Marketing Analytics Ch. 8

Front 1

Advertising

Back 1

Any paid form of non-personal promotion

Front 2

Direct Marketing

Back 2

Use of channels to get response from specific customer

Front 3

Sales Promotion

Back 3

Short-term incentives to encourage people to buy or try (ie coupon / rebate)

Front 4

Public Relations

Back 4

Programs to promote or protect a company’s image

Front 5

Personal Selling

Back 5

Face-to-face interaction to make sales (ie car dealership)

Front 6

Distribution (push & pull)

Back 6

Push: Target trade to push through channels to cust. (sell @ safeway)
Pull: Target customer demand to pull through channels (ad in magazine)

Front 7

Advertising Effects: Advertising Response -- Shape

Back 7

Graphical representation of Sales plot Linear: Easy, but rare S-Shaped: Slow to start, then picks up Supersaturation: Excessive advertising can depress sales (typical, y - sales, x - budget)

Front 8

Advertising Effects: Advertising Response -- Dynamics

Back 8

Speed of sales increase when advertising is increased Rates of decay when advertising decreased Hysteresis: Increase continues after advertising stopped

Front 9

Advertising Effects: Advertising Response -- Interaction

Back 9

Interplay between advertising and other elements Advertising = “Air Cover” to ease personal selling “infantry”

Front 10

Advertising Effects: Advertising Response -- Supersaturation

Back 10

too much advertising turns off customer

Front 11

Advertising Effects: -- Ebbinghaus

Back 11

1800s: Slower to forget lesson if repeated

Front 12

Advertising Effects: Frequency Phenomena -- Declines

Back 12

1968: Response declines after 3+ exposures

Front 13

Advertising Effects: Frequency Phenomena -- Other Findings

Back 13

Optimal frequency: 3 exposures in purchase cycle Beyond 3 exposures, gain little Excessive advertising frequency can decline a good campaign

Front 14

Advertising Effects: Copy Effects -- Copy

Back 14

Copy: Text & layout of printed ads

Front 15

Advertising Effects: Copy Effects -- Bigger and Color

Back 15

-Bigger ads increase recognition levels (1965)
-Color ads increase recognition levels (1966)

Front 16

Advertising Effects: Copy Effects -- Headline & Commercials

Back 16

-Shorter headlines increase recognition
-Short commercials equally effective as longer ones

Front 17

Advertising Effects: Copy Effects -- Belief

Back 17

People do not need to believe ads to remember them (1962)

Front 18

Advertising Budget Decision Methods -- Affordable

Back 18

Set budget based on what company can afford +: Better than no advertising -: Fluctuating budget; difficult to plan

Front 19

Advertising Budget Decision Methods -- % of Sales

Back 19

Set budget as percentage of total/ product sales +: Simple, somewhat popular -: Circular reasoning: AdsSales, not SalesAds

Front 20

Advertising Budget Decision Methods -- Competitive

Back 20

Set budget to match ad budgets of competitors +: Collective wisdom of industry -: Competition not necessarily correct

Front 21

Advertising Budget Decision Methods -- Objectives

Back 21

Set budget to fulfill specific advertising tasks +: Easy to justify -: No way to know how to evaluate objectives

Front 22

Advertising Budget Decisions: Model-Based -- Need to Know

Back 22

Sales for each area, over time Competitive advertising Budget and regional constraints (relates ad spending to sales) (ex Rao Miller model)

Front 23

Advertising Budget: ADBUDG Model -- Advertising cut to 0
on exam

Back 23

Minimum share (Floor)
graph on slide 9

Front 24

Advertising Budget: ADBUDG Model -- Advertising at saturation
on exam

Back 24

Maximum share (Ceiling)
graph on slide 9

Front 25

Advertising Budget: ADBUDG Model -- Maintenance advertising
on exam

Back 25

Steady share
graph on slide 9

Front 26

Advertising Budget: ADBUDG Model -- Advertising up 50%
on exam

Back 26

Predictable increase in share
graph on slide 9

Front 27

Advertising Budget: ADBUDG Model Findings -- Persistence

Back 27

(min – (long-run min)) / (initial share – (long-run min)) = fraction of difference between share and long-run min ((ad for a long time is effective))

Front 28

Advertising Budget: ADBUDG Model Findings -- Wtd. Adv.

Back 28

Wtd. Adv. = Weighted Advertising = Media efficiency x Media effectiveness x Advertising $

Front 29

Advertising Budget: ADBUDG Model Findings -- Findings

Back 29

Sales “floor”; Non-zero sales level at zero level of advertising Impact of persistence (time spent advertising) Impact of media efficiency & effectiveness

Front 30

ADVISOR: Shared-Experience Approach -- Goal

Back 30

Determine budget target for marketing (Personal selling, Technical service, MarCom)

Front 31

ADVISOR: Shared-Experience Approach -- Origin

Back 31

Begun in 1973 at MIT

Front 32

ADVISOR: Shared-Experience Approach -- Cont. Variables

Back 32

Continuous Variables Sales, Number of users, Customer concentration, ...

Front 33

ADVISOR: Shared-Experience Approach -- Dich. Variables

Back 33

Dichotomous Variables(discrete) Life cycle stage (intro, growth, etc), Product plans, Product complexity, ... ((ipod campaign different from ball bearing))

Front 34

ADVISOR: Shared-Experience Approach -- Results

Back 34

Advertising & marketing strongly related to sales

Front 35

Media Decisions: Models -- Models

Back 35

MEDIAC (1966), others

Front 36

Media Decisions: Models -- Requirements

Back 36

Objective function: Assigns value to insertion schedule (e.g., profit per exposure) Solution strategy (Heuristic or Optimization) Constraints (Time, Budget, etc.) ((insert ad in media how often?))(($/add))

Front 37

Media Decisions: Models -- Components

Back 37

Vehicle Exposure Measure: Measure of reach & GRP Repetition effect: Impact of successive exposures Forgetting effect: Forgetting between viewing # 1 and #2 Media-Option Source effect: Exposures from many sources Segmentation effect: Fraction of target market in audience ((if i put 4 or 5 x how much more exposure do i get??))((more effective than from one source?) (what demographic are you trying to hit?)

Front 38

Media Decisions: Models -- Practice

Back 38

Advertising agencies developed empirical procedures Generate good media schedules in less time & effort

Front 39

Ad Copy Development & Decisions -- Goal

Back 39

**Determine if ad likely to work **

Front 40

Ad Copy Development & Decisions -- Objectives

Back 40

Brand awareness, Reminder to use, Distinguish brand

Front 41

Ad Copy Development & Decisions -- Testing

Back 41

Market response and selling

Front 42

Ad Copy Development & Decisions -- Response

Back 42

Attention & Impression: Does ad get attention? (MCI) Understanding: Does ad convey message clearly? (Infiniti) Persuasion: Does ad modify people’s beliefs? (Infomercial) Purchase: Does ad cause person to buy? (So you don’t forget)

Front 43

Ad Copy Development & Decisions -- Split Cable

Back 43

AdTel advertising measurement system Two cables distributes 2 different versions of ad Compare results of two versions

Front 44

Twedt (1952)

Back 44

Studied 152 magazine ads **50% of variance of response in mechanical variables ** Size of ad Size of picture Number of colors Beat out content-related variables

Front 45

Ad Copy -- Diamond (1968)

Back 45

Studied 1070 magazine ads Size of ad Photos vs. Illustrations vs. Text only Number of colors Number of other ads Right-hand page vs. Left-hand page

Front 46

Ad Copy Development: Advertising Design -- Template

Back 46

Template approach: Copy effective ads Goldenberg, Mazursky, and Solomon (1999) **89% of award-winning ads in 6 templates** BUT: No software implementation available

Front 47

Ad Copy Development: Advertising Design -- ADCAD

Back 47

Expert system with knowledge base on ads Rules & principles to link contexts to ad elements Contexts: Audience/ product characteristics Elements: Presenter message emotion format: sad, proud, ... User generates checklist of ad elements likely to be effective (mimic feedback of expert)

Front 48

Ad Copy Development: Advertising Design -- Agencies

Back 48

ADCAD seen as emerging tool Not replacing ad agencies Omelette analogy: “Easy to do, hard to do well”

Front 49

ADCAD: Rules -- Marketing Assessment

Back 49

Product Life Cycle stage: Intro, Growth, Mat, Decline Innovation and Evolution, Discontinuous Brand Usage: None, Some, Heavy

Front 50

ADCAD: Rules -- Marketing Objectives

Back 50

Stimulate primary demand
Stimulate brand trial Increase rate of brand usage

Front 51

ADCAD: Rules -- Advertising Objectives

Back 51

Brand image
Brand recognition
New brand uses

Front 52

notes -- look at adcad operation and example slides

Back 52

look at adcad operation and example slide