The World of Advertising and Integrated Brand Promotion

We need perspective on advertising and IBP!

Technology and consumer control are reshaping the communications environment The lines between entertainment and advertising/IBP are blurring Madison & Vine Firms use advertising/IBP to build brands

We need perspective on advertising and IBP!

Firms of all sizes need and use advertising Advertising is just one of many tools in IBP Advertising/IBP do not guarantee success8 of 10 new products fail People have all sorts of positive and negative (mis)perceptions about advertising and promotion

We need perspective on advertising and IBP!

Four criteria must be met for a communication to be classified as advertising:
The communication must be paid for The advertiser must be identified The communication must be delivered through mass media The communication must be attempting to persuade

We need perspective on advertising and IBP!

Integrated Brand Promotion (IBP) is the process of using a wide range of promotional tools working together to create widespread brand exposure.

We need perspective on advertising and IBP!

IBP is a process IBP uses a wide ranges of tools including:
Advertising Point of Purchase (in-store) materials Direct Marketing (catalogs, infomercials, email) Personal Selling Internet advertising Blogs Podcasting Event sponsorship Brand entertainment (product placement on TV shows, in movies) Outdoor signage/billboards Public relations Influencer (peer-to-peer) communications Corporate advertising

 Advertising Campaign
An integrated series of ads and promotions that communicate a central theme or idea

Distinctions within Advertising

Advertisements
Specific messages designed to persuade an audience

Model of the Communications Process

Fields of Experience

Source / Sender

Channel
Encoding
MESSAGE

Decoding Audience

Receiver /

Response Feedback Loop

Advertising as a Communications Process: Mass Mediated

Advertising as a Communications Process

Production: The advertiser and social context determine ad content.

Reception: The context of ad reception and the audiences understanding of an ad result in a meaningful interpretation of the ad.
Accommodation and negotiation: The ways in which consumers interpret ads

Audiences for Advertising: Audience Categories

Household Consumers Business Organizations The Trade Channel Professionals Government

Audiences for Advertising: Audience Geography

Global advertising International advertising National advertising Regional advertising

Local advertising

Ad in Context Example

This ad ran in Italy. Do you think this is a global or international ad? Whats the difference?

Advertising as a Business Process

The role of advertising in the marketing mix

Advertising in brand management

Advertising in market segmentation, differentiation, and positioning Advertising in revenue and profit generation

Advertising as a Business Process

Definition of Marketing:
The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.
American Marketing Association, 1995

The Role of Advertising in the Marketing Mix

The Marketing Mix
Product Distribution

Perceived Value
Promotion Price

The Role of Advertising in Brand Management

Information and persuasion Introduction of new brands and extensions Building and maintaining brand loyalty/brand equity Creating an image/meaning Building brand loyalty in the trade channel

Advertisings Role in Segmentation, Differentiation and Positioning

Positioning

Segmentation (heterogeneous > homogeneous)

Distinct from other brands Occupies a value level External niche vs. internal

Differentiation (perceived as different or unique)

Advertisings Role in Revenue and Profit Generation

Brand loyalty leads to inelasticity of demand: less price sensitivity to demand
Economies of scale: higher volume results in lower unit cost

Types of Advertising
Primary demand stimulation Selective demand stimulation Direct response advertising Delayed response advertising Corporate advertising

Ad in Context Example

Is this ad an example of primary or selective demand stimulation? Whats the difference?

The Economic Effects of Advertising

Gross Domestic Product Business Cycles

Competition
Prices Value

From IMC to IBP

C o u p o n s

Coordinated promotional activities reinforce one another