Is any paid form of non-personal promotion of ideas, goods, and services by an identified sponsor. Its purpose is to present a message that encourages.

Presentation on theme: "Is any paid form of non-personal promotion of ideas, goods, and services by an identified sponsor. Its purpose is to present a message that encourages."— Presentation transcript:

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2 Is any paid form of non-personal promotion of ideas, goods, and services by an identified sponsor. Its purpose is to present a message that encourages the customer to buy the product, use the services, or to accept the idea. Advertising is typically designed to reach large numbers. Different from Publicity, because Advertising is controlled by the business.

3 Promotional - Advertising designed to increase sales or to increase the use of services. Institutional - Advertising designed to create a favorable impression and goodwill for a business

4 Advertising cannot focus on individual needs because the same message is conveyed to all customers. It can be very expensive, especially TV. It can be very inefficient because everyone is not a potential customer. Advertisements are very short, and less informative than a sales interaction.

5 The Three Major Questions Does the medium have the ability to present the product and the appropriate business image? Does the medium have the ability to target the desired customers? Does the medium have the ability to obtain the desired response rate?

6 Apple is introducing the new iPad, and they are trying to determine the best media to use. Using the Selection of Media Questions, to help Apple decide what to do. Picture Retrieved from: http://reviews.cnet.com/i/bto/20100127/hardware-01-20100127_610x355.jpg. 2/15/11http://reviews.cnet.com/i/bto/20100127/hardware-01-20100127_610x355.jpg

7 1.) What type of Advertisement is it? 2.) What type of Magazine is it? 3.) Why did the company select the magazine to advertise in? 4.) What is the target audience? 5.) What is the drawback to use this type of media for the advertisement?

8 Media Rates are determined by: Time Space

9 Standard Rate and Data Service Publishes Rate Cards for most major media according to general categories, such as print or broadcast media. Audit Bureau of Circulation Print Media uses this to verify circulation figures

10 Two Categories Classified Ad – grouped or classified into specific categories (Help Wanted, Real Estate, Auto Sales, etc.). Pay based by the word or by lines of type. Display Ad – Creative illustrations of the product, art, photographs, headlines, copy, and using a logo. Generally larger and the cost is based upon size.

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12 Run-of-Paper Are usually Display Ads. This allows the newspaper to choose where they will run an ad in the paper. They can charged more for a specific location in the paper. Open Rate This rate is based upon when an advertisement will appear in the paper, usually more on the weekends and Sunday. Contract Rate Purchase a specific amount of space for a given time period. Can be written in terms of location, appearance, # of times, sizes, and many more.

13 Cost Per Thousand (CPM) Rate The cost of advertising in a Newspaper to reach a 1,000 readers. This rate assists a business in determining the costs to advertise in different Newspapers. Cost Per Thousand (CPM) Rate Formula Cost of the Ad x 1000/ The Circulation = CPM rate

14 Magazine Rates are based upon 3 things: Circulation Quality of Readership Production Technique

15 Bleed Half or Full Page ads are printed to the edge of the Page. Black and White Rates Lowest Rates, offered for black and white ads. Color Rates More expensive, offered for color ads. Each time a color is added, rates increase. Premium Position Where ads are placed. Typically front inside cover, back cover. Frequency Discounts Same ad several times a year, less money the more often.

16 Rates depends on the type of format that the advertisement uses. Formats include: Banner Ads, Video Ads, Button Ads, Links, and many more. Rates also based upon page views. Tough to set rates, because effectiveness of ads is hard to judge.

17 Network Radio Advertising – is a broadcast from a studio to all affiliated radio stations. National Spot Radio Advertising – is used to advertise on a local station by station basis. Local Radio Advertising – is done by a local business for its target market. How do Radio Stations determine rates? Rates are determined by the time of day. Drive Times are the most expensive and desired.

18 Advertising Rates for TV are based on Time of Day - Prime time – 8 to 11 Special Events - (Super Bowl) Stations - Viewers Businesses use Nielson Ratings to help determine when they should advertise. http://tvbythenumbers.zap2it.com/2011/02/15/tv-ratings-monday-mad-love-starts-slowly- for-cbs-chuck-harrys-law-hold-at-lows-the-cape-falls/82690

19 Cost sharing arrangement Both a supplier and a local advertiser pay for advertising Participation depends on guidelines set by each party including the type of media, the ad, its placement. Example: Taco Bell and Fritos, New Burrito with Chili Fritos, Rotel and Velveeta http://www.youtube.com/watch?v=o8fX3Msn1uw

20 Advantages Shared expenses, Access to more funding In-store displays TV ads Disadvantages Control over content and the message placements Guidelines.

21 4 Methods to Create a Promotional Budget 1.) Percentage of anticipated sales Budget based on past or future sales 2.) All you can afford Last of your budget after everything is paid for 3.) Following the competition Competitors are matched or planned in proportion to the market 4.) Objective and Task Method Consider certain situation and determine where the company wants to go, and budget accordingly.