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Flashcards in Chapter 2 Deck (43):
1

Define and explain the advertising process according to the following key concepts:

  • Source
  • Message
  • Channel
  • Audience
  • Destination
  • Noise

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Source

This is the point from where the message originates. Sources include the

  • company offering the product/service
  • the brand or the spokesperson.

 

3

Message

The message refers to both the content and the execution of the advertisement.

The receiver’s perception of the message is the core of the message.

The way in which the message can be executed varies from advertisement to advertisement and may be any- thing from humorous to frightening. 

4

Channel

This is the pathway or route that a message follows from source to receiver.

Media such as radio, television, newspapers, magazines, billboards and point-of-purchase displays are examples of various advertising channels.

Word of mouth remains one of the most powerful channels there is.

Note that a message can be transmitted via various channels, but there is such a thing as “channel capacity”.

In other words, there is only so much in- formation that can pass through at any point in time and only so much the receiver can process at any given time.

5

Audience

The audience is better known as the “target market” and is categorised according to

  • demographics
  • geographic location
  • psychographic factors
  • lifestyle
  • behaviours

6

Destination

Note that the receiver of the message is often not the final point of message transmission from the source.

If the receiver engages in word-of-mouth communication, the message is passed on to another destination; in this secondary communication process the receiver becomes the interim source.

Note, also, that in certain instances the absence of word- of-mouth communication will adversely influence the success of a product or service.

7

Noise

As in the normal communication process, noise is also a barrier to the success of the advertising process and may include any number of factors contributing to the disturbance of a message or the distortion of its meaning. 

8

Consider the definition of advertising:

Advertising is any paid form of mass presentation of ideas, products and services by an advertiser; it is specifically addressed to selected target audiences with the objective of creating awareness, informing, reminding, influencing and persuading this audience to buy the product or service or to be favourably inclined towards these ideas, products or services (Koekemoer 2004:67).

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Advantages of Advertising

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Disadvantages of Advertising

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The criteria that advertising objectives should meet.

Shimp (2007:162–163) provides the following six criteria:

  • stated in precise terms
  • quantitative and measurable
  • specific
  • realistic
  • consistent
  • clear

12

The objectives of advertising can be categorised into the following main components:

informational, attitudinal and behavioural

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Here are some of the methods companies use to set their advertising campaign budgets ):

  • The percentage of sales method
  • The task objective method
  • The historical method
  • Share of market — share of voice
  • Competitive parity
  • The combination method

14

The percentage of sales method

Here, the advertising campaign budget is a constant percentage of desired sales.

A car manufacturer may spend less than 1% of sales, while a small retailer may budget 3% to 7% of sales. A jewellery store may budget 8% to 12% of sales, while another company may budget as much as 20% of its sales revenue.

This method works as long as the advertising campaign budget is set as a percentage of desired sales.

If the budget is based on actual sales, and sales drop, the company will not want to cut its advertising campaign budget, or it will get caught in a downward spiral.

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The task objective method

This is based on how much money the company needs to spend in order to reach the specific goals outlined for its advertising campaign.

This method is especially effective for new companies or companies seeking rapid growth.

Some advertising campaign strategies call for heavy spending upfront in order to win long-term customers.

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The historical method

As the name implies, this is based on how much the company spent on reaching its sales targets in previous years.

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Share of market — share of voice

This method links market share to advertising expenditure.

A company with a 20% market share will spend slightly more than 20% of the total advertising rands spent in the market for that product or service.

For new companies, expenditures would be 1,5 times the desired market share until that position is attained. In other words, if a company wants a 20% market share, it needs to spend 30% of its total advertising rands in that market until it reaches this goal.

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Competitive parity

Here a company spends the same as its competitors (ie as a percentage of market share).

This is a self-defence method of budgeting marketing and advertising expenditures.

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The combination method

The best advertising campaign budget is based on a combination of all the previous models.

Ideally, a company needs to: 

  • maintain a minimum level of advertising
  • achieve specific goals
  • maintain its market share
  • keep up with its competitors
  • be in a position to compare this year’s figures with last year’s figures.

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Participants Advertisers (clients)

  • Manufacturers and service firms
  • Trade resellers: retailers, wholesalers, distributors
  • Government and social organisations

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Participants Advertising agencies

  • Full-service agencies
  • Trade resellers: retailers, wholesalers, distributors 
  • In-house agencies

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Participants Specialist services

  • Media, production, research
  • Public relations, promotions, direct marketing
  • Internet, sponsorships, events

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Participants Target Audience

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Developing an advertising campaign

  • 1 – The client brief
  • 2 – The strategic planning process
  • 3 – The creative brief
  • 4 – The strategy/planning board
  • 5 – Media and creative concepts
  • 6 – First review board
  • 7 – Further development
  • 8 – Second review board
  • 9 – Pre-testing
  • 10 – Client presentation
  • 11 – Creative implementation and quoting
  • 12 – Client approval Agreement finalisation Costing
  • 13 – Final production
  • 14 – Present campaign to selected groups and implement
  • 15 – Ongoing evaluation

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1 – The client brief

Identification of competitive brands, strengths, marketing factors, marketing objectives

Information provided: market, competition, brand, positioning, distribution, pricing, promotion

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2 – The strategic planning process

Research, reviews, communication strategies (six phases)

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3 – The creative brief

Strategy (observation, communication objective, consumer insight, promise, support, audience)

Desired brand equity, creative guidelines

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4 – The strategy/planning board

Total communications plan

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5 – Media and creative concepts

Concept, theme, target market, budget, media characteristics

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6 – First review board

Presentation of plans and concepts Why game

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7 – Further development

Rethink and redone

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8 – Second review board

Revised presentation

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9 – Pre-testing

Checklist for television

Checklist for print advertising

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10 – Client presentation

Surprise element or not

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12 – Client approval

Agreement finalisation

Costing

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13 – Final production

Represent campaign, final quotes, media schedule

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14 – Present campaign to selected groups and implement

  • Production of advertising material
  • Agency control of process

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15 – Ongoing evaluation

This completes the overall study/learning outcomes on the development of the advertising campaign. In the next few sections, we will deal with some of these steps in more detail.

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The communication/advertising strategy involves the following steps:

  • Define the business problem or opportunity
  • conduct a background analysis
  • conduct a brand analysis
  • conduct a target consumer analysis
  • define the promise
  • set communication objectives

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The client brief is the first step in ensuring the compilation of an effective communication strategy.

There are two key factors involved in this process:

  1. The information provided by the client
  2. The analysis/situational analysis undertaken by the advertising agency

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Conducting a situational analysis

To conduct the situational analysis, the strategic planner in the advertising agency will use his or her own information/ research and the information provided by the client.

The situational analysis can also be called the background analysis; it will use information about the client’s organisation, brand, competitors, consumers and media to find key insights.

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Information about the target market includes the following:

  • general (demographics, media habits, psychographics, etc)
  • brand specifics (needs, wants, mindsets, beliefs, etc)

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A simple way to conduct an ongoing analysis is to measure the effect of advertising over time at various levels of advertising expenditure.

The resultant effect may involve any of the following:

  • awareness levels
  • image positioning
  • sales