Advertising Industry

Name :- Upadhyay Devangana S.

Subject :- Mass Communication and Media Studies

Topic :- Advertising Industry

Paper :- 15

Submitted to :- Department of  English,

                                          MKB University

Semester :- 04 

·      Introduction

              The first advertising may have been a sing painted on a well of a building. The early outdoor- advertising competitors were town criers employed y merchants to praise their goods. It was Gutenberg’s intention of the moveable-type printing press in1450 that resulted in the mass production of posters and circulars. The first advertisement printed in English was a handbill printed in 1472.

                It was primarily an announcement of a prayer book for sale. Two hundred years later, the first newspaper ad appeared offering a reward for finding 12 stolen horses. By the 17^th century, classified ads were appearing frequently in England’s newsweeklies. These ads featured simple description of products and their prices. Illustrations and colour appeared in advertisements in the late 19^th century.

                   The first advertising agency, which was set up by Volney Palmer in Boston in 1841, introduced system to the business by offering a discount of 25% on ad space in newspapers. This move marked the formal beginning of space selling. Initially, most ad agencies were nothing more than brokers for ad space in newspapers. Advertisers created their own ads. N.M. Ayer and Son became the first full-service agency in 1869. One of the earliest highly successful advertising campaigns was launched by Pears Soap. In late 19^th century, Thomas Barratt, whom many consider the father of modern advertising, launched a series of ads featuring children, animals, flowers, and beautiful woman to promote the company’s products.     

·       Propaganda and Mechanization

                     During World War 1, advertising became a medium for propaganda. Governments used advertising to persuade their citizens to join the military. This Period also saw increased mechanization of the industry, making ads more costly.

·       The Emergence of New Mass Media

                     When new mass media-radio and cinema-became commercially available in the first part of the 20^th century, the advertising industry quickly took advantage of their reach, spread, and popularity. This period of prosperity came to an end with the Wall Street crash of 1929, followed the Great Depression and World War 2.   

             Initially a single business would sponsor a radio programme for a brief mention of its name. Later sponsorship rights for a show were sold to multiple businesses, a practice that soon became the norm.

·       Television

                      The market did not embrace television initially because of the high cost of TV sets and the lack of programming. However, as the American economy improved in the 1950s, industry considered it the number-one medium for advertising. With the establishment of the Du Mont Television Network, the modern trend of selling advertising time to multiple sponsors became a permanent feature of the commercial television industry in the U. S.

·      The Advertising Revolution

                  The industry became more scientific in the 1960s. This period witnessed some of the most creative ads of all time. Instead of focusing on the product, ads endeavored to strengthen the brand and create an image for the company. Advertising also became subtler and more intelligent, often adopting a conversational style.

                     Advertising also turned into a major industry in the 20^th century. The advertising of the age cleverly used all media, outdoor newspapers, television, direct mail, radio, magazines, outdoor signs, and of course the Internet.

·      Contemporary Advertising

                         Remote controls in the hands of every spectator and access to hundreds of cable channels mean that advertising must generate interest and entertain in order to survive. Along with these challenges there are new frontiers such as Internet marketing. Advertisers and agencies today see innovations like digital ads and interactive advertising as challenges and opportunities rather obstacles.

·      Advertising Growth Takes A Break Amid Slowdown

            Growth in ad slots on TV, radio falls by half; print also feels the heat. Harsh Mariwala,chairman and managing director of consumer products major Marico Industries, is keeping his advertising budget on a tight leash.”Given the inflationary environment and moderation in demand, there will be some cut in advertising spends, but it will not be huge competitive intensity is high and to protect market share you have to spend,” he says.

                      Pradeep Bakshi, chief operating officer, unitary products business group, Voltas India, which makes room air-conditioners and water coolers, says his company is scaling down its advertising spend. “While as suggested be visible year.”

               With demand for consumer and fast moving consumer goods moderating there are clear signs that companies are holding back spending. As a result, advertising revenues have grown at a much slower pace in the first six months of this year compared to the previous year. While exact figures are hard to collate, one way to catch the trend is to see the amount of time advertisers are booking on television or the space they are buying in newspapers and magazines. Data compiled by media research agency TAM, the rate of growth of advertising on television in terms of the number of hours was half during the January-June period this year in comparison with the corresponding period last year.

                In 2010, the advertising hours on TV had grown 36 per cent in comparison to terms of column centimeter was down to about 16 per cent in the January-June period as compared to the same period a year ago. In 2010, the growth was 28 per cent compared to the previous year.

                  In radio, advertising spots in terms of hours grew 1 per cent in the January-June period. Last year, the rate of growth was 46 per cent. While TAM doesn’t track the outdoor medium, industry sources say the slump there is to the tune of about 30 per cent. The only exception was the digital medium, which grew 60-70 per cent double the growth rate in the corresponding period last year, national director, digital, Starcom Media Vest Group. The share of digital medium is just 3 per cent f the total advertising pie of Rs. 26,0000 crore. Print and television dominate with 46 per cent and 42 per cent share, respectively. The share of outdoor is about 5 per cent, while radio’s is 4 per cent, say industry experts.

                       Most people in the advertising industry are not sure how long the slowdown will last given that inflation continues to be sticky and advertisers are wary of spending too much on mainline media at a time consumer sentiment is weak and they have to manage expenses prudently.

                    Advertising agencies admit the revenue growth is slowing. Arvind Sharma, chairman, Leo Burnett India, said,

“Client spends grew 20 per cent last year. This year, we are expecting 14-15 per cent growth.”

Mahesh Chauhan, former group chief executive officer, Rediffusion Y&R, who now has his own agency, Salt Brand Solutions, says,

“There is tension in the air. No denying that. Nobody knows long this will last.”

Industry sources, Hindustan Unilever, the largest spender, has cut its advertising budget for the year by Rs. 200-300 crore. In the 2010=11 financial year, HUL’s advertising and sales budget was Rs. 2,764 crore.

                  Of this, the advertising budget alone was Rs. 2,200 crore, said industry sources. This meant the scale-back for the current year was over 9 per cent, they said. A mail to HUL elicited no response till time of going to press. Sources at Mindshare, which manages the HUL account, said the company chose to give cricket a miss this year to prune its advertising budget.

                      Amin Lakhani, principal partner, Mindshare, while declining to confirm or deny this, indicated that advertisers had been cautious over the few months.

“Commodity cost pressures have been severe. Companies dependent on them have had to prune expenditure. This is bound to result in a scale-back in advertising,” he said.

FMCG analysts, companies are likely to report advertising spends as a percentage of net sales for the first quarter of the financial year.

·      Definition of Advertising

a.     The non-personal communication of information usually paid for and usually persuasive in nature, about products or identified sponsor through various media.

b.    Any paid form of non-personal communication about an organization, product, service, or idea from an identified sponsor.

c.     Paid non-personal communication from an identified sponsor using mass media to persuade influence an audience.

d.    The element of the marketing communication mix that is non- personal paid for an identified sponsor, and disseminated through channels of mass communication to promote the adoption of goods, services, person or ideas.

e.     An informative or persuasive message carried by a non-personal medium and paid for by an identified sponsor whose organization or product is identified in some way.

f.       Impersonal; one way communication about a product or organization that is paid by a marketer.

·      Relevance of Advertising in a Marketing Mix

                     Marketing mix consist of four important variables of marketing, i.e. 4ps-product, Price Promotion and Place. Apart from the traditional 4ps, there are also other variables, i.e. Packaging, Posting, and Pace. Advertising is an element promotion. However, it not only assists in promoting the product, but also affects the other variables of marketing mix.

This can be explained as follows:

a)    Advertising and Product: A product is normally a set of physical elements, such as quality, shape, size, colour and other features. The product may be of very high quality. At times, the product is so designed that it requires careful handling and operations. Buyers must be informed and educated on the various aspects of the product. This can be effectively done through advertising. Thus, advertising plays the role of information and education.

b)    Advertising and Price: he price is the exchange value of the product. A marketer may bring out a very high quality product with additional features as competitors. In such a case, price would be definitely high. But buyers may not be willing to pay a high price would be definitely high. But buyers may not be willing to pay a high price. Here comes advertising. Advertising can convince buyers regarding the superiority of the brand and thus its vales its value for money. This can be done by associating the product with prestigious people, situation, or events. Alternatively when a firm offers a low price products the job of advertising needs to stress the price advantage by using hard hitting copy. It is not just enough to convince, nut it is desirable to persuade the buyer. Thus advertising plays the role of conviction and persuasion.

c)     Advertising and Place: Place refers to physical distribution and the stores where the goods are available. Marketer should see to it that too at the right time when the buyers need it. To facilitate effective distribution and expansion of market, advertising is of great significance. Thus advertising do help in effective distribution and market expansion.

d)    Advertising and Promotion: Promotion consists of advertising publicity, personal selling and sales promotion technique. Businessmen today have to face a lot of competition. Every seller effective promotion to survive and succeed in this competitive business world. Advertising can play a significant role to put forward the claim of seller, and to counter the claims of competition and also help to develop brand image and brand loyalty.

e)    Advertising and Pace: Pace refers to the speed in marketing decisions and actions. It involves among other things the launch of new products or brand variations at greater speed than before. As and when new brands are launched, advertising plays an important role of informing educating and persuading the customers to buy the product.

f)      Advertising and Packaging: The main purpose of packing is protection of the product during transit, and preservation of quality and quantity. Nowadays, marketers take lot of efforts to develop and design attractive as they carry advertising value. A creatively design package attract the attention of the customers. It also carries an assurance of quality and creates confidence in the minds of customers to buy the product.

g)    Advertising and Positioning: product positioning aims at creating and maintaining a distinct image of the brands in the minds of the customers. Though advertising the marketer can convey the positioning of the brand and accordingly can influence the buying decision of the target audience.    

·      Classification of Advertising

Advertising is the promotion of a company’s products and services though different mediums to increase the sales of the product and services. It works by making the customer aware of the product and by focusing on customer’s need to buy the product. Globally advertising has becomes an essential part of the corporate world. Therefore, companies allot a huge part of their revenues to the advertising budget. Advertising also server to build a brand of the product which goes a long way to make effective sales. There are several branches or types of advertising which can be used by the companies.

Print Advertising: The print media has been used for advertising since long. The newspapers and magazines are quits popular modes of advertising for different companies all over the world. Using the print media, the companies can also promote their products through brochures and fliers. The newspaper and magazines sell the advertising space and the cost depends on several factors. The quantity of space, the page of the publication, and the type of paper decide the cost of the advertisement. So an ad on the front page would be costlier than on inside pages. Similarly an ad in the glossy supplement of the paper would be more expensive than in a mediocre quality paper.  

Broadcast Advertising: This type of advertising is very popular all around the world. It consists of television, radio, or Internet advertising. The ads on the television have a large audience and are very popular. The cost of the advertisement depends on the length of the ad and the time at which the ad would be appearing. For example, the prime time ads would be more costly than the regular ones. Radio advertising is not what it used to be after the advent of television and Internet, but still there is specific audience for the radio ads too. The radio jingles are quite popular in sections of society and help to sell the products.

Outdoor Advertising: Outdoor advertising makes use of different tools to gain customer’s attention. The billboards, kiosks, and events and tradeshows are an effective way to convey the message of the company. The billboards are present all around the city but the content should be such that it attracts the attention of the customer. The kiosks are an easy outlet of the products and serve as information outlets for the people too. Organizing events such as trade fairs and exhibitions for promotion of the product or service also in a way advertises the product. Therefore, outdoor advertising is an effective advertising tool.

Covert Advertising: This is a unique way of advertising in which the product or the message is subtly included in a movie or TV serial. There is no actual ad, just the mention of the product in the movie. For example, Tom Cruise used the Nokia phone in the movie Minority Report.

Public Service Advertising: As evident from the title itself, such advertising is for the public causes. There are a host of important matters such as AIDS, political integrity, energy conservation, illiteracy, poverty and so on all of which need more awareness as far as general public is concerned. This type of advertising has gained much importance in recent times and is an effective tool to convey the message.

·      Various Media for Advertising  

                   Based on an excellent small business reference book “How to Start and Operate a Successful Small Business: Winning the Entrepreneurial Game” by David E. Rye, as well as contributions from our staffers, are the relative advertising and disadvantages of the advertising media most frequently used by small businesses:

Newspapers:

Newspapers are one of the traditional mediums used by businesses, both big and small alike, to advertise their businesses.

Advantages:

·       Allows you to reach a huge number of people in a give geographic area

·       You have the flexibility in deciding the ad size and placement within the newspaper

·       Your ad can be as large as necessary to communicate as much of a story as you care to tell

·       Exposure to your ad is not limited; readers can go back to your message again and again if so desired.

·       Free help in creating and producing ad copy is usually available

·       Quick turn-around helps your ad reflect the changing Market conditions. The ad you decide to run today can be in your customers’ hands in one to two days.

Disadvantages:

·       Ad space can be expensive

·       Your ad has to compete against the clutter of other advertisers, including the giants ads run by supermarkets and department stores as well as the ads of your competitors

·       Poor photo reproduction limits creativity

·       Newspapers are a price-oriented medium; most ads are for sales

·       Expect your ad to have a short shelf life, as newspapers are usually read once and then discarded.

·       You may be paying to send your message to a lot of people who will probably never be in the market to buy from you.

·       Newspapers are a highly visible medium, so your competitors can quickly react to your prices

·       With the increasing popularity of the Internet, newspapers face declining readership and market penetration. A growing number of readers now skip the print version of the newspaper and instead read the online version of the publication.

Magazines

               Magazines are a more focused, albeit more expensive alternative to newspaper advertising. This medium allows you to reach highly targeted audiences.

Advantages:

·       Allows for better targeting of audience, as you can choose magazine publications that cater to your specific audience or whose editorial content specializes in topics of interest to your audience.

·       High reader involvement means that more attention will be paid to your advertisement

·       Better quality paper permits better colour reproduction and full-colour ads

·       The smaller page permits even small ads to stand out

Disadvantages:

·       Long lead times mean that you have to make plans weeks or months in advance

·       The slower lead time heightens the risk of your ad getting overtaken by events

·       There is limited flexibility in terms of ad placement and format

·       Space and ad layout costs are higher

Yellow Pages:

                There are several forms of Yellow Pages that you can use to promote and advertise your business. Aside from the traditional Yellow Pages supplied by phone companies, you can also check out specialized directories targeted to specific markets; interactive or consumer search databases; Audiotex or talking yellow pages; Internet directories containing national, local and regional listings; and other services classified as Yellow Pages.

Advantages:

·       Wide availability, as mostly everyone uses the Yellow Pages

·       Non-intrusive

·       Action-oriented, as the audience is actually looking for the ads

·       Ads are reasonably inexpensive

·       Responses are easily tracked and measured

·       Frequency

Disadvantages:

·       Pages can look cluttered, and your ad can easily get lost in the clutter

·       Your ad is placed together with your competitors

·       Limited creativity in the ads, give the need to follow a pre-determined format

·       Ads slow to reflect market changes

Radio:

Advantages:

·       Radio is a universal medium enjoyed by people at one time or another during the day, at home, at work, and even in the car.

·       The vast array of radio programme formats offers to efficiently target your advertising dollars to narrowly defined segments of consumers most likely to respond to you offer.

·       Give your business personality through the creation of campaigns using sound and voices

·       Free creative help is often available

·       Rates can generally be negotiated

·       During the past ten years, radio rated have seen less inflation than those for other media

Disadvantages:

§  Because radio listeners are spread are over many stations, you may have to advertise simultaneously on several stations to reach your target audience

§  Listeners’ cannot go back to your ads to go over important points

§  Ads are an interruption in the entertainment. Because of this, a radio ad may require multiple exposures to break through the listener’s “tune-out” factor and ensure message retention

§  Radio is a background medium. Most listeners are doing something else while listening, which means that your ad has to work hard to get their attention

TV:

Advantages:

·       Television permits you reach large numbers of people on a national or regional level in a short period of time

·       Independent stations and cable offer new opportunities to pinpoint local audiences

·       Television being an image-building and visual medium, it offers the ability to convey your message with sight, sound and motion

Disadvantages:

·       Message is temporary, and may require multiple exposure for the ad to rise above the clutter

·       Ads on network affiliates are concentrated in local news broadcasts and station breaks

·       Preferred ad times are often sold out far in advance

·       Limited length of exposure, as most ads are only thirty second long or less, which limits the amount of information you can communicate

Direct Mail:

                Direct mail, often called direct marketing or direct response marketing, is a marketing technique in which the seller sends marketing message directly to the buyer. Direct mail includes catalogs or other product literature with ordering opportunities; sales letters; and sales letters and with brochures.

Advantages:

·       Your advertising message is targeted to those most likely to buy your product or service.

·       Marketing message can be personalized, thus helping increase positive response.

·       Your message can be as long as is necessary to fully tell your story.

·       Effectiveness of response to the campaign can be easily measured.

·       You have total over the presentation of your advertising message.

·       Your ad campaign is hidden from your competitors until it’s late for them to react.

·       Active involvement- the cat of opening the mail and reading it-can be elicited from the target market.

Disadvantages:

·       Some people do not like receiving offers in their mail, and throw them immediately without even opening the mail.

·       Resources need to be allocated in the maintenance of lists, as the success of this kind of promotional campaign depends on the quality of your mailing list.

·       Long lead times are required for creative printing and mailing.

·       Producing direct mail materials entail the expense of using various professionals-copywriters, artists, photographers, printers, etc.

·       Can be expensive, depending on your target market, quality of your list and size of the campaign.

Telemarketing:

                   Telephone sales, or telemarketing, is an effective system for introducing a company to a prospect and setting up appointments.

Advantages:

·       Provides a venue where you can easily interact with the prospect, answering any questions or concerns they may have about your product or service.

·       It’s easy to prospect and find the right person to talk to.

·       It’s cost-effective compared to direct sales.

·       Results are highly measurable.

·       You can get a lot of information across if your script is properly structured.

·       It outsourcing, set-up cost is minimal

·       Increased efficiency since you can reach many more prospects by phone than you can with in-person sales calls.

·       Great tool to improve relationship and maintain contact with existing customers, as well as to introduce new products to them

·       Makes it easy to expand sales territory as the phone allows you to call local, national and even global prospects.

 Disadvantages:

·       As increasing number of people have become averse to telemarketing.

·       More people are using technology to screen out unwanted callers, particularly telemarketers

·       Government is implementing tougher measures to curb unscrupulous telemarketers

·       Lots of businesses use telemarketing.

·       If hiring an outside firm to do telemarketing, there is lesser control in the process given that the people doing the calls are not your employees

·       May need to hire a professional to prepare a well crafted and effective script

·       It can be extremely expensive, particularly if the telemarketing is outsourced to an outside firm

·       It is most appropriate for high-ticket retail items or professional services.

Specialty Advertising:

                     This kind of advertising entails the use of imprinted, useful, or decorative products called advertising specialties, such as key chains, computer mouse, mugs, etc. These objects are distributed for free; recipients need not purchase or make a contribution to receive these items.

 Advantages:

·       Flexibility of use

·       High selectivity factor as these items can be distributed only to the target market.

·       It done well, target audience may decide to keep the items, hence promoting long retention and constant exposure.

·       Availability of wide range of inexpensive items that can be purchased at a low price.

·       They can create instant awareness.

·       They can generate goodwill in receiver

·       The items can be used to supplement other promotional efforts and media.

Disadvantages:

·       Targeting your market is difficult.

·       This can be an inappropriate medium for some businesses.

·       Longer lead time in developing the message and promotional product

·       Possibility of saturation in some items and audiences

·       Wrong choice of product or poor creative may cheapen the image of advertiser.