Advertising management

Advertising refers to any paid form of communication designed to create interest in or stimulate sales of products or services. Companies are constantly searching for novel media, such as these human billboards, to get their message out to potential consumers

Advertising management is a planned managerial process designed to communicate with a firm's target market consumers and which is ultimately designed to influence the consumer's purchase decisions. Advertising is just one element in a company's promotional mix and as such, must be integrated with the overall marketing communications program.

There are different types of advertising. Brand advertising is defined as a non-personal communication message placed in a paid, mass medium designed to persuade target consumers of a product or service benefits in an effort to induce them to make a purchase. Corporate advertising refers to advertising messages that communicate the corporation's values in an effort to influence public opinion. Yet other types of advertising such as not-for-profit advertising and political advertising present special challenges that require different strategies and approaches.

Advertising management is a complex process that involves making many layered decisions including the developing the advertising strategy, setting the advertising budget, setting advertising objectives, determining the target market, media strategy, developing the message strategy (which involves media planning, media buying) and evaluating the overall effectiveness of the advertising effort. However, at its simplest level, advertising management can be reduced to four key decision areas:

Target market definition: Who do we want to talk to?

Message strategy: What do we want to say to them?

Media strategy: How will we reach them?

Measuring advertising effectiveness: How do we know our messages were received in the form intended and with the desired outcomes?

Advertising and advertising management: definitions

Consumers tend to think that all forms of commercial promotion constitute advertising. However, in marketing and advertising, the term 'advertising' has a very special meaning that reflects its status as a distinct type of promotion.

A key characteristic of advertising is that it utilises mass media channels such as newspapers, magazines, radio or TV to reach potential customers

The marketing and advertising literature has many different definitions of advertising, but it is possible to identify common elements or themes within most of these definitions. The American Marketing Association (AMA) defines advertising as "the placement of announcements and persuasive messages in time or space purchased in any of the mass media by business firms, nonprofit organizations, government agencies, and individuals who seek to inform and/ or persuade members of a particular target market or audience about their products, services, organizations, or ideas". The American Heritage Dictionary defines advertising as "the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media." Selected marketing scholars have defined advertising in the following terms: "any non-personal communication that is paid for by an identified sponsor, and involves either mass communication viz newspapers, magazines, radio, television, and other media (e.g., billboards, bus stop signage) or direct to-consumer communication via direct mail" and "the element of the marketing communications mix that is non-personal, paid for by an identified sponsor, and disseminated through mass channels of communication to promote the adoption of goods, services, persons, or ideas. One of the shortest definitions is that advertising is "a paid, mass-mediated attempt to persuade."

Several common themes emerge in the various definitions of advertising:

* Firstly, advertising is a paid form of communication and is therefore commercial in nature.

* Secondly, advertising employs non-personal channels (i.e. commercial mass media) which implies that it is directed at a mass audience rather than at an individual consumer and is a one-way communication mode where the sponsor sends messages, but recipients cannot respond or ask questions about the message content.

* Thirdly, advertising has an identified sponsor .

In summary, given that advertising is paid, it is one of the many controllable elements in the marketing program. Advertising is qualitatively different from publicity where the message sponsor is either not identified or ambiguously defined, and different to personal selling which occurs in real-time and involves some face-to-face contact between message sponsor and recipient allowing for two-way dialogue.

While advertising refers to the advertising message, per se, advertising management refers to the process of planning and executing an advertising campaign or campaigns; that is, it is a series of planned decisions that begins with market research continues through to setting advertising objectives, executing the advertisement and follows up with efforts to measure the extent to which objectives were achieved and evaluates the costs and benefits of the advertising effort.

How does advertising work? Theories of advertising effects

Studies have repeatedly demonstrated a clear association between advertising and sales response. Yet the exact process that leads from the consumer being exposed to an advertising message through to a purchase or behavioral response is not entirely clear. The advertising and marketing literature suggests a variety of different models to explain how advertising works. These models are not competing theories but rather explanations of how advertising persuades or influences different types of consumers in different purchase contexts. In a now classic paper, Vankratsas and Ambler surveyed more than 250 papers to develop a typology of advertising models. They identified four broad classes of model: cognitive information models, pure affect models, hierarchy of effect models, integrative models and hierarchy-free models.

Cognitive information models

Cognitive information models assume that consumers are rational decision-makers and that advertising provides consumers with information utility by reducing the need to search for other information about a brand. For example, an advertisement in the Yellow Pages or an online directory means that the consumer does not have to travel from store to store in search of a product or service. Consumers process this information at a cognitive level before forming an attitude to the brand. A cognition is any thought that surfaces during the elaboration of the information. Certain theoretical work combined with empirical studies suggests that advertising information is more useful for experience goods (experiential services) than for search goods (tangible products). Cognitive information models are also known as the central route to persuasion.

In the cognitive information models, the path to persuasion is as follows:

Ad cognition→ Attitude to ad (A_ad) → Brand cognition → Attitude to brand(A_b) →Purchase Intention (PI)

Research studies suggest that consumers who are involved in the purchase decision are more likely to actively seek out product information and actively process advertising messages while low-involvement consumers are more likely to respond at an emotional level.

Pure affect models

Pure affect models suggest that consumers shape their preferences to a brand based on the feelings and attitudes elicited by exposure to an advertising message. When consumers view an advertisement, they not only develop attitudes towards the advertisement and the advertiser, but also develop feelings and beliefs about the brand being advertised.

Pure affect models help to explain the consumer's emotional responses to advertising and brands. These models suggest that simple exposure is to a brand is sufficient to generate purchase intention. Exposure in the form of advertising messages leads to an attitude to the advertisement (A_ad) which transfers to the attitude to the brand A_b)without any further cognitive processing. Exposure it not restricted to physical contact; rather it can refer to any brand-related contact such as advertising, promotion or virtual brands on websites.

In pure affect models, the path to communication effectiveness is represented by the following:

Attitude to Ad (A_ad) → Attitude to Brand (A_b) → Purchase Intention (PI).

This path is also known as the peripheral route to persuasion. Empirical research in the pure affect sphere suggests that advertising messages does not need to be informative to be effective and that likeable advertising is likely to be more effective. In addition, attitude to the advertisement, especially ad liking and advertiser credibility, may be more important for corporate image advertising than for product-related advertising.

Hierarchy of effects models

Hierarchical models are linear sequential models built on an assumption that consumers move through a series of cognitive and affective stages leading to an ultimate purchase decision. The common theme among these models is that advertising operates as a stimulus and the purchase decision is a response. A number of hierarchical models can be found in the literature including Lavidge's hierarchy of effects, DAGMAR and AIDA and other variants. Some authors have argued that, for advertising purposes, the hierarchical models are the most important and that, of these, the AIDA is one of the most widely applied.

The AIDA model proposes that advertising messages need to accomplish a number of tasks that move the consumer through a series of sequential steps from brand awareness through to action (purchase and consumption)

• Awareness - The consumer becomes aware of a category, product or brand (usually through advertising)
• Interest - The consumer becomes interested by understanding the brand's benefits and how the brand fits with the consumer's lifestyle
• Desire - The consumer develops a favorable disposition towards the brand
• Action - The consumer forms a purchase intention or actually makes a purchase

As consumers move through the hierarchy of effects their information needs change. Early in the purchase decision cycle, consumers rely on non-personal forms of communication including advertising, but as they move closer to the actual purchase, they seek out more detailed information and rely on more personal forms of communication such as sales promotion, sales representatives and referrals.

The path to persuasion in hierarchical models is as follows

Basic AIDA Model: Awareness→ Interest→ Desire→ Action (purchase or consumption)

Contemporary hierarchical models often contain additional steps, however, all follow the basic sequence. Selected alternative hierarchical models are outlined here:

Modified AIDA Model: Awareness→ Interest→ Conviction →Desire→ Action (purchase or consumption)

Hierarchy of Effects: Awareness→ Knowledge→ Liking→ Preference→ Conviction→ Purchase

DAGMAR Model: Awareness → Comprehension → Attitude/ Conviction → Action

Integrative models

Integrative models assume that consumers process advertising information via two paths - both cognitive (thinking) and affective (feeling) and seek to combine the type of purchase with the consumer's dominant mode of processing. Integrative models are based on research findings indicating that congruence between personality and the way a persuasive message is framed (i.e., aligning the message framing with the recipient’s personality profile) may play an important role in ensuring the success of that message. In a recent experiment, five advertisements (each designed to target one of the five personality traits) were constructed for a single product. Findings suggest that advertisements were evaluated more positively when they aligned with participants’ motives. Tailoring persuasive messages to the personality traits of the targeted audience can be an effective way of enhancing the messages’ impact.

There are many integrative frameworks of which the Foote, Cone, Belding (FCB) model is the most widely used.

Rossiter and Percy

Advertising and organisational responsibilities

Calvin Klein is one of a growing number of companies that uses an in-house agency for its advertising and promotion

In commercial organisations, advertising, along with other marketing communications activities, is the ultimate responsibility of the marketing department. Some companies outsource part or all of the work to specialists such as advertising agencies, creative design teams, web designers, media buyers, events management specialists or other relevant service providers. Another option is for a company to carry out most or all of the advertising functions within the marketing department in what is known as an in-house agency. By definition, an in-house agency is a "an advertising organization that is owned and operated by the corporation it serves". Its mission is to provide advertising services in support of its parent company’s business and marketing objectives. Well-known brands that currently use in-house agencies include Google, Calvin Klein, Adobe, Dell, IBM, Kraft, Marriott and Wendy's.

Both in-house agencies and outsourcing models have advantages and disadvantages. Outsourcing to an external agency allows marketers to obtain highly specialised strategic, research and planning skills, access to top creative talent and provides an independent perspective on marketing or advertising problems. In-house agencies deliver cost advantages, time efficiencies and afford marketers greater control over the advertising effort. In addition, personnel who work within an in-house agency gain considerable creative experience which stays within the company. Recent trends suggest that the number of in-house agencies is rising.

Whether a company chooses to outsource advertising functions to an external agency or carry them out within the marketing department, marketers need a strong understanding of advertising principles so that they can prepare effective advertising plans or brief relevant agencies about their needs and expectations.

Advertising and its role in the promotional mix

The Promotional mix refers to the specific combination of promotional methods used for a brand, product or family of products. The promotional mix includes a variety of tools such as:

Sales promotion includes a variety of activities such as special price offers designed to stimulate sales

Advertising:messages paid for by those who send them and intended to inform or influence people who receive them

Public relations (PR): the practice of maintaining goodwill between an organisation and its publics

Personal selling: Face-to-face selling in which a seller attempts to persuade a buyer to make a purchase.

Direct marketing: Contacting and influencing carefully chosen prospects with means such as telemarketing and direct mail

Sponsorship:the act of providing money for a television or radio program, website, sports event, or other activity usually in exchange for advertising or other form of promotion

Product placement: the practice of supplying a product or service for display in feature films or television programs

Sales promotion / merchandising: Activities designed to stimulate sales normally at the point-of-sale; includes retail displays, product sampling, special price offers, shelf talkers, contests, competitions and other methods

Event marketing: a planned activity of designing or developing a themed activity, occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert) to promote a product, cause, or organization.

Exhibitions/trade shows: events where companies can display their wares

Mounting a display at a trade-fair or exhibition, such as the Hong Kong Food Show, is part of a company's total promotional mix

Advertising is just one of many elements that comprise the promotional mix. When marketers communicate with target markets across a broad range of different promotional types and media, the potential for contradictory or mixed messages is very real. Accordingly, it is important that advertising is treated as part of a total marketing communications program and that steps are taken to ensure that it is integrated with all other marketing communications, so that all communications messages speak with a 'single voice'. The process of ensuring message consistency across the entire marketing communications program is known as integrated marketing communications

Marketers need to be aware of the strengths and weaknesses of each of the elements in the promotional mix in order to select the right blend for a given situation. For instance, public relations allows for high credibility message delivery with relatively low costs, while advertising permits message repetition. The "right" promotional mix should consider both message impact and message consistency.

In terms of integrated communications, the literature identifies different types of integration: (1) Image integration refers to messages that have a consistent look and feel, regardless of the medium; (2) Functional integration refers to capacity of different promotional tools to complement each other and deliver a unified, coherent message; (3) Coordinated integration refers to the ways that different internal and external agencies (e.g web designers, advertising agencies, PR consultants) coordinate to provide a consistent message; (4) Stakeholder integration refers to the way that all stakeholders such as employees, suppliers, customers and others cooperate to communicate a shared understanding of the company's key messages and values and (5) Relationship integration refers to the way that communications professionals contribute to the company's overall corporate goals and quality management.

On the surface, integrated marketing communications appear to be simple common sense. Yet, a survey of brand advertisers carried out by the Association of National Advertisers (ANA) revealed that while 67 per cent of marketers engage in integrated marketing communications, just one third are satisfied with their efforts. In practice, integrating communications messages across a broad range of promotional formats and media channels is very difficult to achieve.

Advertising and the marketing plan

Advertising does not occur in a vacuum. Instead it is an integral part of the company's overall marketing program or plan. When a marketer embarks on an advertising campaign, the first step is to review to the corporate objectives as set out in the marketing plan. This is designed to ensure that all promotional efforts are working towards achieving both short-term and long-term corporate goals and are in keeping with the company's values and vision.

A review of the marketing plan can a relatively simple process or it can involve a formal review, known as an audit. The audit might consider such issues as prior marketing communications activity, an evaluation of what has been effective in the past, an outline of competitive advertising activity and a review of budgetary considerations.

Relationship between target market and target audience

The marketing plan can be expected to provide information about the company's long and short-term goals, products offered, prices, distribution and the target market. The information contained in the marketing plan will need to be translated for advertising purposes. For example, a company that aims to increase it share of loyalty might target brand switchers and non-loyal consumers in a given campaign with messages designed to promote the benefits and rewards of loyalty. Thus the target audience for the advertising campaign will comprise only a subset of the total market as defined in the marketing plan.

Marketers and advertisers make a distinction between the target audience for an advertising message and the target market for a product or brand. By definition, the target audience is the intended audience for a given advertisement or message in a publication or broadcast medium, while the target market consists of all existing and potential consumers of a product, service or brand.

It involves designing which strategies to be adopted in order to influence the public, i.e. media selection and deciding on the aspect to be advertised based on the image of the company and the present marketing objective.

Push strategy: In a push strategy, the marketer advertises intensively with retailers and wholesalers, with the expectation that they will stock the product or brand, and that consumers will purchase it when they see it in stores.

Pull strategy: In a pull strategy, the marketer advertises directly to consumers hoping that they will put pressure on retailers to stock the product or brand, thereby pulling it through the distribution channel

Setting advertising objectives

Advertising objectives are derived from marketing objectives. However, advertising objectives must be framed in terms of advertising effects. For example, a company's short-term marketing objective might be to increase sales response for a given brand. However, this objective would require that a large number of consumers are aware of the brand and are favourably disposed towards it. However, to make a final purchase, the consumer may need to inspect or try out the brand at the point-of-sale before making a final purchase decision. Advertising is an excellent tool for creating awareness and interest in a brand, however, it is less effective at turning that awareness and interest into actual sales. To convert interest into sales, different promotional tools such as personal selling or sales promotion may be more useful.

Any statement of advertising objectives must include measurement benchmarks - that is the norms against which advertising effectiveness will be evaluated.

Careers in advertising management

Advertising management is a career path in the advertising or marketing industries. Advertising and promotions managers may work for an agency, a public relations firm, a media outlet, or may be hired directly by a company to work in their in-house agency where they would take responsibility for communications designed to develop the company's brands or group of brands. In the agency environment, advertising managers are often known as account managers and their role involved work closely with client firms. In a marketing department, the advertising manager's position can include supervising employees, acting as a liaison between multiple agencies working on a project, or creating and implementing promotional campaigns.