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Ch. 7/15, Pt. 4/1, Intro to Advertising
Terms in this set (100)
While the payout plan is not always pereefect, it does guide
The manager in establishing the budget.
When used in conjunction with objective and task method, the payout plan provides
A much more logical approach to budget setting than the top-down approaches.
Computer Simulation Models
Involve statistical techniques to determine the relative contribution of the advertising budget to sales.
Because of problems associated with the methods of the computer simulation models
Their acceptance has been limited, and quantitative models have yet to reach their potential.
There is no univerally accepted method of
Setting a budget figure.
Weaknesses in each budget figure may make it
Unfeasible or inappropriate to use.
To successfully develop and implement the budget, managers must
Employ a comprehensive strategy to guide the process, develop a strategic planning framework, build in contingency plans, focus on long term objectives, and consistently evaluate the effectiveness of programs.
Employ a comprehensive strategy to guide the process (to successfully develop and implement the budget, managers must)
Avoiding the piecemeal approach often employed
Develop a strategic framework (to successfully develop and implement the budget, managers must)
That employs an integrated marketing communications plan
Build in (to successfully develop and implement the budget, managers must)
Focus on (to successfully develop and implement the budget, managers must)
Consistently evaluate (to successfully develop and implement the budget, managers must)
The effectiveness of programs.
Once the budget has been appropriated, the next step
Is to allocate it.
The allocation decision involves determining
Which markets, products, and/or promotional elements will receive which amounts of the funds appropriated.
Some marketers have used the allocation decision to stretch their advertising dollars and get more impact from the same amount of money. Companies have taken steps including
Consolidating and cutting division expenditures, reducing agency fees, producing fewer campaigns, and relying more on targeted media.
The individual policy of the company or the advertising agency may influence budget allocation as the agency
May discourage the allocation of monies to sales promotion, preferring to spend them on the advertising area, believing the monies are harder to track in terms of effectiveness and may be used improperly if not under its control.
In smaller markets, it is often easier and
Less expensive to reach the target market.
Too much of an expenditure in smaller markets will lead to
Saturation and a lack of effective spending.
In larger markets, the target group may be
More dispersed and thus more expensive to reach.
Some markets hold more
Potential than others.
When particular markets hold higher potential, the marketing manager
May decide to allocate additional monies to them.
Just because a market does not have high sales does not mean
It should be ignored. As a market like this but with high potential may be a candidate for additional appropriations.
For those brands with small market shares, profit takers
Are in the minority.
As brands increase their market share
Nearly three out of five have proportionately smaller share of voice.
New brands generally receive higher-than average
Older, more mature brands are often "milked"-that is
When they reach the maturity stage, advertising support is reduced.
There's an advertising economy of scale whereby advertising works harder for
Well-established brands, so a lower expenditure is required.
For large brands, it may be possible to reduce advertising expenditures
And still maintain market share.
Smaller brands have to continue to maintain
A large share of voice.
If the marketer wishes to increase market share, they should
Segment markets; determine their competitor's cost position; resist the lure of short-term profits from ad budget cuts; consider niching strategies as opposed to long-term wars.
Segment Markets (if marketers wish to increase market share)
Focusing on those markets where competition is weak and/or underspending instead on a national advertising effort.
Determine Competitors' Cost Position (if marketers wish to increase market share)
How long the competition can continue to spend at the current or increased rate.
Some studies have presented evidence that firms and/or brands maintaining a large share of the market have an advantage
Over smaller competitors and thus can spend less money on advertising and realize a better return.
Larger advertisers can maintain advertising shares that are smaller than their market shares because
They get better advertising rates, have declining average costs of production, and accrue the advantages of advertising several products jointly.
Larger advertisers are likely to enjoy more favorable time and
Space positions, cooperation of middle people, and favorable publicity.
Larger brand share products might actually be at a disadvantage, and not achieve economies of scale because
There's no evidence that larger firms can support their brands with lower relative advertising costs than smaller firms, that the leading brand in a product group enjoys lower advertising costs per sales dollar than do other brands, nor of a static relationship between advertising costs per dollar of sales and the size of the advertiser.
Organizational Factors that Influence Allocation
Organizational structure, power and politics, use of expert opinions, characteristics of the decision maker, approval and negotiation channels, pressure on senior managers to arrive at the optimal budget.
Organizational structure may include
Centralized versus decentralized, formalization, and complexity, and all impact the allocation of funds.
The relative importance of advertising versus sales promotion might vary
From department to department.
The use of outside consultants to provide expert opinions might affect the allocation decision, as
Trade journals, academic journals, and even books might also be valuable inputs on the decision maker's thinking.
Many factors must be taken into account in the budget allocation decision including
Market size and potential, specific objectives sought, and previous company and/or agency policies and preferences.
Reasons why the growth of the internet has been so rapid
Consumers' increased desire for information, the speed and convenience of acquiring this information, and the ability to control what and how much is received.
The ability to conduct e-commerce through one's personal computer is very attractive as it now seems
There is almost nothing that one can't find or buy on the Web.
The increased attention for accountability on the part of businesses has lead to a view of the internet as a medium that would
Provide more direct feedback on the vale of marketing expenditures, customer satisfaction, trends and the competition.
As was true of direct marketing, companies like the fact that, unlike traditional media
It was often easier to account for the ROI of their expenditures with the internet.
Unlike other media, which are essentially unidirectional and responsible for the content provided and products and services offered for sale, the Internet
Is interactive, allowing for a two-way flow.
Consumers not only control when and which messages and content they are exposed to, but also
Now provide their own content, offer their own goods and services for sale, and provide feedback on the same as provided by others.
The internet is a hybrid of media, it is a
Communications medium and also a direct-response medium.
The internet is a communications medium allowing companies to
Create awareness, provide information, and influence attitudes, as well as pursue other communications objectives.
Videos, display ads, and commercials
Are often sued for the purpose of being a communications medium.
The internet is a direct-response medium
Allowing the user to both purchase and sell products through e-commerce.
With the advent of social media, marketers have increasingly pursued the objective of building a brand image and developing a more direct and
Involved relationships with customers through engagement with the brand.
Advertising on the web can be useful in
Creating awareness of an organization as well as its specific product and service offerings.
For small companies with limited budgets, the web offers
The opportunity to create awareness well beyond what might be achieved through traditional media.
A start-up company can almost immediately gain
Worldwide exposure at a reasonable cost through the internet.
For larger companies, the internet is not likely to be the most effective IMC element for creating awareness and
Mass-media advertising may be more useful for this purpose, given its larger reach and lower cost per exposure.
Having a website has become a necessity, as more and more buyers expect that
A company will have a site providing them with detailed information about its offerings, warranties, store locations and so on.
In the government sector, contracts are often put out to bid on the Internet. Information regarding
Requirements, specifications, submission dates, and so forth is disseminated more quickly, to more potential candidates, and at a much lower cost via the Net than it is through other media.
Websites serve as a means of communicating information about
A company's products and services, philanthropic efforts, contact information, and the company itself.
Marketers have a difficult time creating a brand image on the internet, while some have been successful, others have not faired as well and have come to realize
That branding and image-creating strategies must be specifically adapted to this medium.
The internet, as part of an integrated marketing communications program, can
Be a useful tool for branding.
Often websites offer electronic coupons, offer samples, promotions, and sweepstates in an attempt
To stimulate trial.
Blogs and discussion boards are considered particularly useful for
Providing information useful in evaluating products and brands.
Selling directly to customers in both the consumer market and the business-to-business market.
Many companies maintain their existing "brick-and-mortar" stores while also
Selling through the internet.
Web 2.0 has led to dramatic changes in the World Wide Web, primarily as a result of
Decentralization of communications and interactivity, with information provided by users as contributors of content such as user-generated ads content and so on.
Advertising on the internet employs a variety of firms, including
Display ads including banners, sponsorships, pop-ups and pop-unders, interstitials, paid searches, behavioral targeting, contextual ads, and rich media.
Terminology used to refer to the early evolution of the World Wide Web in which users could view web pages and interface with them, but could not contribute to the content of the web page.
Banner Ads may be used for
Creating awareness or recognition, entering viewers into contests and sweepstakes, or direct-marketing objectives.
Banner ads can be static, animated, or
Most studies indicate with banner ads a
Less than 1 percent response rate.
A number of studies have shown that although viewers may not click through the banners, they can
Still be effective in driving consumers to search or visit the ad's website.
Even with low click-through rates, banner ads may still
Create a favorable attitude toward the ads through repeated exposures.
Many consumers find banner ads
Annoying, leading many companies to avoid this advertising format.
2 Types of Sponsorships
Regular Sponsorships, and Content Sponsorships
Occur when a company pays to sponsor a section of a site.
Sponsor not only provides money in return for name association but also participates in providing the content itself.
In some cases, the site is responsible for providing content and
Having it approved by the sponsor; in other instances, the sponsor may contribute all or part o the content.
A window or a creature of some sort appears on the screen in an attempt to get attention.
Pop-Ups often appear when you
Access certain sites and are usually larger than banner ads but smaller than a full screen.
Ads that appear underneath the web page and become visible only when the user leaves the site.
Consumer complaints have led some sites to
No longer accept the pop-up or pop-under advertising forms.
The frequency and effectiveness of pop-ups and pop-unders have been generally reduced given the advent of
Pop-up screeners, which will block the ads before they appear on your screen.
Full-page ads that appear on your screen while you are waiting for a site's content to download.
Unlike banner ads, interstitials require the viewer
To click off the ad to continue to the site they want to go to.
Because consumers have complained that mobile interstitials are irritating, in 2015 Google
Put into place a new policy to discourage their use by declaring the sites that use mobile interstitial apps as "mobile unfriendly"
Unfortunately for advertisers who may want to employ interstitials, they can be
Blocked by pop-up blockers.
In search, in general
The higher a site appears on a search page, the more visitors it will receive.
Organic Search Results
Those that appear because of their relevance to search terms, not advertisements.
Advertisers attempt to reach consumers through nonorganic (paid) search results such as pay-per-click advertising by
Placing their ads on web pages that display results from search engine queries.
While there are a number of search engines offering their services, Google
Is by far the dominant provider.
Search Engine Optimization (SEO)
The process of improving the volume of traffic driven to one's site by a search engine through unpaid (organic) results as opposed to paid inclusions.
The higher a site appears on the search results list, the more
Visitors it will receive.
SEO considers how
Search engines work and edits its HTML and coding to increase its relevance to keywords and to remove barriers to the index activities of search engines.
Behavioral Targeting is based on
Advertisers' targeting consumers by tracking their website surfing behaviors, such as which websites they have visited and/or searches they have made.
By compiling clickstream data and Internet protocol (IP) information, segments of
Potential buyers can be identified and ads directed specifically to them.
By tracking an individual's visits to a number of automobile websites, an ad for cars
Or a dealership could be served to that individual in real time.
Retargeting, once a user visits a website either on his or her desktop or mobile and
Leaves without purchasing the product, a specifically targeted ad will display on participating subsequent websites the user visits.
Purchasing the retrgeting space is not
A fixed transaction, but a bid process.
Since each site has only so much space set aside for display ads, brands must
Bid against competitors for the space. The brand that puts in the highest bid is the one whose ads you will see.
THIS SET IS OFTEN IN FOLDERS WITH...
Ch. 15, Pt. 2, Intro to Advertising
Ch. 18, Summary, Intro to Advertising
Ch. 18, Definitions, Intro to Advertising
Ch. 15/16, Pt. 3/1, Intro to Advertising
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