1

INTRODUCTION TO
ADVERTISING
&
ADVERTISING AND
MEDIA PLANNING

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STUDY GUIDE
INTRODUCTION TO ADVERTISING
COURSE DESCRIPTION

The market place is crowded with many brands of product, all competing to be the leader.
In their effort to gain market leadership, marketers use Advertising as one of their promotion
tool.

This study guide will help you understand how Advertising as a Promotion Mix supports
Marketing and Marketing Communications effort of brands. Therefore the learning process
will begin at understanding the role of advertising in marketing and promotion, and continues
on to describe how advertising works in creating image and differentiation of brands to
achieve competitive advantage in the market place.

As the creator of advertising, Advertising Agencies plays a major role in creating winning
brands. You will also learn how Advertising Agencies work in planning and creating winning
advertising campaign.

SUBJECT OBJECTIVES

After studying this subject, students will be able to:

• Define Advertising
• Understand the role of advertising in the marketing mix
• Understand the characteristics of advertising compared to other promotion tools
• Understand market segmentation, target market and target audience
• Understand the different types of advertising campaign
• Understand the cooperation of the marketing department and its advertising agency
• Understand the different types of advertising agencies and advertising agencies
organization
• Understand the advertising creative process
• Understand the advertising production process
• Understand the media process in advertising
• Understand the ethics and law governing advertising
• Understand advertising testing and evaluation

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Scheme of Work
Semester I Introduction to Advertising
WEEK 1

Topic 1 The Role of Advertising in Marketing

WEEK 2

Topic 2 Advertising and the Promotional Mix

WEEK 3

Student Presentation on Advertising of Choice

Objective: To create awareness and basic knowledge about the elements of advertising
which makes it an effective or ineffective advertising.

WEEK 4

Topic 3 Understanding the Customer and Consumer

WEEK 5

Topic 3 Understanding the Customer and Consumer

WEEK 6

Topic 4 Types of Advertising Campaign

WEEK 7

Topic 5 Specialist Forms of Advertising

MIDTEST

WEEK 8

Topic 6 The Advertising Manager and Advertising Department

WEEK 9

Topic 6 The Advertising Manager and The Advertising Department

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WEEK 10

Topic 7 Determining and Setting Budget

WEEK 11

Topic 8 Types of Advertising Agencies

WEEK 12

Class Presentation and Discussion on Advertising Agencies in Indonesia

WEEK 13

Topic 9 Agency Recognition and Remuneration

WEEK 14

Topic 10 Functions of Departments in Advertising Agencies

FINAL EXAM

Semester II Advertising and Media Planning

WEEK 1

Topic 11 Creation of Advertisements and Commercials

WEEK 2

Topic 11 Creation of Advertisements and Commercials

WEEK 3

Presentation of Advertising Creative: Storyboard / Storyline

WEEK 4

Topic 12 Production of Advertising Materials in Media

WEEK 5

Topic 13 Media in Advertising and Printed Media

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WEEK 6

Topic 14 Broadcast Media and Other Media

WEEK 7

Topic 15 Media Research

MIDTEST

WEEK 8

Topic 15 Media Planning

WEEK 9

Group Exercise on Media Planning

WEEK 10

Topic 16 Ethics and Codes of Practice

WEEK 11

Group Presentation on Codes of Practice

WEEK 12

Topic 17 Advertising and The Law

WEEK 13

Topic 18 Advertising Testing and Evaluation

WEEK 14

Topic 18 Advertising Testing and Evaluation

FINAL EXAM

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Introduction

Marketing departments create products and brands that suit the demands of the
customers and consumers. Advertising agencies help by encouraging the target consumers
and customers to buy the brands through their persuasive messages. If the advertising is
successful and if the customers like the products, they will buy again and again.

Advertising is also used to promote a corporate image, to persuade target audiences

of a company’s performance and abilities, and it may also be used to inform by providing
data such as specifications or details of financial services.

Whatever the form of advertising, advertisements and commercials have to be

created with messages that are appealing, attractive, and convincing. The messages must
also be communicated to customers at the right time and in the right place. Hence, the
advertising industry needs media – newspapers, magazines, television, radio, posters and
cinema. Each publication and each television or radio programme is seen by different types
of people. Equally, a variety of people pass posters and visit cinemas.

The variety of products advertised and the media used mean that advertising is
acomplicated process. It is an area that requires the expertise of specialist companies –
advertising agencies. These agencies form the backbone of the advertising industry, together
with sales promotion, public relations, direct response and other agencies, consultancies
and suppliers.

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PART 1 BACKGROUND TO ADVERTISING

CHAPTER 1

THE ROLE OF ADVERTISING IN MARKETING

CHAPTER OUTLINE:

This chapter is about understanding the relationship between marketing and advertising and
how advertising as part of the marketing mix helps marketers influence their target consumers
into using their brands. It also discusses how advertising can provide a competitive edge by
establishing image and brand differentiation.

OBJECTIVES:

1. To understand the role of business

2. To understand the role of advertising in marketing
3. To understand the marketing mix
4. To understand push/pull concept
5. To understand advertising objectives

Making a profit is the ultimate goal in a business venture and this is achieved by marketing
products which are successful in fulfilling customers needs and wants, be it a physical need
such as to overcome hunger and thirst, or emotional need such as to be accepted by family,
friends and society.

The marketing effort is supported by promotion techniques such as sales promotion and
advertising, so that the target consumers are informed of the availability of products and
services that fulfill these needs and wants.

The Role of Advertising in Marketing

While marketing will establish the goods and services that will sell, advertising will inform the
market that they are available. Advertising will promote the product and service in such a
way to appear attractive to consumers and customers as well as different from competitors.
Advertising will continue to highlight the different benefits and advantages long after the
initial launch, therefore, helping to maintain demand in a competitive market where rivals are
trying to sell their products as well.

Advertising does not only address customers and consumers, but also wholesalers,
distributors and retailers who must be convinced to stock the products before advertising to
the customers and consumers begins.

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THE ROLE OF ADVERTISING IN MARKETING

The Marketing Mix

A company must find products and services that are needed and wanted if they want to
embark on a successful relationship with customers, so that they will come back for more of
the same product. Therefore, there are factors which have to be considered when launching
a new product and are referred to simply as the Four P’s :

the right product

at the right price
in the right place
with the right promotion

The Right Product

It has already been stated that if the product doesn’t suit the customer, it will not be bought,
so there is little point in attempting to advertise in the hope that it will be consumed. Hence
the need to research the market-place to establish what product is wanted by customers;
but the emphasis is on the right product to satisfy the needs and wants of the customer
and user. The right product is more than the physical product –sometimes called the core
product. It means the total product offering with all the variations and combinations.

The Right Price

Pricing is a crucial part of the marketing mix. If you sell a product cheaply enough, customers
will be very eager to buy. But a low price may also indicate the product is lacking in quality
and may not be attractive to the customers. Most often customers are prepared to pay for
products and services that the company has developed that meet their demands.

The Right Place

The right place for products and services are where they must be readily available and
convenient for the customers to have access to them. If they are not located where the
customers want them, then other products and services, often from the competitors, will be
bought.

The right place also means that it will project the image and reputation of the brand.

The Right Promotion

Promotion is the total activity to project the total reputation or image of a product, service, or
company together with their associated names ( i.e. brand and corporate image).

Promotion covers packaging, advertising, public relations, sales literature, sponsorship and
point-of-sale (POS) displays – in fact, all of the above-the-line and below-the line techniques
to assist the sales process. Promotion, therefore, is the total way that a company presents its

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THE ROLE OF ADVERTISING IN MARKETING

products to the market. The result is that promotion communicates the company’s reputation
and the reputation of its products and services. A company’s reputation is a valuable
commodity and many businesses profit from the goodwill that is generated as it results in
more sales and easier sales.

Selling in- Push /Pull

“Push” means “selling in” the products to the wholesalers and retailers to encourage stocking
up once the consumers have seen the advertising or other promotion activities. This process
involves informing the wholesalers and retailers about the products that will sell at the right
price to allow profit for the wholesalers and retailers.

“Pull” is the encouragement for the customers to go to the stores to buy the products, after
they have been exposed to the advertising and promotion activities.

Advertising Objectives

It must not be assumed that once a product has been launched, then the manufacturer, or
indeed the retailer, can sit back and relax. Customers must be reminded to keep buying the
same brand, and failing to do so will lead to brand switching and buying a competing brand.
New brands from competitors will also lure the customers to try them.

This means that manufactures need to innovate by promoting their brands differently, such
as by adding new ingredients or reformulating the products

With regard to the above, aims of an advertising campaign or advertising objectives may be
one of the following:

• to launch a new product or service

• to create brand awareness
• to generate interests
• to generate sales inquiries
• to promote new or improved version
• to inform of another promotion such as sales promotions

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THE ROLE OF ADVERTISING IN MARKETING

Points to remember

• Advertising is a promotion technique which helps marketing of products and services

by making them appear attractive and different from their competitors.

• Advertising is only a part of the marketing mix, therefore, successful marketing effort is
also contributed by other elements of the marketing mix.

• Advertising is only one promotional tool and has to be used with other means such
marketing, public relations, sales promotion, etc to ensure effective promotion efforts.

• Advertising reflects the image and the position of the product within the market place.

• Products and services have to be available in the stores, before they can be effectively
promoted to the consumers.

• Advertising can be used to support existing brands as well as to introduce a new

brand.

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ADVERTISING AND THE PROMOTIONAL MIX

CHAPTER 2

ADVERTISING AND THE PROMOTIONAL MIX

CHAPTER OUTLINE

This chapter will provide an understanding of how advertising as one of the promotion
technique can collaborate with other promotion techniques: marketing public relations,
sales promotions, personal selling and direct marketing to effectively promote a brand in the
competitive market place.

It will discuss the characteristics of each of the promotion technique and how it can be used
as a promotion tool. Other supporting element such as packaging and sponsorship is also
discussed to show its contribution in the promoting and establishing brand image.

OBJECTIVES:

1. To define promotional mix

2. To define advertising
3. To define other promotion tool: marketing public relations, sales promotion, personal
selling, direct marketing
4. To understand how promotion mix are used to achieve marketing objectives
5. To understand how other elements of promotion such as media relations, sponsorship,
packaging design contribute to the promotion efforts

Elements of the promotional mix

The promotional mix consists of the various ways companies use to promote and sell their
products and services to their customers.

The elements of the promotional mix are:

1. Public Relations
2. Advertising
3. Sales Promotion
4. Direct Marketing
5. Personal Selling

Elements such as packaging are also considered as a major element in the promotion effort,
along with other activities such as sponsorship, or a public relations tactic which is effective
in getting across advertising messages as well enhancing brand and corporate image.

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ADVERTISING AND THE PROMOTIONAL MIX

A company can use any of the above promotion tool together, or just one, depending on the
marketing communication objectives.

Public Relations

The Institute of Public Relations defines public relations as follows:

Public relations is about reputation – the result of what you do, what you say
and what others say about you. Public relations practice is the discipline which looks after
reputation with the aim of earning understanding and support, and influencing opinion and
behavior.

Public Relations is assuming greater importance in the promotion efforts of brands and
companies. Public Relations strategy and tactics are often used to communicate effectively
with costumers, employees, and share holders.
However, it is not the role of public relations practitioners solely to build an image
in the market-place, but also to ensure that the company is delivering the products and
services to the satisfaction of its publics. The public relations person does not merely
mount a campaign to state this but makes sure that the company is doing it by advising the
organization on its actions (after all, ‘public relations is about reputation – a result of what
you do . . .’).

Media Relations

Media relations is used as part of the public relations program to get the
company’s message across to everyone who has an influence on the acceptance of the
company, its products or services. Media relations does this by:

● educating the customers about the benefits and advantages of new concepts
● informing customers of the benefits and advantages of dealing with new companies in
the market-place
● encouraging interest in the product
● easing the sales process by establishing goodwill and reputation
● promoting the corporate, brand and product image
● creating awareness
● providing detailed information (e.g. on specifications as well as on the use of products
and services)
● launching the product (by news release and news conferences)

Techniques often used are:

● news releases to announce new products or developments which can be used and
developed as news items in the media
● media statements (oral/written) to make announcements which the company does not
want to expand upon

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ADVERTISING AND THE PROMOTIONAL MIX

● articles and features to expand on issues surrounding the product (e.g. nutrition, when
promoting a snack bar)
● interviews, receptions and briefings to give background to the product, service, company
or key staff (e.g. an inventor)
● news conferences to announce products, services or a key development (e.g. a launch
or take-over bid)
● photo-opportunities or press calls for newspaper photographers and TV cameramen
to obtain shots of a personality or product (e.g. a personality endorsing product or a
stunt)
● case history featuring a product in use – especially in trade and technical public
relations
● facility visit to factory where products are made
● product loans (of computers, for example) for journalists to review.

Other Publicity Tools

As a company cannot always expect that the media will publish their news, it often used
other publicity tools:

● leaflets and booklets to explain, educate and inform, especially of new concepts or
ones difficult to grasp and understand
● news sheets and newsletters to carry more immediate information and items of interest
about the company
● house magazines (external and internal) to inform and give greater background
(including perhaps, social aspects of the organization)
● brochures and videos, particularly for promoting the corporate image.

Advertising

Advertising may be defined as follows:

Advertising is a means of communication which uses printed, broadcast or other media, where
space or air-time may be purchased for the purpose of persuading customers, consumers,
users or other interested parties of the benefits and advantages of an organization and/or
the products or services it delivers.

Advertising aims to create awareness and interests, and its persuasive message convincing
the target audience that the advertised brand will fulfill their needs and wants.

While brand advertising establishes brand image, corporate advertising on the same level
will create corporate image, and thus ensuring customers that brands manufactured by the
company will benefit them.

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ADVERTISING AND THE PROMOTIONAL MIX

Sales Promotion

The Institute of Sales Promotion defines sales promotion as:

Sales promotion comprises that range of techniques used to attain sales and marketing
objectives in a cost-effective manner by adding value to a product or service either to
intermediaries or end-users, normally but not exclusively within a defined time period.

Customers still need that final incentive to actually buy, and so manufacturers, in
conjunction with retailers and wholesalers, will use sales promotion techniques to
ensure that they get the sale. It is no longer a panic measure used when sales are slow
or the stockroom is too full – sales promotion is a strategic tool used in a planned way to
achieve marketing objectives.

Consumers Incentives

• Discount coupons
• Free sample to try the product
• Discounted price
• Added volume
• Gifts
• Buy 1 get 1 free

Trade incentives

• Discount price to increase profits

• Prizes
• Co-operative advertising or joint promotion
• Display material at point of sales to attract customers.
• In store demonstration

Direct-Response Marketing

Direct-response marketing may be defined as:

Direct-response marketing is selling goods or services without shops and usually without
personal salespeople, direct to customers in response to orders generated by direct mail
shots, leaflets, catalogues, telephone calls and printed or broadcast advertisements.

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ADVERTISING AND THE PROMOTIONAL MIX

Differences between direct-response marketing and direct mail

Direct Mail

• Direct mail is dispatch of promotion materials by mail.

• The recipient of the mail shot is asked to do certain action such as asked for brochures
to be sent.

Direct Response

• In direct response mail shot is an order form with information for purchase.
• There is also information for payment of purchase.

Direct-response marketing is a very attractive way for companies to get into the market-
place as it does not involve retail outlets and so there is no need to ‘sell in’ to establish
retailers or to open an individual shop or store. Some very successful companies have been
started in this way (e.g. Body Shop). In addition, computer technology has eased the job
of compiling mailing list of customers, addressing envelopes as well as analyzing customer
preferences and buying habits. Improved telecommunication systems has led to the growth
of telemarketing.

Direct Response Marketing Techniques

• Press advertisements
• Broadcast advertising (radio and TV shopping channels)
• General mail- order catalogues
• Leaflets inserted into magazines and newspapers
• Leaflets and catalogues sent to mailing list
• Leaflets and catalogues distributed door to door

Personal Selling

Salespersons are assigned and trained to promote product and services directly to customers.
Salespersons can range from someone who merely takes sale orders to people who provide
expertise in finding solution to customers’ problems.

Consumer Sales

• Door to door salespersons

• Salespersons working in retail outlets
• Specialist salesperson selling services (insurance)
• Salespersons in showrooms
• Sales/account officer/customer service in bank, etc.

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ADVERTISING AND THE PROMOTIONAL MIX

Trade Selling

For selling in or push strategy, usually performed by salesman and account managers
responsible for corporate sales.

Commercial and industrial selling

Industry requires raw materials, equipment etc, therefore there is a need of business to
business marketing which involves personal selling by:

• Sales representatives to sell office equipments and commercial services

• Sales engineers selling tools, machines, raw materials, chemicals, etc

Packaging

Packaging not only contains the product and protects it during transit from the
manufacturers to the customers and consumers, but it will also preserve it by keeping it
fresh. The pack is also a means of storing, stacking and dispensing the product.

In addition to the above, the pack has become the final means of communicating brand
benefits. The pack can also be used to inform promotion activities.

The elements in the pack design such as shape, size, color, brand name and type face
reflects brand identity and brand image as established by advertising communication. .

Sponsorship

Frank Jefkins gives his definition of sponsorship as :

The giving of monetary or other support to a beneficiary in order to make that beneficiary
financially viable, sometimes for altruistic reasons, but generally to gain some advertising,
marketing or public relations advantage.

Sponsorship may not have a direct effect on sales but it creates a climate of goodwill
where the corporate or brand image is associated with benefiting sports, cultural and other
worthwhile activities, players and performers.

Areas of Sponsorship

• Sport events
• Art/ music events
• Festivals
• Awards ceremonies
• Television and radio programs, etc

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ADVERTISING AND THE PROMOTIONAL MIX

Aims of Sponsorship

● to brand and position a product or service by association

● to create brand awareness by exposure
● to support associated promotional activity
● to reinforce corporate identity
● to overcome an advertising ban
● to target a particular audience
● to generate goodwill in the community
● to support customer relations.

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ADVERTISING AND THE PROMOTIONAL MIX

Points to remember

• Advertising is part of the promotional mix (consisting of public relations, sales promotion,
media advertising, and direct response marketing) and is, therefore, not the sole means
of promoting a product, service, brand or company.

• Within each element of the promotional mix, there are a number of means and methods
that can be used to achieve the sales and marketing objectives.

• However, not all of the elements have to be used for a promotional campaign – only a
combination of the most suitable to achieve the objectives.

• Public relations consists of media relations and publicity tools such as printed matter
and videos, together with presentations and special events to support marketing by
communicating the company’s reputation.

• Media relations can be used to create the climate for the acceptance of new concepts
and new suppliers.

• Advertising uses printed, broadcast and other media to communicate the advertiser’s
message to the market.

• Media advertising can be used to create interest and gain attention.

• Sales promotion uses a range of techniques to stimulate customers to stock or buy the
product as promotions can be targeted at end customers as well as wholesalers and
retailers.

• Direct-response marketing is used to ‘sell off the page’ from catalogues and press
advertisements amongst a range of other techniques.

• Personal selling is used to sell goods and services through retail outlets as well as to
the proprietors and owners of retail outlets.

• Salespersons are used for selling to wholesalers and distributors.

• Personal selling is also used to sell products and services to industrial and commercial
companies.

• Packaging is used to protect and contain products but also to convince customers to
buy the brand or product.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

CHAPTER 3

UNDERSTANDING THE CUSTOMER AND

CONSUMER
CHAPTER OUTLINE

Although many products and services are said to be “mass-market”, but in actuality, no
company markets its products and services to the whole general public. Therefore the
target market, (the people who are most likely to be interested in your products) must be
identified. Through research and then by using the process of segmentation, the company
will select its target market. This chapter will discuss the research process and the means
of segmentation.

OBJECTIVES:

1. To define target market

2. To define target audience
3. To define segmentation
4. To understand the process of segmentation
5. To understand the use of research in identifying target market
6. To understand the role of positioning and branding

Establishing the Market-Place

As it is virtually impossible to get everyone to buy your products or services, a company

must identify the sector of the market that is most likely to buy or use their offerings. The
steps are:

1. establish a sector where there is a demand for which customers are prepared to pay
2. develop the product
3. arrange production cost-effectively
4. distribute the product to the wholesalers and retailers
5. use advertising to tell the market-place about the product.

The Target Market

The marketing department does extensive market research to discover how the market-place
is segmented. It can then study the segments to find the needs and wants of the individuals
within specific segments. The members of the selected segment is then determined as the
target market. In other words the target market are the people who are most potential to buy/
consume the company’s product/ services.

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The Target Audience

The target audience are members of the target market to whom promotion and advertising
messages will be addressed. Target audience can be broken down into smaller more
manageable markets that have different wants and lifestyles. One of the biggest – and most
important target audiences is housewives, because of the major decisions that they make
on household purchases, but even this segment can be broken down into smaller categories
such as urban housewives, working housewives and housewives with children.

Further research will enable the marketing department to find what publications the members
of the target audience read, the radio stations they listen to and the
television programs they watch. Similar research is often done by the advertising agency as
it is vital to develop a message that appeals to the target audience and to ensure that the
commercials and advertisements are seen and heard by the right audience.

Segmentation

A segment must have the following qualities:

1. it must have specific characteristics that can be defined and measured

2. it should be accessible for distribution chain and for advertising and promotion
messages.
3. it must be sufficient in size or volume for the company to gain profit

Once isolated, the segment can be further studied, to establish

1. its precise needs, wants and aspirations

2. the incomes and types of job of people within the segment
3. its location
4. its potential in terms of sales and profit
5. effective means of communicating with it (so that the right media and messages can
be used)
6. economic budgets for advertising and promotion
7. what to offer to suit the characteristics of the segment

The benefits for the company:

1. cost are kept low as they targeted to profitable marketing

2. production are more efficient since as can concentrate on specific items
3. minimized wasted stocks
4. more profits

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UNDERSTANDING THE CUSTOMER AND CONSUMER

Means of Segmentation

● demographics
● geo-demographics (a combination of demographics and location)
● social grades
● family lifecycles
● lifestyle
● behavioral types

Demographics

Classifying target market/target audience on measurable factors:

• sex
• age
• social class
• family life cycle
• education
• employment
• occupation
• marital status
etc

Geo-demographics

Geo-demographic is classifying the target market/audience into location of residences such

as , urban, suburbs, rural, etc.

Social grades

This classification is based on social class which may use annual income or monthly
expenditure as means of classification.

Family life cycle

The family life cycle is used to segment th market based on life stages:

• single
• newly married
• full nest ( have children)
• empty nest ( no more dependents)
etc

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Lifestyle

Lifestyle or the way people live as affected by numbers of factors such as

• daily activities ( hobbies, work activities, social and family activities )

• interests (fashion, music, etc)
• opinions ( attitudes to political, social, economic, cultural issues, etc)

Behavioral Types

Behavioral types are further variation of lifestyle. It is based on social expectation, goals and
beliefs.

Market Research

To determine the different segments and target group, process called market research is
conducted.
Market research will identify:

• market size
• market potentials
• market location
• target market attitudes concerning a particular product

Marketing Research

Marketing research is conducted to provide information that will assist the process of
marketing, for example in identifying which media is effective in reaching the target audience,
which advertising message is credible, etc.

Research Terminologies

Qualitative Research

Based on the work “ quality”, this type of research is looking for qualitative information in
the market place. The qualitative information could refer to consumer needs and wants,
their behavior in using a certain products. This information is helpful to advertisers and
advertising agencies in establishing marketing communication strategies to influence the
target audience to use the products. Another name for this research is Attitudinal Research,
as it considers the attitudes of potential customers and consumers, such as beliefs and
values, as these will influence behavior in the market place.

Attitudes, values and beliefs play an important part in people’s motives, therefore it is vital
that they are examined and tested. The motives that can be investigated include not only
physical needs (such as food, drink, shelter and warmth) but also psychological wants

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(e.g. security, status and esteem). As Maslow’s Hierarchy of Needs (Figure 3.1) suggests,
customers move upwards from satisfying their physical needs until they reach their full
potential.

3
4
4

1 S elf-actualization 2 E steem 3 B elonging

4 S ecurity 5 P hysical needs

Figure 3.1 Maslow’s Hierarcy of Needs

Figure 3.1
Quantitative Research Maslow’s Hierarchy of Needs
Quantitative research looks for answers in terms of quantity or how many, for instance
how many people believe in family planning. The method involves interviewers finding
respondents and asking them appropriate questions. Questions are designed to get a “yes”
or “no” answer, which are called closed question. Quantitative research is often used to find
the number of people who share attitudes based on age, income bracket, sex or any other
demographic factor recorded in the interview. This information is very useful in determining
the target market and target audience.

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Secondary Data

The word secondary suggests that the data is collected after the primary data has been
obtained. However that is not the case. Secondary data which is collected from published
materials such as books and websites is usually collected first and then followed by collection
of primary data.

Desk Research

Desk research referred to acquiring information behind a desk, such as from books in a
library or by using a computer to search for websites. Secondary data is obtained in this
way.

Field Research

Field research is carried out face-to-face by speaking to customers or other respondents

either in their offices or homes or on the street, and it is the favored way of obtaining primary
data.

Primary Data

The objective of obtaining primary data is to find information specifically related to certain
issues important to the advertiser or advertising agencies, such information regarding
motivation and attitudes in consuming certain products.
Primary data are obtained through interviews, questionnaires or discussion with a sample
group.

Sampling

Sampling involves questioning a pre-determined number of individuals who are as ‘sample’

of the overall market sector that is under investigation.

Random Sampling

Random sampling means that anyone has an equal chance to being asked questions, or
participate in the survey. Once the research has
been completed, the data can then be analyzed to establish opinions and
attitudes related to various classifications (by age, sex or other demographics).
Data gained from random sampling might subsequently be used to identify a group (or
segment) that shows a demand for a certain type of product or service.

Quota Sampling

Quota sampling is used when the researchers are seeking to explore a particular group
of people. They will want to establish the size, breakdown, attitudes and opinions of that
particular group, for example students, 18-21 years old, female.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

The quota sample represents a segment which have potentials to be exploited, providing
certain characteristics such as needs and motivation are discovered in the research.

Syndicated Research

With syndicated research, either a number of advertisers join together to commission joint
research or a research agency establishes research programs which it sells to a group of
manufacturers or suppliers. Advertising agencies can also participate either to improve their
own understanding in developing campaigns or on behalf of the client.

Omnibus Surveys

Omnibus surveys are continuous research which is carried out on a regular basis with
regular samples so that an advertiser or an advertising agency can buy the right to have
specific questions asked on particular subjects. The advertiser or agency pays only for the
questions that it wants answers to, although the fee includes a contribution to the overheads
of maintaining the survey. The costs are therefore shared by all those taking part in the
surveys and not by a single company.

Using the results of research

After analyzing the data, the result of the survey is used to determine:

• market trends
• market size and potentials
• target market characteristics such as buying habits

Positioning

Brand positioning means placing the brand in the consumers mind so that it is perceived
differently and more superior than competing brands. Successful brand positioning often
relies in how the brand is viewed as meeting the needs and wants of its target audience and
in how actually the brand fulfills its promise to the consumers.

The brand may have many benefits, but in establishing positioning, the marketer or the
advertising agency should focus on one benefit of the brand that is related to the product, the
competitors (what they say about their brands), and the characteristic of the consumers. If too
many benefits are conveyed, then the message is not “single minded” or focus. For example
Volvo has always stayed with the same positioning : the safety aspect of the brand.

Branding

Branding in marketing terms today means creating an image for a product. It is a combination
of character, identity and the reputation that is developed by the product and its associations
(e.g. the product might be coffee but it is identified and branded as a particular make, such
as Nescafe-Classic). A major task of advertising is creating and maintaining brand image as
means of establishing competitive edge in the market place.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

Brand Image

Brand image is about perception. Perception is not reality but what is believed. Brand image is
the consumer’s total perception of the brand, what he believes the brand is about. Therefore,
brand image indicates how the advertising message is understood and interpreted by the
consumer.

Communicating with the consumers

Advertising must be visually attractive and their messages must be credible as to gain
interest, desire to use and finally the act of purchase.

Advertisers and advertising agencies often used models of communication to measure

consumer response to the advertising message. The most often used model is AIDA:

A – attention
I – interest
D – desire
A – action

AIDA shows the steps in persuading the target audience to response to an advertising
message. A variation includes creating awareness, stimulating interest and understanding,
encouraging evaluation, generating a trial or test and ensuring conviction by the customer
taking action (by buying the product).

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UNDERSTANDING THE CUSTOMER AND CONSUMER

Points to remember

• people have different needs and wants, therefore a company cannot sale its products
and services to everyone

• a process called segmentation is used to identify the target market

• the market place can be segmented through

o demography
o geo demography
o socio economic classifications
o family life cycle
o lifestyle
o behavioral types

• market research and marketing research are conducted to study the market place to
obtain information about the target market and target audience

• qualitative research is to gain information about attitudes, motivation, etc, while

quantitative research to measure size of segment, target markets and audiences

• primary data is collected directly from the source to provide information on a particular
marketing problem. It usually involves field research

• secondary data is obtained from published sources, and likely to be desk research

• communication models such as AIDA can be used to communicate with a brand’s

target market.

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TYPES OF ADVERTISING CAMPAIGN

CHAPTER 4

TYPES OF ADVERTISING CAMPAIGN

CHAPTER OUTLINE

Advertising campaigns are directed at two main audiences: the consumers and traders
(retailers, wholesalers).

Consumer advertising campaign has specific objective and therefore specific messages to be
delivered to the target audience. Hence the many different types of consumer advertising.

Many products are sold directly to the consumers without outlets or shops. In order to
purchase the products, a customer must make a direct order by calling a phone number
of filling up order forms. This type of marketing strategy is supported by Direct Response
Advertising.

Trade advertising are implemented to ensure “selling in” process to retailers, distributors and
wholesalers.

This chapter will examine the different types of consumers advertising as well as trade
advertising and briefly discuss direct response advertising.

OBJECTIVES:

1. To understand the difference between trade advertising and consumer advertising

2. To understand the different types of advertising campaigns directed at the
consumers

Trade Advertising

The objective of trade advertising is to support the “selling in” process to distributors,
wholesalers and retailers. It often involved promotion scheme such as:

• The trade are given special price for bulk purchase, so they can make a profit when
they sell to customers at retail price.
• Providing POS (point of sales) materials such as leaflets, special display materials,
hanging mobiles, etc , to enhance customers interests leading to purchase
• Product launching campaign
• Sales promotion campaign

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TYPES OF ADVERTISING CAMPAIGN

Consumer Advertising

Consumer advertising is to support the “Pull” of the “push/pull” process, by motivating

consumers to buy products and so take them out of the outlets. It uses the mass media
intensively to communicate the advertising message and influence the target market.

Types of consumer advertising

(i) generic advertising

(ii) product advertising
(iii) brand advertising
(iv) range advertising
(v) corporate advertising
(vi) retail advertising
(vii) co-operative advertising.

Generic Advertising

Generic advertising means advertising a product type rather than a brand and is
usually undertaken by a trade association or consortium of manufacturers and
suppliers. A good example is a campaign to promote fresh products like milk, fruit, vegetables
and meat. Generic advertising does not promote a particular supplier but promotes the
overall benefits and advantages of the product type. One of the most well known campaigns
is the “Get Milk.” It can also include the promotion of services like insurance, to enhance
awareness of the benefits of insurance to the target market.

Product Advertising

Product advertising concentrates on promoting the benefits and advantages of the product,
such as the price, value and performance. It is often confused with brand advertising, but
product advertising is aimed to promote the product benefits, whereby brand advertising is
directed to establish brand image and enhance positioning for brand differentiation.

In print advertising, product advertising can be identified because the pack shot is as the
main and often the only visual. The copy will talk about the benefits of the product. As for
TV commercial, it is off course a waste of advertiser’s budget to show 30” of pack shot,
however the pack is still dominantly displayed, with the benefits of the product spelt out in
the storyline.

Brand Advertising

The emphasis of brand advertising is on the brand name, with sometimes little or no reference
to the product This is especially true when there are a number of products sold under a
family brand such as ABC.

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TYPES OF ADVERTISING CAMPAIGN

However, a huge number of products have a single brand name which has developed a
reputation over many years of advertising that goes beyond the mere contents and benefits
of the product. Good examples are found in the highly competitive personal hygiene or
toiletries market, with brand names such as Sunsilk, Pantene, etc

Nowadays, manufacturers are trying to build global brands. Coca-Cola has had the greatest
success with this; its name, logo, bottle and can design are known throughout the world.

The essence of brand advertising is usually image-building for the total product
offering – developing that feeling of goodwill between the branded product or brand name
and the customer.

Range Advertising

Sometimes, a manufacturer has a complete range of products to suit the different

needs of different customers. A common example is hair care products such as
shampoos, conditioners, tints and permanent colors. Ranges are frequently
promoted in a single commercial or advertisement either using the various media available
for advertising. By promoting through range advertising, the advertiser is suggesting that
this brand is “one stop shop” for hair care, so why use another brand. New products can be
introduced easily as the range image is transferred to them.

Corporate Advertising

Corporate advertising promotes the company not the individual products. Corporate
advertising differs from brand advertising because the company name is not always the brand
name. An example is Unilever whose brands include Rinso and Pepsodent . Unilever relies
on brand advertising to promote their products and may rarely see the needs to implement
corporate advertising

Corporate advertising is often used to establish customer relations, so that the customers
readily accept the company and thus smoothing the sales process.
It may also be used for investor relations and community relations, or when research shows
that people are unaware of what the company’s name and what it does.

Retail Advertising

Retail advertising is undertaken by retailers when they want customers to visit and shop
at their shops. Most often the advertising message contains information of specific sales
promotions for specific types of products. The media used are print media and television
and the timing is usually close to the weekend or holidays, when people have more time for
shopping.

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TYPES OF ADVERTISING CAMPAIGN

Co-operative Advertising

Often manufacturers and retailers will combine their efforts (and their budgets) to
undertake specialist promotions emphasizing that a particular brand or product is to be
available only through a certain outlet. Or it may involve two service providers, for example
buying an airline ticket using a credit card issued by a specific bank (purchase Garuda ticket
using credit card issued by Bank Mandiri).

The message is relatively simple – for a limited period, this brand of product is available only
at this outlet at a special offer price or with a gift, or eating at a particular restaurant using a
specific credit card to get a discount on the bill.

Direct Response Advertising

Manufactures without intermediate wholesalers or retailers often use Direct-response

advertising to reach their customers. The customers complete order forms inserted into
magazines and catalogues or give their orders over the telephone. Direct-response advertising
is an effective means for new companies and new products to get into the market-place.
However, it has also emerged as a major selling force in its own right.

Direct-response advertising has to work very hard to sell the product because there is no-
one to sell the product on a face-to-face basis. So press advertisements have to convey
all the sales messages in one go and even television and radio advertisements have to
cover all the selling points comprehensively. Often, the advertisements and commercials
will incorporate sales promotion techniques (such as money-off discounts, which are quite
believable as wholesalers and retailers do not take a cut of the profits).

Direct mail is often used in direct response advertising, whereby a tool such as catalogue is
mailed to a prospect, and the prospect can place an order if he/she so desires.

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Points to remember

• Trade advertising is used to encourage stocking, so joint promotion between

manufactures and retailers will result in profits for both parties.

• Trade advertising uses specialist media targeted at the buying departments and
proprietors of stores, shops, supermarkets and retail chains.

• If trade advertising is the ‘push’ encouraging intermediaries to stock the product

for onward selling, consumer advertising uses the ‘pull’ of the push/pull process to
encourage customers to buy the products and so take them out of the retail outlets.

• Consumer advertising uses several forms of promotion including generic advertising (to
promote the product concept), product and brand advertising (for individual and named
items) and range advertising (to cover a series of variants of the named product).

• Corporate advertising promotes image and goodwill to re-assure the market-place,

lubricate the sales process and create a selling environment in consumer advertising.

• Retail and co-operative advertising promote the availability of products and services
from specific retail outlets.

• Direct-response advertising is a major selling force in its own right, and it is particularly
useful for new companies and products because of the avoidance of intermediaries.

• Direct-response advertising can be used to sell/promote products and services that

customers may not be readily prepared to buy face-to-face in a shop.

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SPECIALIST FORMS OF ADVERTISING

CHAPTER 5

SPECIALIST FORMS OF ADVERTISING

CHAPTER OUTLINE

Aside from the consumer market, there is also the industrial and commercial markets. Due to
the specific characteristics of these markets, specific forms of advertising, must be planned
and implemented to ensure effective communication. This chapter will provide information
regarding the purpose and use of such forms of advertising.

OBJECTIVES:

1. To understand the objectives of promotion to industry and commerce via business to

business, industrial and technical advertising
2. To understand the objective and use of specialist advertising to promote high technology,
pharmaceutical and healthcare products
3. To understand the objectives and use of recruitment advertising
4. To understand the objectives and use of financial advertising
5. To understand the use of advertising in special circumstances such as crisis
management

Promoting to Commerce and Industry

The business sector such as a manufacturing company or an airline have needs for
products and services unique to their own type of business. Although business people
read newspapers and watch television and therefore it is possible to use these mediums to
promote the products used for commercial purpose, but alternative means of promotion are
also available and often more effective.

Business-to-Business Advertising

A business office needs computers, desks, chairs, and stationery. It also needs services
such as security service and cleaning service. Ultimately, there are businesses that supply
these needs, like Hewlet Packard who would supply computers, and another manufacturer
would supply desks and chairs, etc.
Hence when one company promotes through advertising to another company, its called
business-to-business advertising.

Unlike consumer promotion, when promoting to a business, there are many different needs
and motivation to fulfill. For example, the department manager when purchasing a computer
is motivated by the advanced features as he needs something reliable to do his job, but the

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SPECIALIST FORMS OF ADVERTISING

purchasing manager may have a budget, therefore he is considering price over features.
Moreover, the advertising must consider the fact that it is trying to influence an expert
audience. Details of specific features, capacities, etc needs to be exposed as well as other
specifics such as track record, prompt delivery, etc.

Industrial and Technical Advertising

The industrial market is highly technical and complicated and relies not only on
communicating complex specifications to meet critical manufacturing and processing
needs, but also on the capability to deliver consistent quality, on time and within an agreed
budget.

Advertising of this type may offer not only the physical product , but also designs a total
system so that the company control the supply of all equipment including the installation.

Specialist Sector Advertising

High technology

Specialist sector advertising offers high technology products, sophisticated electronic

components, telecommunication systems, to different types of business sectors.

Pharmaceuticals/ healthcare

Pharmaceuticals/ healthcare products operates at three levels: OTC (over the counter),
pharmacist recommendation (P) and prescription only medicines.

OTC can be advertised to the general public, but the other two are strictly controlled. The
promotion of prescribed medicines in Indonesia can only be promoted through personal
selling to medical doctors.

Specialist Advertising
• Recruitment advertising is used for finding candidates for a position in a company.
The specific job title and the qualification of the candidate searched are fully explained
in the advertisement. The identity of the company looking for candidates maybe
identified in the advertisement if it is believed to lure qualified candidates. The primary
media used for this type of advertisement is newspaper.
• Financial advertising is used to inform the public about the company’s performance
and potential. Financial advertising is strictly regulated in both content and format.

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SPECIALIST FORMS OF ADVERTISING

Points to Remember

• Promoting to industry, business and commerce requires an emphasis on different

techniques and media compared with consumer advertising.
.
• Although some advertising for this sector can use television, most advertisements are
placed in the trade, technical, professional and management press.

• There are a number of specified purchasers and end-users involved in buying decisions
for business, industrial and commercial equipment, services and supplies. All of them
have to be influenced by advertising, most probably in different publications.

• Pharmaceuticals and healthcare promotion are similar, but there are also strict
mandatory and voluntary controls that involve advertising within the health sector. It
too has its specialist media and techniques.

• Recruitment advertising is used by virtually every type of enterprise to find the right
candidate for a job opening. Primary used is newspaper.

• Financial advertising involves investor relations, i.e. communicating with shareholders

and consumers (for banks). It shows the company’s performance and potential.

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

CHAPTER 6

THE ADVERTISING MANAGER AND

ADVERTISING DEPARTMENT
CHAPTER OUTLINE

The term advertiser refers to manufacturing or service companies who have brands that
need promotion in the market place to establish favorable market share. As promotion is one
of the responsibilities of marketing, therefore, in the marketing department of the company
there is a position called Advertising Manager. The Advertising Manager plays a crucial role
in ensuring that the brands are well received in the market so that the company will achieve
its sales target leading ultimately to profitable venture.

This chapter will describe the role and responsibilities of the Advertising Manager, how he
coordinates with his department internally and how he works with the selected advertising
agencies, to establish and maintain favorable market position for the company’s brand under
his care.

OBJECTIVES:

1. To understand the strategic role of the advertising manager in planning and determining
the policy and objectives for the company’s advertising
2. To understand how the advertising manager coordinates work with his staff in the
advertising department
3. To understand how the advertising manager works together with the selected advertising
agency.

The Advertising Manager

The job of coordinating and managing advertising in an organization belongs to the

Advertising Manager. The Advertising Manager is employed in-house as the manager of
the company’s internal advertising department. For a company to get full value from the
Advertising Manager, he or she has to be given full responsibility for the task of managing
all aspects of the company’s advertising programs. However, there will be subordinates and
colleagues who take responsibility according to the amount of promotional work undertaken
by the organization.

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Role and responsibilities

Strategic planning

To plan the advertising strategy, the advertising manager must work with colleagues from
other departments such as marketing and sales, because the advertising strategy evolves
out of the marketing strategy which in turn evolves out of the business strategy. However, the
effective advertising manager is not merely taking orders from above, but also contributes
his/her expertise upwards, especially in companies where it is realized that advertising has
a powerful effect in the market-place. The process can be expressed as follows:

Business strategy—Marketing strategy—Advertising strategy

The above process shows that advertising strategy derived from marketing strategy, which
must reflect the business strategy.

Determining policy, aims and objectives

Based on the marketing strategy, the Advertising Manager and his team develop the advertising
objectives and what results in the market place are expected from the implementation of
the advertising campaign. To ensure that all activities are carried out in accordance to the
company’s value , the Advertising Manager also sets out the advertising policies such as
advertising code of ethics that must be abide to when creating advertising communication.

Promotional planning

At this stage, the planning for the whole of the promotional activity for the company can take
place. This is not restricted to advertising but includes all the activities of the promotional mix
in order to develop an integrated marketing communications approach, an approach now
adopted by many competitive brands.

Budgeting

Basically, budgeting is calculating costs for all promotional activities and is one of the
important elements in ensuring that marketing communications objectives are met. Marketing
communications objectives are set to answer to marketing problems, and objectives are
translated into strategy and promotion programs. To be implemented effectively, promotion
programs require a budget. Although it is mentioned at this stage, the budget may have
been set earlier, depending on the company’s financial policy.

Planning – administration and staff (procedures)

First and foremost, the advertising manager is an administrator running the advertising
department. He is responsible for controlling the department, not just coping with the
workload. Consequently, it means planning the department so that it is prepared to deal with
the activities it handles, and that it is adequately staffed and equipped to undertake its role.

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He or she will look at the needs of the department in both areas and so determine what staff
he or she needs to employ and at what level of ability. He or she might look at training needs
to see who can be developed to take on responsibility for some roles and activities. All of this
will involve deciding on salary levels and other benefits.

Implementing the promotional campaign (tactics)

The Advertising Manager is the guardian of the company’s reputation. He must ensure that
the company’s brands are always seen in a positive way, or good brand image. Although
the advertising industry has often been accused of manipulating image, it is realized that
image must be based on facts. If customers are buying a brand because of its quality (the
advertising message/positioning is quality), then the Advertising Manager must liaises with
the production department to ensure that the standard of quality meets the customer’s
expectation.

Below are the activities managed by the Advertising Manager and he may or may not use
outside help to perform some of these tasks:

• Promotional activities : advertising, sales promotions, publicity, direct mail, direct

marketing
• POS ( point of sales), and other merchandising materials
• Sales literatures : brochures/ leaflets
• Exhibitions
• Event marketing/brand activation

It should be noted that not all of the above will be included in the promotion campaign, as the
above tactics are only included if deemed effective in supporting the marketing objectives.

It should also be noted that corporate public relations activities such as financial public
relations, employee communication are not the responsibilities of the Advertising Manager,
but marketing public relations activities such as sponsorship, exhibition, is within his area of
responsibilities.

Internal/external responsibilities

The Advertising Manager has internal responsibilities because some of the work is being
done by his internal staff, and while other activities are carried out external suppliers and
consultants.

External suppliers/consultants that may be used are:

• Integrated marketing communications consultancy

• Sales promotion consultancy
• Direct mail consultancy
• Exhibition contractors
• Printers

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

• Design studios
• Photographers

Agency Selection

Advertising agencies should not be viewed as suppliers for the main reason that advertising
agencies are consulted by the marketing department for their strategic approach in
supporting the marketing objectives. Nowadays, advertising agencies approach to solve
marketing problems is to design a total marketing communication approach known by
many specialists in this area as Integrated Marketing Communication. Integrated Marketing
Communication (IMC) uses several promotion techniques as a unified force to influence
consumer’s perception, attitude and behavior.

Finding agencies

There are a number of ways of finding advertising agencies. The first is by reputation. Some
agencies have become household names, but agencies selected because they are well-
known may not be suitable for the type of work that the company wants. A large and famous
consumer advertising agency is not suitable for a small business-to business advertiser and,
conversely, the large agency may not want the account because the work involved may not
be rewarding enough financially.

The Indonesian Advertising Agency Association (Persatuan Perusahaan Periklanan

Indonesia- P31), a trade associations for advertising agency, may be a good source for
finding appropriate agencies.

Another source would be through referrals by colleagues of the Advertising Manager, who
can vouch with regards to the agencies reputation through their own experience

Making a short list

The selection process includes studying the agencies credentials, such as personnel, clients
list, and sample of successful campaign.

Short list approach may be as follows

• Studying the agency’s credentials

• Considering the services provided ( full service/ part service)
• The fee structure
• Selecting agency for pitching.

A pitching is a final agency selection process involving two or three short listed agencies
presenting their strategy/concept in solving the potential client’s marketing problems.
Briefing the Agencies

At the individual presentations (or new business pitches, as the agencies call them), the
advertising manager will expect to see the ability of each agency to solve the company’s

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

marketing problem. However, agencies cannot pluck solutions out of the air and so will
expect, and ask for, campaign and advertising briefs.

Advertising brief

The advertising brief or sometime may be called by other terms such as campaign brief,
agency brief, is a document prepared by the Advertising Manager to provide information and
guidance for the agency in creating the advertising strategy.

It contains the following information

• Background on the company’s market (market size, market share and competitors)
• Marketing objectives
• Target market
• Product/service (including total product offering)
• Timing (for launches or season selling)
• Other planned promotional activity
• Past advertising campaigns
• Existing company, product and brand images
• Market research results

It may also contain additional information, if available to the company:

• Advertising objectives
• Proposition (or theme for positioning the product, brand or service)
• Benefits, advantages or features that the product might have that differentiate it from
its competitors
• Tone or style required (humorous or prestige, for example)
• Mandatory client requirements (such as use of corporate identity or house style and
tag lines).

Based on the briefs, agency will prepare their concept and strategy and will perform their
best to convince the potential client how their strategy and concept will help achieve the
clients marketing objectives.

Before making the final selection, would-be clients should consider such questions as
these:

● Has the agency come up with a solution to our problem?

● Does it know/understand our market/product/company?
● How long do clients stay with it?
● How long do account handlers stay with it?
● Have the staff got experience of our industry?
● Has the agency got experience of our industry?
● Have the staff got the creative and technical ability to handle the account?
● Is the right chemistry there – between us and them?
● Can we trust them?
● Can we afford them?

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

● Are they suitably equipped?

● Are they recognized?

It is also recommended that the client visit the agency as this may help in providing answers
to some of the above questions.

Working with the agency

A major role of the advertising manager is to liaise with the agency on a regular basis. This
involves a series of quarterly and monthly meetings which are often put into the diary at the
start of the client–agency relationship although there will also be other meetings to look and
approve the detail of the work being done.

The decisions reached at any client–agency meeting are recorded on a contact report. This
is not the minutes of the meeting but a confirmation of decisions made and an action plan
(it is sometimes called an action report). It will include actions that the advertising manager
needs to take (like supplying a product for a photo-shoot) as well as actions required from
agency personnel. Each person who needs to do something will be identified by his or her
initials, and the report will be circulated to all those who could be involved, as well as to key
executives in the company and the agency.

Insert table 6.1 on page 110

Client –agency relationship and staff liaison

Monitoring- quality control and approval

Monitoring is crucial so that the advertising manager can establish how the promotional
program has affected any change – hopefully positively – measured
against research undertaken prior to any activity.

Other more routine monitoring:

• Works are done on time as scheduled

• Advertising appeared as per media plan and schedule
• The quality of work are in line with expectation
• Costs control
• Invoices are processed and paid as in terms of agreement

All of the above needs the advertising manager’s approval to ensure that objectives of
advertising and promotions are met as planned. These activities also provide ways to
analyzing situation so that problems can be identified and advertising can be continuously
improved.

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

Points to remember

• The advertiser is any organization that promotes its products, services or policies
through the promotional mix and includes profit-making companies as well as charities
and public sector organizations.

• The advertising manager works in the marketing department of a company and is

responsible for advertising and promotion activities.

• The advertising manager is responsible for strategic planning; determining policy,

aims and objectives; promotional planning; budgeting; departmental organization; and
implementing the tactics of the program.

• The major responsibility of the advertising manager is to ensure that the promotional
program is implemented effectively.

• The advertising manager is also responsible for building, managing and maintaining
the image and reputation of the company, its products and services.

• The advertising manager does not work in isolation but liaises with other departments
such as marketing, sales and production.

• The advertising agency is selected by the advertising manager and its appointment is
approved by him or her together with the marketing manager and possibly the board.

• The advertising manager liaises with the advertising agency by regular meetings and
routine contact to ensure that it is fulfilling the requirements of the client company.

• The advertising manager decides on which work will be done internally and which will
be done by external suppliers.

• Monitoring and evaluating the work of the external suppliers and the internal staff to
ensure satisfactory standards is the responsibility of the advertising manager.

• The advertising manager also monitors expenditure to ensure that all work is done
within budget.

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DETERMINING AND SETTING OUT BUDGETS

CHAPTER 7

DETERMINING AND SETTING OUT BUDGETS

CHAPTER OUTLINE

Every program and activities performed by the company requires budget allocation. Advertising
and promotion are no exception. Before the fiscal year the marketing department and the
advertising department sit down together to discuss budget allocation for all advertising and
promotion activities.

The basis of budget calculation is based on many factors such as objectives, target sales,
and market data such as expenditures of direct competitors.

This chapter will describe the many methods for setting advertising and promotion budget.

OBJECTIVES:

1. To understand that budgets are based on past performance and future forecasts.
2. To understand how budget are based on promotional plans and that it must have
senior management approval.
3. To understand the various ways of setting up budget

Setting up budget and budget period

All program and activities to be carried out in a fiscal year must be carefully established and
approved by senior management of the company. Budget is based on past performance and
forecast of future sales and the number of tasks to be carried out within the budget period.

The budget period is usually a year, normally the financial year of the organization. Budgets
are therefore prepared by the advertising department and other departments towards the
end of each financial year and approved by the board of directors ready for the next year.

In setting up the advertising budget, the Advertising Manager relies on some information. One
is information from the sales department indicating sales achievements and also problem
areas. Other information is market research from the marketing department which provides
information on market trends, consumer behavior, competitor’s activities, etc.

Methods of setting up budget

• Objective task method

• Historical method

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• Percentage past sales method

• Percentage of future sales method
• Competitor parity method
• The market share method
• Affordability method
• Marginal method
• The unit method

The above methods can be used in combination as the aim is to a structured table of
expenditure so that the promotional plan can successfully managed.

The objective task method

This method requires the setting up of advertising and promotional objectives, and then
putting sums of money against all that needs to be carried out to achieve the objectives.
Therefore the steps in using this method are:

• Set up advertising/promotion objectives

• Decide what promotion activities to be carried out to achieve the objectives
• Set up the budget.

Historical method

The historical method is based on advertising and promotion spending of the previous years.
A percentage may be added to cover inflation and will be added if there are extra activities,
for example using more media to extend media coverage.

Percentage of past sales method

This method is based on the idea that if a product sold well in previous years then it should
be supported for future years. Alternatively stated, it is a way of maintaining sales at the
previous year’s level. The idea works well if the product is growing and reaching saturation,
but not if it has reached maturity or is in decline and needs abandoning or bolstering. There
is also a danger that, if the product is becoming successful, it may sell well in any case, but
this is a difficult decision that needs the joint deliberations of the marketing manager, the
sales manager and the advertising manager.

Percentage of future sales method

This method is based on predicting the volume of sales that is likely to be achieved. This is
not simply guesswork but based on market research and scientific forecasting.

Deciding on percentage.

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There is no magic formula to be used, but based on discussion and deliberation of the senior
management. A fast moving consumer product with heavy competition may spend more
than 15% of its sales on promotion. A leading brand may spend less, but because of high
volume of sales, a small percentage will represent a large amount of money.

Competitor parity/market share method

One of the most important responsibilities of the Advertising Manager is to monitor competitive
brands promotional activities. He can access this information by purchasing advertising
expenditure data.

However, it is not always a good idea to let your rival dictate your advertising expenditure,
especially if similar media strategy is followed. Directly competing brands do not have exactly
the same market characteristics thus lending to different advertising objectives and strategy.
Moreover, if the competing brand has bigger market share, it is definitely not wise to have
the same expenditure.

Therefore, competitor’s expenditure is to be used as a guide in setting up the advertising

budget.

The affordable method

The affordable method is simply a decision made by a senior member of the board, such as
the finance director, without the need to consult with the marketing or sales department.

This method is rarely used anymore, especially if the company is marketing oriented. This
method may be used for a new company or new product, where promotion costs will be
calculated like any other activity in the company.

The marginal method

The marginal (or stratified) method is based on justifying levels of expenditure in relation to
the amount of increased sales that will occur and is a favored method of sales-orientated
companies. It can, therefore, be applied to the various layers of activity in the promotional
mix or the integrated marketing communications approach. It can also be used to justify
increasing sophistication in each of the techniques employed (eg using full-color advertising
rather than black-and-white advertisements, which have lower media and production
costs).

Sales promotion and product advertising may have an immediate effect by selling more,
so these would be given priority under the marginal or stratified method. The advertising
manager has to decide on the various techniques, methods and even media that would be
appropriate, and cost them according to the importance that they will have in achieving the
company’s sales targets before including them within the budget

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Per unit method

The per-unit method is a very scientific method, but is unfortunately production-led rather
than market-driven. It depends on every operation in the production and supply of a product
being costed – from raw materials to the cost of distribution. Advertising is regarded as a
distribution cost in some companies.

This method requires a detailed cost analysis, where some money from total cost of supplying
each unit is allocated to promotion, after accounting for profit margin. This method could
cause overspending if greater volume of units is sold than was forecast and if conversely if
sales decrease, it does not account for more money.

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Points to remember

• Budgets are set annually for the company fiscal year.

• One of the key methods for setting up budget is the objective and task method, where
by what needs to be done is established and costs are calculated.

• Certain methods of determining budget are based on past performance

o Percentage of past sales
o Historical method
o Competitor parity/market share method.

• Other methods are based on future forecasts: task and objective method, affordable
method, percentage of future sales.

• Budget should be market oriented not production based ( per unit method).

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TYPES OF ADVERTISING AGENCIES

CHAPTER 8

TYPES OF ADVERTISING AGENCIES

CHAPTER OUTLINE

Advertising agents were initially established to sell space on behalf of newspapers in the
early 1800’s in England. As product owners started to realize that they need to draw the
market attention to their products, advertising became a very important part of their business
process. As print media’s technology evolved, illustrators and designers were employed to
make print advertising more interesting.

As the marketing science matured, the whole process of advertising was getting very
complicated, there was more significant need to get impact, attract consumers and convince
them the merits of the products or services. In response to this, advertising agencies took
on more people with specialized skills, and today advertising is a highly specialized industry,
helping marketers all over the world creating winning brands.

This chapter will discuss the basic services of an advertising agency and then described
the different types of advertising agencies, established to cater to the different and complex
needs of the increasingly competitive business environment.

OBJECTIVES:

1. To understand the basic elements of an advertising agency in providing service to their

clients
2. To understand the different services offered by advertising agencies.
3. To understand the function of associated agencies and consultancies

The advertising agency

“An advertising agency is an independent organization of creative and business people

who specialized in developing and preparing advertising plans, advertisements and other
promotional tools. It purchases advertising space and time in the media on behalf of their
client.”

(AAAA- American Advertising Agencies Association)

The basic elements of an agency business

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Account Handling

Competitive business environment demanded more complex marketing communication

process. As a result of this the agency’s clients became more demanding and therefore
there was a need for some kind of coordination and liaison between the client and the
departments of the advertising agency- a need met by the account handler.

Advertising Agencies

Account handling

Creative Media Production

department department department

This the role of the account handling:

• Advise the client company on how their products can be branded and positioned in the
market place to counter act competitors
• Responsible for all clients contact to establish the broad requirements of the clients.
• Brief the various departments of the advertising agency with regards to client
requirements
• Ensure advertising campaign help to solve the client’s marketing problem
• Manage the advertising budget and ensures costs are justified.
• Ensure clients are happy with agency’s overall service.

Creative Department

Creativity is what really builds an agency reputation. Advertising is about visual and copy
elements that attract attention and convince the market to use the brands advertised. Thus
advertising creativity is about creating messages that will effectively establish positive brand
image and positioning.

The creative department is led by a creative director, backed by an art director and
copywriter.

Media Department

Electronic, telecommunications and computer technology resulted in extensive choice of

media. Therefore, the media department must undertake extensive research to design an

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effective media plan and schedule to deliver advertising messages to the target audience.
Then to ensure the best deal budget wise, the media buyers in the media department must
go through negotiation process with the media houses, as there is no fixed price for media
space and airtime

Production Department

The production department is responsible for the production process if TV, print and radio
commercials. The actual production process itself is not done in the agency, but is outsourced
to production houses, printers and recording studios. The role of the production department
is to select the third parties and supervises their work and coordinates with the creative and
account handling teams.

The full service advertising agency

The full service advertising agency is set up to meet the extended needs of the client
company for advertising and promotions services. Hence the organization consist of the basic
elements of the advertising agency previously mentioned, plus others such as marketing
public relations, brand activation, etc.

Companies using this type of agencies are usually large FMCG manufacturers with large
advertising expenditure. Working with full service advertising agencies is very convenient
for these large companies as all of their promotion needs are under “one roof”, so to speak,
making control and supervision of the advertiser easier. However, a smaller company who
may not have an advertising department, may also seek the benefits of working with a full
service advertising agency.

Specialist agencies

Specialist agencies are emerging for two main reasons:

1. The successful individuals working in advertising agencies see the potential of
establishing their own agencies for the reason of earning more money as business
owners. A creative director for example might go on his own to establish specialist
creative agency sometimes known as “creative boutique”
2. A big a full service agency might choose to fragment itself into several specialist
agencies for several reasons: more efficient and effective business strategy being one
of them. As specialist agencies, they can work together on clients which need full
service, and then can pursue business on their own according to their specialty.

A la carte agencies

A client may choose to work with this type of agency, because it does not need the total
offering of the full service advertising agency. A la carte agency is often the choice of
advertising managers who handle most of the advertising in house or internally. A company
who needs the service of an advertising agency on an occasional basis, for example when
launching a new packaging design, may need the creative resources of the agency to create
the new designs.

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Freelance designers ad copywriters

After gaining several years experience working in an agency, creative people often it is more
exiting to work on their own as freelancers. Their service will be called upon by agencies
when they have more workload then they can handle. This type of working arrangement
suits smaller agencies, as they don’t have to hire full time staff, thus avoiding high overhead
costs. This in turn provide cost advantage for the client, in that the client pays only for what
is used ( after agency’s mark up) rather than having to cover the costs of agencies overhead
with full time staff. Another advantage is that freelance creative may bring a fresh approach
or have a special style that reflects the clients requirement.

Media Independents

Advertising agencies are able to negotiate favorable prices with the media due to the sheer
volume of space and air-time that they purchase on behalf of their own clients. It was realized
that if the media department could buy on behalf of several agencies representing even
more clients there would be further economies of scale by buying in bulk. And so media
specialists set up the media independents.

They are called “media independents” as they act independently of the advertising agencies
and its media department. Media independents agencies are used by full service as well as
a la carte agencies, as they have better buying powers and can negotiate favorable prices,
which they pass on to the agencies, who pass them on, in turn to their clients.

Clients working with creative boutiques or freelance creative may also opt to work with
media independent agencies.

Specialist media agencies

These are agencies which specialize in one particular medium such as outdoor, mobile
advertising or foreign publications. This is so because the buying condition differs than that
of mass media, and often these types of agencies have different trade permit than agencies
previously described.

Associated agencies and consultancies

Sales promotion consultancies

These consultancies specialize in developing sales promotional schemes to meet the
marketing and sales objectives of any company. They have a wide range of skills and
expertise and are able to evolve a proposal aimed at stimulating customers or motivating
intermediaries (including their sales staff). They specialize in media advertising, direct mail
and door-to-door distribution, although they may work with media independents for their
media bookings. They also select the gifts and other incentives needed in the promotion
scheme.

An agency of this type may work with an advertising agency or directly with the marketing
department of a company.

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Direct response marketing agencies

In providing service direct response agencies will consider profiles, market penetration and
wastage, and select the appropriate media to get to their target audience. Direct mail is often
used to mail catalogues and brochures. Much of the work of this type of agency is database
or relationship marketing.

Telemarketing

Another form of direct response is promotion via telephone, which may be operated by the
company in house or outsourced to an agency which specialized in this service. However, this
type of promotion has got a bad reputation, mainly due to the poorly trained telemarketers.

Public relations (PR) consultancies

Public relations consultancies are retained by organizations on a fee basis, usually for a year
at a time. Their job is to inform, create goodwill and communicate the company’s image and
reputation, as well as promote the corporate and brand names. A PR consultant produces
publicity materials such as news releases, articles and feature stories. They conduct press
conferences, briefings and interviews to gain editorial coverage (or so called “free publicity
“ as space for these activities are not purchased).

As media coverage cannot be guaranteed, PR consultants have to develop news writing

skills to increase the likelihood that their stories will be printed. Although marketing public
relations help to promote brands in the market place, but the message carried are informative
rather than persuasive.

PR consultancies also prepare road shows, seminars, exhibitions, to improve relationship

between the companies at its customers.

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POINTS TO REMEMBER

• There are four basic elements to an advertising agency: account handling, creative,
media and production departments.

• Other departments are added to meet clients needs, and this evolved into full service
advertising agencies which offer a number of services to promote all aspects of the
products/services.

• Full service advertising agencies, although most often used by big FMCGs companies,
are sometimes used by smaller companies.

• Specialist agencies emerged to cater to more specialized needs of the client

companies.

• There are supporting consultancies, such as sales promotion, direct response and
public relations, which the client and advertising agencies may call upon as needed.

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AGENCY RECOGNITION AND REMUNERATION

CHAPTER 9

AGENCY RECOGNITION AND

REMUNERATION
CHAPTER OUTLINE

As a service provider, an advertising agency’s reputation is one of its selling points. For an
agency reputation means that it is recognized not only for its work, but also for other specific
and technical aspects of the business.

This chapter will explain the concept of recognition and how it relates to the agency
remuneration system.

OBJECTIVES:

1. To understand the agency recognition system, the criteria, and trade association
granting recognition
2. To understand how agency gain income and profit by the various remuneration
methods

Agency recognition

The most important recognition to an agency is that by the media houses. Good business
relations with the media are very important for the agency to carry out its commitment to
its clients. The media must be sure that the agency has a substantial financial strength to
pay the media services used by the agency on behalf of its clients. Once recognized by the
media, agency will receive many privileges from the media houses, such as longer credit
terms, more discounts and bonuses.

Criteria for recognition

To obtain recognition, the agency applies for membership in a recognized trade associations.
Persatuan Perusahaan Periklanan Indonesia (PPPI) is one such organization. Another
assurance is the agency’s clients list and track record in credit payment. If the agency caters
to high profile and big spender client companies, it reflects the agency’s financial strength
and reputation, as it is safe to assume that high profile clients will choose to work with
reputable agencies.

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Agency income

The commission system

The commission system is based on above the line media expenditure. In the agency –client
contract/agreement, it is decided the percentage the agency will receive from the client’s
above the line expenditure. When using this system, media discounts are rebated to client.
Example:

Rate card price: Rp 10.000.000

Discount 20%: Rp 2.000.000
Cost after disc Rp 8.000.000
Agency com 15% on gross Rp 1.500.000
Cost to client Rp 8.000.000 + Rp 1.500.000 = Rp 9.500.000

In this case, the agency is entitled for 15% ( if this is the % agreed on the agency-client
contract) on gross media costs.

Agency fee

The fee system is income generated by agency for their time and skills, especially as
nowadays many agencies operate increasingly like consultants advising their clients on
marketing communication strategies. Advertisers may accept the fee system if they in turn
receive objective and expert advice from their agencies resulting in agency-client relationship
based on trust and mutual benefits.

Handling charges or “mark-ups”

Handling charges usually applies for below the line activities and production of advertising
materials. For this type of work, agencies usually assigned a third party, and the mark up
is calculated based on a certain percentage of the costs submitted by the supplier. For
instance :

Printing cost Rp 10.000.000

Mark up 15% Rp 1.500.000
Cost to client Rp 11.500.000

The handling fee “mark up” covers the agency time and expertise in overseeing the work
done by the supplier, thus ensuring satisfactory result.

Variation on the commission and fee system

The payment system described above can take any combination. When the agency provides
full service, all 3 may be used: the commission system for media services, fee system for
consultation and concept development and mark ups for jobs where agency supervision of
third party are required such as in producing advertising and other promotion materials.

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Points to remember

• Agency recognition by the media is vital for an agency to buy airtime and space on
behalf of the client

• Criteria for recognition are membership at advertising trade association, such as PPPI,
agency’s client list and track record of media payment.

• Once recognized, agencies are entitled for media commissions (discounted from rate
card price), and other privileges

• The agency income is derived from the agency commission which is generated from
media commissions, agency fee for providing strategic advice to clients and handling
fee or mark ups for supervision of third parties.

• Any of the above payment system can be combined depending on service rendered
and as stipulated in the agency-client contract.

• Agency and client relationships are based on effective service plus cooperation, trust
and respect on both sides.

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FUNCTIONS OF DEPARTMENTS IN ADVERTISING AGENCIES

CHAPTER 10

FUNCTIONS OF DEPARTMENTS IN
ADVERTISING AGENCIES
CHAPTER OUTLINE

The service provided by an agency to their clients very much depends on how effective
is the teamwork between the departments of the advertising agency. This chapter will
provide an understanding of the advertising agency’s organization, describing the role and
responsibilities of each department, and how they join force to provide satisfactory service
to the client.

OBJECTIVES:

1. To understand the functions of the main departments of the advertising agency

2. To understand the area of responsibility of the account handling department especially
in relation with briefing and coordinating with other departments
3. To understand how the creative department works, from receiving and interpreting
brief
4. To understand the media planning and buying function
5. To understand the production department’s role in ensuring concept are implemented
in publication and broadcasting

Functions of the basic advertising agency

The four main departments in the advertising agency

1. Account handling
2. Creative
3. Production
4. Media

Account handling

The main function of this department is to liaise with the clients and to discuss needs and
wants and to interpret them for the various agency departments. Therefore this department
plays a vital role in maintaining and strengthening agency-client relationship.

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There three level as follows:

Account director

The account director, the most senior level is concerned with the overall health and strategy
of clients accounts under his responsibilities. He may work on different accounts with different
executives and support teams.

The concern of the account director is to ensure that the work undertaken for the clients meets
their objectives, whether short , medium or long term. He leads the account team and other
departments in the formation of strategy and is responsible for the overall implementation
of the campaign.

Account planner

The account planner is responsible for ensuring that the actions taken by the agency will
support the long term development of the brand. In doing so the account planner studies
market trends, competitors activities and consumer behavior. In small agencies, this function
is undertaken by the account director.

Account executive

The account executive ensures that all aspects of the work are carried out to everyone’s
satisfaction. The tasks associated with this position is liaising with the other three departments
of the advertising agency, making sure that work is performed on time and meets the agency
standard of quality. He also communicates with the client frequently to ensure that line of
communication between agency and client is always open and healthy.

Creative department

the creative department is the producer of ideas and concept and is very important in
establishing and maintaining reputation of the agency.

Creative director

The responsibility of ensuring that the message suits the product, brand or service is that
of the creative director. Creative directors have usually risen through the agency’s structure
from copywriting or art directing. As the head of the creative, he directs the art director
and copywriter in establish creative concept and strategy to meet the requirement of the
campaign outlined in the creative brief.

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Elements of the creative brief

• the reason for advertising : launching of new brand

• the objective of advertising, for example brand awareness for launching of new brand
• target audience: to whom the advertising message is addressed
• communication strategy: positioning, promise, the essence of the advertising
message
• rationale: the supporting factors for the promise so the message is credible
• key benefits of the product or factors that fulfill the needs and wants of the target
audience
• the advertising tone
• the mandatory such as logo, tag line, etc
• media platform

Copy chief/copywriter/ art director/compugraphic designer

The copy chief is a position in the creative department who is responsible for writing the
copy (wordings) of the advertising, and as he is a senior member of the team, he supervises
more junior position, the copywriter.

In making advertising concept, copy chief/copywriter and art director sit down together to
interpret the advertising brief, or the direction/ guidelines provided by the creative director.
The art director will brief the compugraphic designer so he can help the art director in
preparing the visual part of the concept. The next step is to discuss the concept, or copy
platform with the creative director. Once the creative team agrees on the concept, they will
discuss it with the account handling team to ensure that the copy platform addresses the
marketing issue to be resolved by the advertising campaign. If everything is in order, the
creative team prepares the finishing touches to the concept and presentation schedule is
arranged with the client.

Role of the account handlers in the creative process

As the account handlers, of all levels, are in regular contact with the client, they are absorbing
the needs and wants of the client, whether these are expressed formally or merely implied
by the client’s behavior or attitude. They learn to understand what the client will accept and
will reject, and so they form a vital link in communicating what is required without inhibiting
the creative process.

However, the account handler, when presenting the concept, also explains and defends the
creative ideas, to get them accepted by the client, as they have been carefully thought out to
enhance and reinforce the advertiser’s message. If, in fact, the client is not convinced then
it is up to the account handlers to break the news to the creative team. On some occasions,
complete campaigns have been thrown out by the client, but in many cases the campaign
requires only a small change of emphasis.

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Media department

The media department is split into three areas:

• Media research
• Media planning
• Media buying

Media researcher

Media data such as audience data is essential for media department of the advertising agency
in order to select appropriate media to place the advertisements and commercials. Much
of this complicated media data is available on line, by subscription to computer databases
operated by the independent media research organization. The media department can
look at individual publications, radio and television programs which might have audience
profiles similar with the profile of the target audience. This is called intramedia comparison.
If comparison is made between different types of media (newspaper vs magazine), this is
known as intermedia comparison. It is possible off course that several media can target the
same audience, which leaves option to decide on which can be used to deliver different
aspect of the message.

Therefore , the role of media research is to support media planners with providing media
data such as audience data, TV ratings, media penetration, etc. Such data will help provide
a strategic media plan to support the advertising objectives.

Media planners

The media planner takes the statistical research undertaken by the media researcher as
the basis for deciding which media, newspaper, radio, television (intermedia decision) or
which newspaper, which radio station and programs, or which TV channel and programs
(intramedia decision) , will be the most appropriate to carry the advertising. Another factor
that must be considered is the ability of the medium to carry the message, so the media
planner must consider the following characteristic of the medium:

● television advertising, for impact, to gain attention and create awareness as well as
image building
● national newspapers and magazines, to give detailed information such as specifications
and credit details as well as offering the opportunity to include a response coupon
● regional and local newspapers, for co-operative advertising or advertisements to draw
attention to local outlets
● radio, to create image and mood for the product (as well as local stations to draw
attention to local outlets/stockists)
● cinema, to remind as well as give impact (but on a limited basis as people go the
cinema infrequently)
● trade journals, to convince the retailers of the messages being communicated by direct
mail

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The media planner then produce a media plan which provide the media objectives and
strategy, and media schedule to show the selected media, time and frequency and the
budget/costs.

The media plan is presented to the client by the media planner and the account handlers for
discussion and approval.

Media buyer

The final process of the media department is to buy the advertising space and airtime.

The media buyers will negotiate with media houses for discounts and credit terms. One of
the best strategies to secure good discounts is to buy large volume of space or airtime. The
agency credit record is also a factor often considered by media houses to give discounts and
other privileges to the agency.

Production Department

The responsibility of the production department is to make sure that everything that is needed
to produce the final advertisement is prepared cost effectively to the highest quality and then
delivered to the right place at the right time and in the right format.

Since actual production of advertising materials are not done in house at the agency but are
outsourced to the appropriate productions houses, printers, etc so the role of the production
department is coordinating and supervising the work of the selected external production
suppliers.

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Points to remember

● The functions of meeting clients’ needs are coordinated by the account handling team
with the assistance of an account planner.

● Account handling consists of account directors (responsible for strategy) and account
executives (who liaise with the client and other agency departments on getting the
work completed)
.
● The account planner’s role is primarily concerned with the long-term solution of the
client’s needs and wants, but might include attention to details that may affect the well
being of the clients and their accounts.

● Account handling is based on responding to campaign and advertising briefs prepared

by clients outlining the requirements that they want fulfilled.

● The role of the creative department is to find a way that is credible but still has
attractiveness to communicate the benefits and advantages of clients, their products
and services.

● The creative director works with creative teams to develop the key concepts and copy
platform to carry the client’s message, based on a creative brief.

● Concepts are worked up into visuals (by a compugraphic designer) and copy (by a
copywriter) or storyboards and scripts (by a scriptwriter) to a standard that can be
presented to the client.

● The media department is responsible for research to establish the media which would
be best suited to reach the client’s target audience. This would include determining
which were the best slots, positions, locations or sites and not just the overall medium
but the particular publication, television or radio station, or cinema screen.

● The media planner creates detailed media schedules and media expenditure for the
client’s approval.

● Based on the approved schedule, the media buyer negotiates the best deals in terms
of position and location related to the lowest cost.

● The media department negotiates packages with radio stations, television companies
and contractors for outdoor and transport advertising (poster) and cinema advertising
for the benefit of the client.

● The production department ensures that advertisements and commercials are

completed as scheduled and meets the agency standard of quality

● The production department co-ordinates with external production suppliers such as

production houses and printers for the production of all promotional material generated
by the agency,

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CREATION OF ADVERTISEMENTS AND COMMERCIALS

CHAPTER 11

CREATION OF ADVERTISEMENTS AND

COMMERCIALS
CHAPTER OUTLINE

The creation of advertisements and commercials requires specific skills. First of all there are
specific skills to interpret information written on the creative brief, which is the basis for the
concept development of advertisements and commercials. Then there are specific skills in
the formulation of creative strategy and message execution in the form of writing copy and
scripts as well as art direction for the visual part of the advertisement and commercial.

This chapter discusses the meaning of creativity in advertising, how concepts are developed
and how creative strategy are realized in the form of storyboard, layout and script.

OBJECTIVES:

1. To understand what is creativity in advertising

2. To understand the creative process in developing advertising concept
3. To understand how to prepare TV commercials
4. To understand how to prepare print advertisements
5. To understand how to prepare radio commercials

Creativity in advertising

Creativity is definitely one the most important aspect in advertising. A unique advertisement or
commercial always gets the audience’s attention and make the commercial or advertisement
stands out among other advertisements and commercials .However, being different and
getting attention are not the only criteria for creativity in advertising. Advertising is a marketing
problem solving tool. Marketers/advertisers financed the advertising campaign to achieve its
marketing objectives. Therefore advertising must be persuasive and motivates the audience
by providing advertising message that answers to the target audience’s needs and wants.
Creativity in advertising means.

• Effective in helping the advertiser achieve its marketing objectives.

• Provide a unique and effective way to communicate with the target audience
• Creating advertising message which relates and provides answers to the target
audience’s needs and wants
• Persuasive message which motivates the consumers, therefore contributing to sales
• Effective in establishing brand image
• it must be ethical

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The creative process

Studying the creative brief

The creative brief provides the information required by the creative team and is used to
guide them in developing the concept. The creative team under the direction of the creative
director will study and analyzed the information in the brief, to get the essence of:

• The advertising objective

• The audience needs/ wants/problems
• The aspects of the brand which can fulfill the needs/wants or solve the problems of the
target audience
• The motivation to buy the brand
• The way to communicate effectively.

Brainstorming

It is the practice of the creative people to brainstorm together to get ideas. When brainstorming,
all ideas that come are listed and discussed. The ideas might relate to the feature and
benefits of the products or consumer behavior that you want to evoke with your message.
The ones with potentials are short listed and finally the “big” idea is selected.

The creative strategy

The two previous processes will result in finding the “big” idea. The big idea will be formulated
into the creative strategy that is what message to be conveyed, to whom and with what
approach:

• who to influence
• what to say in order in order to influence
• how to say in order to influence

Then the creative strategy is implemented in what is called the message execution which
simply means the technique to convey the advertising message to the target audience. The
message execution should be:

• attractive, attention getting

• simple and easy to understand
• able to create the perception as defined in the creative strategy

Message execution takes the form of storyboard for TV commercials, layout for print
advertisements and script for radio commercials

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TV commercials

Television has other elements over print advertising: visuals, sounds, movements, thus
providing powerful impact to the advertising message.
However the same principle applies, the commercial has to attract, creates interests and
desire, so that potential customers will act in favor of the brand compared to that of the
competitor’s.

The storyboard

The concept of TV commercial is called the storyboard. The storyboard contains the story
line to communicate the “big “idea and visuals are used to explain the story line. The script
for TV commercial is short and concise, and further enriched with music and sound effects to
create interests and get attention. Every scene in the storyboard is framed like a TV screen.
Below each frame is written the dialogues, camera angle, music and sound effects.

The storyboard is used by the agency to explain and sell the advertising concept to the
client.

Print advertisement

Print advertisement refers to advertising placed in magazines, newspapers, tabloids, etc.

Elements of print advertisement are:

• headline
• sub headline
• body copy/main copy
• slogan/tagline
• visual
• layout

Headline

Headlines are used to attract attention to the advertisement, so that it will be read by the
target audience. The format of the headline depends on many factors, among others are the
creative strategy, the media used and how it should relate to the visual and body copy

Sub headline

The sub headline is used to support or enhanced the message in the headline: such as to
provide information and improved understanding.

Body copy

The body copy is an elaboration of the statement or promise made in the headline or sub
headline. Therefore the function of the body copy is to persuade by giving information that
will motivate the target audience to use the brand.

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Slogan/tagline

Slogan or tagline is used to provide the final persuasion, by giving a phrase of reason to
use the brand. Written in only a few words, slogan/ tagline conclude the whole advertising
message. It also strengthens the positioning of the brand. Tagline is usually catchy and easy
to remember.

Visual

The visual of a print advertisement is often the most visible and dominant element. It is
created to get attention and to communicate the concept of the advertisement and to convey
the brand image.

Layout

Layout is how all of the above elements are placed in the advertisement. Again the main
objective is to get attention, to convey the advertising message in a simple way to ensure
comprehension and to establish the brand image.

Radio

After the so-called excitement of the all-singing and all-dancing television, radio may seem
a dull medium for any creativity, yet, despite only having sound, it can be used to create the
most marvelous word-pictures using the listeners’ imaginations. With sound, there are not
only the words but the fact that the words can be dramatic or humorous while sound effects
and music can create exactly the right mood.

The elements of radio commercials are:

• Script containing the main message, the promise and the positioning of the brand.
• Music, to get attention, to enhance the positioning and to create overall mood.
• Sound effects to promote imagination in the listeners mind.

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POINTS TO REMEMBER

• Creativity is a very important aspect of advertising

• A creative advertising means that it is effective in helping the advertisers reach his
advertising objectives, relates to the needs and wants of the consumers, persuasive
and motivating the consumers to use the brand so helps to increase sales.

• The creative process begins with the creative team studying and analyzing the essence
of the brief and brainstorm together to get ideas

• The big idea is formulated in the creative strategy which basically means conveying
what message to whom and using what approach

• The message execution is simply the technique in which to convey the message to the
target audience

• The message execution must be attractive, simple and easy to understand and must
establish the brand positioning.

• For a television commercial, elements such as pictures, movement, sound, and camera
directions have to be included as well as dialogues.

• The storyboard contains the story line to communicate the “big “idea and visuals are
used to explain the story line.

• Storyboards are used by agency to explain the concept of TV commercial to their

clients

• Print advertisement refers to advertising placed in magazines, newspapers, tabloids,

etc.

• The elements of print advertising are : headline, sub headline , body copy, slogan/
tagline, visual and layout

• Although radio only has sound, it can be used imaginatively with music and sounds
effects

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PRODUCTION OF ADVERTISING MATERIALS IN MEDIA

CHAPTER 12

PRODUCTION OF ADVERTISING MATERIALS

IN MEDIA
CHAPTER OUTLINE

The production of advertising material is outsourced to a third party : printing establishments,

recording studios, production houses. The production department of the advertising
agency is mainly responsible for coordinating work between the outside suppliers and the
various departments of the advertising agency such as the account handling and creative
departments.

This chapter will describe the role of the production department to ensure that production
of advertising materials is conducted professionally and on time for the clients advertising
campaign. It will also describe the production process of print advertising , TV and radio
commercials.

OBJECTIVES:

1. To understand the role of the production department in ensuring production of advertising

materials are done in a professional manner
2. To understand the production process of print advertisement and other printed promotion
materials
3. To understand the production process of TV commercial.
4. To understand the production process of radio commercial

The role of the production department

Once the concept – copy and layout (visual), or storyboard has been approved by the
client, the producer (in bigger sized agency there are print producer, TV producer and radio
producer, in smaller agency all production process are undertaken by one producer), begins
the production process by allocating a job number and title. The job numbering system is
vital to keep tract of the work through agency and suppliers until completion. Therefore, the
responsibilities of the production department are as follows:

• Coordinating all work required for the production process internally with relevant
departments: creative and account handling ( to handle all communication with client)
and externally with the suppliers. In bigger agencies progressing work to outside
suppliers are monitored by the traffic controller, however in smaller agencies this
function is performed by the production manager.
• Monitoring the production process, ensuring conformation to production schedule
• Ensuring that standard quality is met

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• Ensuring that all costs borne by agency are allocated to the right job and prepare
invoices for approval to the account handlers.

Throughout the whole workload of the production department, the key elements are quality
control and following tight production schedule. This is to ensure that production of the
agency’s work is to the highest standard and are done on schedule.

Producing printed advertisement and other printed promotional

material.

The print production process begins after the client has approved the copy and layout
(concept). The production process is as follows

Pre production process:

This stage is the preparation stage prior to actually producing the print material. It consists
of appointing the agency print producer, preparing detailed planning such as costing,
timing, appointing photographer, casting, location hunting or studio set up, make up and
wardrobe.

Production

At this stage the finish artwork is prepared by the compugraphic designer who has taken
over tasks of the paste up artists prior to computer technology. All the elements of the print
materials: visuals (photo or illustration), headline, body copy, tag line, etc are all incorporated
in the computerized artwork.

Post production

The next step is taking the final artwork for printing. Since the advancement of computer
technology, the traditional way of producing print materials by way of color separation and
proof prints are no longer practiced. The printing process nowadays uses digital techniques
develop for computer printers such as inkjet or laser printer.

The process is much faster and more cost efficient compared to traditional printing methods.
Every print can be different because printing plates are not required and less waste of
chemical and paper.

The client has to approve the finished product and then the print advertisement is dispatch
to media for placement.

Producing TV commercials

Once the story board and script is completed, the TV producer is asked for advice on the
following

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Pre production

1. feasibility study: The TV producer will check if the storyboard is feasible

technically. The TV producer will also make sure it can be produced within budget
and time frame.
2. initial approval : further checking to ensure that the script will not create problems
legally or ethically.

The next step is presentation of storyboard to client

3. appointing the TV producer: once the storyboard is approved by client and

ready for production, the agency TV producer is appointed. (in bigger sized
agency there may be more than one TV producer, therefore one needs to be
appointed).
4. selecting the production house: as production of TV commercial is outsourced
to a production house, the TV producer will then begin the process of selecting
the production house and the director. The production house will submit detailed
costing and time frame for approval by the agency.
5. detailed planning: once the proposal from the production house is approved,
detailed planning to produce the commercial begins: location hunting, casting,
wardrobe, make up artists, etc. Several meetings between account handlers,
creative team, production team and the production house team are conducted to
ensure the production process will go smoothly. These meetings are called pre
production meetings.

Production

6. filming: studio or on location shooting. Although it is strictly guided by the

planning and the discussions in the pre production meetings, the actual filming
may try different angles and approaches, to be used if the original angles didn’t
work. This will save the expense of re filming. Commercials are still made on
35mm film, and edited by computerized techniques to produce the commercials
on broadcast standard video tapes.

Post production

7. post production editing: this includes recording and dubbing the voice overs,
music and sound effects, as well as color corrections. With computer technology,
some colors can be emphasized, while others toned down. The commercial is
edited into 30”, 15” and 5” duration.
8. approval of censor board: all commercials must be censored to ensure
compliance to ethical regulations.
9. dispatch to media: the TV commercial is transferred into video tapes/ DVD and
dispatch to TV stations.

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Producing radio commercials

The production of radio commercial starts with an approved script.

Pre production

The radio producer prepares the detailed planning such appointing the recording studio,
costing, selecting voice talents, sound effects , copyrights for music if any, producing the
jingle, if any.

Production

At this stage all audio element are mixed and recorded at the recording studio. Durations of
radio commercials are usually 30” to 60’

Post production

Once the sample recording is approved by the client then the commercials are transferred
to CD format and dispatch to radio stations for placement.

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Points to remember

The role of the production department

• The production process begins by allocating a job number and title. The job
numbering system is vital to keep tract of the work through agency and suppliers until
completion.
• The production department coordinates all work required for the production process
internally with relevant departments of the advertising agency.
• It also ensures that works are done as scheduled and meets the agency’s standard of
quality.

Press advertisement

• the production department is in charge of the production process which includes

preparing final artwork and printing process
• final artwork is done by the compugraphic designer and is the conversion of copy and
visual into finished or camera ready artwork
• The finished artwork is processed by way of digital printing process, which is more time
and cost efficient compared to traditional printing process.

TV commercials

The production of a television commercial starts with a feasibility study is based on the script
and perhaps a storyboard.

The stages of producing television commercials are:

1. feasibility study by the head of television production

2. script approval to ensure compliance with ethical board
3. appointment of the producer (and production assistant) from within the agency
4. selection of director from a television commercial production company taking account
of detailed costing
5. detailed planning
6. studio and location filming
7. post-production editing
8. approval by board of censor
9. dispatch of finished commercials to television stations or channels.

Radio commercials

1. the production process begins after the script is approved and the radio producer will
make detail planning
2. all the audio elements such as voice over, music, sound effects are mixed and recorded
at the recording studio
3. once demo or sample recording is approved by client, it is transferred to CD format and
dispatch to radio stations for placement.

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MEDIA IN ADVERTISING AND PRINTED MEDIA

CHAPTER 13

MEDIA IN ADVERTISING AND

PRINTED MEDIA
CHAPTER OUTLINE

Media serves an important role in advertising. It is used to carry and convey advertising
message to the target audience. To do this efficiently and effectively, media planners have
to make several considerations, such as media data, media characteristics, etc.

As one of the chapter about media, this chapter will go through the many categorizations
of media used by advertising agency. It will also show the extent of media available for
advertising and how it is used to achieved optimum result.

OBJECTIVES:

1. To understand the extend of media available for advertising

2. To understand different types of media and how it used in advertising.
3. To understand the use of print media.

The role of media in advertising

Without media, advertising message will not reach the target audience. Media cost is the
largest part of the advertising budget, therefore media planners must be sure that the most
effective and efficient media is selected to carry the advertisements and commercials. Thus
several considerations are undertaken:

• Media costs: what media to be used to accommodate the advertising budget given.
For example, as TV spots are relatively more expensive than other media placements
costs, therefore a rather small budget may not be feasible for buying TV spots
• Media data: who reads it, listen, watch, how many, how often, etc
• Media characteristics:
o Physical
o Restrictions
o Timing for booking

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Media used in advertising

• Press/print – newspapers, magazines, tabloids

• Radio – local and national
• Television- national, local, cable
• Outdoor - billboards, signage
• Mobile - public transport
• Cinema
• Internet
• Direct mail - brochures, catalogues

Above the line and below the line media

This categorization of media is used by agencies to distinguish media which are vital for
the agencies main source of income. Agency commission is gained from above the line
media, thus contributing the agencies main source of income. However, agency will focus
on the client’s promotional objectives, when electing above the line media and below the
line media.

Above the line media

• Provide high reach of the target audience

• Spots and spaces purchased for advertising
• Agencies source of main income from media commissions
• TV, magazines, newspapers,tabloids, radio, outdoor, mobile are in this categorization.

Below the line

• Specific, made for specific purpose

• Limited reach, reach specific audience
• Agencies income limited to design and production
• Leaflets, brochures, posters, are in this category

Primary and secondary media

The principle of primary and secondary media is of greater importance than above the line
and below the line media to the advertiser.

Primary media

The media most often used to carry the advertising message. The main consideration is
reach and costs.

Secondary media

The media used to support the primary media.

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Printed media

Newspapers

• National newspapers- general : Kompas, Republika, etc

• National newspapers-business: Business Indonesia, etc
• National newspapers-English language: Jakarta Post, etc
• National Newspaper-evening: Suara Pembaruan, etc
• Regional/local newspapers: Pikiran Rakyat (Bandung/Jawa Barat, Jawa Post-
Surabaya/Jawa Timur, etc)

The characteristics of newspaper are high reach of the target audience, high in news value,
offers a variety of size for purchase. However, it has a short life only half a day and the
quality of paper may not be suitable for advertisements relying on visual impact such as high
end fashion brand.

Magazines

Magazines are more segmented than newspapers as shown below

• Consumer magazines- women general: Femina, Kartini.

• Consumer magazine-women fashion: Dewi.
• Consumer magazine –parenting: Ayah Bunda.
• Consumer magazine –business: Gatra.
• Consumer magazine teenagers –girls: Cosmo girls.
• Consumer magazine teenagers –boys: Hai.
• Business Magazine: SWA.
• Lifestyle magazine: Prestige.

Beside consumer magazines, various trade magazines are also available usually published
by trade associations. Most magazines are circulated nationwide. Magazines are segmented,
has a longer life and higher duplication of readers than newspaper. It has a better production
quality than newspapers, so advertisements look more attractive.

Tabloids

Tabloids can be said as a cross between newspapers and magazine. In appearance and
paper quality they are more similar to newspapers, but in content and segmentation are
more like magazines. Tabloids are not published daily like newspapers, but weekly. Tabloids
worth mentioning here are: Bola for the soccer fan, Nova for women and Cek & Ricek for
celebrity news.

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Points to remember

• Media is used in advertising to reach the target audience.

• Since there are many types of media, the media planners must refer to media data to
ensure that the media selected is appropriate in that it is the most effective and cost
efficient media to reach the target audience.

• Categorization of media includes, above the line media, below the line media, primary
and secondary media.

• Above the line media and below the line media are initially defined to differentiate which
media generate the most income for the agency. However, the selection of above the
line media and below the line media must take into account the promotion objectives.

• Primary media is media most often used to carry the advertisement, chosen based on
the audience it represents and the costs.

• Secondary media is selected to support the primary media.

• Printed media consists of newspapers, magazines and tabloids.

• Newspapers are further categorized into, national, regional/local, general and

business.

• Magazines represent many segments of the market, such as consumer magazines for
women, teenagers, men, and business/ trade magazines.

• Tabloids are similar to newspapers in terms of paper quality but are similar to magazine
in term of segmentation, content and time of publication (weekly instead of daily).

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BROADCAST MEDIA AND OTHER MEDIA

CHAPTER 14

BROADCAST MEDIA AND OTHER MEDIA

CHAPTER OUTLINE

Having discussed the role of media in advertising and the printed media, this chapter will
focus on broadcast media: television and radio. It will discuss how these media are used
as advertising media. Other media, also important for many aspects of promotion such as
outdoor media, cinema, direct mail, door to door distribution and POS displays will also be
presented in this chapter.

The previous chapter and this chapter will show the importance of selecting the appropriate
media to achieve specific advertising and promotion objectives, as each media differ in
characteristics and hence have their own strengths and weaknesses.

OBJECTIVES:

1. To understand the use of television as an advertising medium

2. To understand the use of radio as an advertising medium
3. To understand how profile of television and radio audiences differs according to the
channels and stations, the programs and time of day
4. To understand how the following media deliver advertising messages:
»» Outdoor media
»» Cinema
»» Door to door
»» POS ( point of sales)

The broadcast media

Television

Although television is not always a primary medium, it is often the first choice to
advertise FMCGs and consumer durables, especially if they are targeted at the so called ‘mass
audiences’. Television can swiftly and effectively communicate benefits and advantages in
an effortless, lively manner to large target audiences.

Television if can be afforded by the advertiser, has definite advantages. It delivers moving
pictures which can enhance the persuasiveness of the message. Sound effects and music/
jingle are often used to reinforce mood for the brand.

Advertisers will opt to buy spot at peak hours or “ prime time” , where popular high rated
programs are relayed. Many television channels will compete with each other to offer
programs which will command highest viewers.
The revenue from selling advertising spots pays for the production of programs or buying
programs from overseas. Advertisers pay increased air time price for high rated programs.

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Terrestrial television used land based transmitters to relay their programs , whilst satellite
television used high powered electronic beam from an earth station to a satellite in space
which is then reflected back to be collected by receiver dishes outside houses or buildings.
The use of satellites enables the receipt of more channels to the viewers compared to the
use of land based transmitters.

International advertisers benefit from satellite television in that it can reach international
audiences.

Cable television is carried by optical fibers, which are strands of glass along which tiny light
beams are passed to carry the television signal. The optical fibers used are two way, so
there are immense opportunities for advertisers to discuss their products on television for
customers to buy at the press of button on the remote control unit. Thus emerge shopping
channels, using direct response marketing with their target market.

Radio

Radio is broadcast via airwaves, the use of which is controlled by government, so that a
radio station is operated by contractor under license.

Radio covers a local area and most radio stations have developed a distinct programming
format to cater to specific segments of the population. Hence emerge business news radio
stations, stations directed at the female segment of the population, etc.

Advertising spots are 30 seconds or 60 seconds. Prime times are early morning when
people are in their cars to go to work and again early evening when they are going back
from work. One of the advantages or radio, is that it can be listened to anytime, thus the
prime time are usually directed at working people. Lack of pictures is not really a problem,
as the combination of tone and style of voice plus music and sound effects can often paint a
powerful “picture” in the mind of the listeners.

Radio also provides information important to the listeners such as weather forecasts, traffic
condition, latest development on particular news of interests, etc and such information may
be sponsored by the advertiser.

Beside spot advertising and sponsorship, other means of promotion using radio are: Ad
lip, where the announcers relay the advertising message, and creating specific talk show
programs are also gaining popularity among advertisers.

Other media

Outdoor advertising

Outdoor advertising involves putting the advertising message on billboard, pedestrian

crossing bridge and shop signage. Today it has evolved into mobile advertising, using public
transport as advertising medium.

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Billboards are controlled by specialist media agency and advertisers can rent for a period of
time. Billboards are not placed randomly but are selected with care based on research data
indicating the profile of the public, the estimated number that pass each day and how times
a day they pass.

The advantage of outdoor advertising is that people cannot really avoid it. Off course
people don’t stop to look at a billboard, the brand name, colors, the powerful visual and
brief associated message will subconsciously remind them of the television or magazine
campaign they have seen.

Cinema

Most cinemas are complexes, with a number of screens to have several films showing
to different audience. Cinema goers are usually teenagers and young adults, so brands
targeting this segment often find cinema as quite an effective medium for advertising. Cinema
has its own way of delivering the advertising message, it has sounds and movements, and
the large screens in a darkened room with impressive audio system. Moreover, there is the
captive audience, unlike television where people can switch channels or do other activities
during commercial break.

Selection of cinema is based on who will see the film, the location of the cinema, time such
as weekend, etc.

Direct mail

Unfortunately, direct mail has become known as ‘junk mail’ owing to too many
companies are doing it badly. In fact, provided it is addressed correctly (by name, to the
potential buyer or user) with a mailing piece (or promotional leaflet) and a message that
appeals to the customers’ or consumers’ needs and wants, it is highly successful.

Targeting depends on getting the right mailing lists of named individuals, and this has to
be done precisely. This is undertaken by direct mail houses, which build or create lists of
names and addresses within certain categories such as professionals, business owners ,
etc. Companies can now build their own mailing lists on computer databases and code them
in such a way that they can target mail shots to individuals based on goods and services
already bought and the pattern of buying.

Door-to-door distribution

Door-to-door distribution simply means delivering promotion materials to people’s houses.

The areas to receive the door-to-door are mapped according to the profile of the target
audience.

Another variation of door-to-door is inserting the leaflet in the newspaper, providing off course
the target audience has a similar profile to the readers.

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Point of Sales (POS) displays

POS are used at the retail or outlet where the brand is sold and can take the form of :

• Stickers/show cards on counters

• Hanging mobiles suspended from ceiling
• Metal displays, free standing in the store
• Dummy pack (actual size or enlarged)
• Crowners to put on bottle necks
• Open/closed sign
• In store videos
• Shop signs

The purpose is to get customer’s attention and to remind them that the brands are available
in the store. It will also remind them of the key advertising message. As they promote sales,
such materials are welcomed by the retailers. Since competition for space is fierce, POS
displays must be well planned and budgeted.

The media combination

No promotion plan can really be effective by using one medium. To achieve maximum impact,
promotion campaign usually employs various media:

• TV commercial to gain awareness, impact and image

• Newspapers and magazines to provide detailed information such as specifications
• Radio as reminders to a specific segment and create mood for the brand
• Cinema for impact and reminder to a specific segment
• Direct mail to inform retailers about product benefits and to provide detailed information
to consumers.
• POS materials to promote sales of brands in shops where they are sold

Advertising can be supported by other promotion techniques:

• Sales promotion to encourage purchase through incentives

• Personal selling to encourage interaction with customers
• Exhibitions to show product and product demonstration
• Sponsorship to create goodwill.

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Points to remember

• Television is an effective media as it has sound and movement to reinforce the

advertising message.

• Television has prime time showing high rated programs.

• The higher the number of people watching the program, the higher the price for the
spot.

• Different programs attract different profile of audiences, and the type of viewer changes
throughout the day’s programming.

• Radio is an effective advertising medium as it can be listened to anywhere and anytime,

while doing other things.

• Although lacking visuals, radio advertising with sounds and music helps to create a
powerful and personalized image of the brand.

• Outdoor advertising cannot be avoided and carry brief messages, as reminder.

• Cinema is effective to reach young audience and also provide captive audience.

• Cinema provides impact in terms of large screen, sounds and movements.

• Direct mail can be effective provided if executed properly, the right targeting, correctly
addressed, and contain useful and persuasive messages.

• Door-to-door advertisers allow advertisers to deliver leaflet, sales promotion offers, etc
to specific target audiences in certain neighborhoods.

• POS is an effective way to remind customers of the brand image and key advertising
message of brands that are sold in the store.

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MEDIA PLANNING

CHAPTER 15

MEDIA PLANNING
CHAPTER OUTLINE

Media research is the first and fundamental step in media planning. To understand how
many people buy specific newspapers and magazines, or more importantly, how many read
them and what types of people they are – requires media research. Similar information is
also required for broadcast media such as who watches and listens to television and radio
programs, is very crucial in making a strategic media plan. To fulfill the needs of media data,
agencies employ the services of independent media research companies.

This chapter will discuss how agencies acquire the information needed to make media
plans, what data is needed, and how this data is used for planning media. This chapter will
elaborate the process of media planning and media buying.

OBJECTIVES:

1. To understand the need of media research for media planning purposes and how it
is required
2. To understand what data is needed for inter media planning of above the line
media
3. To understand what data is needed for below the line media
4. To understand how media data is used in media planning and buying

Media research- above the line

As advertising campaigns are being based on integrated marketing communications, media

research is being used to investigate inter media habits, that is to see which radio listeners
are viewers of which TV channels and programs and which newspapers and magazines
they read.

For advertising agencies, media research is important to establish the profile of who receives
the advertising message as well as the depth or penetration in the market place. Penetration
is also called coverage (especially in printed media) and reach in broadcast media.

For media houses, the result of the research allows them to set rates (costs) of advertising
space and airtime, and these are not only based on the size of the space or the duration
of the airtime, but most importantly on how many people will be exposed to the advertising
message and their purchasing power to buy certain goods and services.

Using information regarding audience profile, penetration and media rates, agencies can
select the best media to target the desired market effectively and can calculate the required
budget.

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Independent research organizations

Independent research organizations are used to establish media data to assure advertisers
and advertising agencies that the research is accurate, valid and unbiased. Therefore the
agency’s media department can rely on the data and be assured that the media they buy on
behalf of the clients will reach the advertisers target audience.

Media data can be obtained by working together with a world wide media research
organization such as AC Nielson. Local research companies are often used by advertisers and
advertising agencies to conduct omnibus surveys and competitors advertising expenditures.
The Indonesian advertising trade organization, PPPI, published annually an advertiser and
agency guide to media in Indonesia called the Media Scene.

Research-below the line

Direct mail

There is no media research for direct mail, but there are ways of establishing the number
of potential contacts that a mailing can reach. Mailing lists are classified by names and
addresses, professions, buying power, and also indicate an estimate of the number of people
in each classification. Data base technology allows for cross-tabulation of different criteria to
build a list tailored made to match the audience profile the advertisers want to reach.

Internet and POS

The Internet and World Wide Web are still in their infancy and not readily available to some of
the key target groups that an advertiser wants to reach (e.g. majority of users are young and
may be lacking in buying power). Consequently, they are not fully recognized as mainstream
media and so little research has been undertaken into their effectiveness as advertising
media. However, figures are available on the number of times that a website is “visited”.

Currently there is no research undertaken by independent research organization into

effectiveness of POS materials. Its effectiveness relies upon the evaluation of the advertisers
marketing and promotion team.

Media Planning

Based on the analysis of the media data obtained from above mentioned research, media
planners will select media that will direct advertising messages effectively and efficiently to
the target audience.

In addition, media houses also provide what is called media kit. The media kit contains
interpretation of data collected and analyzed by the independent media research
organizations:

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1. Circulation and readership figures (or viewing or listening figures)

2. Profile of readers (or viewers or listeners, etc)

3. Area of coverage (in geographic terms)

4. An editorial schedule of subjects to be covered in the publication so that advertisers

can place their advertisements in special issues, features or sections. For television,
this takes the form of video presentation, while cinema chains issue lists of forthcoming
films

5. Advertising rates (including rates for special positions or peak viewing times)

6. Frequency (daily, weekly or monthly appearance)

7. Mechanical details (e.g. method of printing and requirements for film for printed
media).

The scope of media planning

• Media objective: what is to be achieved , qualitative as well as quantitative

• Media strategy : how is the best way to achieve the above objective
• Media schedule: the implementation of media strategy: when and where to place the
advertisements and commercials
• Media budget: costs required to place the advertisements/commercials.

Media objectives:

• Who to reach with the use of selected media

• How many
• How often (frequency)
• Effective reach needed to get your message across
• Media budget

Media strategy

• Which media to use: (macro media selection and micro media selection)
• Budget allocation for each type of media
• Monthly reach and frequency
• Media efficiency
• Size and duration of advertising

Media schedule

• Showing the most effective and efficient use of media selected

• Showing the reach and frequency as stated in the media objective

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Media budget

• Monthly media budget

• Macro media budget
• Overall campaign budget

Media brief

Media brief is a document prepared by the account handler which contains all relevant
information required by the media planner. It contains the following information:

1. Product/brand information: physical characteristics, use, benefits, etc

2. Marketing objective: what the advertiser wants to achieve with marketing efforts
3. Brand performance in the market: market share and other indication of how the
brand is doing among its competitors
4. Advertising objective: what the advertiser wants to achieve through advertising
campaign
5. Past advertising efforts and result
6. Consumer buying and usage habits
7. Direct competitors: who and what they do, how do they differ with the brand
8. Target audience
9. Why the audience wants to use the brand
10. Market area: the campaign coverage of marketing area.
11. Media recommended by advertiser
12. Duration of campaign
13. Media budget

Media efficiency

As mentioned above, media plan strives to select the most cost efficient media to place
the advertising message. Therefore there are ways to compare media efficiency as shown
below

Cost per thousand (CPT)

The above is used to compare the cost of different media, to determine which is more cost
efficient. The elements are the costs for advertising space/airtime divided by 1000 readers/
audience.

Cost of Space
Cost per thousand= -------------------------------------------
Readership divided by 1000

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Media buying

The media buying is the implementation of media planning, meaning that after the approval
of the media schedule by the client, the media buyer is responsible to purchase space or
airtime for the advertisers. In doing this, they have two interests to achieve:

1. For the advertiser: negotiates the best price ( discounts)

2. For the agency: finds opportunities to earn extra money ( more discounts, flexible
terms of payment)

The media buyer is also responsible for making sure that the advertisement appears in the
media as per media purchase order and that the agency is billed as per agency –media
buying contract. The media buyer also follows up with the account handler to ensure that the
client pays the media bills on time, so that media can be paid on time too.

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Points to remember

• The media process consists of media research, planning and buying

• Media research is crucial as accurate data regarding the media’s audience and media
characteristics such as penetration, rates are important considerations in the media
planning process

• Media research is undertaken by independent media research organizations to ensure,

accurate, valid and unbiased data

• Account handlers prepare media brief containing information to be used as a basis for
formulating media plan.

• Upon receiving the media brief, media planner will create media plan and schedule
consisting of macro media selection and micro media selection. The most effective and
cost efficient media are the main considerations when making a media plan.

• Media efficiency is calculated via various methods such as the CPT (cost per
thousand).

• Media buyers will proceed to buy space and air time once the media schedule is
approved by the advertisers.

• Media buyers will check that advertisements and commercials appear as scheduled
and that media bills are paid on time.

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ETHICS AND CODES OF PRACTICE

CHAPTER 16

ETHICS AND CODES OF PRACTICE

CHAPTER OUTLINE

Advertising is very powerful and can impact the target audience way of thinking, emotions
and behavior. Therefore, it is important that the advertising message does not impact the
target audience in a negative way.

Most advertisers and advertising agency prefer voluntary control, meaning they themselves
control what should be said and what should not be said in an advertisement or commercial,
bearing in mind the interest of the target audience. The voluntary controls ensure advertisers
maintain the standard of behavior which protect the reputation of the industry and so ensure
by implication, that the customer is being protected.

This chapter discusses the objectives and roles of code of advertising practice and how it
benefits the advertisers, advertising agencies and consumer.

OBJECTIVES:

1. To understand the objectives and role of advertising code of practice

2. To understand how the advertising code of practice benefits the advertisers,
advertising agencies and consumers

Advertising creativity and ethics

Creativity and persuasiveness is the basis of the advertising message. To motivate the
consumers, advertising messages focus on the consumer benefits, be its rational benefits
such as value for money or emotional benefits, promising beauty and image.

An advertisement or commercial is creative not just because it is different than other

advertisements or commercials, but because it motivates the consumers without over
promising and without misconceptions. A creative advertisement or commercial can in its
own unique way make the consumers understand why a certain brand will benefit them.
Advertisers and its target audience must build and maintain a long term relationship to
ensure consumer trust and loyalty. In short, creative advertising is also ethical advertising.

The advertising code of practice strives to ensure that consumers expectation are met, and
that advertisers and advertising agencies work together to fulfill this expectation.

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Advertising code of ethics: objectives

For consumers

• Protect consumers from over promise and misleading information and perception
• Motivates the consumers to use the brand because advertising message answers to
consumers’ needs and wants
• The advertising message is credible, thus establishing consumer’s confidence in using
the brand
• Advertising message is focused and informative, therefore helps the consumer to
select the right brand to serve their needs.
• Educate the consumers by giving examples and appropriate information

For advertisers and advertising agencies

• To use as standard practice in order to uphold professionalism and reputation of the

marketing and advertising business
• To promote healthy competition among advertisers
• To practice corporate social responsibilities
• To provide guidelines in creating concepts with the consumers interests in mind.

The Advertising Code: general

The Advertising Code states that all advertisements should:

• be legal (and do not break the law or incite anyone to break the law)

• be fair and promote healthy competition by not exploiting negatively competing

brands

• be decent (and should not cause serious or widespread offence on the grounds of
race, religion, sex or disability)

• be honest (by not exploiting credulity, lack of knowledge or inexperience of

consumers)

• be truthful (by not misleading through inaccuracy, ambiguity, exaggeration, omission,

etc)

• show responsibility to the consumer and to society

• follow business principles of ‘fair competition’

• not bring advertising into disrepute

• apply the Code in spirit as well as in the letter

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• be able to be substantiated

• not exploit or exaggerate fear

• not show or encourage dangerous practices (especially with the young)

• not encourage drinking and driving

• not condone violent or anti-social behavior

• not use people (e.g. personalities) without permission

• use only genuine testimonials related to the product (and have written permission to do
so from the individuals, publications or organizations involved)

• indicate clearly that advertisements are not editorial matter

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Points to remember

• The advertising industry prefers voluntary control, meaning they themselves control
what should be said and what should not be said in an advertisement or commercial.

• The voluntary controls ensure advertisers maintain the standard of behavior which
protect the reputation of the industry and so ensure by implication, that the customer is
being protected.

• To be creative, an advertisement /commercials must be unique, answers to consumers

needs and also must be ethical.

• The advertising code of practice ensures long term relationship between consumers
and advertisers and also guides advertising agencies to create creative and ethical
advertising.

• The advertising code of practice also aims to promote healthy competition among
advertisers.

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ADVERTISING AND THE LAW

CHAPTER 17

ADVERTISING AND THE LAW

CHAPTER OUTLINE

Like any other service provider, advertising agencies rely on the long term and mutually fruitful
relationship with its clients. This relationship is formalized by the agency –client contract
agreement which guides how each party work together to maintain a professional working
relationship which may lead to a long standing business partnership. Many advertisers have
been known to stay with their agencies for many years.

As agencies act on behalf of their clients with third parties: the media, production houses
and suppliers, agencies also need to formulate contract agreements with third parties to
safeguard their interests as well as their clients.

This chapter will cover the agency- client contract agreement, agency and third party contract,
and discuss the basics of agency and client business relationship.

OBJECTIVES:

1. To understand contract agreement between agencies and its clients

2. To understand contract agreements between agencies and third parties
3. To understand agency-client business relationship

Agency/client contracts and agreement

Every company involved in marketing makes contracts. Contracts are made between
agencies and clients as well as between agencies and suppliers (like the media owners,
freelance compugraphers, copywriters, and photographers as well as printers).

A contract consists of three elements – an offer, an acceptance, and a consideration.

An offer (of goods or services) by one party and an acceptance (of the offer) by a second
party. This is called an agreement and becomes a contract only when
a consideration is included by the first party and accepted by the second.
(A consideration is an old term usually meaning a sum of money.)

Listed below are the areas that a typical contract would cover:

● period of initial contract (usually 1 year)

● length of notice period (usually 3 months)
● clear definition of the services to be provided
● statement of approval procedures for work produced

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● provisions for terminating the contract

● terms of business (regarding payment of the agency, mark-ups and handling
charges (for both the agency’s work and that of third-party suppliers)
● repayments of volume and other discounts, including commissions from the media
owners
● the rights of the advertiser to use other suppliers
● arbitration or means of settling disputes should they arise
● insurance (for professional indemnity, etc)

Termination of contract

Termination of contract may be initiated by the agency or client. The client may terminate the
agency for the following reasons:

• Unsatisfactory service
• Slacking in creativity
• Client’s new management wants to explore other agencies
• Change in agency’s management or personnel
• Agency’s pricing
• Wants fresh new ideas

The following reasons usually lead to termination of contract by agency

• The client doesn’t honor the terms of payment in the contract agreement
• The client’s business is not profitable: agency spends more man hour than it charges
the client but cannot ask for higher fees.
• Conflict of interest: agency has been appointed by client’s direct competitor who has
more promising business potential.

The goal: long term and profitable business partnership

Just like everything else, a business relationship has to pass several cycles to survive:

The introduction cycle

At this stage, agency and client has not formalized their relationship, but they are learning
about each other. The client is impressed with the agency’s skills and experience, its human
resources, its eagerness to serve the client by showing understanding of the client’s business
and market. The agency has a positive feeling about the client: he shows understanding of
how an agency work, his objectives are realistic and clear and he has the financial means.
These positive impressions then lead the relationship to the next cycle.

The development cycle

The relationship is formalized by a contract. Agency will continue to impress clients with
their professionalism and service excellent. Client shows his eagerness by providing the

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information needed by agency. At this stage work rules and condition for team work is
established. Mistakes made at this cycle are usually forgiven.

The maintaining cycle

The key at this cycle is effective communication to support effective teamwork.

As work intensified, expectation increases, problems also arises. As long as effective
solutions are found and the motivation to work together persists, then usually agency and
client can form a very long and successful working relationship. Foote, Cone & Belding
(FCB) worked with Sunkist for 85 years, Konimex and Matahari Advertising has worked
together for 30 years.

The termination cycle

Many factors can lead to termination of business relationship as previously described, and
like so many other things in life, the termination could be amicable or could be a negative
experience for both parties.

Agency/third party contracts and agreements

Agency buys advertising space and airtime from the media houses, it also commissioned
production establishments to produce advertising materials on behalf of its clients. So if
the agency buys space form the media, it makes contract with the media and sells the
space back to its clients. If the client does not pay, agency must foot the bill. The same with
other third parties employed by the agency on behalf of its clients This is why agencies are
required to be creditworthy.

The working relationship between agencies and its third parties, indirectly influenced agency
and client business relationship. if the agency cannot manage its third parties, then the
quality of work that it gives to its clients suffers.

The law of copyright

Anyone who creates something has a right to protect it from being copied or used by other
party. This is an automatic right, with no registration required (unlike a trade mark under
older legislation). Anyone who copies any aspect of an
advertisement without permission can be sued for an injunction and damages by an owner
through a civil action.

The rights to all work done by the agency (including artwork) belong to the agency, even
though the work has been commissioned by and paid for by the client. This is the case
unless the client insists on a clause assigning ownership in the agency/client agreement.

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Other copyrights to be considered

• Work by photographers, free lance designers etc commissioned by the agency on

behalf of its clients
• The use of materials from external source as such the right to use the cartoon character
Mickey Mouse.

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Points to remember

• Agency and client formalized their working relationship with a contract agreement

• A contract consists of an offer ad an acceptance , which forms an agreement, together

with a consideration, usually a sum of money

• A contract can be terminated by either agency or client, as long as provisions for

termination have been met.

• As agency buys many service from other third parties on behalf of its clients, agency
also form contract agreement with third parties.

• Copyright covers the ownership of words, artistic works (photographs, illustrations,

etc), music and many other created elements.

• The goal of agency and client working relationship is long term business partnership.

• A business relationship consists of several cycles which if passed successfully will

ensure a mutually beneficial business relationship between agencies and its clients.

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ADVERTISING TESTING AND EVALUATION

CHAPTER 18

ADVERTISING TESTING AND EVALUATION

CHAPTER OUTLINE

Market situation is very complex. It is imperative to establish the market situation such
competitive environment, consumer perception and attitudes, before planning and executing
an advertising and promotion campaign. This to ensure that the campaign is effectively
directed at relevant market issues.

This chapter will explain the various methods of testing and evaluation to ensure that
campaigns are planned strategically and executed appropriately. Successful campaigns
will enhance advertiser’s confidence in the methods of advertising as well as on the
professionalism of the advertising agency.

OBJECTIVES:

1. To understand the reasons for doing testing and evaluation.

2. To understand the methods of pre-campaign testing.
3. To understand continuous research to monitor performance of advertising and
promotion.
4. To understand the methods of evaluating a campaign.

Testing the market place

Testing of the market place to discover information such as the level of market response to
the brand, how the company and the brands are perceived by the consumers and customers,
are initially taken by the advertiser’s marketing team. Their findings are then briefed to their
agency.

The agency will then conduct their own research to find other pertinent information which will
guide them to plan an effective campaign. If negative attitudes, motivations and opinion by
the customers and consumers are found, then the agency can find ways to re-position the
brand so it will be perceived in a positive way. On the other hand positive attitudes can also
be discovered and then enhanced in the campaign.

Reasons for testing are:

• Seeing where things may go wrong so can be avoided.

• Highlighting opportunities that can be exploited for further business growth, or positioning
and communicating brands more effectively.
• Showing how to fulfill objectives.
• Indicate short and long term plans.

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Testing and evaluating advertising

Testing an evaluation of advertising takes place before, during and after campaign. Research
methods are qualitative or quantitative.

Qualitative research:

This type of research is used to find out the extent of attitudes and beliefs within the market
place. It involves small number of people therefore requires less funding and easier to set
up. As this type of research provides valuable insights into opinions relating to advertising
research, it is often used to test concepts.

Quantitative research:

On the other hand, quantitative research aims to establish size and mostly demographic
nature of the target or market.

Pre-production testing

The objective of pre-production testing is to ensure that the creative ideas and concept will
get the message across to the target audience. This is important because the advertiser
and advertising agency wants to be sure that the advertising will achieve the objectives,
therefore money and time well spent.

Aspects to be tested:

• What is the impact of the advertisement or the commercial?

• How does the target audience relate to the message. Is it understood?
• Does the message convey the right image?
• Is the message credible?
• Is it persuasive enough?
• Does it stands out among other advertisement/commercial

Discussion and interview methods

• Group discussion
• Depth one-on-one interview
• Semi structured and structured interview

The individuals selected to participate in discussion and interviews have similar profiles to
the target audience. To get the most of these activities, skilled interviewers and facilitators
are used with a well designed questionnaire. A closed questionnaire requires only Yes or
No answer, an open questionnaire requires the respondent to provide more descriptive
answers.
Split-run testing

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A split –run test is done by placing two concepts in different edition of the same publication
and seeing if there is a difference in perception.

Test marketing

This is a rather elaborate and expensive method, as a mini campaign is conducted to assess
brand acceptance and promotional techniques. However, it is equally important that the
likely effectiveness of the advertising campaign should be tested before it is carried out
nationwide.

Post-production testing

Post-production testing means looking if the advertisements are recalled and that the
advertising objectives are met.

Checking the campaign.

This is checking to ensure that the advertisements and commercials appear at the right
time and at the right place. For press advertisements , voucher copy is given to the agency
and for commercials a time table of commercials transmitted in a chronological order is
provided.

Recall testing

The objective of recall testing is to see if people remembered the advertisement among
other advertisements that they have seen the day before.

The recall testing can be either unaided or aided. In the first, the individuals are asked
to respond instantly and recall advertisements and their contents from a test selection of
advertisements, or from memory of actual types of advertising or product classes. With
aided recall, the individuals are shown a selection of advertisements or cards with brand
names and are asked which they have seen.

Reading and noting

This is used to test the percentage of people who look at particular page of a magazine, and
how many percent saw the advertisements and actually read the content.

Checking responses and sales

Increased inquiries and sales are of course the easiest objectives to measure. This is
especially true if some response mechanisms are included in the advertisement, such as
coupon. Coupons are coded, so the advertiser can see from which media the coupons have
cut.

For broadcast media, a free number (toll free number) is often used to measure the number
of responses received.

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Continuous testing ad testing during campaign

Consumer panels

Panels are groups of people who agree to report on their buying behavior either by giving
regular interviews or by completing daily diaries of their purchases. They might also be
chosen to complete questionnaires on a regular but voluntary basis. Members of other panels
use bar-code scanning devices (similar to those used in supermarkets) to record purchases,
with the data being transmitted to the market research company for central processing and
analysis. One of the best-known kinds of panel records the television commercial breaks
and programs that viewers watch. This is a valuable way of determining how many people
may have seen a commercial.

One major advantage of panels is that agencies and advertisers can subscribe to these
services on a continuous basis or immediately prior to a campaign to monitor the purchases
through the life of the advertising or promotion.

Retail and dealer audits

The research involves taking stock levels and accounting for all stock deliveries over a
regular period. It covers a number of products and brands, so that it is possible to see the
effect of an advertising campaign by the variations in stock turnover of a particular brand.

Tracking studies

Advertisers subscribe to this means of continuous research to receive 13 reports produced

every 4 weeks throughout the year. Like retail audits, it concentrates on certain categories of
product, such as confectionery, toiletries, drinks, clothing or consumer durables, or services,
such as travel, retailing or financial services.

This research involves weekly self–completion questionnaires by selected respondents to

monitor how effectively advertised brands are being communicated. It also monitors the
respondent’s media habits.

Opinion polls

A poll or survey is conducted to detect changes in awareness and opinions over a period of
time. Based on this the effect of advertising and promotion can be evaluated. It also can be
used prior to the campaign to get an understanding of the market place.

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www.lspr.edu

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