Advertising

"Advertising is the non-personal communication of

information usually paid for and usually persuasive in nature
about products, services or ideas by identified sponsors
through the various media." Now let's take this statement
apart and see what it means.

Nature of Advertising

Mass communication Process

Informative
Persuasive
Competitive
Is Paid for
Has an Identified Sponsor
Non personal

Scope of Advertising
The scope of advertising is to communicate a
message to current customers or
potentiallytargetnew customers.
Processing information to the customer to keep them
informed of what is happening within the company
eg: New products, sales, new store openings, etc.
Increase customer loyalty and repeat business. By
keeping customers informed of anupcoming salefor
instance, you are holding onto loyal customers and
may even attract some new business.
Communicating a message directly to the consumer.

Scope of Advertising
The scope of advertising is to communicate a
message to current customers or
potentiallytargetnew customers.
Processing information to the customer to keep
them informed of what is happening within the
company eg: New products, sales, new store
openings, etc.
Increase customer loyalty and repeat business. By
keeping customers informed of anupcoming salefor
instance, you are holding onto loyal customers and
may even attract some new business.
Communicating a message directly to the consumer

Increasedrevenuethrough advertising
particular products or informing customers
ofnew serviceson offer. This will also offer
economic benefits for the wider community as it
may givea companybetter scope to offer
moreemployment opportunities.
Television commercials. Some larger brands
such as Loreal get celebrities such as Eva
Longoria and Cheryl Cole to help advertise their
products.

Scope of advertising for

manufacturers

Large-scale production & marketing

Introduction of new products
Creates new demand
Effective personal selling
Builds brand image
For reduction in cost of production

Scope of advertising for

consumers
Provides Information and guidance
For attracting more consumers
Raises living standards
Effective product use
Removes misunderstanding

Types of Advertising
National
National Advertising
Advertising
Retail/Local
Retail/Local Advertising
Advertising

Consumers

Primary
Primary vs.
vs. Selective
Selective
Demand
Demand Advertising
Advertising

Business-to-Business
Business-to-Business Advertising
Advertising
Professional
Professional Advertising
Advertising
Trade
Trade Advertising
Advertising

Organizations

Classification of
Advertising
Classification on the basis of function
Classification on the basis of region
Classification on the basis of target market
Classification on the basis of
desiredresponses
Classification on the basis of the media used
in advertisement

Classification on the basis

of
function
Informative advertising: This type of
advertising informs the customers about the products,
services, or ideas of the firm or organization

Persuasive advertising: This type of

advertising persuades or motivates the prospective

buyers to take quick actions to buy the products or
services of the firm. Example: Buy one, get one
free.

Reminder advertising: This genre of

advertising reminds the existing customers to

become medium or heavy users of the products
or services of the firm that have been
purchased by them at least once. This type of
advertising exercise helps in keeping the brand
name and uses of the products in the minds of
the existing customers.

Classification on the basis

of region
Global advertising: It is executed by a firm in its
global market niches. Reputed global magazines
like Time, Far Eastern Economic Review, Span,
Fortune, Futurist, Popular Science. Cable TV
channels are also used to advertise the products
throughout world. Supermodels and cinema stars
are used to promote high-end products Examples:
Sony, Philips, Pepsi, Coca Cola, etc.
National advertising: It is executed by a firm at
the national level. It is done to increase the
demand of its products and services throughout
the country

 Regional advertising: If the manufacturer

confines his advertising to a single region of the

country, its promotional exercise is called Regional
Advertising. This can be done by the manufacturer,
wholesaler, or retailer of the firm. Examples:
Advertisements of regional newspapers covering those
states or districts where these newspapers are
circulated

Local advertising: When advertising is done

only for one area or city, it is called Local Advertising.

Some professionals also call it Retail Advertising. It is
sometime done by the retailer to persuade the
customer to come to his store regularly and not for any
particular brand.
EX : FM radio

Classification on the basis

of target market
Consumer product advertising: This is

done to impress the ultimate consumer. An ultimate

consumer is a person who buys the product or service
for his personal use. This type of advertising is done
by the manufacturer or dealer of the product or
service

Industrial product advertising: This is

also called Business-to-Business Advertising. This

is done by the industrial manufacturer or his
distributor and is so designed that it increases the
demand of industrial product or services
manufactured by the manufacturer

 Trade advertising:This is done by the manufacturer

to persuade wholesalers and retailers to sell his goods.
Different media are chosen by each manufacturer
according to his product type, nature of distribution
channel, and resources at his command. Hence, it is
designed for those wholesalers and retailers who can
promote and sell the product.

Professional advertising:This is executed by

manufacturers and distributors to influence the

professionals of a particular trade or business stream.
These professionals recommend or prescribe the products
of these manufacturers to the ultimate buyer. Doctors,
engineers, teachers, purchase professionals, civil
contractors architects are the prime targets of such
manufacturers.

Classification on the basis

of desiredresponses
Direct action advertising:This is done to
get immediate responses from customers.
Examples: Season's sale, purchase coupons in a
magazine.

Indirect action advertising:This type of

advertising exercise is carried out to make a positive
effect on the mind of the reader or viewer. After getting
the advertisement he does not rush to buy the product
but he develops a favourable image of the brand in his
mind.

 Surrogate advertising:This is a new

category of advertising. In this type of
promotional effort, the marketer promotes a
different product. For example: the promotion of
Bagpiper soda

Classification on the basis

of the media used in
advertisement

Audio advertising:It is
done through radio, autorickshaw promotions, and
four-wheeler promotions etc

Visual advertising:It is
done through PoP displays,
without text catalogues,
leaflets, cloth banners,
brochures, electronic
hoardings, simple hoardings,
running hoardings etc.

 Internet advertising:The World

Wide Web is used extensively to
promote products and services of all
genres. For example Bharat
Matrimony, www.teleshop.com,
homeshop18.com

Notice in the above ad that the only copy we

see is Real California Milk. This is simply
suggesting that we purchase dairy products
that come from Happy Cows. There is no
branding it supports only the milk.

Primary Demand Example:

orange juice,
milk

Primary v. Selective demand Advertising

Selective Demand Example

The Snapple ad as it appears above
is quite simple. There is only Snapple
Green Tea products being displayed.
There is branding from the Snapple
representation.

Commercial v. Non
commercial Advertising:
Non-commercial advertising is
advertising indulged in by
non-profit organization such
as the government or
charitable institutions to
support ideas, solicit
donations, etc.

Commercial advertising is
concerned with selling a
product or an idea to help a
commercial institution. It may
consist of consumer
advertising aimed at the
ultimate consumer or
business or industrial
advertising aimed at
industrial producers inducing
them to purchase the product

Product v.
Institutional
Advertising
Institutional Advertising:
Thepromotional message
aimed at creating animage,
enhancingreputation,building
goodwill, or advocating an idea
or
the
philosophy
of
anorganization,
instead
ofsales
promotion.
Whenemployedby
an
organization
tomarketitself
(instead of itsproducts), it
iscalledcorporate advertising.

Covert Advertising

Covert advertising is a unique kind of

advertising, in which a product or a
particular brand is incorporated in
some entertainment and media
channels like movies, television
shows, or even sports.

Coffee Cup Advertising:

A relatively new form of mass
advertising is the placement of
small ads or promotional material on
paper cups for coffees or onto the
tabletops of the diner or cafe. Its
origins can be traced to Australian
companies, and is now gaining
popularity in Asia and the Americas.

Advertising
Appropriation/ Budget
Percentage of sales method
Task and objective method
The competitive parity method
Affordable method
A Percentage of Revenue

PERCENTAGE OF SALES
METHOD
procedure used to setadvertising budgets, based on
a predetermined percentage of past sales or a
forecast of future sales. This method of budget
allocation is popular withadvertisersbecause of its
simplicity and its ability to relate advertising
expenditures directly to sales. Management usually
determines the budget's percentage figure, which is
based on the industry average or the company's
historical or previous year's advertising spending.

The competitive parity method

Advertising-expensebudgetingmethodbased on what abrand'sor
firm'scompetitorsareestimatedto bespending. This
methodassumesthe other firms have the samemarketing objectivesand
know what they are doing.

A Percentage of Revenue
Many companies set their marketing budgets by allocating between 1%
and 10% of their revenues to marketing. This method assumes a direct
relationship between revenuegenerationand marketing. In many
instances this is not the case. For example, launching a new brand
usuallyrequires important marketing resources, while the revenue it
generates is zero.

 Objective-and-task method
way of allocating funds to advertising based on the
desired results, the steps that must be taken to
achieve those results, and the projected costs of
each.

Affordable method
procedure used to setadvertising budgets, based on
what the advertiser thinks it can afford to spend.
This method lacks consideration for the objectives of
the advertising and how those objectives can best be
met. The advertiser may spend less than necessary
to achieve a sales target or fail to provide the
necessary support to a new or declining brand.

Advertising Campaign
Process

The Process of
Advertising
The following are thesteps involved in the process of
advertising:
Step 1 - Briefing:the advertiser needs to brief about the
product or the service which has to be advertised and
doing the SWOT analysis of the company and the product.
Step 2 - Knowing the Objective:one should first know
the objective or the purpose of advertising. I.e. what
message is to be delivered to the audience?
Step 3 - Research:this step involves finding out the
market behaviour, knowing the competitors, what type of
advertising they are using, what is the response of the
consumers, availability of the resources needed in the
process, etc.

 Step 4 - Target Audience:the next step is to identify the

target consumers most likely to buy the product. The target
should be appropriately identified without any confusion. For
e.g. if the product is a health drink for growing kids, then the
target customers will be the parents who are going to buy it and
not the kids who are going to drink it.
Step 5 - Media Selection:now that the target audience is
identified, one should select an appropriate media for
advertising so that the customers who are to be informed about
the product and are willing to buy are successfully reached.
Step 6 - Setting the Budget:then the advertising budget has
to be planned so that there is no short of funds or excess of
funds during the process of advertising and also there are no
losses to the company.

 Step 7 - Designing and Creating the Ad:first the

design that is the outline of ad on papers is made by the
copywriters of the agency, and then the actual creation of
ad is done with help of the art directors and the creative
personnel of the agency.
Step 8 - Perfection:then the created ad is re-examined
and the ad is redefined to make it perfect to enter the
market.
Step 9 - Place and Time of Ad:the next step is to decide
where and when the ad will be shown. The place will be
decided according to the target customers where the ad is
most visible clearly to them. The finalization of time on
which the ad will be telecasted or shown on the selected
media will be done by the traffic department of the agency.

 Step 10 - Execution:finally the advertisement

is released with perfect creation, perfect
placement and perfect timing in the market.
Step 11 - Performance:the last step is to judge
the performance of the ad in terms of the
response from the customers, whether they are
satisfied with the ad and the product, did the ad
reached all the targeted people, was the
advertise capable enough to compete with the
other players, etc. Every point is studied properly
and changes are made, if any.

Segmentation

Positioning Strategy in
advertising

Advertising Agency
Firm that
(1) creates new promotional ideas,
(2) designs print, radio, television, and internet
advertisements,
(3) books advertisement space and time,
(4) plans and conducts advertising campaigns,
(5) commissions research and surveys, and
(6) provides other such services that help a client
in entering and succeeding in a chosen market.

 Anadvertising agencyorad agencyis a

servicebusinessdedicated to creating, planning
and handlingadvertising(and sometimes other
forms ofpromotion) for its clients.
An Advertising Agency or ad agency is a service
provider that works for clients to create an
effective and goal oriented advertising campaign
aimed at representing the Company positively in
the eyes of its target customers.

 According to American Association of Advertising

An advertising agency is an independent organization
of creative people and business people who specialize
in developing and preparing market plans,
advertisements, and other promotional tools.

Primary services of
Advertising agencies
complete a marketing analysis

develop an advertising plan

prepare a creative strategy
create advertising executions
develop and implement a media plan
handle billing and payments
integrate other marketing communications

Types of Advertising
Agencies

Full Service Agencies

A full service ad agency is one that provides a range of marketing
services. A full services agency provides services that are directly
related to advertising such as copywriting, artwork, production of
ads, media planning etc. It also provides such services in respect of
pricing, distribution, packaging, product design etc. Some full service
agencies also provide non-advertising related services including
strategic market planning, direct market promotion programs,
interactive marketing and web site design, and public relations

A typical full-service advertising agency typically involves 4 main

departments:
Account Management
Creative Services
Media Planning and Buying
Research and Account Planning

Modular Agencies
A modular agency is a full service agency that
sells its services on a piece meal basis. Thus an
advertiser may commission an agencys creative
department to develop an ad campaign while
obtaining other agency services elsewhere.
Or, an advertiser may hire an agencies media
department to plan and execute a program for
advertising that another agency has developed.
Fees are charged for actual work undertaken.

In House Agencies
Those companies, which prefer to have closer
control over advertising, have their own in-house
agency. This type is owned completely by the
advertiser.
It performs almost all functions that an outside
advertising agency would perform and thats why
some people refer to it as full-service advertising
department of the advertiser.
Fabrica : UCB
Mudra Communications

 The difference between an in-house agency and an

advertising department is that the in-house agency
can undertake to serve several other clients, if the
owner so desires, but an advertising department
solely undertakes that work of its owner and not of
outside clients.
Advantages
Disadvantages
Less experience
Cost savings
Less objectivity
More control
Less flexibility
Better coordination

Specialist Advertising
Agencies
There are some agencies who undertake advertising work

only in certain areas. There are agencies that specialize only

in financial services or only in publicity or only in point-ofpurchase material etc.
There are also agencies that specialize in certain types of
advertising: the recruitment, job, medical, classified,
industrial, financial, direct response, sales Retail, yellow
pages, theater / entertainment investment, travel and so on.

Mega agencies
Concept of 1980s
Merger of two agencies
1986, Saatchi & Saatchi, a London based - the third largest,
started the movement

Creative Boutiques
These are shop agencies that provides only
creative functions and not full-service. The
specialized creative functions include copy
writing, artwork and production of ads, they
charge a fee or percentage of full service
agencies, and as such most of them convert into
a full service agency or merge with other
agencies to provide a wide range of services.
JUGULARis a creative boutique agency in the
Meatpacking District in NYC

Ogilvy & Mather

Top management:Piyush Pandey, Executive chairman & National creative director,
John Goodman, CEO
Shareholding:WPP 74%, others 26%
No of employees:Creative: 334, Servicing : 350, Production: 63, Account planning:
20, Others: 162 (back office)
Divisions:Ogilvy Activation, Ogilvy Public Relations Worldwide, Ogilvy-One Worldwide
Key Accounts:Asian Paints, BP/Castrol, Cadbury, Gillette India, HUL, Hutchison Essar,
IBM, Seagrams , SBI, Tata Motors

McCann Erickson India

Santosh Desai, President
No of employees:Creative: 114, Servicing : 88, Production: 16,
Account planning: 11, Media planning: 18

Key Accounts:Coca-Cola , Hindustan Lever, Johnson & Johnson,

L'Oreal , General Motors, Dabur, Intel, Marico , Mastercard,
Microsoft, Nerolac, Perfetti, Tata Indicom, TVS Motors

Lowe Lintas
Top management:Pranesh Misra, President &
COO
No of employees:Creative: 104, Servicing: 181,
Production: 19, Account planning: 20, Others: 38
Key Accounts:Unilever, Idea Cellular, Britannia,
LG, Maruti Suzuki, ITC, Bajaj Auto, J&J , The Hindu

JWT
Top management:Colvyn J Harris, CEO
Key Accounts:PepsiCo, DYC, Hero Moto Corp., Glaxo Smithkline, Frito Lays India, Unilever
Home & Personal Care, Ford

Leo Burnett:
Top management:Arvind Sharma, Chairman, India Subcontinent
No of employees:Creative: 55, Servicing : 55, Production: 6, Account planning: 2
Key Accounts:P&G , Coca-Cola , Heinz India, McDonald's , Bajaj Auto, Godfrey Phillips

Benefits of using an
Advertising Agency
1. They have the ability to buy
media in bulk at rates that a
single business cannot obtain.
2. They are educated as to the
best times and places to run
ads to reach your target
market, ultimately minimizing
wastage
3. They can help you fine tune
your target market so that the
message is designed to reach
those you want to reach.
4. Easily Administered

The Benefits of Using an

Advertising Agency
Added Expertise
Media Knowledge and Unbiased
Advice
Easier Administration
Media Buying
Quality Control
Information
Fending off the media
And when things go wrong
Cost Saving
Time Saving

Disadvantages of using an
Advertising Agency
A main disadvantage of using an advertising
agency would be the communication factor. If an
agency does not communicate or relay it's clients
goals and creative wishes properly problems can
occur within a contract and lawyers may have to
become involved.
Another disadvantage would be the media buying
discounts you may not be able to take full
advantage of due to commission barriers within
an agency,

Role of Advertising
Agencies
Advertising agency is a service provider that
helps its clients by developing suitable ad
campaigns for them.
Their aim is to represent its clients' products and
services before customers in such a way that a
positive image is created in their minds.
Advertising agency's role start with the
identification of its clients' goals and objectives.
This turns out to be of immense value in planning
and creating the future course of action
concerning ad campaigns.

For whom is the product or service designed?

Who would use it?
Who is the "target group"?
What's special about the product? In what way is it
distinct?
Unique? Different?
What's its "position" in relation to other similar
products?
What do you want to convey to the public about your
product?
How should your company contact the public?
What medium should it use? Radio? TV? Newspapers?
Magazines?
Bus/subway ads? Direct mail? etc.

 Once an advertising agency gets acquainted with its

clients' business objectives, it starts creating and
planning its ad campaigns.
For this it keeps in mind certain points such as
increasing sales, pushing new products in the market,
restating benefits of its clients' brands, and drawing
new customers in addition to establishing and
maintaining contacts with their existing customers.
An advertising agency's professional teams put in their
best efforts to develop attractive slogans, jingles, and
body copy for ads. All this is done within the defined
parameters of its clients and their budgetary
allocations.

Functions of Advertising
Agencies
Account Planning

Advertising agencies typically have account

planners who work as the go-between for the client
and the agent. They ensure that client needs are
expressed to the research and creative teams.
They also work to ensure that necessary information
is transferred to the client regarding creative,
research, competition or any of other factor that may
somehow affect how the client's product gets
marketed to consumers. Account planning is where
agencies start their initial interaction with clients.
It also includes checking bills, making payments,
cash discounts allowed by media, collection of dues
from clients, payment to staff, payment to
outsideprofessionals like- writers, producers, models,
etc.

Account Services / Account

Management

Marketing Research
Advertising agencies work with companies
to establish the characteristics of their
target markets through marketing research.
Advertising agencies spend a substantial
amount of time researching consumers to
understand what they buy and what
motivates them to buy.
Knowing the competition, account
managers at advertising agencies research
the environment, identify competitors, and
research their marketing tactics.
Through market research, advertising
agencies also identify political, social,
technological and economic factors that
may affect a client's campaign.

Creative Function
Advertising agencies are
known for their creative
output, which can include
website design, advertising
copy,
magazine
advertisements, and radio
and television commercials.
The medium of advertising
often varies by campaign.
Graphic designers, web
designers, writers, editors
and creative directors make
up an advertising agency's
creative department.

Developing Ad-Copy
Ad-agency with the help of their writers,
artists, designers, animators, graphicdesigners, and film-directors prepares and
develops Ad-copy.
Approval of Client: Ad-copy is shown to the
client for his approval
Ad-Execution: After approval, verification, and
required changes, the ad-copy is handed to the
media for ad-execution

Media Selection and

scheduling: It is very
important function of adagency to select
appropriate media for its
clients. Ad-agency has to
consider various factors
like- media cost, media
coverage, ad-budget,
nature of product, client's
needs, targeted customer,
and etc while selecting
media.
Evaluation Function:
After execution, it is the

Marketing Function: The advertising agency also

performs various marketing function like- selecting
target audience, designing products, designing
packages, determining prices, study of channel of
distribution, market research, sales promotion,
publicity, etc.
Selling Advertising Space
Advertising agencies don't just create advertising
pieces for clients; they also give clients insight as to
which media will be most effective for their product,
service, event or cause.
In the process, they work to secure advertising
placements for customers either online, in print, on
television or on the radio. They negotiate terms and
work to get clients the best deals to maximize their

Examples of Top Advertising

Agencies
Ogilvy & Mather- Hutch (Vodafone), Cadbury,
Asian Paints and Fevicol.
JWT, J Walter Thompson- Nestle, Bayer, Ford,
Nokia and Unilever.
Mudra Communication-Neutrogena, HBO, Philips,
Reliance NetConnect, Big Bazaar.
FCB Ulka Advertising Ltd-Tata Indicom, Whirlpool,
Zee Cinema, Santoor, Sunfeast and Amul.

Grey Worldwide (I) Pvt. Ltd- Hero Moto corp,

Maruti Suzuki, Nestle, Ambuja Cement, UTV,
P&G and Godrej.

Organization Structure
The activities within an ad agency are
divided into 4 broad groups:
1. Account management
2. The creative department
3. Media buying
4. Research

Recently added: public relations,

direct marketing, and promotional

Organization Chart
Board of Directors
Managing Director

Client Services
Director
Servicing Group

Media
Research

Creative
Director
Creative Groups
Audio Visual
Language
Studio
Production

Finance /
Accounts

Secretarial /
Legal Personnel

Remuneration of ADAgencies
COMMISSIO
N SYSTEM

Incenti
ve
Based

FEE
Arrangeme
nt

Cost Plus
Agreemen
t
There are few methods used to compensate the agencies for their varied services.
Commission , Fee arrangement , Cost-plus agreement, Incentive-Based compensation.

Commissions from Media

The traditional method of compensating agencies is through
a commission system, where the agency receives a specified
commission (usually 15 percent) from the media on any
advertising time or space it purchase for its clients.
Eg: Assume an agency prepares a full-page magazine ad and arranges
to place the ad on the back cover of a magazine at a cost of Rs
100,000.The agency places the order for the space and delivers the
ad to the magazine. Once the ad is run, the magazine will bill the
agency for Rs 100,000,less the 15 percent (Rs 15,000) commission.
The media will also offer a 2 percent cash discount for early payment,
which the agency may pass along to the client. The agency will bill
the client Rs 100, 000, less 2 % cash discount on the net amount, or a
total of Rs 98,300.The Rs 15,000 commission represents the agencys
commission for its services. The commission system had many
advantage, including: 1. Traditional and well understood. 2. Simple
and easy to operate. 3. Inspite of its conceptual imperfections it
worked well in most cases

Fee Arrangement
Fee Arrangement Under the fee structure, the client and the ad
agency negotiate a flat sum to be paid to the agency for all work
done. The agency estimates the cost (including out of pocket
expenses) of servicing the client who either accepts or negotiates
for a lesser amount. Negotiations continue until an agreement is
reached. There are two basic types of fee arrangement systems.
In the straight or fixed-fee method, the agency charges a basic
monthly for all of its services and credits to the client and any
media commissions earned. Agency and client agree on the
specific work to be done and the amount the agency will pay for
it.
Types of Fees-arrangements: Fixed- Fee Method
Speculative Method

Cost Plus Agreement

The cost-plus system is generally used when the media billings

are relatively low and a great deal of agency service is required
by the client.

This happens most often with industrial products, new product

introductions etc. that require disproportionate amount of agency
help in preparing brochures, catalogues and other noncommissionable marketing activities.
Under a cost-plus system, the client agrees to pay the agency a
fee based on the costs of its work plus some agreed-on profit
margin (Often a percentage of total costs).
This system requires that the agency keep detailed records of the
costs it incurs in working on the clients account . Direct costs
(personnel time and out-of-pocket expenses) plus an allocation
for overhead and a markup for profits determine the amount the
agency bills.

Incentive-Based
Compensation
Incentive-Based Compensation Many clients these days are
demanding more accountability from their agencies and tying
agency compensation to performance through some type of
incentive-based system.
While there are many variations, the basic idea is that the
agencys ultimate compensation level will depend on how well it
meets predetermined performance goals.
These goals often include objective measures such as sales or
market share as well as more subjective measures such as
evaluations of the quality of the agencys creative work.
Companies using incentive-based systems determine agency
compensation through media commissions, fees, bonuses, or some
combination of these methods.

Client Agency
Relationship

Definition
Client-agency relationship means relationship
between advertiser and ad-agency. Cordial
relationship with full trust and confidence is must
to get maximum from ad agency and agency can
also work with free hand. Certain basic principles
have been evolved by the experts of advertising
management to have sound relations between
the agency and the media that help client and
media to have long ending business relations to
reap the benefits of continuous relations. These
are pointed as;

Agency and the Clients:

Advertising agency is known for selling professional services to the clients. There
cannot be any hard and fast rules for arriving at working agreement between the two
because each DVERTISING agency and its clients are unique working under their own
set of circumstances and conditions.
Commitment:
Every advertiser expects that the agency he engages refrains from accepting
advertising work for his competitors. It is equally true that the advertiser shall not
engage any other agency without the prior consent of the agency.

Prior Approval:
The advertising agency is to get the prior approval for all the advertising work
on the basis of client feedback and for all the expenses connected with the
advertising. It is of crucial importance because; it is a matter of money
spending and commitment.
Payment:
In accordance with the agency contract with the media, the client is to pay the
agency at the medias published rates and the agency, has the right to retain
its commission allowed by the media. Any concession extended by the media
is to be passed on to the client.

Mutual Trust and Confidence:

There should be an attitude of mutual confidence
and trust. The agency should be allowed to
participate in panning and there should be no
interference in its executive. The company should
have the freedom to contribute creative ideas to the
agency and the later should accept them with due
changes and considerations.

Hoarding
Hoarding A temporary wooden fence erected
round a building. It is commonly known as large
outdoor signboard.

A 'classic' Hoarding, consisting of large pieces of

printed paper attached to a durable backing on a
structure. Hoardings are showing large,
apparently humorous slogans, and distinctive
visuals. Hoardings are highly visible in the top
designated market area.

Major Types
Bulletins- These are the largest standard-size
hoardings, located primarily on major highways,
expressways. They afford greatest visibility due
not only to their size, but because they allow
creative "customizing" through extensions and
ornamentations (Decorations).

Posters- They are the other common form of

hoarding advertising, located chiefly in
commercial and industrial areas, smaller than
bulletins.

Other Types of
Hoardings

Painted Hoardings
Digital Hoardings
Mobile Hoardings
Inflatable Hoardings
Multi-purpose Hoardings

Painted Hoardings
Commonly such types of hoardings are
painted on large studios with the help of line
drawings and oil painting.
Usually to advertise upcoming albums or
movies.
Hand painted & Graphical machines both
are used to make painted hoarding.

Digital Hoardings
Created from computer programs and software.
Can be designed to display running text, images
and other contents.
Can display several different displays from the
same company, and even provide several
companies.

Mobile Hoardings
Movable
Difficult to ignore.
Can be placed wherever there is heavy foot traffic
due to an event including convention centers,
train stations, airports and sports arenas.
Information is retained through repetition.

Inflatable Hoardings &

Multipurpose Hoardings

An inflatable framework
with an attached banner ad

Most appear near sports

events or exhibitions.
If the hoardings have some
extra feature like telecom
antennas or power wiring,
that comes under Multipurpose hoardings.

Hoarding Contractors

Who takes the responsibility for providing the space

for the hoarding, not in creating, building or anything
related to the idea or content of the hoardings.
Acts like the mediator b/w ad agency and the space
provider.
They take charges as monthly, annually or any
particular time interval. eg. KASHI AD AGENCY. They
have their own fix frames on the building in crowded
areas like Lanka, Sigra, or at the highways.
Companies or Person who want to fix their hoardings
at that frame may go to this agency.

Printers
To advertise in newspapers, magazines,
catalogs, or mailers.
Usually, for printing ads which are
combination of photographs, illustrations,
and copy.

Types of Printing

Letterpress Printing: Transferring to the paper

from a raised surface. (Rubber stamp)

Intaglio Printing: Transferring to the paper

through an etched or depressed surface. (egQuality magazines often use for photo section &
advertising inserts.)

Lithographic Printing: Transferring to the paper

from a flat surface which has been specially
treated. Eg: News Paper

ADVERTISING
EFFECTIVENESS
Proving the commercial value of
advertising, that is, its
contribution to shareholder
value, rather than just its
creative merit
Does advertising really work?

The Need to Measure

Advertising Effectiveness
To justify money spent (budgets), ROI
To determine if the advertising
campaign should be stopped or
continued
To determine possible areas of
modifications in the campaign messages
In the longer interest of the profession
(some evidence of the relevance of
advertising & the practitioners

Stages of Advertising
Campaign Measurement
Pre-production/campaign stages - (copy
testing, message & symbols testing etc)
Production/campaign stages - (visibility,
awareness research etc)
Post-production/campaign stages
(behavioural change, objectives,
effectiveness research)
Feedback is needed at every stage to
influence future campaign efforts

Methods of evaluating
advertising effectiveness
Pre testing Method :

Testing is done
during the preparation of advertisement.
( consumer jury and trail area test)

Post Testing Method: Testing is done

after ad has actually been launched in targeted
market area( Recognition Test and recall test)

Concurrent Method:

Testing is done
when advertising campaign is running in the
market. ( telephonic survey and customer diary
test)

Methods of Measuring
Advertising Effectiveness
Checking advertising objectives (AIDA,
DAGMAR) set before the campaign with
results achieved afterwards
Measuring the volume of sales before the
campaign & the volume afterwards
Calculating the number of returned coupons
& ref no. quotes
Calculating sales leads and responses as a
result of advertising (ad to sales ratio)
Asking customers directly How did you hear
about usWere you

Research Methods
Primary & Secondary Research

Past sales records/Current sales records

Observations
Testing (pilot surveys), focus groups etc
Questionnaires
Interviews (one-on-one, group) etc

PREPARATION AND
CHOICE OF METHODS OF
ADVERTISING BUDGET
The money spent in advertising forms an
important cost factor and no matter what type of
company it is, large or small, budget decision
may lead to profitability or drain away most of the
profits. Advertisement can be considered as an
investment into future sales. Proper budget
allocation for long-term reinforcement effect is
necessary for proper planning. Setting the budget
is a different job and a lot of experience is
required to avoid overspending yet maintaining
the companys image.

There are certain factors that must be taken into

consideration for preparing the budget. These are:
Stage of the product life cycle: Different budget
allocation are made in different stages.
The products which are selling and are in the mature
stage of PLC require less expenditure. Where as the
products in the introductory stage of PLC or new products
require much heavier expenditure to create awareness.
Market share is also an important factor for preparing of
budget. To gain greater market share the advertising
budget should be high.
With competition one tries to out do the competitor and
competitive parity method is used.

 Greater advertisement frequency needs greater

expenditure and a higher budget.
If the product can be differentiated and has
noticeable features and attributes it may require
lesser advertisement expenditure.
It is difficult to measure the effectiveness of
advertising sales, as it can be due to other factors
as well.

Ethical and social issues in

advertising
Advertising is primarily a means by which sellers
communicate to prospective buyers.

What they communicate?

The worth of their goods and services

Contd

ETHICS IN ADVERTISING

Should not mislead the consumer

What it promises must be there in the performance of
products
Ad should not be indecent and obscene
As advertising is also a social process, it must honor the
norms of social behavior, and should not offend our
moral sense
ASCI (Advertising Standards Council of India) regulates
the advertising in India has the set guidelines

ADVERTISING AND
SOCIETY

Advertisements are not just the sellers

They reflect the society
Whatever is used in society is reflected in advertising
e.g.
o Indian society is highly family oriented (example ads: savings
for children, daughters marriage)
o Indian society is people-oriented, and not self-oriented
o For the sake of our family and others, we Indians can postpone
our own gratification
o We are also fun loving (example ads: Lux, Coke, Denim Jeans
etc)

ASCI GUIDELINES
To ensure the truthfulness and honesty of
representations and claims made by advertisements and
to safeguard against misleading advertising.
To ensure that advertisements are not offensive to
generally accepted standards of public decency.
To safeguard against indiscriminate use of advertising
for promotion of products which are regarded as
hazardous to society or to individuals to a degree or of a
type which is unacceptable to society in large.
To ensure that advertisements observe fairness in
competition so that consumers need to be informed on
choices in the market place and the canons of generally
accepted competitive behavior in business are both
served.

ETHICAL ISSUES IN
ADVERTISING
Advertising is a highly visible business activity and any
lapse in ethical standards can often be risky for the
company.
Some of the common examples of ethical issues in
advertising are give below:

Vulgarity/Obscenity used to gain consumers attention

Misleading information and deception
Puffery
Stereotypes
Racial issues
Controversial products (e.g. alcohol, gambling, tobacco etc)