2007 Thomson South-Western

Using Other Advertising Media

Chapter Sixteen

• Explain why postal mail advertising is an efficient and effective ad medium.

• Understand p-mail’s five distinctive features compared to mass forms of advertising.

• Appreciate the role of database marketing, data mining, and lifetime value analysis.

Chapter Sixteen Objectives

• Understand the role of audio-video advertising.

• Appreciate the value of yellow-pages advertising.

• Recognize the growth and role of video-game advertising (adver-gaming).

Chapter Sixteen Objectives

• Appreciate branded entertainment and brand placements in various venues (movies, TV, etc.).

• Understand the role of cinema advertising and Web films.

• Appreciate the potential value of various other ad media.

Chapter Sixteen Objectives

Postal Mail Advertising

P-mail advertising:

Advertising matter sent via the postal service to the person whom the marketer wishes to influence

Ex. Letters, postcards, programs, calendars, catalogs, videocassettes, blotters, order blanks, price lists, menus, etc.

1. Countdown mailing

3. Special Issue of Road and Track

Magazine

4. Test-Drive Kit

Mailing

2. Subsequent Qualification

Mailing

P-Mail Advertising

P-Mail Distinctive Features

Targetability

Measurability

Accountability

Flexibility

Efficiency

What Functions Can P-Mail Accomplish?

1. Increase sales and usage from current customers

2. Sell products and services to new customers

3. Build traffic at a specific retailer or Web site

What Tasks can P-Mail Accomplish?

1. Simulate product trial with promotional offers and incentives

2. Generate leads for a sales force3. Deliver product-relevant information and

news4. Gather customer information that can be

used in building a database5. Communicate with individuals in a

relatively private manner

Who Uses P-Mail Advertising

• All types of marketers

• Some budget as much as 10% of their advertising to P-mail

• Car companies’ expenditures alone exceeded $70 million in one year.

The Special Case of CatalogsConsumer’s Perspective:

1. Catalog shopping saves time 2. Catalog buying appeals to consumers who

are fearful of shopping because of crime. 3. Catalogs allow people the convenience of

making purchase decisions at their leisure. 4. 800-numbers, web-sites, credit-cards, and

liberal-return policies make it easy to buy. 5. Merchandise quality and prices are often

comparable if not better than those of stores

6. Guarantees are attractive

The Special Case of Catalogs

Growth rate has subsided because:

• The novelty of catalog scanning has

worn off for many consumers. • The costs of catalog marketing have

increased dramatically • Third-class postal increases in recent

years and sharp increases in paper prices have also raised costs.

Database Marketing

• Successful direct mailing necessitates the availability of computer databases and the addressability inherent in the databases.

• Up-to-date databases allow a firm to offer varied messages to different groups of customers

Lifetime Value Analysis

Customer lifetime value:

Net Present Value (NPV) of profit that a company stands to realize on average new customer during a given number of years.

Lifetime Value Analysis5 ways to augment lifetime values:

1. Increase the retention rate

2. Increase the referral rate

3. Enhance the average purchase volume per customer

4. Cut direct costs

5. Reduce marketing communication costs

The Practice of Data Mining“information extraction activity whose goal is

to discover hidden facts contained in databases”

RFM System:

• Recency of a customer’s purchase

• Frequency of purchases

• Monetary Value of each purchase

Audio-Video Advertising

- Videotapes, CD-ROMs, or DVDs are used to present key video and audio information about a brand.

- Research shows that customers are less likely to throw these mailings away than they are a brochure or other printed material.

Yellow Page Ads

• Annual revenues exceeding $15 billion.

• Both local and national advertisers use the service

• Heavy users tend to fall in the 25-49 demographic with

relatively

• Reasons for using Yellow Pages:• Saving time spent shopping around for information

• Saving energy and money

• Finding information quickly

• Learning about products and services

• 60% of American adults use yellow pages at least once

Yellow Page Ads

Yellow pages differ from other ad media:

Unlike other media, yellow pages consumers actively seek ads

Advertiser largely determines quality of ad placement by the actions it takes

Clear-cut limits on possible creative executions

Method of purchase (i.e. purchased for full year).

Video-game Advertising (a.k.a. Adver-gaming)

• Video game users usually play a single game for 40 hours before they grow tired of it.

• Over 60 million game players predicted by 2009, with 40% in the 18-to-34 age category.

• Today nearly 40% of game players are girls and women.

Brand Placement in Movies• Evidence of effectiveness of such advertising is limited

but growing

• Building Brand Awareness, as well as enhancing recall

• Peripheral Route of persuasion

• Little to lose and more to gain by using this form of advertising

• Brand placement in movies dates back to the 1940s.

• Limited research to verify effectiveness of this type of advertising.

• Younger consumers appear to be the most responsive to brand placement in movies.

Brand Placement in TV Programs

• Brand placement spending on television is even greater than in movies, accounting for nearly 60% of brand expenditures in 2005.

• Brand placement in books and songs reflect the lifestyles of the protagonists and singers and is very prevalent in hip-hop music.

Cinema Advertising and Web Films

• $350 million was spent in a recent year on cinema ads prior to films.

• Especially valuable for reaching young audiences.

• Web films are short feature films available on the Internet for free viewing. This media reaches a target of 18-35 year old men and women.

Virtual Signage

• Some brand logos seen at sports venues on t.v. are virtual (i.e. computer generated image)

• Advertisers in the U.S. have embraced virtual signage but in Europe regulators such as the European Broadcasting Union have banned virtual advertising from events in which it holds broadcasting rights.