Lecture Advertising and promotion (2/e) – Chapter 8: Establishing objectives and budgeting for the IMC program

Chapter 8
Establishing objectives and
budgeting for the IMC program

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8-1


Learning objectives
1. To recognise the importance and value of setting
specific objectives for advertising and IMC.
2. To understand the role objectives play in the IMC
planning process and the relationship of marketing
communication objectives to marketing objectives.
3. To know the differences between behavioural and
communication objectives, and the issues regarding
the use of each.
4. To recognise some problems marketers encounter in
setting objectives for their IMC programs.
5. To understand the process of budgeting for IMC.
6. To understand the theoretical issues involved in
budget setting.
7. To know the various methods of budget setting.
Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-2

Problems

Characteristics

Hierarchy
Top down

Value of
objectives

Determining
objectives
Communication
vs behavioural
Approaches
to setting
objectives

AOS

Objectives

Objectives
& Budgets

Establishing
the budget

Build up

Budgets

Budgeting
approaches

Allocating
the budget
Setting objectives
for IMC

DAGMAR

RTTT

SMARRT

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-3


The value of objectives

Objectives
Objectives

Consensus
Consensus
Planning

Planning
&
& decision
decision making
making
Measurement
Measurement
&
& evaluation
evaluation

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-4


Hierarchy of objectives
Marketing
Marketing objectives
objectives
IMC
IMC objectives
objectives

Advertising
Advertising
objectives
objectives

Objectives
Objectives for
for other
other
elements
elements of
of IMC
IMC

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-5


Marketing versus
communication objectives
Marketing
Marketing objectives
objectives
•• Generally
Generally stated
stated in
in the
the
firm’s
firm’s marketing
marketing plan
plan
•• Achieved

Achieved through
through the
the
overall
overall marketing
marketing plan
plan
•• Quantifiable,
Quantifiable, such
such as
as
sales,
sales, market
market share,
share, ROI
ROI
•• To
To be
be accomplished
accomplished in
in aa
given
given period
period of
of time
time
•• Must
Must be
be realistic
realistic and

and
attainable
attainable to
to be
be effective
effective

IMC
IMC objectives
objectives

vs
vs

•• Derived
Derived from
from the
the overall
overall
marketing
marketing plan
plan
•• More
More narrow
narrow than
than
marketing
marketing objectives
objectives
•• Based

Based on
on particular
particular
communications
communications tasks
tasks
•• Designed
Designed to
to deliver
deliver
appropriate
appropriate messages
messages
•• Focused
Focused on
on aa specific
specific
target
target audience
audience

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-6


Characteristics of objectives
Measurable
Measurable communications

communications tasks
tasks

Time
Time period
period

Elements
Elements of
of
objectives
objectives

Specify
Specify target
target
audience
audience

Benchmark
Benchmark starting
starting point
point for
for
degree
degree of
of change
change sought
sought
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8-7


Google Labs’ objectives

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8-8


Characteristics of objectives

Pure Blonde’s Live well with as little compromise as
possible campaign
Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-9


Problems

Characteristics

Hierarchy
Top down

Value of
objectives

Determining
objectives
Communication
vs behavioural
Approaches
to setting
objectives

AOS

Objectives

Objectives
& Budgets

Establishing
the budget

Build up

Budgets

Budgeting
approaches

Allocating
the budget

Setting objectives
for IMC

DAGMAR

RTTT

SMARRT

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-10


Sales vs communication objectives
Communication
Communication
objectives
objectives

Sales
Sales objectives
objectives
•• Sales
Sales
•• ROI
ROI
•• Relative
Relative market

market share
share

vs
vs

•• Communications
Communications effects
effects
•• Awareness
Awareness action
action

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-11


Factors affecting sales
Advertising
Advertising
and
and
promotion
promotion

Distribution
Distribution

Competition
Competition

SALES
SALES

Technology
Technology

Product
Product
quality
quality

The
The
economy
economy

Price
Price

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8-12


Use sales objectives when…
Sales objectives are appropriate when using:

 IMC tools designed to elicit direct action
(sales promotion, direct marketing)
 direct response advertising
 retail advertising.
Also useful when advertising plays a dominant role in
the marketing program, such as in FMCG.

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-13


Communications objectives
Possible communication objectives include:
 increasing the percentage of consumers in
the target market who associate specific
features, benefits or advantages with our
brand
 increasing the number of consumers in the
target audience who prefer our product over
the competition
 encouraging current users of the product to
use it more frequently or in more situations
encouraging consumers who have never
used our brand to try it.

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-14


Communications objectives (cont.)

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8-15


Westpac is a good corporate
citizen

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8-16


Advertising effects
Behavioural
Conative
Realm of motives.
Ads stimulate or
direct desires.
Affective
Realm of emotions.
Ads change attitudes
and feelings.

Cognitive
Realm of thoughts.
Ads provide
information and facts.

Movement
Purchase
Conviction
Preference
Liking
Knowledge
Awareness

Relevant promotions
Point of purchase
Retail store ads, deals
‘Last-chance’ offers
Price appeals, testimonials
Competitive ads
Argumentative copy
‘Image’ copy
Status, glamour appeals
Announcements
Descriptive copy
Classified ads
Slogans, jingles, skywriting
Teaser campaigns

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8-17


Pyramid of
communications effects
5% Use
20% Trial
25% Preference
40% Liking
70% Knowledge
90% Awareness
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8-18


Backstage Shampoo

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8-19


Clear and consistent
communications objectives

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8-20


Problems

Characteristics

Hierarchy
Top down

Value of
objectives

Determining
objectives
Communication
vs behavioural
Approaches
to setting
objectives

AOS

Objectives

Objectives
& Budgets

Establishing
the budget

Build up

Budgets

Budgeting
approaches

Allocating
the budget
Setting objectives
for IMC

DAGMAR

RTTT

SMARRT

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-21


Advertising opportunity score
(AOS)

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8-22


Advertising opportunity score
(AOS) (cont.)

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-23


Approaches to setting
objectives: DAGMAR

Define
Advertising
Goals for
Measuring
Advertising
Results

Awareness
Awareness
Comprehension
Comprehension

Conviction
Conviction

Action
Action

Copyright 2012 McGraw-Hill Australia Pty Ltd
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8-24


DAGMAR’s advantages and
limitations
Advantages

Limitations

Assessment
Assessment of
of campaign
campaign
effectiveness
effectiveness

Problems
Problems with
with the
the response

response
hierarchy
hierarchy

Value
Value of
of communicationcommunicationbased
based objectives
objectives

Sales
Sales objectives
objectives

Measurement
Measurement of
of stages
stages

Practicality
Practicality and
and cost
cost

Less
Less subjective
subjective

Inhibition
Inhibition of

of creativity
creativity

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