field. They have a team of different people for
different functions like copywriters, art directors, planners, etc.
The agencies make optimum use of these people, their experience and their
knowledge.
They work with an objective and are very professionals.
Hiring them leads in saving the costs up to some extent.
Types of advertising agencies.

1. Full service Agencies

Agencies that offer advertisers all of the elements advertising like message creation, media
placement, research and related services are known as full-service agencies.

Large size agencies.
Deals with all stages of advertisement.
Different expert people for different departments.
Starts work from gathering data and analyzing and ends on payment of bills to the
media people.

2. Creative Boutiques

Creative agencies specialize in "creative" or design-based business models and their basic
interest is in the creation of the advertisement or branding. These agencies are known for
their creative output, which can include website design, advertising copy, magazine
advertisements, and radio and television commercials. While the full-service agencies offer
design in conjunction with media buying, media agencies concentrate only on media buying.
The client who chooses to use a design only based advertising agency must undertake
some of the advertising purchasing such as media buying.

Very creative and innovative ads.
No other function is performed other than creating actual ads.

Advertisement Management
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Kathmandu Don Bosco College
Semester VIII
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Small sized agencies with their own copywriters, directors, and creative people.

3. Media Buying Agencies

The media buying agencies are the agencies who purchase large quantities of advertising
space or time with various media on behalf of several clients. Their primary purpose is to
manage the media buys and place the advertisers message in the media.

Buys place for advertise and sells it to the advertisers.
Sells time in which advertisement will be placed.
Schedules slots at different television channels and radio stations.
Finally supervises or checks whether the ad has been telecasted at opted time and
place or not.

4. In-House Agencies

The organizations who have their own department looking after advertising assignments or
agencies coming from its own management is known as in-house agencies. An In-House
agency is a team that focuses on one goal to sell the company's product, they will handle all
aspects of the brand. Some advertisers believe that they can undertake advertising functions
by themselves at a lower cost than would be charged by an outside agency. In-House is
better if a company is looking to build up an image over a number of years.

As good as the full service agencies.
Big organization prefers these type of agencies which are in built and work only for
them.
These agencies work as per the requirements of the organizations.


5. Interactive Agencies

Interactive agencies may differentiate themselves by offering a mix of web design / web
development, search engine marketing, internet advertising/marketing, or e-business/e-
commerce consulting. Interactive agencies rose to prominence before the traditional
advertising agencies fully embraced the Internet. Today, the most successful interactive
agencies are defined as companies that provide specialized advertising and marketing
services for the digital space. The digital space is defined as any multimedia-enabled
electronic channel that an advertiser's message can be seen or heard from. Interactive
agencies function similarly to advertising agencies, although they focus solely on interactive
advertising services. They deliver services such as strategy, creative, design, video,
development, programming deployment, management, and fulfillment reporting. Often,
interactive agencies provide: digital lead generation, digital brand development, interactive
marketing and communications strategy, rich media campaigns, interactive video brand
experiences, Web 2.0 website design and development, e-learning Tools, email marketing,
SEO/SEM services, PPC campaign management, content management services, web
application development, and overall data mining & ROI assessment.
The creation of sites such as MySpace, Facebook and YouTube have sparked market
interest, as some interactive agencies have started offering personal and corporate
community site development as one of their service offerings. It still may be too early to tell
how agencies will use this type of marketing to monetize client ROI, but all signs point to
online networking as the future of brand marketing and Interactive being the core of Brand's
Communication and Marketing Strategy.

Modernized modes of communication are used.

Advertisement Management
Course Text Materials
Kathmandu Don Bosco College
Semester VIII
13
Uses online advertisements, sending personal messages on mobile phones, etc.
The ads produced are very interactive, having very new concepts, and very
innovative.




6. Specialized Agencies

There are some specialized agencies which work for some special advertisements that
specialize in particular kinds of advertising: recruitment, help-wanted, medical, classified,
industrial, financial, direct-response, retail, yellow pages, theatrical/entertainment,
investment, travel, social message, finance and so on. These types of agencies need people
of special knowledge in that field.
Specialization occurs in such fields for a variety of reasons. Often, as in recruitment
advertising, for example, specialized media or media uses are involved that require
knowledge and expertise not ordinarily found in a general-line agency. In other cases, such
as medical or industrial advertising, the subject is technical and requires that writers and
artists have training in order to write meaningful advertising messages about it.

Integrated Marketing Agencies
Regional and Local Agencies
Midsize Agencies
Niche Units
Ethnic Agencies


The Traditional Agency Hierarchy

Advertising agencies are divided into four functional areas according to traditional approach.
Creative Department
Account Management
Research Department
Media Department

Creative Department

The creative teams take research and the clients' wants and needs as expressed by the
account manager, and produce creative advertising campaigns. They are the people who
create the actual ads form the core of an advertising agency. Graphic designers, web
designers, writers, editors and creative directors make up an advertising agency's creative
department.

Modern advertising agencies usually form their copywriters and art directors into creative
teams. Creative teams may be permanent partnerships or formed on a project-by-project
basis. The art director and copywriter report to a creative director, usually a creative
employee with several years of experience. Although copywriters have the word "write" in
their job title, and art directors have the word "art", one does not necessarily write the words
and the other draw the pictures; they both generate creative ideas to represent the
proposition i.e., the advertisement or campaign's key message. Once they receive the
creative brief from their account team, the creative team will concept ideas to take to their
creative director for feedback. This can often be a back and forth process, occurring several
times before several ads are set to present to the client. Creative departments frequently
work with outside design or production studios to develop and implement their ideas. The

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creative process forms the most crucial part of the advertising process. The first known
creative department in an advertising agency was formed by J.W Thompson.

Account Management

Account management or client servicing is to represent the agency to the client and
coordinate between clients need with other departments of the agency. Each client is known
as an account. Agencies appoint account executive or account manager also called client
servicing executive to liaise with the clients. The account executives need to be sufficiently
aware of the client's needs and desires that can be instructed to the agency's personnel and
should get approval from the clients on the agency's recommendations to the clients.
Creativity and marketing knowledge are the needed area of the client servicing. They work
closely with the specialists in each field. The account manager will develop a creative brief,
usually about a page that gives direction to the creative team. The creative brief often
includes information about the target audience and their attitudes and behaviors. The
creative team will take the brief and, in line with the account managers creative brief,
develop original copy and graphics depending on media strategy.

The account manager ensures that client needs are expressed to the research and creative
teams. They also work to ensure that necessary information is transferred to the client
regarding creative, research, competition or any of other factor that may somehow affect
how the client's product gets marketed to consumers.

Research Department

The primary function of research department is to learn as much as possible about the
consumers, how they interact with the clients brand and how it fits into their lifestyle. This
function is also known as strategic planning. Advertising agencies work with companies to
establish the characteristics of their target markets through marketing research. From
holding focus groups to conducting surveys online and in person, advertising agencies
spend a substantial amount of time researching consumers to understand what they buy and
what motivates them to buy. Once the ad is ready they test the ad among a small group of
consumers to gather their feedback before going on large-scale.
The account managers also research the environment, identifying competitors, and
researching their companies and marketing tactics. Through market research, advertising
agencies also identify political, social, technological and economic factors that may affect a
client's campaign.

Media Department

The media department determines in which media and when should be the produced ad
messages be placed. Their job is to determine the most appropriate medium in which to
deliver the message and then choose from the limited number of programs or titles within
that medium to find the most appropriate target audience.

There are two distinct functions of media department:
Media planning
Media buying

Media planning is putting together a schedule of different media vehicles deciding which one
will be the most appropriate to reach the target audience. To accomplish this the media
planners study the media habits and activities of the target to whom the ads are being
addressed.


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Once the plan is approved by the client the media buyers process to secure the media space
and time from the chosen media. It is their duty to identify the most efficient media space
and time. Once the buy has been made its their responsibility to ensure that the ad appear
as per schedule.




Agency Compensation

Compensation amounts and methodologies are essential parts of every advertiser-agency
relationship, and clarifying the issues involved in agency compensation has
become increasingly important.

Media Commission
Fee-Based Compensation
Mark-Up Compensation

Media Commission
The agency buys time or space with the media and charges the same amount to the client
with certain additional amount of commission to it.

Fee-Based Compensation
The agency and advertiser agree in advance on how much the agency will receive for
certain period of time for providing service to the advertiser.

Mark-Up Compensation
The agency charges the advertisers a set mark-up added to every element or services
provided upon cost plus margin basis. This consists of addition of certain percentage of
mark-up for the purchased media space or time and the services undertaken for the
advertisers.

Advertiser-Agency Relationship

Advertiser Agency Relationships

As in any type of relationship advertiser and agency require trust, openness, and
honesty to work well.
Can deteriorate when there is suspicion, disagreements, or hatred between two
sides.
As the companies grow bigger they start generating complaints against each other.
There are examples of advertiser-agency relationships that lasted as little as 3
months and other gone on for 50 years or more.

Reasons for Breakups between Advertiser and Agency

If advertiser finds that some agencies are more responsive, efficient and creative
than the existing.
Lack of flexibility in the case of agency.
If the compensation received is not acceptable to the agency.
If the agency go after competing account such as another brand in the same
category.

Factors that help to Continue Good Relationship between Advertiser and Agency

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Keep no secrets - the more information you can reveal to your agency, the better
equipped they will be to reach your goals.
Be realistic - set goals and metrics for the agency that you otherwise would expect to
achieve yourself. Setting unobtainable goals will not benefit either party.
Communicate, Communicate, Communicate - its essential to keep the lines open and
flow of information in both directions constant.
Although advertisers are the purchasers and ultimately sign off on their
contract/services, they are not the experts. So, if the advertiser is going down a path
that doesn't make sense for their business, the agency should speak up and make
recommendations.
How Does It All Work - having patience with an advertiser is key, particularly in an
area where they may not be well versed. Education can go a long way when trying
to introduce new services to your advertiser. If they understand it, they may
recognize the potential benefits and buy into it.


Media

Channels of communication that serve many diverse functions, such as offering a variety of
entertainment with either mass or specialized appeal, communicating news and information,
or displaying advertising messages. The media carry the advertisers' messages and serve
as the vital link between the seller of a product or service and the consumer.


Types of Advertising Media

1. Print Publications
2. Broadcasting Television, Radio
3. Outdoor Billboard, Signage
4. Online Website, Email
5. Direct Mail
6. Product Placement
7. Mobile Devices
8. Sponsorships
9. Other Media Outlets


1. Print Publications

Print publications refer to advertising through print media such as newspapers, magazines,
brochures, fliers etc. Print media has always been a popular and common advertising option.
Often, newspapers and magazines sell the advertising space according to the area occupied
by the advertisement, the position of the advertisement in the publication (front page/middle
page, above/below the fold), as well as the readership of the publications and at all
geographical levels. For instance, an advertisement in a relatively new and less popular
newspaper will cost far less than an advertisement in an established newspaper that has a
high readership. The price of print ads may also depend on quality of the paper and the
supplement in which they appear.
Print media also offers the ability to target a specific audience based on geography or
common interests. Print advertising usually includes larger display ads, as well as classified
advertising. The classifieds are typically very affordable, whereas display ads are a bit more
price.


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Magazines, especially those that target specific niche or specialized interest areas, are more
narrowly targeted compared to broadcast media. Additionally, magazines offer the option of
allowing marketers to present their message using high quality imagery.

Newspapers have usually wider market coverage and is most suitable to target local
markets.

2. Broadcasting Television, Radio

Broadcast advertising is a very popular advertising medium that constitutes several
branches like television and radio. Television advertisements have been very popular ever
since they were introduced and is an efficient way to mass-market message to large
audience. The cost of television advertising often depends on the duration of the
advertisement, the time of broadcast (prime time/lull time), sometimes the show on which it
will be broadcast, and of course, the popularity of the television channel itself. The radio
might have lost its charm owing to new age media. However it remains the choice of small-
scale advertisers.

Radio jingles have been very a popular advertising medium and have a large impact on the
audience, which is evident in the fact that many people still remember and enjoy old popular
radio jingles. Radio commercials are an effective way for businesses to target a group of
people based on location or similar tastes. For example, a local night club seeking college
student clientele would probably consider advertising on a local pop station.


3. Outdoor Billboard, Signage

Outdoor advertising makes use of several outdoor tools and techniques to attract the
customers attention. The most common examples of outdoor advertising are billboards,
signage, kiosks and also events and trade-shows organized by the company. Billboard
advertising is very popular. However it has to be really concise and catchy in order to grab
the attention of the passersby. Kiosks not only provide an easy outlet for the company's
products but also make for an effective advertising tool to promote the company's products.
Organizing special events or sponsoring them makes for an excellent advertising opportunity
and strategy. The company can organize trade fairs, or even exhibitions for advertising their
products or participate in one.
The use of signs to communicate a marketers message is called signage. The most obvious
method of using signs is through billboards, which are generally located in high traffic areas.
Indoor billboards are often smaller than outdoor billboards and are designed to attract the
attention of foot traffic (i.e., those moving past the sign). For example, smaller signage in
airports, train terminals and large commercial office space fit this category.
While billboards are the most obvious example of signage advertising, there are many other
forms of signage advertising include:
Sky writing where airplanes use special chemicals to form words
Plane banners where large signs are pulled behind an airplane
Mobile billboards where signs are placed on vehicles, such as buses and cars, or
even carried by people
Plastic bags used to protect newspapers delivered to homes
Advertisements attached public transportation vehicles


4. Online Website, Email

Any type of advertising done through website is called online advertising. It is an increasingly
popular method and is fastest growing media for promoting a business. The Internet offers

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many advertising options with messages delivered through websites or by email. There are
many forms of online advertising such as banner ads that are image ads displayed on web
pages, Google AdWords that is advertising that matches an ad to an internet user's search
inquiry, social networking marketing, email advertising etc.

Internet advertising allows for a large variety of creative types including text-only, image-
only, multimedia (e.g., video) and advanced interactive (e.g., advertisement in the form of
online games). In addition Internet advertisements can be delivered in a number of different
sizes (measured in screen pixels) ranging from full screen to small square ads that are only
a few pixels in size. The placement of an Internet advertisement can occur in many ways
including fixed placement in a certain website location (e.g., top of page), processed
placement where the ad is delivered based on user characteristics (e.g., entry of words in a
search box), or on a separate webpage where the user may not see the ad until they leave a
site or close their browser (e.g., pop-under).

Social network marketing has been the fastest-growing form of Internet advertising. This
includes using sites like Facebook, Twitter, and LinkedIn to promote a product or service.
Many social networks have advertising available, such as Facebook Ads.

Using email to deliver an advertisement affords marketers the advantage of low distribution
cost and potentially high reach. In situations where the marketer possesses a highly targeted
list, response rates to email advertisements may be quite high. This is especially true if those
on the list have agreed to receive email. However, as most people are aware, there is
significant downside to email advertising due to highly publicized issues related to abuse
(i.e., spam).


5. Direct Mail

This method of advertising uses postal and other delivery services including postcards,
letters, brochures, catalogs and flyers, to a physical address of targeted customers. Direct
mail is most effective when it is designed in a way that makes it appear to be special to the
customer. For instance, a marketer using direct mail can personalize mailings by including a
message recipients name on the address label or by inserting their name within the content
of marketers message.

Direct mail can be a very cost-effective method of advertising, especially if mailings contain
printed material. This is due to cost advantages obtained by printing in high. Consequently,
the total cost of printing 50,000 postcards is only slightly higher than printing 20,000
postcards. Obviously there are other costs involved in direct mail, primarily postage
expense.

While direct mail can be seen as offering the benefit of a low cost-per-contact, the actual
cost-per-impression can be quite high as large numbers of customers may discard the
mailing before reading. This has led many to refer to direct mail as junk mail and due to the
name some marketers view the approach as ineffective. However, direct mail, when well-
targeted, can be an extremely effective promotional tool.


6. Product Placement

Product placement is an advertising approach that intentionally inserts products into
entertainment programs such as movies, TV programs and video games etc. It is also called
covert advertising.
Placement can take several forms including:

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visual imagery in which the product appears within the entertainment program
actual product use by an actor in the program
words spoken by an actor that include the product name

Product placement is gaining acceptance among a growing number of marketers for two
main reasons. First, in most cases the placement is subtle so as not to divert significant
attention from the main content of the program or media outlet. This approach may lead the
audience to believe the product was selected for inclusion by program producers and not by
the marketer. This may heighten the credibility of the product in the minds of the audience
since their perception, whether accurate or not, is that product was selected by an unbiased
third-party.
Second, entertainment programming, such as television, is converging with other media,
particularly the Internet. In the future a viewer of a television program may be able to easily
request information for products that appear in a program by simply pointing to the product
on the screen. With the information they may get the option to purchase the product. As this
technology emerges it is expected that product placement opportunities will become a
powerful promotional option for many marketers.


7. Mobile Devices

Handheld devices, such as cellphones, smartphones, portable computers and other wireless
devices, make up the growing mobile device market. Such devices allow customers to stay
informed, gather information and communicate with others without being tied to a physical
location. While the mobile device market is only beginning to become a viable advertising
medium, it may soon offer significant opportunity for marketers to reach customers at
anytime and anyplace.

Also, with geographic positioning features included in newer mobile devices, the medium
has the potential to provide marketers with the ability to target customers based on their
geographic location. Currently, the most popular advertising delivery method to mobile
devices is through plain text messaging, however, over the next few years multimedia
advertisements are expected to become the dominant message format.


8. Sponsorships

A subtle method of advertising is an approach in which marketers pay, or offer resources
and services, for the purpose of being seen as a supporter of an organizations event,
program or product offering. Sponsorships are intended not to be viewed as blatant
advertisement and in this way may be appealing for marketers looking to establish credibility
with a particular target market. However, many sponsorship options lack the ability to tie
spending directly to customer response. Additionally, the visibility of the sponsorship may be
limited to relatively small mentions especially if the marketer is sharing sponsorship with
many other organizations.


9. Other Media Outlets

Advertising through inserted material in product packaging e.g., inside credit card bill.
Advertising imprinted on retail receipts e.g., grocery store, cash machine.
Word of Mouth Advertising - While some may argue that word of mouth is not advertising
because it's free, this form of promotion is one of the most credible and priceless assets
of any business. Even if business owners can't buy word of mouth advertising, they can

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encourage their customers to tell their friends and family about the great product or
service they purchased.
Advertising using telephone recordings.
Advertising via fax machine.



Functions of Media

1. Media Sales
2. Media Measurement


Media Sales

Media Sales is an activity of supplying advertising space or time to advertisers and agencies.
The advertising space or time in a media is known as advertising units. Each media has
personnel known as media representatives responsible for selling the advertising units at the
best possible price to the buyers. The media representatives sell advertising space to
companies who want to promote their products or services. Depending on the company,
they could be sell advertisements in magazines, newspapers or on poster sites; airtime on
TV, radio or cinema or online opportunities on leading websites.

Media Sales is a term used broadly to describe sales roles within a variety of different media;
including advertising within magazines, on radio, on television and on websites, selling
delegate places or sponsorship for conferences and events, selling outdoor space (large
billboards and poster sites etc) or selling subscriptions and data/information.

The organization of media sales force varies by company. At some larger organizations, the
representatives may be responsible for particular advertising category such as automotive or
electronics while in small company one staff may represent the entire category.

Media Measurement

The other function of media is to keep track of the audience, determine whether their ad
campaign is working, ascertain who has seen the ad, how frequently the audience has seen
and what is the effect generated by the communication.

Types of measurement

Competitive Expenditure
It is the study with regard to the amount being spent on each brand in different media.

Audience Research
It is the study of audience with regard to media usage pattern, product purchase behavior,
demographics of the audience and their lifestyle characteristics, etc.

Independent companies known as syndicated suppliers provide the service of media
measurement.