Advertising

Essential role in consumer economies

Financial basis of modern mass media

• consumer economies

• advertising and prosperity

• advertising and democracy

Origins of advertising

• stepchild of technology– printing press

• industrial revolution– steam powered

presses– factories– immigrants

• pioneers

Advertising agencies

• Agency structure– creative– account executives– media buyers– research

• Agency compensation– three kinds: comm., fees, performance

• Advertiser role in advertising

Placing advertisements

• media plans– CPM--cost per thousand

• media choices• alternative media~$5billion a year

– business magazines– gay newspaper ads– Spanish language media– direct mail

Pitching messages

• importance of brands

• lowest common denominator

• market segments• redundancy

techniques

Redundancy techniques

• “redundancy”=repetition

• barrages--”ads in flights” or “waves”

• bunching--promoting in limited period

• trailing--running condensed versions

• multimedia trailing--reinforce ads with less expensive media

• saturation--target, block out competition

New advertising techniques

• stealth ads

• product placement

• infomercials

• “infotainment” advertising--games

• ‘zines

• new site ads--sports stadiums

Research and psychology

• motivational research– Freud and Dichter– Goebbels– use of fantasies, sexual innuendo– sexual images

• subliminal advertising– Jim Vicary, 1957– “subception”

Conglomeration and globalization

• acquisition binge– deregulation in 1970s– hands off business approach– demassification of mass media– fragmentation of audiences

• agency consolidation problems– huge profits to spend on acquisitions– financing available

Advertising regulation

• media gatekeeping– “caveat emptor”– “caveat venditor”– Edward Bok– codes of ethics

Regulation, con’t

• industry self-regulation• public interest advertising• National Advertising Review Council• Codes--AAAA

– false, misleading statements/exaggerations– testimonials from unknowledgeable people– unfair disparaging of competitive products– distorted, insufficiently supported claims– offending public decency

Other regulation

• “public interest” advertising

• government regulation– Federal Trade Commission 1914– tobacco and liquor industries

• Seagram company

– nine other agencies• FDA, Postal Service, FCC, SEC• state law against fraud

Problems and issues

• advertising clutter– #of ad messages doubled in 60s & 70s– too many commercials during Olympics– NAB code limited quantity; ruled unfair

• creative excesses

• advertising effectiveness--what works?– mag. ads entice 13%; newspaper ads

15%; TV ads 25%.