 What is Advertising:- Advertising is one of the largest generator of revenue in the world

economy. It moves markets and minds. It generates employment both directly and
indirectly and influences a large section of the people. It creates lifestyles, it involves people
with products. It aims at building relationships between customers and brands.

 Today, the most acceptable definition of advertising is:- ‘Advertising is any paid form of
non-personal presentation and promotion of ideas, goods, or services by an identified
sponsor.’ Presentation refers to an offering, while promotion involves communication of
ideas and persuasion. In other words, advertising offers people ideas, goods & services and
persuade them about their benefits, utility and desirability.

 Another good definition of advertising is:- ‘Advertising is a business activity, employing

creative techniques, to design persuasive communication in mass media that promote
ideas, goods and services in a manner consistent with the achievement of the advertiser’s
objectives, the delivery of consumer satisfaction & the development of social and economic
welfare.’

 A working definition of advertising is:- ‘Advertising is the mass paid communication of

building brands through persuasive communication and positioning them in the
consumers’ perception with a constant eye on the market environment and consumer
expectations.’

 Characteristics of Effective Advertisement:- Effective advertisements work on two levels.

First, they should satisfy consumers’ objectives by engaging them and delivering a relevant
message. And second, the ads must achieve the advertisers’ objectives.

Ex:- Tata Indigo :- Class starts early.

Samsung Mobile:- The big screen experience.

NECC (National Egg Co-ordination Committee):- (Generic adv):- Sunday ho ya

Monday, Roz khao Ande.

 The three broad dimensions characterizing effective advertising are Strategy, Creativity &
Execution.

 Types of Advertising:-

1. Brand Advertising:- The most visible type of advertising is national consumer, or brand
advertising. Brand advertising focuses on the development of a long–term brand identity
and image.

Ex:- Maruti Adv:- Kitna deti hai.

2. Retail or Local Advertising:- A great deal of advertising focuses on retailers or manufacturer

that sell their merchandise in a restricted area. Local advertising can refer to a retailer or a
manufacturer or distributor who offers products in a fairly restricted geographic area.

Ex:- Sudha Dairy, Prabhat Khabar, Vadilal Icecream.

3. Political Advertising:- Politicians use advertising to persuade people to vote for them.

Ex:- Congress, BJP.

4. Directory Advertising:- People refer to it to find out how to buy a product or service.
 Ex:- Yellow pages, Trade directories. Etc.

5. Direct–Response Advertising:- Direct–response advertising can use any advertising medium,

including direct mail, but the message is different from that of national and retail
advertising, as it tries to stimulate a sale directly.

Ex:- e-bay, bag it today, etc.

6. Business to Business Advertising:- It includes messages directed at retailers, wholesalers

and distributors and from industrial purchasers and professionals such as lawyers and
physicians to other businesses, but not to general customers. Advertisers place most
business advertising in publications or professional journals.

7. Institutional Advertising:- Institutional advertising is also called Corporate Advertising. The

focus is on establishing a corporate identity or winning the public over the organizations’
point of view.

Ex:- Pharmaceuticals company advertising.

8. Public Service Advertising:- Public service announcements / advertisements (PSAs)

communicate a message on behalf of some good cause, such as stopping drunk driving,
smoking, preventing child abuse etc. these advertisements are usually created by
advertising professionals free of charge & the media often donate the space and time.

9. Interactive Advertising:- Interactive advertising is delivered to individual consumers, who

have access to a computer & the internet. Advertisers use Web pages, Banner ads, and e-
mails to deliver their messages. In this instance, the consumer can respond to the ad or
ignore it.

 Roles of Advertising:- Advertising also can be explained in terms of the four roles it plays in
business & in society:-

1. Marketing:- Marketing is the process a business uses to satisfy consumer needs & wants
through goods & services.

 The particular consumers at whom the company directs its marketing effort constitute the
target market.

 The tools available to marketing are Product, Price, Place & Promotion – which are
collectively referred to as the Marketing Mix or the four Ps.

 The role of advertising within marketing, is to carry persuasive message to actual and
potential customers.

Ex:- NECC Advertising.

2. Communication:- Advertising is a form of mass communication. It transmits different types

of market information to match buyers & sellers in the market place. Advertising both
informs and transforms the product by creating an image that goes beyond straight-
forward facts.

Ex:- Raymond Advertisements.

3. Economic:- Two point of views are there:-

a. Advertising is so persuasive that it decreases the likelihood that a consumer will switch to
an alternative product, regardless of the price charged.

b. The second approach views advertising as a vehicle for helping consumers assess value,
through price as well as other elements such as quality, location and reputation. Advocates
of this school view the role of advertising as a means to objectively provide price / value
information, thereby creating a more rational economy.

4. Societal:- Advertising has a number of social roles.

 It informs us about New and Improved products & helps us compare products and features
& make informed consumer decisions.

 It mirrors fashion and design trends & adds to our aesthetic sense. Advertising tends to
flourish in societies that enjoy some level of economic abundance, in which supply exceeds
demand.

 Functions of Advertising:- Advertising performs three basic functions:-

1. Provides Product & Brand information:-

2. Provides Incentives to take action:-

3. Provides Reminders & Reinforcement:-

 Players of Advertising:- In addition to the types of advertising and their various roles &
functions, advertising can be defined in terms of those who play important roles in
bringing ads to the consumer. There are five key players in the advertising world:-

1. The Advertiser:- Advertising begins with the advertiser, the person or organization that
‘needs to get out a message’.

 The advertiser makes the final decisions about the target audience, the media that will
carry the advertising, the size of the advertising budget, and the length of the campaign.

2. The Advertising Agency:- Advertisers hire independent agencies to plan and implement part
or all of their advertising efforts.

 This working arrangement is known as the Agency–Client partnership. Successful agencies

typically have strategy & creative expertise, media knowledge, workforce talent, and the
ability to negotiate good deals for clients.

 Large advertisers, (either companies or organizations) participate in the advertising process

either through their advertising department or through their in–house agencies.

3. The Media:- The media is composed of the channels of communication that carry the
message from the advertiser to the audience, and in the case of the Internet it carries the
response form the audience back to the advertiser.

 Each medium has an organization structure in place, that is responsible for selling
advertising space or time.

 Each medium also has the capacity to assist advertisers in making comparison between
media as well as making the optimum choice within a particular media category. Many of
the medias even assist the advertisers in the design & production of the advertisements.
 4. Vendors:- Vendors are the group of service organizations that assist advertisers,
advertising agencies and the media.

 Members of this group are also known as Freelancers, Consultants, and Self employed
professionals.

Ex:- Copywriters, Graphic artists, Photographers, Songwriters, Market Researchers,

etc.

5. The Target Audience:- All strategies start with the customer. In marketing strategy, the
term target market denotes the customer, the person, who purchases the product.

Ex:- Kellogg’s Corn flex. Pamper dippers.

 The target audience has a direct bearing on the overall advertising strategy, especially on
the creative and the media strategy.

 Advertising Budget:- Determining the total allocation to advertising is not an easy task.
Often an amount is budgeted for advertising during the budget planning process (just
before the end of the fiscal year).

 The amount could be totally arbitrary, based on the advertising manager was able to beg,
borrow or steal.

 In addition, the allocation of fund usually is a political process.

 Companies led by financial types are unlikely to give much money to advertising & will
require the advertising manager to justify every penny.

 Where as, companies led by marketing or advertising types are likely to be generous to
advertising & will view the cost as a long–term investment.

 Although, the appropriation & budgeting process relies on numerical information, the
process is more art than science.

 It is often based on educated guesses, tradition, or the financial condition of the company.

 It is also in constant flux, i.e., if a campaign seems to be working, it is easier to get

additional funds. But the opposite is also true.

 At the same time, if a company has a financial downturn, advertising will probably take the
first hit.

 The budget is a critical part of planning an advertising campaign, it also determines how
many targets & multiple campaign plans a company or brand can support.

Ex:- McDonald’s, TATA, Maruti can support multiple campaigns.

 Certain types of advertisers – for example – Industrial & Business–to–business, operate on

smaller advertising budgets than consumer durable companies. Their media choices and
narrow targeting strategies reduce their budgets, so these companies often rely more on
direct mail, trade publications and telemarketing for their advertisings.

 The big budgeting question at the marketing–mix and marketing communication–mix level
is:- How much should we spend on advertising? There are five common budgeting
methods, which help us answer this question:-
 1. Historical Method:- Historical information is the source for this common budgeting method.

 A budget may simply be based on last year’s budget, with a percentage increase for
inflation or some other market place factor.

 This method, though easy to calculate, has little to do with reaching advertising objectives.

2. Objective–Task Method: Bottom–Up:- The objective–task method is also a common method

for determining the budget.

 This method looks at the objectives for each activity and determines the cost of
accomplishing each objective.

Ex:- What will it cost to make 50% of the people in the market, aware of the said
product? How many people do we have to reach & how many times? What would be the necessary
media levels & expenses?

 The advantage of this method is that the objectives are the starting point.

 Conversely, its results are only as good as the stated objectives and the allocated amount
assigned to each objective.

3. Percentage–of–Sales Method:- The percentage of sales method compares the total sales
with the total advertising budget during the previous year or the average of several years
to compute a percentage.

 This technique can also be used across an industry to compare the expenditures of
different product categories on advertising.

 There are two simple steps to be followed:-

Step 1:-

Step 2:-

New Advertising Budget = % of Sales * Next Year’s Sales Forecast.

 This method has got two advantages. It is simple to use, and expenditures are directly
related to funds available.

 However it has several limitations also. It assumes that advertising is a result of sales
rather than the cause of sales.

 Also, this method does not include the possibility of diminishing returns, means that after a
certain point additional money may generate fewer & fewer sales.

 In short, using the percentage–of–sales method may mean under-spending when the sales
opportunities are high, and, overspending when the potential is low.

4. Competitive Methods:- Budgeting often considers the competitive situation and uses
competitors’ budgets as benchmarks.

 Competitive parity budgeting relates the amount invested in advertising to the product’s
share of market.
  Share–of–mind concept suggests that the advertiser’s media presence – affects the share of
attention, the brand will receive, and that, in turn, affects the market share the brand can
obtain.

 The depiction of these relationship can be as follows:-

Share of Media Voice = Share of Consumer Mind = Market Share.

 The relationships depicted above are only a guide for budgeting.

 The actual relationship between share of media voice and share of mind or share of market
depends to a great extent on factors such as the creativity of the message and the amount
of clutter in the market place.

 A simple increase in the share of voice does not guarantee an equal increase in share of
market.

5. All You can Afford:- When a company allocates whatever is left over to advertising, it is
using the ‘All you can afford budgeting’ method.

 It is actually not a method, but rather a philosophy about advertising.

 Companies using this approach don’t value advertising as a strategic imperative.

 However, as unsophisticated this approach appears, it might prove effective if the

allocations made to the other business functions do well.

Note:- While all these budgeting techniques have their proponents, the organizations select from
them the one, they feel is going to suit them the most.

 Evaluating Effectiveness:- The final section in a campaign plan is evaluating the

effectiveness of the marketing communication program or campaign.

 Types and Stages of Evaluation:- Evaluation is done through Testing, Monitoring, and
Measurement.

 Testing is used to predict results; Monitoring tracks performance; and Measurement

evaluates results.

 Advertisements typically are tested before they run as a way to predict their effectiveness,
known as Copy Testing.

 Ideally, the results of evaluation research should be available before large sums of money
are invested in finished work or in media buys.

 The results, the actual effects, are measured after the ad or campaign runs.

 Diagnostic research is also used in all stages of a campaign to deconstruct an

advertisement in order to spot message problems.

 The four types of research used in evaluation are:-

i. Developmental Research through pretesting estimates the likelihood that an ad idea will
work or that one idea is better than another.

ii. Concurrent Research using tracking studies and test marketing, monitors the way the
campaign is unfolding and how the messages and media are working.
 iii. Post-testing Research evaluates the impact after the campaign is over or after the ad ran.
The comparison can be done based on research company norms or on previous campaigns
by this brand.

iv. Diagnostic Research deconstructs an ad to see what elements are working or not working.

 Factors to Be Evaluated:- Usually, advertising is measured in terms of its communication

effects, which become surrogate measures for sales impact.

Such factors as purchase intention, preference, and liking, suggest that the
advertising message can make a positive contribution to an eventual purchase decision.

 According to Research professionals, “Ads work best when they engage viewers’ interest,
when consumers enjoy watching them, when they are relevant, and when they tell their
story in a unique and interesting way”.

 Good evaluation plans, and the objectives found in them, are based on a model of human
response to an advertisement – an idea about how advertising works.

 EFFECTIVENESS RESEARCH QUESTIONS:-

Effect Research Question

Perception

Awareness / Noticed What ads do you remember seeing? What ads were noted?

Attention / Interest What ads did you find interesting? Did you read/watch most of
them?

Brand Linkage What brand is being advertised in this ad?

Recognition (Aided) Have you seen this ad/this campaign?

Relevance How important is the product message to you? Does it speak to

your aspirations?

Cognition What thoughts came to your mind?

Clarity What happened in the commercial?

Comprehension Are the claims/product attributes/benefits understood?

Confusion What is the main message? What is the point of the ad? Is there

anything in the ad you don’t understand?

Recall(Unaided)& What do you remember seeing in the ad? What brands were
advertised?

Brand Recall (In open ended responses, was the brand named?)

Differentiation What’s the difference between brand X and Y?

Emotion How did it make you feel? What feelings did the ad stimulate?

Liking Do you like this brand? This ad message?

 What did you like or dislike in the ad?

 EFFECTIVENESS RESEARCH QUESTIONS (Contd.):-

Effect Research Question

Persuasion

Attitude Change In what Category (or product set), which brand would you choose?

(Usually a pre – and post – test)

Preference What brand do you prefer?

Intention Do you intend to try it or buy it?

Argument What are the customer’s reasons to buy it?

Believability Do you believe the reasons, claims, proof statements?

Association What is the personality of the brand?

When you think of this brand, what (product, qualities, attributes,

people, lifestyles, etc.) do you think of?

Action How many responded (called, sent back card, used coupon, clicked,

visited Web site, visited dealer, visited booth, etc.)?

 The Effects Behind Advertising Effectiveness:- When we ask, “How does advertising
work?”, we are talking about the impact, an advertisement has on the receiver of the
message.

 People generally respond to a message in predictable ways, so advertisers try to design

advertisements – and think carefully through the strategy behind the ad – in order to
create a message that will deliver a desired response.

 This intended response is called the ad’s objective. So what are these effects that determine
whether an advertisement works or not?

 The Simple Answers:- The most common and long-standing explanation of advertising
effect is one, referred to as AIDA, which stands for Attention, Interest, Desire, and Action.

 The idea is that First, an ad gets attention, then it creates interest, then desire and finally
stimulates action. It’s a simple model that identifies the four effects and makes a prediction
about how they are related in a hierarchy of steps.

 Because AIDA assumes that consumers start with Attention and wind up with a Decision, it
is also referred to as a Hierarchy–of-Effects Model.

 There are a number of these hierarchical models that advertisers use to plan their
advertising, but the problem is that advertisers now know that people don’t always
proceed through steps in this predicted fashion.

 This considered purchase, is a fairly rational approach and it works for some products, such
as major purchases. This rational, information–driven process is what the AIDA model
describes.
  However, with the impulse purchase we almost work the AIDA model backward: We buy
the product and then we think about whether we like it or not. And sometimes we may be
driven by an emotional need that defies logic and rational thinking.

 Hence, AIDA isn’t adequate as a model for the various types of effects advertising can
create.

 Another relatively simple answer to how advertising works, is the model commonly referred
to as Think–Feel–Do.

 The idea here is that advertising motivates people to think about the message, feel
something about the product, and do something, such as try it or buy it.

 This model has been used to identify various patterns of responses depending again, on the
type of product and the buying situation.

Advertising’s
Path Goal Example
Objective

Provide
Think – feel – do Learning, interest Computer game, CD, DVD information,
emotion

College,
Provide
Learning,
Think – do – feel a computer, information,
understanding
arguments
a vacation

A new suit,
Feel – think – do Needs Create desire
a motorcycle

Establish a
Feel – do – think Wants Cosmetics, fashion psychological
appeal

A candy bar, Create brand

Do – feel – think Impulse
a soft drink familiarity

Remind of
Do – think - feel Habit Cereal, shampoo
satisfaction

 The Facets Model of Effective Advertising:- The effects identified in the AIDA and Think–
feel–do models are important, but we also need to include other critical objectives that
professionals use in their work – such as Persuasion and Association.
 Our answer to the question of how advertising works, then, is to say that effective
advertising creates six types of consumer responses. These six effects, in terms of consumer
responses are:-

• Perceive (Perception):- Exposure, Selection, Attention, Interest, Relevance, Awareness,

Recognition.

• Understand (Cognition):- Information, Cognitive Learning, Differentiation Recall.

• Feel (Affective / Emotion):- Liking, Emotions, Resonance.

• Connect (Association):- Symbolism, Conditional Learning, Brand Image and Personality.

• Believe (Persuasion):- Attitudes, Argument, Involvement, Motivation, Influence, Conviction,

Loyalty.

• Act (Behaviour):- Try, Buy, Repeat Buy, Others:- Visit, Call, Click, Refer, Advocate.

 These are facets, which come together to make up the unique consumer response to an
advertising message.

 The effects are holistic, leading to an impression or what Preston calls an “integrated
perception”.

 An effective message, then, has a diamond-like quality that represents how the message
effects work together to create the desired consumer response.