644 – Buyer Behaviour &

Communication Strategies

16. Advertising
 Advertising
At its simplest, advertising is first and
foremost a process of communication:
- Paid for and non-personal.
 Advertising
Usually defined as:
• Mass media communication via newspapers,
magazines, radio, TV, billboards, Internet or
other media and/or direct to customer via direct
mail.
• Cost-effective way to disseminate messages.
 Advertising today
The challenges:
• Big market - 2008 NZ Advertising Market: $2.32 billion,
down $18 million on 2007.
• Increasingly advertising literate customers.
• Increasing volume of advertising clutter.
• More complex and fragmented marketing environment.

The answer:
• Integrated marketing communications
• (Consistent, unified message and identity through all
organization’s marketing and communication activities)
• To provide cut-through and consistency.
NZ Advertising Market 2008

Source: NZ Advertising Standards Authority

 NZ Advertising Market 2008

• Newspapers - $760 million (down 7.3%)

• Television - $647 million
• Radio - $268 million
• Magazines - $249 million
• Interactive - $193 million (up 43%)
• Outdoor - $74 million
• Unadressed Mail - $61 million
• Addressed Mail - $56 million
• Cinema - $9 million
Source: NZ Advertising Standards Authority
 Broad models employed in advertising

• Sales response
– Simple price-based strategy which encourages the purchase purely
on the basis of its price.
• Persuasion
– The ability of the ad to shift attitudes towards the brand and
motivate purchase, persuading the audience that the presented
product is the most desirable available product (building “brand
advantage” by highlighting specific benefits culminating in overall
impression of a superior brand).
• Involvement
– Aims to interest and engage the customer, to relate and empathize
with the ad and feel good about the brand (Levi’s 501 – 80s & 90s
campaigns).
Effective Advertising - moves customers
along the continuum
Stages ‘AIDA’ model ‘Hierarchy of
Effects’ model
Attention Awareness

Cognitive Knowledge

Interest Liking

Affective Preference
Desire
Conviction

Behaviour Action Purchase

 The Advertising Process
Setting Advertising
Objectives

Deciding Budget

Media Creative

Evaluate
 Potential Advertising Objectives

To:
• Inform
– The market about a new product, new uses for the
product, how it works, about a price change, etc.
• Persuade
– Building brand preference, encourage brand-switching,
changing buyers perceptions, etc.
• Remind
– Where to buy it, that product may be needed shortly,
maintaining top-of-mind awareness.
 1. Set Advertising Objectives
Decide on Objectives:

• What is the problem?

– Can advertising solve it?
• What do we want the advertising to do?
– To inform, to persuade, to remind, to move consumers from awareness
to purchase?
• Who do we need to be talking to?
– Target Audience
• What is the market situation?
– Situation Analysis factors
• How does the customer feel about our brand and those of the
competition?
– Customer survey.
– What motivates the customer and what do they find relevant?
 2. Set the Budget

• 4 ways to set the advertising budget:

– Affordable method;
– % of sales method;
– Competitive parity method, and;
– The object and task method.
 3. The Creative

Decide on the advertising message:

• Generate, evaluate, select and execute.

• Content, structure, format and source?
• What do we need to say in our advertising?
– Key messages.
• What do we want people to think and feel?
– Rational, emotional or moral appeal.
• Careful selection of style, tone, words and format.
• Is it in keeping with the product/service positioning?
 4. The Media
• Deciding on Reach, Frequency and Impact.
• Deciding on cost-effective media.
• Media Planning.
• Advantages and Disadvantages of each media.
 Advantages and Disadvantages of:
Newspapers
• Newspapers are one of the traditional mediums used by businesses, both big and small alike, to
advertise their businesses.

Advantages
• Can reach a large number of people in a given geographic area.
• Can decide the ad size and placement within the newspaper.
• Exposure to your ad is not limited; readers can go back to your message again and again. 
• Quick turn-around possible - one to two days.

Disadvantages
• Ad space can be expensive.
• Ad has to compete against the clutter of other advertisers, including large ads those of your
competitors.
• Poor photo reproduction limits creativity.
• Advertisement can have a short shelf life. 
• Fairly low targeting potential, unless in specialist section.
• Newspapers are a highly visible medium, so your competitors can quickly react to your prices.
• Some newspapers face declining readership and market penetration with growth of Internet.

Source: www.powerhomebiz.com
 Advantages and Disadvantages of:
Magazines
• Magazines are a more focused, albeit more expensive, alternative to newspaper
advertising. This medium allows you to reach highly targeted audiences.

Advantages
• Better targeting of audience, for magazine publications that cater to specific audiences
or whose editorial content specialises in topics of interest to your audience. 
• High reader involvement means that more attention will be paid to your advertisement.
• Better quality paper permits better color reproduction and full-color ads.
• The smaller page permits even small ads to stand out.

Disadvantages
• Long lead times mean that you have to make plans weeks or months in advance.
• The slower lead time heightens the risk of your ad getting overtaken by events.
• There is limited flexibility in terms of ad placement and format. 
• Space and ad layout costs are higher.

Source: www.powerhomebiz.com
 Advantages and Disadvantages of:
Radio
Advantages
• Radio is a universal medium available at home, at work, in the car, shops, etc. 
• Large range of radio program formats offers to efficiently target your advertising dollars to
specific segments of consumers. 
• Gives your business personality through the creation of campaigns using sounds and
voices.
• Free creative help is often available.
• Rates can generally be negotiated.
• During the past ten years, radio rates have seen less inflation than those for other media.

Disadvantages
• Because radio listeners are spread over many stations, you may have to advertise
simultaneously on several stations to reach your target audience.
• Listeners cannot go back to your ads to go over important points.
• Ads are an interruption in the entertainment. Because of this, a radio ad may require
multiple exposures to break through the listener's "tune-out" factor and ensure message
retention.
• Radio is a background medium. Most listeners are doing something else while listening,
which means that your ad has to work hard to get their attention.

Source: www.powerhomebiz.com
 Advantages and Disadvantages of:
Television
Advantages
• Television permits you to reach large numbers of people on a national or
regional level in a short period of time 
• Independent stations or niche channels on SKY offer opportunities to target
specific audiences.
• Television conveys your message with sight, sound and motion which provide
powerful image-building potential.

Disadvantages
• Message is temporary, and may require multiple exposures for the ad to rise
above the clutter.
• Preferred ad times are often sold out far in advance.
• Limited length of exposure, as most ads are only thirty seconds long or less,
which limits the amount of information you can communicate.
• Relatively expensive in terms of creative, production and airtime costs.

Source: www.powerhomebiz.com
 Advantages and Disadvantages of:
Direct Mail
Advantages
• Your advertising message is targeted to those most likely to buy your product or service. 
• Marketing message can be personalised, thus helping increase positive response. 
• Your message can be as long as is necessary to fully tell your story. 
• Effectiveness of response to the campaign can be easily measured. 
• You have total control over the presentation of your advertising message. 
• Your ad campaign is hidden from your competitors. 
• Active involvement - the act of opening the mail and reading it -- can be elicited from the
target market.

Disadvantages
• Some people do not like receiving offers in their mail, and throw them out immediately without
even opening the mail. 
• Resources need to be allocated in the maintenance of lists, as the success of this kind of
promotional campaign depends on the quality of your mailing list. 
• Long lead times are required for creative printing and mailing.
• Producing direct mail materials entail the expense of using various professionals - copywriter,
artists, photographers, printers, etc. 
• Can be expensive, depending on your target market, quality of your list and size of the
campaign.

Source: www.powerhomebiz.com
 5. Campaign evaluation
The extent to which :
 The message reached the right people.
 The ads actually said what was expected.
 Customer perceptions were changed.
 Sales increased.
 The media mix was effective.
 Any lessons that could be learned from the campaign.
 Campaigns could be improved in the future.
 Evaluating advertising performance
• The difficulty is that advertising has the potential to work
on variety of levels, only some of which are open to
measurement and evaluation.
• Popular measures can simply assess ad spending impact
vis-à-vis revenues generated through customer spending.
• Such single measurement focus cannot lead to an
adequate evaluation of advertising impacts.
• Advertising evaluation should reflect the unique
differences of each campaign.
 Potential advertising evaluation measures
Message
• The extent of the ad’s ability to communicate service/ product benefits.

Saliency
• The extent of the ad’s ability to cut through media clutter and attract attention.

Appeal
• The extent of the ad’s appeal and ability to provoke positive reactions.

Branding
• The extent of the ad’s linkage and reinforcement with the brand.

Persuasion
• The extent of the ad’s ability to shift consumer attitudes towards the brand and
stimulate purchase.
 Next Lecture:

• Media Planning