Advertising & Communication
Lecture 1 Introduction
- Advertising is a science, not an art. We are looking for solid scientific evidence, that is what you will
get in this course. Advertising is persuasion, which Bill Bernbach thinks is an art, not science. The
professor thinks the art of persuasion actually is a science.
- Memorable (things) emerge also from formulas, artists do not always need to break the rules. Also,
bad advertisement can do well, but that will not happen consistently (regression of the mean).
• Casual observation [weak evidence]
• typical practice + expert opinions/advice
• empirical evidence – typically collected by scientists/academics.
• non-experimental correlations [mild evidence]
• quasi-experimental (WAPB) [strong evidence]
• laboratory & field experiments [strong evidence]
• meta-analyses [very strong evidence]
- David Ogilvy says that you need to be able to advertise yourself before being possible to advertise
anything else (so, communication is important). He also regards advertising as a medium for
information (not as entertainment or art), solely with the purpose to sell (not with hopes that the
consumer only thinks the ad is creative).
- Typical advertisement has traditional contact points: movies, TV, promotions, stores, billboards. But
also, non-traditional contact points (like t-shirts and more funny way of advertising). The professor
asked us to think about these non-traditional contact points (do you recognize them? Look them up).
- Advertising comes from ad-vertere (Latin), meaning ‘to turn toward’, see this as ‘turning’ the mind
of customers towards the consideration of a brand. Promotion comes from ‘to move forward’, see this
as ‘move sales forward’ by providing incentives to act now. Combining advertising (mind turning) +
promotion (stimulate action) is essential for effective advertisement.
- The goal of marketing communication is to sell the brand by showing it & saying things about it, in a
manner that establishes the marketer’s desired position in the mind of customers.
- Young children (3-5 years) already prefer brands they know (mere exposure effect?).
- Positioning is in the mind! (think about ‘diamond shreddies’)
- Marketing & communication creates brand equity in the following ways:
Intangible value of a brand beyond the physical assets the company possesses.
Differentiating effect that brand knowledge has on consumer response to the marketing of the
brand.
The benefits of marketing effects that you have because people just recognize your brand
name.
Goals (selling) vs. means (‘real beauty’). The ‘real beauty’ campaign increased Dove lotion sales with
700%, but do they really care? Yes, but to the extent that it helps sales. Unilever is the owner of both
Dove and Axe (really big difference in advertising, just to sell).
- David Ogilvy says that the manufacturer that dedicates his advertisement to building the most
sharply defined personality will get the largest share of the market at the highest profit.
,- DAGMAR-model: Defining Advertising Goals for Measured Advertising Results. The place in the
product life cycle (Introduction, Growth, Marketing, Decline) will decide what type of advertisement
is effective.
Category need: why do you really need the product, think about very new innovative
products.
Brand Awareness: increasing ability to identify (recognize and recall) the brand.
Important to be possible to SEE the product, think about social media.
Brand Knowledge: awareness of brand characteristics, features and benefits.
Brand attitude: increase consumers’ perceived value of a brand, celebrities affect brand
attitude but less suited for increasing brand knowledge.
Brand purchase intention: a mediating step between attitude and purchase, especially for
high involvement products.
Purchase facilitation: no barriers hindering the purchase (men buying bra’s example).
Purchase: this is the main goal (example of spoons encouraging purchase).
Satisfaction: does a product live up to the expectations? Short vs long-term sales. Never
tell lies! It will hurt you in the long run. ‘a great campaign will make a bad product fail
faster’.
Brand loyalty: mental commitment between customer and brand (more than just a habit)
- There is no universal law for advertising principles. Actions how to advertise depend on: Objectives
(DAGMAR), product and the target market.
- Low involvement product (system 1) vs high-involvement product (system 2)
Argument quality is very important for high-involvement.
- Utilitarian vs Hedonic product
Informational tactics vs emotional tactics
- Commercial vs pro-social
Counterarguments are more likely for commercial, because audience is more sceptical.
- Search products (style of clothing) can be evaluated prior to purchase, experience products (wine)
can be evaluated only after use and credence products (education) can not be properly evaluated even
after use.
- With new products customers need information, with familiar products customers need to feel
differently.
- User vs Purchaser (target markets), for example a woman buying her husband a nice perfume.
Literature 1 (p1-24)
“how believable (truthful) (informative) are ads?” reflected positive attitudes toward advertising
through the mid-1950s, reaching an eight on a nine-point scale. However, by the 1970s, the ratings had
plummeted to below three.
Management is far behind medicine. Managers rely on gut feelings and experience rather than
evidence. This applies especially to advertising. Randall Rothenberg, an advertising expert at Booz
Allen Hamilton, wrote that, “Having spent the past seven years in management consulting, I’ve found
myself stunned by the degree to which agencies’ continual search for ‘the new’ has them ignore
otherwise articulated bodies of knowledge.” Conclusive, marketing is science, not an art.
In addition, I am concerned about long-term implications. For example, deceptive practices may be
profitable in the short run but are unlikely to be profitable in the long run. Conversely, short-run
practices that lose money, such as making good on guarantees, might be profitable in the longer run. In
other words, because I used the systems approach in the formulation of evidence-based principles,
they offer opportunities for advertisers to improve the effectiveness of their advertising in delivering
long-term benefits for sellers and customers.
,Given the complexity of advertising and the difficulty on getting good feedback, experience provides a
poor way to learn how to persuade people through advertising. However, we all believe that this rule
does not apply to us. Typical practice is based primarily on casual observation by advertisers. I refer to
this type of evidence as “received wisdom,” and draw upon it in the book when empirical evidence is
lacking, the situation is simple, or the principle is obvious. Received wisdom is useful for such
situations. (…) Casual observation falls short when advertisers do not have or use accurate, timely,
well-summarized feedback about the outcomes of their procedures relative to alternatives.
Advertising experts are also prone to this problem. If they think that an advertising technique will
work, their experience is likely to confirm this belief. Using one’s judgment to develop principles in
situations that involve several conditional factors is also difficult. For example, some experts have
concluded that humor harms persuasion, while others have concluded the opposite. As it turns out,
research has shown that the effectiveness of humor depends on the conditions—under some conditions
it helps and under others it harms.
Systematic observation and record keeping can greatly improve the ability to learn. Certainly, it is
more effective than casual observation. For example, if you record the time shown in the next few
watch ads you see, you’ll quickly learn that almost all watch ads show the same time.
There are three important and overarching conditions that I will now describe: the advertisers’
objectives, product offerings, and target markets.
Objectives
The development of an effective advertising campaign should begin with a meaningful, complete, and
clear statement of objectives. Although this might seem obvious, advertisers often plunge ahead
without knowing what they want to accomplish. (…) The objectives of an advertising campaign
should be relevant to the ultimate objectives of the organization. One way to identify ultimate
objectives is to keep asking “why?” until it is no longer sensible to ask. For example: Why would you
want to increase market share? For most companies, the ultimate objective for advertising should be to
have a good return on the investment in the advertising campaign. One should also consider the impact
of advertising on other stakeholders, such as creditors, employees, customers, suppliers, and retailers.
Advertising can be used to maintain loyalty by encouraging customers to resist switching to a
competitive product. The notion of building brand loyalty was popular in the early 1900s and has
grown substantially since then. A Tareyton cigarette campaign of the 1960s, “I’d rather fight than
switch,” illustrates this type of advertising. Much advertising is done to help customers feel better after
they have made a purchase. It can provide reassurance that the purchase was a good one. It can also
help manage customer expectations regarding the benefits offered because customers often
overestimate the pleasure they will receive from new purchases.
Likeable ads represent a strategy, not an objective. While many successful ads are likeable, many are
not. For example, comparative ads and those based on fear, guilt, or provocation are sometimes very
effective though not likeable. Because of its potential misuse as an objective, my advice is that
advertisers should not ask whether customers or experts or clients like an ad.
Furthermore, in a field study that examined the performance of 20 large U.S. firms over a half-century,
those with competitor-oriented (market share) objectives were found to be less profitable and less
likely to survive than those whose objectives were directly oriented to profits.
Similar results have been found for advertising decisions. In one study, 57 subjects were asked to
make “advertising spending decisions as marketing managers of a medium-sized manufacturer selling
in mature markets,” and to assume they were committed to remaining with the company for five years.
The advertising decision involved high (competitive) or low (cooperative) budgets. The payoffs were
constructed so that cooperative decisions had much higher profits. Of the 57 subjects, 78 percent
focused on beating their competitor—and thus earned lower profits. (…) I am not suggesting firms
should ignore their competitors’ actions; they might have some good ideas about how to better satisfy
, users. However, you should ignore them when setting objectives; a firm’s aim should not be to defeat
its competitors. This does not apply however to all organizations. For example, it does not apply to
political organizations.
Customers gain from advertising because it helps them find better products, reassures them that their
decisions were sensible, and increases their enjoyment in using a product. Here’s an experiment that
demonstrated the importance of advertising in enhancing customers’ experience. Three jars of peanut
butter were given to subjects. One brand was familiar; the other two were fictitious. In fact, the peanut
butter in the three jars was identical. Nevertheless, three-quarters of the subjects preferred the known
brand; the remaining quarter were split between the two unidentified brands. Experiments with beer
have shown similar findings.
the United Kingdom was one of a dwindling group of cooperatives (the number of cooperatives had
fallen by 90 percent from 1960 to 1996). It was suffering from declining sales and low staff morale.
As a result, the company decided to emphasize its benefits (convenience, honesty, and a decent way to
run a business) in its campaign: “Business with the values of today’s family.” The campaign’s
objectives were not only to increase sales but also to reduce employee turnover. Employee surveys
showed improvement, with comments such as “It [the campaign] makes you feel a bit prouder to work
for them.” The employee turnover fell by about a quarter. The campaign won an IPA Advertising
Effectiveness Award.
Products
Comparative advantage:
Does the product offer meaningful benefits that competitors’ products do not offer? If yes, advertisers
can make strong arguments in their ads.
High vs low-involvement
In a high-involvement situation, people think about an ad’s claims; however, in a low-involvement
situation, customers are influenced by seemingly irrelevant considerations because they are paying
little attention. (…) If people are involved enough to think carefully about their answers, and to check
them, they are quite likely to answer correctly. However, if they are impatient and answer quickly,
they are likely to make mistakes. If you answered them quickly, you could see how easy it is to be
misled. (…) It is not entirely correct to describe a product as high or low-involvement because the
terms relate not only to the nature of the product, but also to the involvement of the customers who are
considering the product being advertised.
Utilitarian vs Hedonic
Some products are purchased primarily to solve problems. These are referred to as “utilitarian
products.” Examples include glue, maps, soap, can openers, trucks, and drills. In contrast, some are
purchased primarily for enjoyment. They are typically referred to as “hedonic” products. Examples are
art, perfume, chocolate, and vodka. (…) Whether a product is hedonic, or utilitarian can be important
to how the product is advertised. For example, in 2003, Song Airlines, a subsidiary of Delta Airlines,
ignored the fact that their new airline was a utilitarian service and instead treated it as hedonic in their
advertising. They introduced their airline in 2003 using emotion as opposed to describing relevant
features and benefits. Song lost money and ceased to exist in 2006.
Pro-social vs commercial products
Pro-social products are those that appeal to altruism; for example, “Please help to reduce hunger in
Africa,” or “Let’s work together to save the planet.” The advertiser is seen as trying to help others
rather than seeking personal gain. As a consequence, people are inclined to trust the ad’s claims. In
contrast, a for-profit ad is obviously self-serving, so people tend to be wary.
Target market
What interest groups are relevant?
