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65 Cards in this Set

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4 groups in the Advertising Business
~advertisers- companies that sponsor ads
~agencies-help advertisers plan, create, and prepare ad campaigns
~suppliers-assist in preparing advertising materials
~media-sells time and space to carry advertising
Local (aka Retail) Advertising
Advertising by businesses within a city or county directed toward customers within the same geographical area.
*Where the action is: Most sales are made or lost locally
4 main types of Local Advertisers
1) Dealers and local franchises of national companies w/one main product line
2) Stores that sell a variety of branded merchandise(convenience/grocery stores)
3)Specialty businesses/services
4)Governmental, Quasigovernmental ,and Nonprofit Orgs.
Types of Local Advertising:

a)Product Advertising

b)Regular Price-Line Advertising
a)Advertising intended to promote goods and services and attempts to stimulate short-term action while building awareness.

b)A type of retail advertising designed to inform consumers about the services available or the wide selection and quality of merchandise offered at regular prices.
c) Sale Advertising

d)Clearance Advertising
c)A type of retail advertising designed to stimulate the movement of particular merchandise or generally increase store traffic by placing the emphasis on special reduced prices.

d)A type of local advertising designed to make room for new product lines or new models or to get rid of slow-moving product lines, floor samples, broken or distressed merchandise, or items that are no longer in season.
e)Institutional advertising

f)Classified advertising
e)A type of advertising that attempts to obtain favorable attention for the business as a whole, not for a specific product or service the store or business sells. The effects of institutional advertising are intended to be long term rather than short range. (PROMOTE IDEA)

f)Newspaper, magazine, and now Internet advertisements usually arranged under subheads that describe the class of goods or the need the ads seek to satisfy. Rates are based on the number of lines the ad occupies. Most employment, housing, and automotive advertising is in the form of classified advertising.
Integrated Marketing Communications
The process of building and reinforcing mutually profitable relationships with employees, customers, other stakeholders, and the general public by developing and coordinating a strategic communications program that enables them to make constructive contact with the company/brand through a variety of media.
Schlock Approach
heavy bold type, items crowded into ad space, loud headlines, and unsophisticated graphic design.

simplified method of advertising utilized by some local retailers
Cooperative Advertising
The sharing of advertising costs by the manufacturer and the distributor or retailer. The manufacturer may repay 50 or 100 percent of the dealer's advertising costs or some other amount based on sales

Purpose= build brand image, and help distributors, dealers, etc. make more sales
a)Vertical Cooperative Advertising

b)Horizontal Cooperative Advertising
a)Co-op advertising in which the manufacturer provides the complete ad and pays a percentage of the cost of placement.
(Manufacturer-> Retailer)

b)Joint advertising effort of related businesses (car dealers, realtors, etc.) to create traffic for their type of business.
(Retailer <-> Retailer)
a)Regional Advertisers

b)National Advertisers
Companies that operate in one part of the country and market exclusively to that region.

b)Companies which advertise in several geographic regions or throughout the country.
*Association of National Advertisers members
How National And Local Differ
Focus- National=Building brands, competitive features (strategic planning); Local= attracting customers to a particular point(tactical planning)

Time Orientation-National=Long term campaigns; Local= Short term ads

Resources- National has much more resources(money and people)
point
In retailing, the place of business.

Dealership, Store, etc
Greatest difference b/w local and Regional
Relationship with the customer:

National= little contact; think in terms of large groups(segments)

Local= day-to-day contact; get feedback regularly
Centralized Advertising Dapartment
A staff of employees, usually located at corporate headquarters, responsible for all the organization's advertising. The department is often structured by 1)product, 2)advertising subfunction (copy, art, print, etc), 3)end user, 4)media, or 5)geography.

*offers greatest control; efficiency and continuity across divisional boundaries
Decentralized System
The establishment of advertising departments by products or brands or in various divisions, subsidiaries, countries, regions, or other categories that suit the firm's needs, which operate with a major degree of independence.

*better for very large companies where central is impractical: Each division is its own marketing department
*has drawbacks
International Structure
Organization of companies with foreign marketing divisions, typically decentralized and responsible for their own product lines, marketing operations, and profits.
Brand Manager
The individual within the advertiser's company who is assigned the authority and responsibility for the successful marketing of a particular brand.

*work under category manager
Multinational Corporations
Corporations operating and investing throughout many countries and making decisions based on availabilities worldwide.
*strive for full, integrated participation in world markets.
Global Marketers
Multinationals that use a STANDARDIZED approach to marketing and advertising in all countries.
*create global brands
~The product that is used, and the needs its satisfies, are universal
Requirements for Global Advertising:
1) Has each country's market for the product developed in the same way

2) Are the targets similar in different nations

3) Do consumers share the same wants and needs
Advertising Agency
An independent organization of creative people and businesspeople who specialize in developing and preparing advertising plans, advertisements, and other promotional tools for advertisers. The agency also arranges for or contracts for purchase of space and time in various media.
Characteristics of an Agency
1)They are Independent. it can bring an outside, objective viewpoint to the advertiser's business.
2)Combo of creatives and businesspeople.
3) Have media expertise
4) Their moral, financial, legal, and ethical obligation is to their clients. It is in the SELF-INTEREST of clients to use an agency.
5) More experience in different situations than advertisers
Local Agency
Advertising agency that specializes in creating advertising for local businesses.
*Used less than National Advertisers
Regional and National Agencies
Advertising agency that focuses on the production and placement of advertising suitable for regional/national campaigns.
International Agencies
An advertising agency that has offices or affiliates in major communication centers around the world and can help its clients market internationally or globally.
Full-Service Agencies
An agency equipped to serve its clients in all areas of communication and promotion. Its ADVERTISING services include planning, creating, and producing advertisements as well as performing research and media selection services. NONADVERTISING functions include producing sales promotion materials, publicity articles, annual reports, trade show exhibits, and sales training materials.

*usually either general consumer agencies or B2B agencies
General Consumer Agency
An agency that represents the widest variety of accounts, but it concentrates on CONSUMER ACCOUNTS-companies that make goods purchased chiefly by consumers.
*Most ads placed in consumer media that pay commission
*include both large and entrepreneurial agencies
Business to Business Agencies
Represents clients that market products to other businesses; also called high-tech agency.
ex. electronic components to computers
Creative Boutiques
An organization of creative specialists (such as art directors, designers, and copywriters) who work for advertisers and occasionally advertising agencies to develop creative concepts, advertising messages, and specialized art. A boutique performs only the creative work.
Media-Buying Services
An organization that specializes in purchasing and packaging radio and television time.

aka media agency
Interactive Agency
An advertising agency that specializes in the creation of ads for a digital interactive medium such as Web pages, CD-ROMs, or electronic kiosks.
Account Executives
The liaison between the agency and the client. The account executive is responsible both for managing all the agency's services for the benefit of the client and for representing the agency's point of view to the client.
Management (or Account) Supervisors
Managers who supervise account executives and who report to the agency's director of account services.
Account Planning
A hybrid discipline that bridges the gap between traditional research, account management, and creative direction whereby agency people represent the view of the consumer in order to better define and plan the client's advertising program.
*Research is crucial! Put consumer at the center of the process.
Creatives:

a) Copy

b) Copywriters
a)The words that make up the headline and message of an advertisement or commercial.

b)People who create the words and concepts for ads and commercials.
c) Art Director
c)Along with graphic designers and production artists, determines how the ad's verbal and visual symbols will fit together.
d)Creative Director
d)Heads a creative team of agency copywriters and artists that is assigned to a client's business; is ultimately responsible for the creative product—the form the final ad takes.
Other Roles:
Advertising Production

Media Planning And Buying- Important b/c of fragmentation of audiences

Traffic Management

Agency Administration
Sales Promotion Department
In larger agencies, a staff to produce dealer ads, window posters, point-of-purchase displays, and dealer sales material.
Structure:

a)Departmental System
The organization of an ad agency into departments based on function: account services, creative services, marketing services, and administration.
b)Group System
System in which an ad agency is divided into a number of little agencies or groups, each composed of an account supervisor, account executives, copywriters, art directors, a media director, and any other specialists required to meet the needs of the particular clients being served by the group.
Compensation Methods:

a) Media Commissions
a)Compensation paid by a medium to recognized advertising agencies, usually 15 percent (162/3 percent for outdoor), for advertising placed with it.
b) Markup
A source of agency income gained by adding some amount to a supplier's bill, usually 17.65 percent.
Fees:

c)fee-commission combination

d)Straight-Fee (or retainer) Method
*becoming more popular
c)A pricing system in which an advertising agency charges the client a basic monthly fee for its services and also retains any media commissions earned.

d)A method of compensation for ad agency services in which a straight fee, or retainer, is based on a cost-plus-fixed-fees formula. Under this system, the agency estimates the amount of personnel time required by the client, determines the cost of that personnel, and multiplies by some factor.
e) Incentive System
A form of compensation in which the agency shares in the client's success when a campaign attains specific, agreed-upon goals.
In-House Agency
Agency wholly owned by an advertiser and set up and staffed to do all the work of an independent full-service agency.

*Loss of objectivity
How do agencies get clients/develop new business?
Referrals- agency review consultants

Superior Presentation Skills

Networking and Community Relations
Speculative Presentation
An agency's presentation of the advertisement it proposes using in the event it is hired. It is usually made at the request of a prospective client and is often not paid for by the client.
Stages in the Client/Agency relationship:

a) Prerelationship Stage

b) Development Stage
a)The initial stage in the client/agency relationship before they officially do business.

b)In the agency-client relationship, the honeymoon period when both agency and client are at the peak of their optimism and are most eager to quickly develop a mutually profitable mechanism for working together.(Rules established, Set Roles, First work created)
c)Maintenance Stage

d) Termination Stage
In the client-agency relationship, the day-to-day interaction that, when successful, may go on for years.

d)The ending of a client-agency relationship.
Factors Effecting the Client/Agency Relationship:
Four C's:

Chemistry

Communication

Conduct *Most common

Changes
Suppliers
People and organizations that assist both advertisers and agencies in the preparation of advertising materials, such as photography, illustration, printing, and production.
a)Art Studios

b)Web Design Houses
a)Company that designs and produces artwork and illustrations for advertisements, brochures, and other communication devices.

b)Art/computer studios that employ specialists who understand the intricacies of HTML and Java programming languages and can design ads and Internet Web pages that are both effective and cost efficient.
c) Printers
Business that employs or contracts with highly trained specialists who prepare artwork for reproduction, operate digital scanning machines to make color separations and plates, operate presses and collating machines, and run binderies.
d)Independent Production Houses
Supplier company that specializes in film or video production or both.
e)Independent Research Companies
Research firms that work outside of an agency. They may come in all sizes and specialties, and they employ staff statisticians, field interviewers, and computer programmers, as well as analysts with degrees in psychology, sociology, and marketing.
Media
A plural form of medium, referring to communications vehicles paid to present an advertisement to its target audience. Most often used to refer to radio and television networks, stations that have news reporters, and publications that carry news and advertising.
a)Print Media
Any commercially published, printed medium, such as newspapers and magazines, that sells advertising space to a variety of advertisers.
b)Electronic Media
Radio and television, which may be transmitted electronically through wires or broadcast through the air.
c)Digital Interactive Media
Electronic channels of communication— including online databases, the Internet, CD-ROMs, and stand-alone kiosks—with which the audience can participate actively and immediately.
Out-of-Home Media:

d)Outdoor Advertising

e)Transit Advertising
d)An out-of-home medium in the form of billboards.

e)An out-of-home medium that actually includes three separate media forms: inside cards; outside posters; and station, platform, and terminal posters.
*Bus, Taxi, and Subway
f)Direct Mail Advertising
f)All forms of advertising sent directly to prospective customers without using one of the commercial media forms.
International Media
Media serving several countries, usually without change in content, available to an international audience.

*Global Media Vehicles(ie. CNN)
Foreign Media
The local media of each country used by advertisers for campaigns targeted to consumers or businesses within a single country.
-Must be in the language of that country