MARKETING MATERIAL

9088 – Marketing Practice 8 ADVERTISING 

Chapter 8

ADVERTISING 

We now move on to see what you can do with the knowledge you have gained about your customers. The most immediate application of this knowledge is typically in shaping the promotional programmes you will undertake. It is true to say, though, that almost all that is important about your promotional strategy should have been decided by this stage. The analysis you have already completed - as to what is the optimum product/service package - will in effect have defined all the important variables; including those relating to the promotional components of the package. In particular, the positioning exercise(s) will have mapped out the factors which are the key to successful promotion. All that remains is to deliver that promotion to the customer. 

It is not something divorced from it, to be added as ornamentation by the advertising agency. It is, instead, an integral part of the package. Often it may be the most important overall element, outstripping the importance even of the 'physical' elements, but even so it is still integral to the overall package; not something to be created in isolation.

At one extreme, the work which has been done so far should have very accurately defined what best meets the needs and wants of the customer; or at least best meets it within the resources available to the organisation. That product offer (the complete package, which include the intangible elements such as image) should, thus, be the most powerful message you can convey to the customer. To try to add anything to that would not merely be to gild the lily but to reduce the impact of the main message.

At the other extreme, if the package is to be profitable this is not likely to be a one-time sale. Profits are usually made from repeat sales. Thus, the message must not offer more than you can in reality deliver. It is said that satisfaction equals perception minus expectation[1]. If you raise the customer's expectations too high, his or her perceptions of the actual performance will almost certainly fall short of these; resulting in disappointment, and possibly a slight feeling of having been the victim of a fraud.

On the other hand, if you don't raise expectations high enough you may not make the sale in the first place - hence the need to achieve exactly the right balance.

Having nailed down what it is that actually you offer, however, the secret of great promotion is then to communicate that as brilliantly and powerfully as you can. That is where the all important creative element should enter.

The theory of promotion, especially that of advertising, was largely covered in the earlier sections on the customer. By describing that customer you also largely specify how you should communicate with him or her. Thus, the advertising agencies have often been the main protagonists for the various models which try to explain the customer, and in particular the customer's buying behaviour. The lifestyle models have been especially attractive to these advertising agencies, since they offered a very attractive (often 'creatively' attractive) vehicle for their talents.

The practice of promotion is much more difficult to categorise. Apart from the rather mundane descriptions of the communication process, again described earlier, there is remarkably little suitable theory around. Practice is dominated by creative solutions (for the delivery of the message almost as much as for the message itself). This is inevitable where the task is to make your offering stand out from the many others which confront the customer, and then to make even detergents seem interesting and important. Before we move on, however, let me reiterate the message above: no matter how creative the final message is it must match the needs of the product/service package.

Before we start to concentrate on the message, though, let us look at the delivery systems, in the context of the promotional mix. Thus, there is a range of alternative (and often complementary) vehicles available. We will look at these as we go through the chapter. As a very direct approach, there is face-to-face sales. There is the more indirect one, when it is too expensive to confront the customer personally, of advertising, or the even more indirect one of public relations. Finally, there is the very immediate one of sales (point of sale) promotion - which, if the reports are to be believed, now accounts for the largest part of the spend on promotion as a whole. To put these in a more memorable context than just the rather amorphous 'product mix' (even though that does convey exactly what is involved) I like to look at the 'promotion lozenge'. Once again it is shaped like a diamond, but I prefer to call it a lozenge because (unlike the earlier research diamond) it does not have any clear cutting edges. It is generally much less well defined, softer at its extremes; and there is definitely a quality of trial and error involved - suck the lozenge and see!

This lozenge is not as arbitrary as it may seem. It actually is organised along two dimensions. Hopefully, the vertical one is obvious. It is the move from direct (sales) to indirect (advertising) contact with the customer.

Perhaps less obvious, but in many respects more important, is the horizontal dimension. This shows the flow over time, from the start with the establishment of a general interest via public relations (PR) through investment in image building with advertising and much of the selling process, to the very immediate impact of sales promotional devices at the point of sale. It also demonstrates the gradation from the long term investment in PR and advertising/sales to the very short term effect of promotion.

The demands posed by your product/service package determine the actual shape of the lozenge; another reason for choosing a soft, malleable lozenge rather than a hard diamond. If you need the face-to-face (sales) contact to explain a complex package, and the price of this is sufficiently high to cover the high costs this implies, then the lozenge becomes almost an inverted triangle:

The advertising element is almost missing, though even in the almost pure sales environment there will remain some element of indirect contact - often in the form of direct mail, to generate prospects for the face to face contact. The 'point of sale' here is a time (not a place), and the promotional element is usually only seen in the form of discounting the price. Despite my earlier comments though, sales professionals would argue that this does need to have a very sharp cutting edge.

Almost the exact reverse occurs for fast moving consumer goods where the low unit price means that face-to-face selling is simply not an economic proposition:

Here 'sales' drops' out of the picture, but not totally - for someone has to persuade distribution chains to carry the product/service package to the 'point of sale' (which here is a place not a time). On the other hand, most of the effort must by necessity be invested in the indirect communications. Once again, though, the promotion (here used at the point of sale) is very short term - again usually in the form of some price reduction (either directly or indirectly).

You can play many different games with the lozenge, but I will finish with one which distorts it to show - quite realistically - advertising (for, say, a consumer durable or a car) preceding face-to-face sales activity in the retail outlet.

Traditionally, advertising and promotion has been treated as current cost; with an immediate, but short-term, effect. Although this view probably is justified in terms of most forms of sales promotion it seriously distorts some important aspects of advertising and PR. A more useful view in this context is that:

Adopting such a long-term perspective has a number of important implications. The first of these revolve around the patterns of performance which might expected. Thus, the basic pattern is not that of the short run supply and demand curves but that of the longer term competitive saw which we looked at in the earlier chapter. Indeed, it is a level saw; its overall trend relatively flat but with the teeth representing the impact of the individual campaigns (or even that of individual insertion, or even of words within the single advertisement - it shares with fractals the ability to continue to display new detail at ever greater degrees of 'magnification').

Following the implied principle of the fixed asset, this sawtooth maintenance pattern can be overlaid on a gradually declining trend in performance; notionally equivalent to depreciation in financial accounting; which. again, we examined in the earlier chapter. Thus, over time there may be a slow drift away from the ideal position - as the customers' needs and wants change and/or competitive positioning improves. Your own response to this may take two forms. The first, and perhaps the most effective, is that of:

in much the same way that an autopilot's feedback mechanisms ensure that an airliner follows the correct flightpath. The emphasis here is on the dynamic approach to (current) change - where most of traditional marketing theory revolves around decisions based upon static (historic) positions.

If such dynamic repositioning is not possible, perhaps because the necessary product changes come in discrete steps, then periodic readjustments may be needed. This is where the concept of:

This long-term asset investment aspect of brand performance is largely ignored by traditional marketing theory.

The above pattern of responses assume, however, a complementary repositioning process - which builds upon existing strengths. This process cannot, though, be held to be true of two situations. The first of these is well recognised. It is the new product launch, where the logistic curve, described in a later chapter, may be most effectively used to represent the relatively slow build-up of brand position which results from even quite high levels of investment; for the key aspect is the level of investment needed. It is seen in two main dimensions. One is the amount of (financial) investment needed. To buy you way into a market is a very expensive process indeed. The main practical feature, though,  is the level of risk.  Most managements believe, quite incorrectly, that risk is reduced if the levels of investment are minimised; the reverse is true. Once you accept the basic level of risk:

If you want to make a major impact on a market (one that will, for instance, put you into the most profitable Rule of 1:2:3 slots) you must recognise that the level of investment needed will be correspondingly high; in practice probably beyond the reach of all but the largest Japanese corporations where major markets are concerned (and hence the earlier emphasis on segmentation).

The second dimension is time. Any new penetration of a market takes far longer than is expected. Rather than the one to two years that optimists expect and the three to four years that pessimists allow for:

The one pattern which is rarely discussed, but is often encountered in practice, is that of:

Perhaps the most usual reason for this is that a change in advertising, say, incorporates a radically different message; but this often occurs without management even realising the repositioning this implies.

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As can be seen, the starting point of the combative repositioning is actually below the baseline; since the new investment has first to overcome the existing positioning before it can develop its own strengths; though such campaigns are rarely maintained for the time (measured in years) necessary to develop these final positions. It should be obvious that this is likely to be a remarkably poor investment (even if it can retain some carry-over of the infra-structural investment - distribution, for example). It would often be more profitable to start a completely new brand; at least that would not have to overcome the historical position before building its own. Why then does combative repositioning happen so frequently?

The first answer is in the way of an excuse. Sometimes the 'depreciation' simply cannot cope with all the changes needed, and a major repositioning exercise (incorporating essential elements of combative repositioning, since the new position is radically different) is needed - and the requirement for the brand within the organisation's portfolio is so strong that it justifies the extra investment.

But this is usually just an excuse. Combative repositioning typically happens for two reasons. The first is perhaps forgivable. It is simply that, while they do recognise the change in position implied, the perpetrators do not appreciate the level of investment which already exists in the brand's position. This is a common misunderstanding, for we have seen that it is the exceptional manager who does recognise the importance of that investment.

The second is less forgivable, and can most often be laid at the door of creatively ambitious advertising agencies or arrogantly insensitive brand managers. This is they do not even understand what the current position is that , let alone its strategic importance. In their anxiety to create an exciting new campaign they happily ignore what has gone before.

I would like to report that combative repositioning is the exception rather than the rule, but it is not. Only the really powerful brands seem to be safe in their managers' hands - but maybe that is precisely why they remain powerful brands. Combine widespread ignorance about the levels of investment needed, and the timescales involved, with the ignorance of the dangers of combative repositioning and it is easy to see why so few brand leaders are ever serious challenged.

Having decided your promotional strategy, there are just two main aspects of the promotional task: the delivery vehicle and the message. Let us, therefore, start with the vehicle which will be chosen to carry the message. When we come to the choice here the single most important factor is frequently the size of the budget - though most theory would hold otherwise. At one extreme, if you have a small budget you may be restricted to appearing in a range of very specialist media (possibly just in the small ads). At the other, with a multi million dollar budget, only television may be big enough to absorb it. The rest of the choices fall somewhere between these two extremes:

This basic cost equation may be moderated by the choice of advertising pattern:

Even the heaviest advertisers use this approach, since the impact is not just determined by the absolute levels but also depends upon the levels relative to competitors; if your competitor's (current) exposure outweighs your own you may be in danger of losing the (current) competitive battle for the customers' hearts and minds.

The optimal pattern therefore becomes a matter of sophisticated judgement - as to how many bursts are needed to retain much the same impact as continuous advertising (that is the trend under the saw is relatively flat, and there certainly is no hysteresis effect) versus the necessary minimal impact (OTS - see below) to be achieved by each burst.

Within the limitations set by the budget there are two dimensions by which the pattern of delivery is judged. The most basic of these is coverage.

Some consumer goods are targeted upon almost the whole population. In their case the main choice as to coverage is simply, once again, what can be afforded. The cost of reaching the last few per cent of the population grows exponentially. It is convenient to think of it as a variant of the 80:20 Rule - though in this case quite simply the 80% Rule. Anything over 80% coverage of any market or segment rapidly becomes prohibitively expensive.

At the other extreme, the requirement for coverage of very specialised segments is precision. There is simply no justification for coverage of those not in the target segment - though, conversely, there is no justification for paying not to cover them (where the cheapest media coverage of even specialised segments is often much less precise than might be desired - and may even be found most cheaply via the apparently inefficient mass media).

The other dimension is that of the degree of the individual's exposure to the campaign. It is generally agreed that the customers need to see any advertisement a number of times before it has any significant effect.  

On the other hand there is a level beyond which saturation sets in and any further investment has no additional impact. The shape of the curve therefore is:

Perhaps the most useful chart is a combination of OTS and coverage; since this best demonstrates whether or not you are delivering your message to your chosen target audience with the optimal impact.

The ideal performance is represented here by the sharp edged peak which closely matches coverage of your target audience to the optimal level of OTS. The reality is often closer to the much broader, diffuse curve; where large proportions of the coverage receive inappropriate levels of OTS (either too low, which means that they are unlikely to recognise the message, or too high, where much of the exposure is wasted). Usually the best that can be hoped for is the more cost-effective curve which is broader than the ideal but which takes advantage of the lower cost media, and special deals, to pull down the average cost per thousand whist still using a core schedule which is quite tightly targeted.

To build the desired patterns a mix of specific media is often used. The broad performance of the main types, against some key dimensions is shown below;

In terms of overall advertising expenditures, media advertising is dominated by press and television; which are of comparable size (by value of 'sales'). Posters and radio follow some way behind, with cinema now representing a very specialist medium.

Spending in the press is dominated by the national and regional newspapers; with the latter taking almost all the classified advertising revenue. The magazines and trade/technical journal markets are about the same size as each other, but less than half that of the newspaper sectors.

National newspapers are traditionally categorised, from the media buyer's viewpoint, on the basis of class; even though this is of declining importance to many advertisers. They are obviously best matched to national advertisers who are happy with black and white advertisements (which can still carry quite detailed messages); though limited-quality run-of-the-paper colour is now available, and high quality colour is available in some supplements. They are supposed to carry more 'weight' with their readers (since they are deliberately read, not treated just as 'background').

Regional newspapers may be dailies, which look and perform much like the nationals, or weeklies, but are rather more specialised - and are often supposed to carry less 'weight' (though they may be kept longer - for reference) - and they dominate the market for classified advertising. Indeed, there is usually much more advertising competing for the reader's attention, and the weekly newspaper is fast becoming the province of the 'free-sheets'; which are typically delivered free to all homes in a given area - obtaining all their revenue from the very high proportion of advertising which they carry, and accordingly having the least 'weight' of all.

Advertisements in newspapers, referred to as 'insertions', are usually specified as so many centimetres across so many columns. A multiple of 3cms is used as the standard measure, Thus, a '30cm double' would be an advertisement which was 30cm long, down the page, and across two columns of type; where the width of columns varies from paper to paper - an important consideration when you are having the printing blocks made. Alternatively the space may be a full page, or a half or quarter. In addition the position is also often specified; so that, for example, an advertiser of a unit trust will probably pay extra to make certain the insertion is next to the financial pages.

Magazines offer a more selective audience (which is more 'involved, with the editorial at least) and are traditionally categorised into general interest, special interest and trade/technical. The advertiser will, therefore, be able to select those which match the specific profile demanded by the advertising strategy. The audience is usually concentrated, containing only those with that specialist interest. Their weight, or 'authority', is correspondingly high; and they may be kept for a considerable time for use as reference - as well as passed to other readers (so that 'readership' figures may be much higher than 'circulation' figures). They can offer excellent colour - but the clutter of many competing advertisements may make the advertiser's message less impactful.

In the trade and professional fields there are now a significant number of 'controlled circulation' magazines. These are like the 'free press', in that they are delivered free to the recipients; but, at least in theory, those recipients should have been carefully screened to ensure that they are of value to the advertisers - and the circulation can, if properly controlled, represent a wide cross-section of the buyers, and influencers, in the advertiser's target audience.

As with newspapers, the insertions are normally placed as full page, half page etc. The rates for positioning are, however, usually more varied, with premiums paid for facing editorial matter (rather than buried in a mass of other advertisements) and, of course, for colour.

Television is the most important mass medium, albeit a rather transitory one. It is normally the most expensive medium, and as such is generally only open to the major advertisers (though some regional contractors, TV media; offer more affordable packages to their local advertisers). It offers by far the widest coverage, particularly in the peak hours (roughly 7.00 - 10.30 pm); and especially of family audiences. Offering sight, sound, movement and colour, it has the greatest impact, especially for those products or services where a 'demonstration' is essential; since it combines the virtues of both the 'story-teller' and the 'demonstrator'. To be effective, however, these messages must be kept simple - and have the impact to overcome the surrounding distractions of family life.

The medium is generally unselective in its audiences, and offers relatively poor coverage of the upper-class and younger-age groups, but as it is regionally based it can be used for regional trials or promotions (including test markets).

The price structures can be horrendously complicated, with the 'rate card' (the price list) offering different prices for different times throughout the day; and this is further complicated by a wide range of special promotional packages, and individual negotiations! It is truly the province of the specialist media buyer.

Satellite television is now supposed to be the medium of the future. Cable television was similarly supposed to represent the future a decade ago. This promise has been largely fulfilled in the US; where the average household can now tune into more than 30 channels. It has yet, though , to achieve comparable levels of penetration in other countries; in any case, it will still require much the same media buying, as well as creative, rules as the more earthbound channels.

Posters represent something of a specialist medium, which is generally used in support of campaigns using other media.

The use of radio has increased greatly in recent years, with the granting of many more licenses. It typically generates specific audiences at different times of the day; for example, adults at breakfast, housewives thereafter, with motorists in the rush hours. It can be a very cost effective way of reaching these audiences (especially as production costs, too, can be much cheaper) - though the types of message conveyed will be limited by the lack of any visual elements, and may have a 'light-weight' image.

Although the numbers in the national cinema audience are now small, this may be the most effective medium for extending coverage to the younger age groups - since the core audience is aged 15 - 24.

Finding out exactly who is the audience for a particular newspaper, or who watches at a given time on television, is a specialised form of market research - which is usually conducted on behalf of the media owners. The press figures are slightly complicated by the fact that there are two measures. There is that of readership, which represents the total number of readers of a publication, no matter where they read it - even in the doctor's waiting room; which is obtained from market research. There is also circulation, which is the number of copies sold (which is mostly independently validated); each of which copies may, of course, be read by a number of readers - typically around 3 per copy for a newspaper, but in excess of 6 per copy for some magazines. One particularly effective measure of the effectiveness of press advertising, along with that of direct mail, can be implemented where the purpose of the advertising is to elicit a direct response, typically in terms of motivating the reader to ask for further information through a 'coupon' included in the advertisement or mailed material. Each such advertisement or mailing can then be given a code; the usual means being including a dummy 'department number' (which equates to the publication used, say) as part of the mailing address. The response obtained from each of the publications (or each of the mail packages) can then be measured accurately; at least in terms of the percentage coupon response rate - though, of course, that may not be an appropriate measure if what is primarily being attempted is a shift in attitudes.

A more specialised form of testing is that relating to the content of the advertisement itself. This may take place at three stages; preliminary - where parts of the advertising (including 'concepts') are tested before being incorporated in the finished advertisement; pretesting - where the finished advertisement is tested in its entirety (usually against its predecessor and/or its competitors) to ensure that it meets the objectives set by the advertising strategy; post-testing - the actual consumer results, researched after exposure to the advertising.

Media buying is, however, a very sophisticated process - best left to the experts. In any case, the final schedule rarely looks much like the planned one; since the deals which the media buyers obtain during their negotiations with the media owners usually distort the pattern, in order to gain the best possible cost per thousand across the target audience.

There is a further element in the media selection equation; impact. The reader or viewer does not react to all advertisements (even conveying the same message) equally. In part this may be the creative treatment, but it is also a function of the media; 

In terms of size, a full page advertisement or a two minute commercial may be more expensive (and increase the cost per thousand) but it may also have significantly greater impact. Research has shown that a full page may get 85% more readership than a half page, and colour can generate 50% more readership than black and white[4]

In part it may be a function of the position within the medium. An insertion facing the contents page at the front of a Sunday colour supplement will be more effective than one buried in the mass of advertisements; though those at the back may receive 65% greater readership than those at the front[5]. A commercial run during a prestige programme will have more impact than one during an early evening soap.

As we have seen, the medium itself may contribute to the impact. This may relate to the specific product; a luxury food product may have more relevant impact in an up-market woman's magazine than in the national press. But the medium may also carry some inherent impact. Thus, it has long been a saying in agencies that "we carefully evaluate the best, most cost effective, media plan and then choose television anyway!". For those campaigns which can afford it, television normally has the highest impact.

When it comes to the stage of deciding exactly what message this vehicle is to carry the picture is much less clear. This is where the creative departments of advertising agencies earn their keep - and it is almost impossible to suggest any generally meaningful guidelines in this area.

Perhaps the best advice of all is KISS (Keep It Simple Stupid). This another way of saying 'less is more', a philosophy I have already referred to a number of times. It is especially relevant however in the case of advertising (or any other form of promotion). The simpler the message the greater the impact it will make and the greater the attention it will receive.

This is best tracked (by marketing research) in terms of 'spontaneous awareness' of the advertising. In practice the pattern is not the simple line shown above, but is the one indicated below:

That rising from the origin is almost trivial, it simply indicates that when you remove almost any trace of message the advertisement the message will not even be read let alone convey any useful information - it becomes mere graffiti.

That departing from the straight line at 50 words is rather more significant. It reflects the observation[6] that up to 50 words or so impact progressively decreases at a quite rapid rate, but above this limit the fall-off becomes much slower.

The opposite is true of the information content of each message. This grows linearly with the number of words, not saturating (in the context of the promotional role) until 1,000 words or so. It should be noted, however, that this assumes that all the words used do in fact convey information. All too often communications are blurred by superfluous words, which add nothing - but both detract from the working limits and also confuse the genuine messages.

If we impose this curve on the earlier one and combine the two (by multiplication rather than addition) we get the picture below which shows the compound outcome, which we describe as 'appreciation'. In general, but with many exceptions, this may be highest at the extremes of short and long advertisements.

This is a measure of what information has been transmitted to the average customer. It is best tracked by prompted recall.

The lesson to be learned from the diagram is, in part, the neces3ity for tracking how your advertising is working in practice. It is in the main, though, a graphical illustration that while advertising must achieve at least a threshold level of impact this is only the starting point for communicating the brand story. The curves are specific not just to the product/service package but to the concept being communicated. In particular, the above curves may not provide a useful model if the concept is so simple that a few words may suffice to describe it, as is the case with not a few FMCG brands. Then impact has to be all.

The limit varies, and typically grows, as the customer progresses through the 'campaign' (essentially following the AIUAPR process):

Thus the headline, which is primarily intended to contribute to the impact will usually be very short; to be followed by more lengthy body copy which explains the product (and creates the attitude changes necessary for the first trial purchase). Then, depending upon the product, the label copy may be longer still and the instructions - if provided - even longer (though few suppliers realise the promotional potential of such instructions - especially when they may be used to turn the purchaser into a peer reference for other prospects).

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