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© 2010 South-Western, a part of Cengage Learning
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
Eighth Edition
Other Advertising Media
CHAPTER
14
1. Explain why postal mail advertising is an efficient and
effective ad medium.
2. Understand p-mail’s five distinctive features
compared to mass forms of advertising.
3. Appreciate the role of database marketing, data
mining, and lifetime-value analysis.
4. Appreciate branded entertainment and brand
placements in various venues (movies, TV, etc.).
5. Appreciate the value of yellow-pages advertising.
Chapter Objecves
After reading this chapter you should be able to:
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 14–2
6. Recognize the growth and role of video-game
advertising (advergaming).
7. Understand the role of cinema advertising.
8. Appreciate the potential value of various “alternative”
ad media.
Chapter Objecves (cont’d)
After reading this chapter you should be able to:
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 14–3
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.


14–4
Framework for Various Forms of “Other” Advertising
Table 14.1

Direct Advertising via Postal Mail

Brand Placements in Movies, in TV Programs, and Elsewhere

Yellow-Pages Advertising

Video-Game Advertising (Advergaming)

Cinema Advertising

Potpourri of Alternative Ad Media
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–5
Direct Advertising via Postal Mail
Direct Advertising via Postal Mail

Postal Mail (P-mail) Advertising
Postal Mail (P-mail) Advertising

Is any advertising matter the postal service delivers to
Is any advertising matter the postal service delivers to
the person whom the marketer wishes to influence.
the person whom the marketer wishes to influence.


Letters, postcards, programs, calendars, folders, catalogs,
Letters, postcards, programs, calendars, folders, catalogs,
videocassettes, blotters, order blanks, price lists, and menus.
videocassettes, blotters, order blanks, price lists, and menus.

Why Use P-mail
Why Use P-mail

Less expensive than television advertising
Less expensive than television advertising

Better targeting of messages to desired prospects
Better targeting of messages to desired prospects

Easier identification of prospects who purchased
Easier identification of prospects who purchased
advertised product
advertised product

Favorable attitudes of consumers toward mail ads
Favorable attitudes of consumers toward mail ads
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–6
Illustrations of Successful P-mail
Illustrations of Successful P-mail
Campaigns
Campaigns
Caterpillar 414E

Industrial Loader
Campaign
(B2B)
Stacy’s
Pita Chip
Campaign
(Consumer Packaged Good)
The Saab
9–5
Campaign
(Consumer Durable Good)
Highly Successful
Direct Mail
Campaigns
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–7
P-mail’s Distinctive Features
P-mail’s Distinctive Features
Measurability
Targetability
Efficiency
Flexibility
Accountability
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–8
What Functions Does P-mail Accomplish?

What Functions Does P-mail Accomplish?

P-mail Campaigns Can:
P-mail Campaigns Can:
1.
1.
Increase sales and usage from current customers
Increase sales and usage from current customers
2.
2.
Sell products and services to new customers
Sell products and services to new customers
3.
3.
Build traffic at a specific retailer or Web site
Build traffic at a specific retailer or Web site
4.
4.
Stimulate product trial with promotional offers and incentives
Stimulate product trial with promotional offers and incentives
5.
5.
Generate leads for a sales force
Generate leads for a sales force
6.
6.
Deliver product-relevant information and news
Deliver product-relevant information and news
7.
7.

Gather customer information that can be used in building a
Gather customer information that can be used in building a
database
database
8.
8.
Communicate with individuals privately to minimize the
Communicate with individuals privately to minimize the
likelihood of competitive detection
likelihood of competitive detection
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–9
The Special Case of Catalogs
The Special Case of Catalogs

Effects of Catalogs
Effects of Catalogs

Two-thirds of recipients visit cataloguer’s web site
Two-thirds of recipients visit cataloguer’s web site

Sales to catalog recipients are 150% greater
Sales to catalog recipients are 150% greater

Catalog recipients buy more items and spend more
Catalog recipients buy more items and spend more
money
money


Advantages of Using Catalogs
Advantages of Using Catalogs

Saves time
Saves time


No fear for security
No fear for security

No shopping pressure
No shopping pressure


Ease of purchasing
Ease of purchasing

Comparable goods
Comparable goods


Attractive guarantees
Attractive guarantees
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–10
Growth in Catalog Marketing
Growth in Catalog Marketing

Waning interest
in catalogs
Increased cost of
catalog marketing
Third-class postal
rates increases
Factors in the Slowdown
in the Growth Rate of
Catalog Marketing
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–11
Audiovisual Advertising
Audiovisual Advertising

Audiovisual Advertising
Audiovisual Advertising

Involves the use of electronic devices to present
Involves the use of electronic devices to present
audiovisual advertising messages captured in the
audiovisual advertising messages captured in the
form of videotapes, CD-ROMs, or DVDs.
form of videotapes, CD-ROMs, or DVDs.

Appears to be both more effective and less expensive
Appears to be both more effective and less expensive
than print advertising delivered via direct mail.
than print advertising delivered via direct mail.


Research shows customers are less likely to throw
Research shows customers are less likely to throw
away these mailings than a brochure or other printed
away these mailings than a brochure or other printed
material.
material.
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–12
The Use of Databases
The Use of Databases

Benefits of an Up-to-date Database
Benefits of an Up-to-date Database

Directs advertising efforts to the best prospects for a
Directs advertising efforts to the best prospects for a
company’s products or services
company’s products or services

Offers varied messages to different groups of
Offers varied messages to different groups of
customers
customers

Creates long-term relationships with customers
Creates long-term relationships with customers


Enhances advertising productivity
Enhances advertising productivity

Provides the capability to calculate the lifetime value
Provides the capability to calculate the lifetime value
of a customer or prospect
of a customer or prospect
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–13
The Use of Databases (cont’d)
The Use of Databases (cont’d)

Customer Lifetime Value
Customer Lifetime Value

Is valuing each present or prospective customer is
Is valuing each present or prospective customer is
viewed not as an address but as a long-term asset
viewed not as an address but as a long-term asset

Is the net present value (NPV) of the profit that a firm
Is the net present value (NPV) of the profit that a firm
could realize on average new customer during a given
could realize on average new customer during a given
number of years
number of years

Augmenting the Lifetime Value of Customers

Augmenting the Lifetime Value of Customers

Increase the retention rate
Increase the retention rate

Increase the referral rate
Increase the referral rate

Enhance the average purchase volume per customer
Enhance the average purchase volume per customer

Cut direct costs for distribution channel
Cut direct costs for distribution channel

Reduce marcom costs
Reduce marcom costs
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–14
Customer Lifetime-Value Analysis
Table 14.2
Note: Discount rate assumes an interest rate of 20 percent: D = (1 + i)
n
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–15
The Use of Databases (cont’d)
The Use of Databases (cont’d)


Database Mining
Database Mining

The computerized process of discovering hidden facts
The computerized process of discovering hidden facts
(i.e., revealing relationships among customer buying
(i.e., revealing relationships among customer buying
behavior variables) contained in a firm’s databases.
behavior variables) contained in a firm’s databases.

Database Manipulation and Mail Targeting
Database Manipulation and Mail Targeting

R-F-M
R-F-M
system of point values
system of point values

R
R
ecency of a customer’s purchase
ecency of a customer’s purchase

F
F
requency of a customer’s purchases
requency of a customer’s purchases

M

M
onetary value of a customer’s purchases
onetary value of a customer’s purchases
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–16
The Use of Databases (cont’d)
The Use of Databases (cont’d)

RFM System in Application
RFM System in Application

Testing effectiveness:
Testing effectiveness:

Categorize customers into quartiles or quintiles cells
Categorize customers into quartiles or quintiles cells

Take a representative random sample from each cell
Take a representative random sample from each cell

Distribute a catalogue, brochure or other p-mailing
Distribute a catalogue, brochure or other p-mailing

Provide sufficient time for sampled customers to respond
Provide sufficient time for sampled customers to respond

Determine response rate and average expenditure per cell
Determine response rate and average expenditure per cell


Project these statistics to full membership
Project these statistics to full membership

Based on response-rate and average-expenditure and with
Based on response-rate and average-expenditure and with
knowledge of the cost of distributing the mailing, calculate
knowledge of the cost of distributing the mailing, calculate
whether this mailing is a profitable proposition
whether this mailing is a profitable proposition

Decision rule:
Decision rule:
Target direct mailing only to those cells whose
Target direct mailing only to those cells whose
revenue potential outstrips mailing expense
revenue potential outstrips mailing expense
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–17
Brand Placements in Movies
Brand Placements in Movies
and TV Programs
and TV Programs

Brand Placement (Branded Entertainment)
Brand Placement (Branded Entertainment)

Shows evidence of limited but growing effectiveness

Shows evidence of limited but growing effectiveness

Builds brand awareness and enhances recall
Builds brand awareness and enhances recall

Provides a peripheral route of persuasion
Provides a peripheral route of persuasion

Is low risk in that it:
Is low risk in that it:

Is less intrusive that ads
Is less intrusive that ads

Is less like to be rejected by younger consumers
Is less like to be rejected by younger consumers

Enhances the brand image when appropriately placed
Enhances the brand image when appropriately placed

Can be detrimental if placement control is lost
Can be detrimental if placement control is lost

Can be difficult to calculate its effectiveness and ROI
Can be difficult to calculate its effectiveness and ROI

Is becoming more expensive
Is becoming more expensive
© 2010 South-Western, a part of
Cengage Learning. All rights

reserved.
14–18
Brand Placements in Movies
Brand Placements in Movies
and TV Programs (cont’d)
and TV Programs (cont’d)

Factors determining the value of a brand
Factors determining the value of a brand
placement:
placement:

The amount of onscreen time and foreground or
The amount of onscreen time and foreground or
background positioning of the brand in a scene
background positioning of the brand in a scene

Whether characters use the brand, mention it, and
Whether characters use the brand, mention it, and
exclaim its virtues
exclaim its virtues

Whether the brand appears during an important plot
Whether the brand appears during an important plot
point
point

Younger consumers appear to be the most
Younger consumers appear to be the most
responsive to brand placement in movies

responsive to brand placement in movies
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–19
Yellow-Pages Advertising
Yellow-Pages Advertising

Yellow Pages
Yellow Pages

Is an online and print ad medium for both local and
Is an online and print ad medium for both local and
national advertisers that 60% of consumers use
national advertisers that 60% of consumers use
weekly to:
weekly to:

Save time when they are seeking a product or service
Save time when they are seeking a product or service
supplier and are prepared to make a purchase
supplier and are prepared to make a purchase

Save energy and money
Save energy and money

Find information quickly
Find information quickly

Typical Users

Typical Users

Are in the 25-to-49 age category
Are in the 25-to-49 age category

Are college educated
Are college educated

Have household incomes of $60,000 and up
Have household incomes of $60,000 and up
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–20
Yellow-Pages Advertising (cont’d)
Yellow-Pages Advertising (cont’d)

Distinguishing Features of Yellow-Pages
Distinguishing Features of Yellow-Pages
Advertising
Advertising

Ads actively sought by consumers
Ads actively sought by consumers

Quality of ad placements determined by ad size and
Quality of ad placements determined by ad size and
long-term participation of advertisers
long-term participation of advertisers


Creative limits on ad format and for entire year
Creative limits on ad format and for entire year

Annualized method of purchasing ad space
Annualized method of purchasing ad space
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–21
Video-game Advertising
Video-game Advertising
(a.k.a. Advergaming)
(a.k.a. Advergaming)

Market Characteristics
Market Characteristics

In-game advertising totaled $400 million in 2008
In-game advertising totaled $400 million in 2008

Paid advertising to total nearly $2 billion by 2011
Paid advertising to total nearly $2 billion by 2011

60+ million gamers by 2009
60+ million gamers by 2009

Users
Users

Are young and over 40 percent are female

Are young and over 40 percent are female

Play a game for an average of 40 hours
Play a game for an average of 40 hours

Have an average household income between
Have an average household income between
$35,000 and $75,000
$35,000 and $75,000

Play online with multiple other players
Play online with multiple other players
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–22
Cinema Advertising
Cinema Advertising

Market Features
Market Features

In-theater advertising is a $1 billion market
In-theater advertising is a $1 billion market

Advertisements appearing prior to a featured
Advertisements appearing prior to a featured
film do not antagonize consumers
film do not antagonize consumers


Target Market Characteristics
Target Market Characteristics

Younger consumers are more positively
Younger consumers are more positively
disposed toward cinema advertising than
disposed toward cinema advertising than
older individuals
older individuals
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–23
Potpourri of Alternative Advertising Media
Potpourri of Alternative Advertising Media

Alternative Media Examples
Alternative Media Examples

Post-it notes
Post-it notes

Stadium cup holders
Stadium cup holders

Sides of garbage trucks
Sides of garbage trucks

Restroom space
Restroom space


Labels on fruits and
Labels on fruits and
vegetables
vegetables

Back covers of comic books
Back covers of comic books

Skywriting
Skywriting

Human body
Human body
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–24
3M’s Post-it
Notes as an
Advertising
Medium
Figure 14.1
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
14–25
A Football
Stadium’s Cup
Holders as an

Advertising
Medium
Figure 14.2

×