2. Ads are Everywhere
Product placement: The purchase of spaces for particular goods to appear
in a TV show, movie, or music video
Which ads do you watch for fun?
How and when do ads annoy you?
Can you think of ways you intentionally avoid advertising?
4. Early Advertising
Babylonian merchants hung signs outside of their stores
Advertising has been discovered in Pompeii
By 900 C.E., many European cities had town criers who called out the
news—and directed customers to various stores
Handbills and posters existed as early as the 1400s
The first newspaper ad in colonial America ran in the Boston News-Letter
in 1704
5. The First Advertising Agencies
Before the Industrial Revolution, 90 percent of Americans lived in isolated
areas and produced most of their own tools, clothes, and food
The limited existing advertising was generally for local merchants
National advertising came along with the railroads in the 1850s
The first American advertising agencies were space brokers, individuals
who purchased space in newspapers and sold it to various merchants
6. Advertising in the 1800s
Agencies collected a fee from its advertising client for each ad placed
The fee covered the price that each media outlet charged for placement of
the ad, plus a 15 percent commission for the agency
The more ads an agency placed, the larger the agency’s revenue
Agencies had little incentive to buy fewer ads on behalf of their clients
Nowadays, many ad agencies work for a flat fee, and some will agree to be
paid on a performance basis
7. Trademarks and Packaging
Manufacturers came to realize that if their products were distinctive and
associated with quality, customers would ask for them by name
Advertising let manufacturers establish a special identity for their products,
separate from those of their competitors
Studies suggest that although most ads are not very effective in the short run,
over time they create demand by leading consumers to associate particular
brands with quality
8. Patent Medicines and Department
Stores
By the end of the 1800s, patent medicines and department stores
accounted for half of the revenues taken in by ad agencies
Some patent medicines contained up to 40 percent ethyl alcohol, and
some even contained morphine
Many contemporary products—such as Coca Cola—originated as
medicines, and it contained traces of cocaine
Post and Kellogg’s cereals claimed to cure stomach problems
The Food and Drug Act passed in 1906 regulated these claims
Department stores were criticized for undermining local stores, but they
could also put more of their profits into ads
9. Advertising’s Impact on Newspapers
The companies that were the first to take advantage of the Industrial
Revolution were also the first to advertise
Whereas newspapers in the mid 1880s featured 70-75 percent newshole,
by the early 1900s, more than half the space in daily papers was devoted
to advertising
10. Promoting Social Change and
Dictating Values
Advertising significantly influenced the transition from a producer-directed
to a consumer-driven society
Advertising also promoted technological advances by showing how new
machines—such as vacuums, washing machines, and cars—could improve
daily life
Advertising encouraged economic growth by increasing sales, prompting
manufacturers to produce greater quantities, which reduced the cost per
unit
11. Appealing to Female Customers
By the early 1900s, advertisers and ad agencies believed that women, who
made up 70-80 percent of newspaper and magazine readers, controlled
most household purchasing decisions
However, 99 percent of the copywriters and ad execs at the time were men
Many ads emphasized stereotyped appeals to women, believing that
simple ads with emotional and even irrational content worked best
12. Dealing with Criticism
The industry began to actively deflect criticism that advertising created
consumer needs that ordinary citizens never knew they had
After WWII, the Ad Council was created (PSAs)
13. Early Ad Regulation
Partly to keep tabs on deceptive advertising, advocates in the business
community in 1912 created the nonprofit Better Business Bureau, which now
has more than 100 offices in the U.S.
At the same time, advertisers wanted a formal service that tracked newspaper
readership, guaranteed accurate audience measures, and ensured that papers
would not overcharge ad agencies and their clients
As a result, publishers formed the Audit Bureau of Circulations, now known as
the Alliance for Audited Media
1914, the government created the FTC (Federal Trade Commission)
The industry created the American Association of Advertising Agencies to
minimize government oversight
Subliminal advertising: Hidden or disguised print and visual messages, banned
in 1958
15. Advertising Today
Until the 1960s, most ads were determined by a slogan, the phrase that
attempts to sell a product by capturing its essence in words
Through the influence of European design, TV, and (now) multimedia
devices, such as the iPad, visual style became dominant in U.S. ad agencies
16. The Influence of Visual Design
Part of the visual revolution in the 1960s and 1970s was due to magazines
such as Vogue and Vanity Fair hiring European designers as art directors.
Europe had government-sponsored radio with no ads, so they were driven
by visuals rather than words
By the 1970s, ad agencies had put together teams of writers and artists,
granting equal status to words and images
The quick-edits and musical/visual style of MTV influence advertising
Now, popular songs and music are regularly featured in ads…
Ads are now more interactive, often 3D, very visual, but design has become
much simpler
17. Types of Advertising Agencies
About 14,000 ad agencies currently operate in the U.S.
Mega-agencies: Large ad firms that formed by merging several agencies
that maintain regional offices worldwide
Boutique agencies: Devote their talents to only a handful of select clients
Both types of agencies suffered declines in 2008 and 2009 due to the
economic decline, but had slowly improved by 2013
18. Mega-Agencies
Mega-agencies provide a full range of services, from advertising and
public relations to operating their own in-house radio and TV production
studios
The trend towards mega-agencies has stirred debate among consumer
and media watchdog groups
Some consider large agencies a threat to the independence of smaller
firms, which are slowly being bought out
The four largest firms control more than half of advertising dollars globally
19. Boutique Agencies
The visual revolutions in advertising during the 1960s elevated the
standing of designers and graphic artists, who became closely identified
with the look of particular ads
Offering more personal services, the boutiques prospered, bolstered by
innovative ad campaigns and increasing profits from TV accounts
20. The Structure of Ad Agencies
Ad agencies, regardless of size, generally divide the labor of creating and
maintaining advertising campaigns among four departments:
1. Account planning
2. Creative development
3. Media coordination
4. Account management
21. Account Planning, Market Research,
and VALS
The account planner’s role is to develop an effective advertising strategy
by combining the views of the client, the creative team, and consumers
Market research: Assesses the behaviors and attitudes of consumers
toward particular products long before any ads are created
Demographics: Age, gender, occupation, ethnicity, education, and income
Psychographics: Categorizes consumers according to their attitudes,
beliefs, interests, and motivations
VALS (Values and Lifestyles): Researchers measure psychological factors
and divide consumers into types (thinkers, achievers, experiencers)
22. Creative Development
Teams of writers and artists outline the rough sketches for print and online
ads, and then develop the words and graphics
They do everything from choosing a narrator’s voice to determining sound
effects
Viral marketing: short videos or other content that quickly gains
widespread attention as users share it with friends online or by word of
mouth
Often the creative side of the business finds itself in conflict with the
research side
Both sides acknowledge that they can’t predict which ads and which
campaigns will succeed
23. Media Coordination: Planning and
Placing Advertising
Media buyers: People who choose and purchase the types of media that
are best suited to carry a client’s ads, reach the target audience, and
measure the effectiveness of those ad placements
Saturation advertising: A variety of media are inundated with ads aimed at
target audiences
24. Account and Client Management
Account executives: Responsible for bringing in new business and
managing the accounts of established clients
Oversees new ad campaigns in which several agencies bid for the client’s
business
25. Trends in Online Advertising
The earliest form of online advertising was banner ads
Different formats have emerged, including video ads, sponsorships, and
rich media like pop ups, pop unders, flash multimedia ads, and interstitials,
which popup in new screen windows as a user clicks to a new web page, or
spam
Paid search advertising has become the dominant format of web
advertising
26. Online Advertising Challenges
Traditional Media
Because internet advertising is the leading growth area, advertising mega-
agencies have added digital media agencies and departments to develop
and sell ads online
Facebook has made big strides in mobile advertising
Google and Facebook account for the most online advertising
27. Online Marketers Target Individuals
Internet ads offer many advantages to advertisers, compared to traditional
media outlets
Perhaps the biggest advantage is that marketers can develop consumer
profiles that direct targeted ads to specific web site visitors
They do this by collecting information about each internet user through
cookies and online surveys
Agencies can also add online and retail sales data to user profiles to create
a database, largely without your knowledge
Online ads are beneficial because they are precisely targeted and easily
measured
28. Advertising Invades Social Media
Social media provide a wealth of data for advertisers to mine
Social media are helping advertisers use personal endorsements to further
their own products and marketing messages—basically letting consumers
do the work for them
30. Conventional Persuasive Strategies
Famous-person testimonial: A product is endorsed by a well-known person
Plain-folks pitch: Associates a product with simplicity
Snob-appeal approach: Using a product will maintain or elevate their social status
Bandwagon effect: Everyone is using a particular product
Hidden-fear appeal: Plays on consumers’ sense of insecurity
Irritation advertising: Creating name recognition by being annoying or obnoxious
31. The Association Principle
Association principle: A widely used persuasive technique that associates a
product with a positive cultural value or image even if it has little
connection to the product
32. Disassociation as an Advertising
Strategy
Companies sometimes create second, dummy corporations to link new
brands in a product line to eccentric or simple regional places rather than
to images conjured up by big cities and multinational conglomerates
33. Advertising as Myth and Story
Myths help us define people, organizations, and social norms
According to myth analysis, most ads are narratives with stories to tell and
social conflicts to resolve. Three common mythical elements are found in
many types of ads:
1. Ads incorporate myths in mini-story form, featuring characters, settings,
and plots
2. Most stories in ads involve conflicts, pitting one set of characters or social
values against another
3. Such conflicts are negotiated or resolved by the end of the ad, usually by
purchasing a product. The product or those who use it often emerge as
the heroes of the story
34. Product Placement
Product placement: Strategically placing ads or buying space in movies, TV
shows, comic books, video games, blogs, and music videos so that
products appear as part of a story’s set environment
36. Commercial Speech and Regulating
Advertising
The First Amendment ensures that citizens and journalists can generally
say and write what they want, but it says nothing directly about
commercial speech—any print or broadcast expression for which a fee is
charged to organizations and individuals buying time or space in the mass
media
37. Critical Issues in Advertising
Is advertising manipulating helpless consumers? Does it attack our dignity,
and invade the privacy of our minds?
According to this view, the advertising industry was all-powerful
Most people are not easily persuaded by advertising
Between 75 and 90 percent of new consumer products typically fail
because they are not embraced by the buying public
However, advertising has raised the American standard of living and
finances most media industries
Critics continue to condemn ads that stereotype or associate products with
sex appeal, youth, and narrow definitions of beauty
Some of the most serious concerns involve children, teens, and health
38. Children and Advertising
Groups have worked to limit advertising aimed at children
Some TV shows are developed directly to promote a line of toys
Parents groups have worried about the heavy promotion of products like
sugar-coated cereals
39. Advertising in Schools
Channel One offered free video and satellite equipment (tuned exclusively
to Channel One) in exchange for a 12 minute package of current events
programming that included two minutes of ads
Public pressure managed to get most junk food ads removed from
Channel One by 2006
Organizations like the National Dairy Council have provided posters,
folders, or magazines
40. Health and Advertising—Eating
Disorders
Advertising has a powerful impact on the standards of beauty in our
culture
A long-standing trend in advertising is the association of certain products
with ultra-thin female models
This type of advertising suggests standards of style and beauty that are not
only unattainable, but unhealthy. It can lead to an increase in anorexia and
bulimia, and an increase in plastic surgery
Advertising has also been blamed for the tripling of obesity rates in the
U.S. since the 1980s
41. Health and Advertising—Tobacco
Cigarette ads on TV have been banned since 1971
Cartoon characters are banned in cigarette ads (no more Joe Camel)
Cigarette advertising campaigns often target a specific group of people,
such as women, African Americans, or young people
42. Health and Advertising—Alcohol
Like tobacco ads, alcohol ads have been accused of using cartoon
characters to appeal to young audiences
College students are often targeted by alcohol advertising
43. Health and Advertising—Prescription
Drugs
TV ads have made household names out of prescription drugs like Nexium,
Claritin, Paxil, and Xanax
Nearly 1 in 3 adults have asked a doctor about a prescription drug they
saw on TV
The growth of prescription drug advertising brings the potential for false
and misleading claims, particularly because a brief TV ad can’t
communicate all the relevant cautionary information
Only the U.S. and New Zealand allow advertising for prescription drugs
44. Watching Over Advertising—Excessive
Commercialism
Commercial Alert—a nonprofit, brings attention to the ways that
advertising has crept out of its “proper sphere,” such as movies cross-
promoting with fast-food restaurants
They also bring attention to corporate partnerships in children’s books,
and the placement of products woven into stories aimed at teens
They question the limit of corporate influence on publicly elected
government bodies
45. The FTC Takes on Puffery and
Deception
The FTC (Federal Trade Commission) enforces truth-in-advertising rules
Commercials must not be deceptive
When the FTC discovers deceptive ads, it usually requires advertisers to
change them or remove them from circulation
They can also impose fines or require an advertiser to run spots to correct
the deceptive ads
47. The Future of Advertising
Although commercialism has generated cultural feedback that is often
critical of advertising’s pervasiveness, the growth of the industry has not
diminished
Many consumers buy magazines or watch the Super Bowl just for the
advertising
Many consumers dismiss advertising as trivial, or a “necessary evil”
As a society, we have developed an uneasy relationship with advertising
