CHAPTER 4

Develop An Advertising Plan

Purpose of an Advertising Plan:

Advertising Plan: Describes the thinking and tasks needed to achieve a successful advertising campaign that fits into the advertiser’s marketing strategy.

All decisions made during the creation of an advertising campaign must fit into the advertising plan.

Components of an Advertising Plan

1. Introduction2. Situational Analysis 3. Objectives4. Budget5. Strategy6. Execution Methods7. Evaluation

Introduction

Presents an executive summary and overview of the entire plan.

Executive Summary: Summarizes the most important parts of the advertising plan. Similar to a summary of an entire book. Can be two paragraphs to two pages in length.

Overview: Summarizes important information in each section of the document. Similar to a summary of each chapter in a book.

Situational Analysis

Describes the factors that influence the advertising plan.

1. Reviews the company and product history.2. Evaluates the product’s strengths and weaknesses.3. Defines the target market.4. Evaluates the competition.

Objectives

Describes the goals that the advertising should accomplish.

Sample goals/objectives:1. Increase consumer awareness of brand.2. Change consumer attitudes about the product.3. Promote replacement of outdated products

with new products using new technology.4. Persuade consumer to try a sample of product.5. Convert occasional user of product to regular

user.6. Persuade consumers to switch from a

competitor’s product.7. Increase sales.

Objectives

An objective must be clearly stated and include criteria to measure the success of the campaign.

Example: Based on surveys completed at the conclusion of the three week advertising campaign, McKnight Advertising Agency will increase brand recognition from 50% to 55%.

Budget

Identifies the amount of money that will be spent on advertising and the method used to calculate the amount. Budget methods:

1. Affordable Method2. Historical Method3. Percent of Sales Method4. Share-of-Voice Method5. Objective and Task Method

Affordable Method

The advertiser spends what it thinks it can afford.

Commonly used by small, inexperienced businesses.

Disadvantages:Poor method of setting a budget because the

advertiser doesn’t know if it is spending too much or too little.

Historical Method

The amount of the current budget is based on the amount the advertiser was able to afford the previous year.Ex. (Last year’s budget) x (Inflation) =Current Budget

Disadvantages:Generally not recommended because the

budget does not take into account changes made to the business since last year (i.e. competition).

New businesses cannot use this method

Percentage of Sales Method

Amount of current budget is based on % of last years sales or anticipated sales.

Commonly used by large companies.Higher % of budget is used on new products

It costs more to build a consumer’s awareness of a new product. (10%-35%)

DisadvantagesCould lead to overspending on budget or

decrease in advertising due to low sales.

Share-of-Voice Method

Based on the idea that if you spend more than your competition consumer’s will be more aware of your product than your competitor’s.

Many companies use this method.

Disadvantages:Your competitor’s spending information may be

impossible to obtain.The same amount of money will not

automatically create a campaign of the same quality.

Your competitor may have a different objective, requiring a different budget.

Objective and Task

The only method that uses the relationship between what you want to accomplish and what you want to spend.

Objectives must be specific and clear.Costs are based on the level of the objective

(or task) you want to accomplish.Disadvantages:Obtaining each level of your objectives will

require a different spending level.

Strategy

Identifies how the advertising plan objectives will be accomplished.Involves:

1. Identifying the target market2. Selecting a positioning strategy3. Choosing the type of advertisement

Positioning

The process of making an advertiser’s product different from other products in the consumer’s mind.

Benefit positioning: Selects a single benefit that users might believe is important.

User positioning: Demonstrates how the product will fit into consumer’s lifestyle.

Competitive positioning: Focuses on the differences between your product and other similar products

Choose the Type of Advertising

Brand AdvertisingInformative AdvertisingComparative AdvertisingDefensive AdvertisingPersuasive Advertising

Execution

Identifies where, when, and how the ad will be placed in the appropriate media.

Evaluation

Describes the tests and criteria that will determine the success or failure of the advertising campaign.

Return on Investment: The amount you earn from the money you spend.

Changing Behavior is Difficult

Hierarchy of Change

Awareness and Recall

Change Attitude

Brand Preference

Believe Product Claims

Change Purchase Behavior

Evaluation Measurement Tools

Awareness and Recall Testing Unaided recall: “Do you remember any commercials

you saw on T.V. last night?” Aided recall: “Tell me what you think of when you

hear the work ‘Nike.’”

Mall Intercept MethodMail QuestionnairesTelephone SurveysConsumer PanelsTracking Studies