Advertising pr lecture_notes_com130 opensource textbook

1. Advertising:An
Industry in Disruption
LectureNotesCOM130

2. Disruption
By 2016, the only older, or
“legacy,” mass medium whose
global advertising revenue was
not totally disrupted by the
Internet was television.
Television had nearly a 38
percent share of worldwide ad
revenue in 2015 which
represented a 2 percent rise
between 2007 and 2015.
Here are the five biggest
obstacles the online
ad industry is facing right
now:
Rapid Growth. The digital
landscape just keeps growing.
...
Ad Blockers. Ad blockers are
costing advertisers billions of
dollars. ...
Reduced Exposure. Social
media was a gift to businesses.
...
Increasing Costs. ...
Elusive Audiences.
FaceBook and Google have
killed advertising agencies

3. Audience
Monetization:
Who’s doing it
best?

4. Challenges
Getting the attention of the
target market amid clutter
and screen distraction
Mobile marketing tactics:
time spent with smartphone
video is reserved for
snackable content
Privacy issues for the
consumer. How is personal
data used?
Social MediaTrends:Which
platforms and content types
are gaining favor?
Most consumers find pop-
ups intrusive and say ads can
affect the site experience
Concerns with fake news
leads some advertisers to
reconsider open exchanges

5. Overview
59%
31%
35%
17%
40%
10%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
There is constantly more and more advertising everywhere
Advertising is getting better and better (e.g. funnier, more interesting)
Advertising annoys me a lot
I am willing to pay (more) to avoid seeing/hearing advertising
I avoid certain media when there is too much advertising shown/played there
None of these
Share of respondents
Note: United States; May 18 to 21, 2017; 16 years and older; 1,037
Further information regarding this statistic can be found on page 58.
Source(s): Statista Survey; ID 716648
7
Consumer attitude towards advertising in the United States as of May 2017
U.S. consumer opinion about advertising 2017

6. Opportunities
 Radio’s weekly audience is large and growing

7. Opportunities
in 2019
User-generated content
boosts purchase confidence,
online shoppers say
TV remains the dominant
screen for video viewing
Consumers have higher
expectations in the buying
process and will shift loyalty
based on their experiences
Traditional media is still the
best way to reach Boomers

8. HowAds
Function in
society
A marketing function
(helps companies sell
products or services)
Advertising is
educational (people learn
about new or improved
products or services)
Advertising plays an
economic role
(encourages new
competition and lower
prices)
By reaching a mass
audience, advertising
reduces the cost of
personal selling and
distribution
Advertising performs a
social function (helps
increase productivity and
raises the standard of
living)

9. Public
Relations
 is the art and social science of
analyzing trends,
 predicting their consequences,
counseling organization leaders,
and
 implementing planned
programs of action which serve
both the organization’s and the
public’s interests.
 Public Relations is:
 working with public opinion.
 concerned with communication.
 a management function.

10. PR is Not
Advertising
 public relations is a function of management whereas advertising is a
marketing function.
 advertising uses all communication methods except interpersonal
communications
 public relations uses all forms of communication.
 advertising is paid for, whereas PR communications are not, though
advertising may be used to help further the public relations agenda.
 PR is not Publicity (the placing of stories in the mass media). Publicity
is a tool of a public relations campaign. Publicity is primarily a one-way
process whereas PR involves two-way communication.

11. PRWork
According to
the
Occupational
Handbook
PR specialists create and maintain a good public image
for the organization they represent by crafting media
releases and developing social media programs to shape
public perception of their organization.
PR specialists typically need a bachelor’s degree in
public relations, journalism, communications, English, or
business.
Employment of public relations specialists is projected
to grow 9 percent from 2016 to 2026

12. Industry financials
14
19.3
0
5
10
15
20
25
2016 2020
RevenueinbillionU.S.dollars
Note: Worldwide; forecast
Further information regarding this statistic can be found on page 55.
Source(s): University of Southern California (Annenberg Center for Public Relations); The Holmes Report; ID 645836
8
Public relations (PR) industry revenue worldwide in 2016 and 2020 (in billion U.S. dollars)
PR industry revenue worldwide 2016-2020

13. Employment
7%
6%
4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Total, all occupations* Public relations specialists Media and communication workers
Change
Note:
Further information regarding this statistic can be found on page 65.
Source(s): Bureau of Labor Statistics; ID 299878
19
Change in employment for public relations specialists in the United States from 2014
to 2024
Change in employment for P.R. specialists in the U.S. 2014-2024

14. Leading players
208.8%
92.7%
84.6%
73.4%
70.7%
51.3%
51.2%
48%
46.2%
45.5%
0.0% 50.0% 100.0% 150.0% 200.0% 250.0%
Hudson Cutler & Company
NJF
Day One Agency
Vested
HealthUnlimited
Nebo
Nyhus Communications
Bospar PR
CURA Strategies
Praytell
Fee income growth rate
Note: United States; constant currency
Further information regarding this statistic can be found on page 71.
Source(s): The Holmes Report; ID 550905
26
Fastest growing PR agencies in the United States in 2017
Fastest growing PR agencies in the U.S. 2017

15. Conventional
Persuasive
Strategies
Famous-person
testimonial
Plain-folks pitch Snob-appeal approach
Bandwagon effect Hidden-fear appeal Irritation advertising
Association principle
•Association of a product with a
positive cultural value or image
even if it has little connection.
Used in most consumer ads
Disassociation
•Responding to consumer
backlash, major corporations
present products as though from
smaller, independent companies.

16. Advertising as
Myth andStory
 Myth analysis
 Most ads are narratives with stories to tell and social
conflicts to resolve.
 Three common mythical elements found in ads
 Mini-stories
 Stories involving conflicts
 Conflicts are negotiated or resolved, usually through
the use of the product.

17. History of
Advertising:
Emerging
Market
After the CivilWar:
Railroad linked all
parts of the country
(and manufacturers
with consumers)
The U.S. population
doubled between
1870-1900 (more
consumers)
New communication
media (telephone,
typewriter, high-
speed printing press,
Motion pictures,
national magazines,
photography, and
rural mail delivery
People had
disposable income to
spend on new
products
With the advent of mass production in
the 1800s came the parallel needs for
mass consumption and mass markets.

18. History ofAd
Agencies
The advertising agency, an
organization that specializes in
providing advertising services to its
clients.
• Bought newspaper space, sold it to merchants
Earliest ad agencies were
newspaper space brokers.
• Prototype of the first ad agency in 1841
• Sold space to advertisers for a 25 percent commission.
Volney Palmer
• First full-service modern ad agency
• Worked primarily for advertisers and product companies
N.W. Ayer & Son
• Manufacturers realized consumers would ask for their
products specifically if they were distinctive and associated
with quality.
Trademarks and packaging

19. Types of
Agencies
• Provide a full range of services
• WPP Group, Omnicom,
Publicis Groupe, and the
Interpublic Group
Mega-
agencies
• Devote talents to select clients
• Peterson Milla Hooks
Boutique
agencies

20. Advertising in
the 1800s
Advertising let
manufacturers
establish special
identity for their
products.
Nineteenth-century
ads created the
impression of
significant differences
among products.
Early and enduring
brands: Smith
Brothers (1850s),
Campbell Soup (1869),
Quaker Oats (1877)

21. Advertising in
the 1800s
• By the end of the 1800s, one-sixth of all print ads came
from patent medicine and drug companies.
• Patent medicine ads were often fraudulent. Advertisers
developed industry codes. Federal Food and Drug Act was
passed to police patent medicine claims.
Patent
medicines
• Comprised more than 20 percent of ad space by the early
1890s
• Frequently criticized for undermining small businesses
Department
stores
• Advertising significantly changed the ratio of copy at most
papers.
• Recent recession hit papers hard.
Impact on
newspapers

22. Advertising in the 1900s
Both the Great Depression
and WWII curtailed growth
in the advertising industry.
01
The Cold War of the 1950s
fostered fears of
advertising’s motivations
and techniques, especially
subliminal advertising.
02
The 60s reflected a new
creative spirit and the 70s
a conservative pause and
return to basics.
03
The 80s and 90s pushed
the ad industry into
changing national
demographics, the
introduction of new mass
media forms, and an
emerging global market
economy.
04
The Internet brought big
expenditures in online
advertising. Early online
ads were NOT as effective
as hoped!
05

23. PushingValues
andSocial
Change
 Advertising led to social
changes.
 Transition from producer-
directed society to
consumer-driven society
 Promoted new
technological advances that
made life easier
 Emphasized appeals to
women
 Accused of inciting consumer
need for unnecessary products
 Formation of the Ad Council

24. EarlyAd
Regulation
• The Better Business Bureau (BBB)
• Audit Bureau of Circulations (ABC)
• FederalTrade Commission (FTC)
• American Association of Advertising
Agencies (AAAA)
Advertising
regulation
entities
• Hidden or disguised messages
• No more effective than regular ads
Subliminal
advertising

25. Visual Design
1960s
Ad-rich magazines hired European
designers as art directors.
1970s
Agencies developed teams of writers and
artists, granting equal status to images and
words.
1980s
Visual techniques of MTV influenced many
ads and agencies.

26. Types ofAds
Classified according to the target
audience. Many target audiences
can be defined, but the most
general are consumer and business.
consumer advertising targeted at
the people who buy goods and
services for personal use
business-to-business targeted at
people who buy products for
business use
Classified according to geographic focus, targeting
international, national, or local (retail) audiences
Classified according to purpose, such as selling a specific
product or service as opposed to trying to improve a company's
image or influence public opinion

27. Three Main
Components
of the
Advertising
Industry
local (or retail) advertisers: local companies with customers in the local
area. The emphasis is on attracting people to the specific store or place
national advertisers: sell products or services all across the country. The
emphasis is on the product or service itself rather than where it is sold
Two main types of advertisers are national and local or retail.
advertisers, advertising agencies, and the media. In 2019, the role of
advertising agencies is shifting to Google and Facebook.

28. Roles in
Advertising
Account planner
Develops the advertising strategy
Coordinates market research
Used to assess the behaviors and
attitudes of consumers toward
particular products
Methods include demographics,
psychographics, focus groups, and
the Values and Lifestyles (VALS)
strategy.
Creative development
Writers and artists outline rough
sketch of ads.
Storyboard (TV)
Web sites, flash games, downloads,
and viral marketing (digital)
Media buyer
Choose and purchase media based
on suitability, target audience, and
effectiveness of ads
Incentive clauses encourage
saturation advertising

29. Key
Advertising
Terms and
Concepts
 Reach: How many people can get the message?
 Frequency: How often will the message be received?
 Selectivity: Does the medium actually reach the intended
potential customers?
 Efficiency: How much does it cost to reach a certain number of
people (usually expressed in terms of cost per thousand people)?

30. Overview
53%
48%
41%
39%
36%
36%
35%
34%
31%
29%
26%
25%
24%
22%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Newspaper inserts/circulars
Point-of-sale circulars
Circulars delivered to driveway/door
Ads in printed newspapers
Ads on magazine websites/social sites
Ads on non-media social sites
Direct mail advertising
Ads on non-media websites
Ads on newspaper websites/social sites
TV commercials
Ads on TV websites/social sites
Ads on radio station websites/social sites
Radio commercials
Ads in printed magazines
Share of respondents who often do
Note: United States; June 15 to 20, 2016; 1,003 local media users
Further information regarding this statistic can be found on page 65.
Source(s): Various sources (Athlon Media Group AMG Parade); ID 308130
14
Advertising influence on purchase decision among consumers in the United States as of June
2016, by medium
Advertising effectiveness in the U.S. 2016, by medium

31. Online
Advertising
Targeting individuals
• Collect information
through cookies and
online surveys
• Track ad impressions and
click-throughs
• Build profiles for
consumers based on this
information
• Use smartphone
technology to tailor ads
by geographic location or
user demographic
Social media
• Social networking sites
provide advertisers with a
wealth of data.
• Some sites ask whether
users liked each ad.
• Companies buy
traditional paid ads on
social networking sites.
• Controversy over
whether people must
disclose if they are paid
to promote a product

32. OnlineAd
Revenue

33. Product
Placement
• Coca-Cola on American Idol
• 200+ marketing partners in
Man of Steel, worth $160
Million
Placing ads in
movies,TV
shows, comic
books, video
games, etc.
• Petitioned to mandate
warnings
• Mandates rejected by the FTC
• FCC proposed placement rules
FTC and FCC

34. Breakdown of online advertising revenue in the United States in 2017, by type
Breakdown of U.S. online advertising revenue in 2017, by type
Note: United States; 2017
Further information regarding this statistic can be found on page 8.
Source(s): PwC; IAB; ID 190458
44%
32%
14%
9%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%
Search
Banner
Digital video
Other*
Share of revenue
2

35. Overview
50%
61%
50% 39%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
March 2014 March 2017
Shareofrespondents
Trust Do not trust
Note: March 2014 and March 2017; among adults who see any advertising at least once a month
Further information regarding this statistic can be found on page 66.
Source(s): YouGov; ID 325458
15
Level of trust in advertising according to consumers in the United States in 2014 and 2017
Trust in advertising in the U.S. 2014-2017

36. References
 Advertising consumption and perception (2017). StudyID 51596. Statistica
 Estimated aggregate revenue of U. S. Advertising agencies from 2000 to
2016 (2016). Study ID 183938. Statistica
 Public relations specialists. (2019).The Occupational Handbook. Bureau of
Labor Statistics. Retrieved from https://www.bls.gov/ooh/media-and-
communication/public-relations-specialists.htm
 Understanding Mass Media (2010). Open-source version adapted byThe
Saylor Foundation. Retrieved from http://www.saylor.org/books
 What are the biggest advertising challenges faced by marketers? (2017).
Marketing Charts. Retrieved from http://www.marketingcharts.com