Advertising Sales Promotion

Advertising and Sales Promotion
Management
Sub Code - 426
Developed by
Prof. Priyanka Mathur Dhingra
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
 
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe  2. Dr. B.P. Sabale  3. Prof. Dr. Vijay Khole  4. Prof. Anuradha Deshmukh 
Group Director  Chancellor, D.Y. Patil University, Former Vice-Chancellor  Former Director 
Welingkar Institute of Navi Mumbai  (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant
Prof. Kanu Doshi Prof. B.N. Chatterjee

Dean – Finance Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Dean – Management Development Programs Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ
Prof. B.N. Chatterjee Prof. Vineel Bhurke

Dean – Marketing Faculty – Rural Management
Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai
Prof. Dr. Swapna Pradhan Course Editor

Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai
Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai
Mr. Ajay Prabhu Ms. Kirti Sampat

Faculty – International Business Assistant Manager – PGDM (HB)
Corporate Consultant Welingkar Institute of Management, Mumbai
Mr. A.S. Pillai Mr. Kishor Tamhankar

Faculty – Services Excellence Manager (Diploma Division)
Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai
COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

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1st Edition( May, 2015). 2nd Edition (Feb, 2016)
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CONTENTS
Contents
Chapter
Chapter Name Page No.
No.
1 Introduction to Advertising and Sales Promotions – 3-19

Getting the Basics Right
2 Background to Today’s Advertising 20-34

3 The Role of Advertising and Sales Promotions in Building 35-55
Brands
4 The Advertising Agency – Structure and Functions 56-75

5 The Communication Process 76-98
6 Advertising Objectives and Budgeting 99-118
7 The Creative Strategy 119-138
8 Media Planning 139-158
9 Media Vehicles 159-180
10 Legal and Ethical Aspects of Advertising 181-204
11 Breakthrough the Digital Horizon 205-226
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INTRODUCTION TO ADVERTISING AND SALES PROMOTIONS – GETTING THE BASICS RIGHT
Chapter 1
Introduction to Advertising and Sales
Promotions – Getting the Basics right
Objectives
After completing this chapter, the learners will:
• Know about Marketing Communication

• Understand the meaning of Advertising and Sales Promotions
• Develop a clarity towards the basic elements of the Promotional Mix
• Gain an insight Into the need, role and functions of Promotions
Structure:
1.1 Introduction
1.2 Growth of Advertising and Sales Promotion
1.3 Marketing – Its All about Creating a Brand
1.3.1 Marketing Mix
1.3.2 Definitions
1.4 Marketing Communications – The basic element of Branding
1.5 Elements of the Promotional Mix
1.5.1 Advertising
1.5.2 Direct Marketing
1.5.3 Publicity and Public Relations
1.5.4 Sales Promotion
1.5.5 Personal Selling
1.5.6 The New Kid on the Block – Digital Advertising
1.6 Role of Promotions in Business
1.6.1 Marketing Role
1.6.2 Communication Role
1.6.3 Economic Role
1.6.4 Societal Role
1.7 Summary
1.8 Self Assessment Questions
1.9 Multiple Choice Questions
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1.1 Introduction
The business of Advertising is to attract attention. The word Advertising

originated from the Latin word ad verter, which means to turn the mind
towards or to draw attention to.
Here are some interesting quotations ascribed to Advertising:
• “You can’t save souls in an empty church.” – David Ogilvy
• “Doing business without advertising is like winking at a girl in the dark,

you know what you are doing, but nobody else does.” – Stewart H Britt
• “In our factory, we make lipstick. In our advertising, we sell hope.” –

Charles Revson
• Chris Jacques, Chairman, BBDO Asia Pacific thinks that “advertising is the
business of creative thinking for commercial advantage”.
The purpose of this opening chapter is to provide the students with an

overview of the field of advertising and promotion and its role in the
marketing process. A product or service is advertised to create awareness
about it in the minds of potential buyers. Advertising is the means of
informing as well as influencing prospective customers to create demand.
Majority of consumers classify all-persuasive brand messages like – TV and
Radio commercials, magazines and newspaper ads, banners on various
online sites, direct mail offers, coupons, sponsored events, image building
articles and free gifts – as ‘Advertising’. But Advertising is just one of the
tools of the Promotional Mix. The industry clubs all the promotional mix
elements under an umbrella term called ‘Integrated Marketing
Communications’ (IMC) or ‘Marketing Communications’ (MC), popularly
termed as Marcom.
This chapter introduces the concept of Marketing Communications, its

evolution, and examines how various marketing and promotional elements
must be synchronised to communicate effectively. We will also discuss the
various elements of the promotional mix along with a brief discussion of
these basic tools of IMC. Advertising, like all forms of mass communication,
has undergone dramatic changes during the last decade. Although it
continues to be the primary tool for marketing communication, the forces
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of technological change and business consolidation have had significant

effects on its practice and execution. So, let us embark on this exciting
journey towards this integrated world of Advertising and Sales Promotions.
1.2 Growth of Advertising and Sales Promotion
Advertising dates back to 3000 BC when people used to write messages on

stones and walls. Even though the form of trade was barter and word-of-
mouth was the main channel of communication, people communicated
through those writings. From those times of product, pictures being carved
out and hung in the front of shops and messages carried by ‘Town
Criers’ (people employed by the town or city to make public
announcements) to the technically dazzling, highly entertaining and
interactive dramas on brands, the world of advertising has come a long
way. Today, the bewitching Social Media engages the audience and
generates a dialogue in contrast to the traditional brand messages which
involved only one-way communication from the businesses to the
customers.
Activity 1
Lux Soap – The Journey of Change from 1934-2014
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Figure 1 Figure 2
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The pictures above depict the journey of Lux ‘The Beauty Soap of the Film
Stars’ as a brand from 1934 to 2014. Lux soap was first produced in United
Kingdom in 1899. It was produced by British company name Lever
Brothers. Lever Brothers was founded in 1885 by William Hesketh Lever
and his brother James. They used glycerin and vegetable oil to
manufacture soap, called the ‘Sunlight Soap’. The flaked version of soap
was called ‘Lux’. The Lux trademark was registered in United States in
1900.
Lux soap was launched in India in 1929. The soap’s very first
advertisement featured actress Leela Chitnis as its brand ambassador. It
was popularly known as ’the beauty soap of film stars.’
From 1930s right through 1970s, Lux soap colours and packaging were
altered several times to reflect fashion trends. In 1958, five colors made up
the range: pink, white, blue, green and yellow. In 1990s, Lux launched its
own range of shower gels, liquid soaps and moisturising bars. Today, Lux
soap is sold in 100 countries and sales achieved 1.0 billion euros in 2005
alone.
Can you track the advertisements of any of your favourite brands?

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The ability of advertising and other promotional methods to deliver brand

messages to the target audience has given them a major role in the
marketing programmes of most organisations. Evidence of the growing
importance of advertising and promotions comes from the growth in
expenditures in these areas.
The growth in promotional expenditure reflects the important role that

promotions play in the marketing programmes of companies as they
attempt to communicate and sell their products to their consumers. The
worldwide Advertising spends have seen a Compounded Annual Growth
Rate (CAGR) of 6% over the last decade and stood at over $505 billion in
the year 2013 for the top 25 markets like US, Japan, China, etc.
Indian consumers have become more selective about the products they
purchase. Marketers are continuously trying to provide the best deals to
current and potential customers. In India, Ad spends in the year 2013 were
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at about $15 billion (` 90,000 crore ) and have grown at a CAGR of over
13% in the last decade. They are expected to grow at a similar pace in the
next decade.
The digital media has occupied a prominent space in the ad spends

worldwide. For developed markets, the digital spend had a share of over
25% in 2013. In India, it was just under 10% for the same year. As the
internet penetration increases in India, the digital spend is also likely to
catch up to the range 25% to 30% in the next decade. This media space is
growing the fastest among the various media channels.
Exhibit 1
Top 10 Global Advertisers
Rank Company Worldwide Measured US Measured -

- Media Ad Spending Media Ad Spending
(in US $) (in US $)
2012 2011 % 2012 2011 %
Chang Change
e
1 Procter & Gamble Co., 10,615 11,252 –5.7 3,143 3,147 –0.1
Cincinnati
2 Unilever, Rotterdam, 7,413 7,317 1.3 858 678 26.5

Netherlands/London
3 L’Oreal, Clichy, France 5,643 5,593 0.9 1,507 1,386 8.8
4 Toyota Motor Corp, Toyota 3,310 2,881 14.9 1,245 1,102 13.0
City, Japan
5 General Motors Co., Detroit 3,206 3,346 –4.2 1,655 1,787 –7.4
6 Coca-Cola Co., Atlanta 3,029 2,913 4.0 385 391 –1.7
7 Nestle, Vevey, Switzerland 2,987 2,937 1.7 840 837 0.4
8 Volkswagen, Wolfsburg, 2,971 2,857 4.0 546 533 2.3

Germany
9 McDonald’s Corp, Oak 2,693 2,656 1.4 957 965 –0.8

Brook, ill.
10 PepsiCo, Purchase, N.Y. 2,470 1,837 34.5 844 658 28.3
Source: Ad Age’s 2014 Marketing Fact Park, Top 10 Global Advertisers for CY 2012.
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1.3 Marketing – It’s all about Creating a Brand

Marketing is putting the right product in the right place, at the right price
and at the right time. However, a lot of hard work needs to go into finding
out what customers want, identifying the location which is convenient for
them to purchase the product, how to produce the item at a price that
represents value to them, and to inform them about its availability.
‘Marketing mix’ is a general phrase used to describe the different kinds of
choices organisations have to make in this process.
1.3.1 Marketing Mix
The term Marketing Mix was first introduced by Prof. Neil H. Borden of
Harvard Business School, London in 1953. He got the inspiration for this
concept from Prof. James Culliton, an American Marketing expert. Prof.
Culliton in 1948 described the marketing manager as a ‘decider’ or ‘mixer
of ingredients’. According to him, “a marketing manager is a decider, who
sometimes follows a recipe prepared by others, sometimes prepares his
own recipes, sometimes adopts recipe of the ingredients immediately
available, and sometimes invests some new ingredients which are not tried
before.” A Marketing Manager is, thus, someone who is constantly engaged
in designing a mix of marketing procedures and policies to make the
enterprise profitable. Prof. Borden highlighted the elements of the
marketing mix as – product planning, pricing, branding, channels of
distribution, personal selling, advertising, promotions, packaging, display,
servicing, physical handling, fact finding and analysis, etc.
Prof. Jerome McCarthy in 1960 codified and popularised the concept of the
Marketing Mix as the 4Ps – Product, Price, Place and Promotion.
!
Figure 3
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These marketing mix elements need to be understood well by marketers to

establish a successful marketing mix programme. The set of controllable,
marketing tools that the firm blends to produce the response it wants in
the target market are:
• Product: Variety, brand name, quality, design, packaging, and services.
• Price: List price, discounts, allowances, payment period, and credit

terms.
• P l ac e : Di s t r i b u t i o n c h an n e l s , c ove rag e , l o g i s t i c s , l o c at i o n s ,
transportation, assortments, and inventory.
• Promotion: Advertising, sales promotion, public relations, and personal

selling.
Look at the image given below. Nestle, Kellogg’s, Cadbury, Pepsi, Proctor &
Gamble et al.
Look around your surroundings. Chances are you would come across these
brands inside of your house, office, educational complex or a restaurant.
Activity 2
!
Figure 4
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What makes you decide on the Brands which you buy?

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The relationship you developed with the brand of your choice is because of
Marketing. Marketing has many definitions. Simply put, Marketing is an
ongoing communications exchange with customers in a way that educates,
informs and builds a lasting relationship between the customer and the
brand over time. It is a systematic process which influences consumers
into selecting, using and becoming loyal to specific brands.
1.3.2 Definitions
Marketing builds a relationship between consumers and brands using the

power of persuasion. It conveys the value of and ultimately sells products
and services. Marketing communication modifies the perceived value and
desirability of a product or service.
The American Marketing Association offers the following formal definition:

“Marketing is an organisational function and a set of processes for creating,
communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the organisation and its
stakeholders”.
The underlying theme across the various definitions of Marketing is

‘creating, delivering, and communicating superior customer value’ which
has succinctly been summarised as the Marketing Mix. The mix of the 4 Ps
– Products, Price, Placement and Promotion, that drives shoppers to
choose your brand over someone else’s. The interplay of the 4Ps creates a
value proposition and the image of the brand to the world.
The key to effective marketing is getting the communication mix correct for
your brand, product or service, understanding how it best interacts with
customers. Marketing is about making consumers fall in love with the
brand.
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1.4 Marketing Communications – The basic element of

Branding
What is a brand? It is not just a name on the packaging of the product. It

is not just an image. A Brand is a promise of quality, it is a bundle of
attributes. A Brand is a perception resulting from experiences of consumer
at various touchpoint with the brand. It is the information and the
messages that the brand sends out in the form of communications through
various promotional mix elements. It should be noted that promotion is
best viewed as the communication function of marketing. Promotional mix
is a term for various types of messages used to build a brand. The
Promotional mix elements or tools are Advertising, Direct Marketing,
Internet, Sales Promotion, Publicity, Public Relations, Personal Selling, etc.
These tools have to be used in tandem with appropriate media. The media
comprises of the medium which carries these marketing messages to the
target audience. The media that promotional mix elements frequently
employ are Television, Radio, and Internet including social and digital,
Newspapers, Magazines and OOH (Out of Home) media.
Let us discuss some prominent elements of the marketing mix.
1.5 Elements of Promotional Mix
Activity 3
Elements of the promotional mix ensure that brands figure in the

top of the mind recall when the consumer reflects on their
shopping list. Give it a thought. How do you get the information
related to the brands? How do they become a part of your
consumption basket?
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Let us look at some of the elements of the Promotional Mix.
Figure 5
1.5.1 Advertising
Advertising is defined as any paid form of non-personal communication

about an organisation, product, service or idea by an identified sponsor (as
defined by American Marketing Association). It is used to communicate
with large audiences, create brand awareness, image and achieve brand
differentiation besides launching new products. Advertising is a cost-
effective way for communication since the unit cost per exposure is very
low. It presents a controllable message since the advertiser pays for space
(in print media like newspapers and magazines) or time (in broadcast
media like television and radio). On the flip side, the cost of producing and
placing ads is very high, particularly TV ads. It also suffers from an excess
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of ads leading to clutter (large volume of advertising messages) and loss of

audience attention.
1.5.2 Direct Marketing
Direct Marketing is a database-driven tool of marketing by which

organisations communicate directly with target customers. There are no
intermediaries, i.e., distributors, retailers or wholesalers involved. Changes
in society such as urbanisation and double-income households, etc. have
made consumers more receptive to the convenience of direct-marketed
products. Companies like Oriflame, Amway, Tupperware and many more
are practicing Direct Marketing to promote and sell to their customers.
Direct mailers, e-mails, inserts in newspapers and magazines, brochures,
etc. are the common ways of practicing Direct Marketing. It has received a
lot of criticism when it comes to personal privacy and data tracking. Direct
Marketing also suffers clutter as there are too many messages competing
for consumers’ attention.
1.5.3 Publicity and Public Relations
Publicity is defined as any form of non-paid commercially significant news

about a company, its products and or services. It is available free of cost.
Publicity can be favourable or unfavourable since there is no control on the
publicity by the advertiser. The advantage that publicity offers is that
consumers believe publicity more than advertising since it comes from
media rather than the company itself. The goal of public relations is to
mold opinion. It works to protect an organisation’s or a brand’s reputation.
Public relation is defined as a management function which maintains
mutually beneficial relationships between an organisation and its
stakeholders like employees, suppliers, vendors, customers, etc. It is used
to generate goodwill for the organisation and maintain good corporate
image. The difference between publicity and public relations is that
Publicity is one aspect of public relations. It is often referred to as free
media. The goal of publicity is to get attention in online and traditional
media through news coverage, feature articles, talk show interviews, blog
postings, etc.
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1.5.4 Sales Promotion
Sales promotion has been defined as a direct inducement that offers extra
incentives to enhance or accelerate a product’s movement from the
producer to a consumer. Sales promotion include a wide variety of tools
like contests, coupons, free samples and point of purchase material. They
are a useful means of stimulating a quick and immediate response from
consumers. Sales Promotions can be classified as Consumer Promotions
and Trade Promotions. Consumer promotions motivates end customers to
buy the goods under incentive plans. Trade promotions offer incentives to
dealers, distributors and wholesalers. It acts as an effective tool to achieve
short-term sales.
Personal selling includes one-to-one relationship with customers with the

purpose of introducing the product to the customer, convincing him/her of
the product’s value, and closing the sale. Personal selling is the most
effective way to make a sale because of the interpersonal communication
between the salesperson and the customer. The apparent benefit of
personal selling is that it allows salesperson to judge the reaction of the
customer and thus gives the opportunity to tailor the communication to
particular situations and alter the message strategy to accommodate the
feedback. It is however, expensive as compared to advertising and other
tools of the promotional mix.
1.5.6 The New Kid on the Block – Digital Advertising
The Digital platform (which includes social media, mobile apps, mobile-
optimised websites, blogs and interactive in-store kiosks, among others) is
currently touching billions of customers globally. Digital media is far less
expensive than purchasing traditional 30 to 60 second television ads or full
page newspaper and magazine advertising space. Companies are now able
to stay in front of their audience around the clock for a mere fraction of
traditional costs. Plus, tweaking an ad campaign that’s not working
generally takes less time than other forms of advertising. Digital
advertising provides a new way of transmitting information, entertainment,
engagement, interaction and communication with the Generation Next.
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1.6 Role of Promotions in Business
Advertising and the promotional mix plays an important role in business.

Without advertising, many great products would be the world’s best-kept
secrets.
1.6.1 Marketing Role
Philip Kotler defines marketing as ‘satisfying needs and wants of customers

through an exchange process’. Marketing is the process a business uses to
satisfy consumer needs and wants by enabling an exchange of value.
Customers purchase products only after they are made aware of its
availability in the market. If the product is not advertised, customers will
not be aware of the availability and the benefits offered by them. Its
overall intent is to attract and retain loyal customers. Advertising plays a
very important role in generating awareness, especially for new products.
It helps in educating and enabling the customers to compare the features
and benefits of products and purchase the one that best meet their needs.
1.6.2 Communication Role
Advertising is an act of persuasive communication through which a

prospective buyer becomes aware of the company and its products. It
allows businesses to ‘spread the word’ about their products and services.
Advertising helps to keep the consumers informed about whatever new
products or services are available in the market at their disposal. It
transmits different types of market information to connect buyers and
sellers in the marketplace. Advertising is just one tool used in marketing
communication, others include sales promotion, public relations, direct
response, events and sponsorships, packaging, and personal selling. Thus,
advertising helps in generating awareness, in creating an image of the
product and motivating the consumers towards purchase.
1.6.3 Economics Role
Advertising helps in generating demand and increasing sales. A positive

economic view of advertising sees it as a vehicle for helping consumers
assess the value of the product through price as well as other marketing
mix elements, such as quality, location, and reputation. Advertising,
therefore, is a means to creating a more rational economy. Advertising
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creates an aspiration among consumers for leading a better lifestyle thus

giving a boost to demand. The increase in demand leads to economies of
scale for manufacturers. As more and more companies cater to the
demand of customers, it leads to reduction in prices. Advertising, thus,
leads to a cost advantage for the customers. Advertising helps producers
by smoothening out fluctuations in demand. It helps in creating goodwill
for the company and establishes customer loyalty even after the product
reaches a mature age.
1.6.4 Societal Role
Advertising benefits the society by bringing to light sensitive issues like

gender inequality, child labour, girl child education, female infanticide,
illiteracy, national integration, etc. It bridges the information gap on many
issues of national concern like polio eradication, AIDS and Multi Drug
Resistant Tuberculosis. It encourages people to come forward for blood and
organ donations, contributing and offering aid in hours of natural and
communal disasters. It promotes peace and national harmony.
Indian advertising industry has evolved from being a small-scale business

to a full-fledged industry. In a short span of time, it has carved a niche for
itself and placed itself on the global map. There are tremendous
employment opportunities in Indian Advertising Industries in the country
and abroad since this industry always has a perennial demand of talent.
Activity 4
Write a note on your experiences with advertising and sales promotions

in the role it plays in influencing demand and generating aspiration to
procure a certain product.
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1.7 Summary
Advertising is an integral part of the marketing mix or the 4Ps. A product is

successfully marketed when all its 4Ps, i.e., the Product, its Price, its Place
and its Promotions are in sync. Promotions is the communications function
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of the marketing mix. Advertising is a part of Promotions. It is integral to

developing awareness about products, promote sales, to introduce new
products, etc. For a long time, the promotions of companies were
dominated by Advertising. Today, it is recognised to be a part of a wider set
of elements known as the elements of the promotional mix or marketing
communications mix. A combination of these is adopted by firms to carry
on their promotional activities. The tools or elements of promotion mix are
Advertising, Sales Promotion, Direct Marketing, Personal Selling, Publicity,
Public Relation and Digital Marketing.
Marketing Communications or promotional mix elements are indispensable

for both the sellers and the buyers. They play an essential role in Business
and Society. Advertising communicates and helps to keep the consumers
informed about new products or services that are available in the market at
their disposal. Advertising is useful to economy as it encourages people to
purchase goods and services. It brings about all-round development of the
economy by increasing demand leading to lowering of prices. This industry
generates huge revenues and generates employment. It generates
awareness on socially sensitive themes and benefits the society.
1. Why do businesses advertise?
2. Define advertising and discuss where it fits in the marketing process.
3. Name and describe the four roles advertising plays in business and in
society.
4. Critique the statement, “Advertising is the communications arm of the

marketing process.”
5. Describe the different elements of the promotional mix.
6. “Marketing communications build brands.” Elaborate
7. Explain what is meant by the phrase “the new age media”.
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1. Product, price, promotion, and __________ are the 4Ps of the

marketing mix.
a. people
b. place
c. package
d. print
2. Price, product, place and promotion together form the __________
a. value
b. promotional mix
c. marketing mix
d. integrated marketing communication
3. Traditionally, __________ has been the cornerstone of brand-building

efforts.
a. interactive media
b. mass media advertising
c. public relations
d. product placement
4. __________ is the coordination of all seller-initiated efforts to set up

channels of information and persuasion to sell goods and services.
a. Publicity
b. Advertising
c. Organisational communication
d. Promotion
5. Which of the following is NOT an element of the traditional promotional

mix?
a. Packaging
b. Advertising
c. Personal selling
d. Sales promotion
[Answer: 1. (b), 2. (c), 3. (b), 4. (d), 5. (a)]
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
! !20
BACKGROUND TO TODAY’S ADVERTISING
Chapter 2
Background to Today’s Advertising
Objectives
• Understand the evolution of advertising from 18th century to present

• Know about the major milestones in the world of media and advertising
• Have an overview of the development of advertising as a business
• Appreciate the challenges that have led to the shaping of advertising in
its current ‘avatar’
Structure:
2.1 Introduction
2.2 Evolution of Advertising
2.3 Advertising in Historical Perspective
2.3.1 Early Days (Late 1400s)

2.3.2 The Industrial Revolution
2.3.3 The Age of Technology
2.4 Media in Historical Perspective
2.4.1 Print Media – Newspapers and Magazines

2.4.2 Broadcast Media – Television and Radio
2.4.3 Growth of Indian Advertising
2.5 Top Advertising Agencies in India

2.6 The Way Forward – Digital Media
2.7 Summary
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2.1 Introduction
Advertising plays a key role in helping firms succeed, and thriving firms
contribute to any economy through higher tax payments and by creating
more jobs. Various studies have shown that growth in GDP is invariably
linked to higher rates of investments in advertising by businesses. Business
sectors with the highest rates of investment in advertising are those where
competition, a recognised driver of growth, is liveliest. The world of
advertising is evolving and growing at an accelerated pace, even as this
book takes shape. The media space and the advertising business is
changing shape from its established and familiar pattern to the exciting
‘Digital avatar’. New tech savvy talent is being hired rapidly to match this
sudden demand of fast-paced digital technology. Marketers have long used
technology, in some form or the other, to engage consumers. However,
with the evolution of the internet, technology is now part of almost every
marketing strategy. All of consumer communications, entertainment and
transactions are converging on one platform. Convergence will continue to
be a major driving focus for the global advertising industry. It is a virtuous
circle between supply side innovation led by new technology and demand
side adoption led by consumer behaviour. Advertising is an inescapable
part of our lives and very much involved in the rapidly changing technology
of the world we live in. Advertising, in one form or another, has been with
mankind ever since trading began.
2.2 Evolution of Advertising
The ability of Advertising and Promotions to communicate with large

audiences has made them vital to the growth of business. To understand
contemporary advertising, we need to know the context of its origins.
Practitioners know that advertising is not a single function but a
coordinated collection of promotional tools ranging from the simple to the
sophisticated.
! !22
Mankind has communicated the availability and source of goods from pre-
historic times. Earliest known evidence of advertising, from around 3000
BC, was found in the form of a clay tablet which bears inscriptions for an
ointment dealer, a scribe, and a shoemaker. The early Egyptians used
papyri (a writing material from the papyrus plant) to offer rewards for the
return of runaway slaves. Advertising came to be practiced by royalty, who
sent drummers to make announcements or communicate the will and
desires of the monarch to his people. Advertising as a form of transmission
of information dates back to ancient Greece and Rome. The Greeks relied
on town criers to chant the arrival of ships (public announcements) and to
announce what cargoes they carried. The Roman merchants used signs
engraved in stone or terra cotta to advertise what they were selling. The
Pompeiians used wall signs to sell their wares. The oldest advertising
professionals were the town criers (who are still found in smaller towns
during elections and to spread messages local in content). Signs, symbols
and pictures were used because many people could not read.
Over the years, the evolution of advertising has been closely tied to social,
economic and technological developments. Many factors contributed to the
growth of advertising – an educated and aware consumer, a consumption
culture, industrial development, mass production, growth in per capita
income, and a good transportation which was essential for the distribution
of goods. Previously, trade was limited to local or regional areas. By 1920,
the convergence of the availability of branded products, the ability to
provide national distribution and a growing middle class, gave birth to the
advertising industry.
Activity 1
Trace the journey of advertising of India’s favourite snack ‘Maggi’

or ‘Cadbury’s Dairy Milk’.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
! !23
2.3 Advertising in Historical perspective
Let’s investigate how Advertising developed historically. This history can be

divided essentially into three broad areas: Early Days (late 1400s), The
Industrial Revolution and the Age of Technology.
2.3.1 Early Days (Late 1400s)
From the beginning of product exchange in pre-historic times to the middle

of the seventeenth century, buyers and sellers communicated in very
primitive ways. In this first stage, ads were primarily ‘Classified handbills’.
They were tacked on walls by professionals offering their services. It wasn’t
until Johann Gutenberg invented the movable type and the printing press
in Germany in the mid-1400s that printed materials could be mass-
produced. Advertisers began to use this technology to reach thousands of
people in far-flung areas by printing flyers and pamphlets. Advertising as it
is known today can be traced back to the invention of printing press, with
movable types in 1441. The first visible sign of advertising came in by
middle of 1700 as printed posters and signs began to appear. Then came
the Industrial revolution, and it changed both the pattern and the
economies of production and consumption, fuelling the growth of
advertising.
2.3.2 The Industrial Revolution
! !24
Before the Industrial revolution, most people lived on farms. They were
relatively self-sufficient, growing and making what they needed, businesses
were small family operations that produced items to be sold in village
marketplace. But in mid-1700s, due to introduction of large-scale factories
and power-driven equipment, a mass migration from villages to urban
areas began. The Industrial revolution gave an impetus to marketing.
Businesses could turn out more and varied items at a faster rate and a
lower cost than ever before. However, the gap between production and
consumption increased. To bridge this gap and to stimulate demand for
selling the larger quantities they were producing, businesses turned to
advertising to quickly and easily reach many potential customers. Also with
similar products available, companies needed persuasive communication to
create demand for particular brands.
Exhibit 1
World’s First Advertising Agency
The first advertising agency in the world was started in 1841 in

Philadelphia, USA by Voleny B. Palmer, who announced that he represented
certain newspapers. This enabled him to sell advertising space to
advertisers. He received 25% commission from newspapers on the space
sold. After the Civil war, another category of agents, known as wholesale
space buyers emerged. These wholesalers purchased space from
newspapers in bulk and then resold to smaller agents and advertisers at
varying prices, depending on demand. George P. Rowell pioneered this
method in 1865 and remained the most successful advertising agent for a
long time. (Cohen, 1988)
Activity 2
Search and find out the top 10 advertising agencies in India for
2014.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
Ogilvy and Mather, JWT, Mudra, McCann-Erickson are sure to have figured
in the survey you conducted on the top agencies operating in India.
! !25
Exhibit 2
!
Early Days at !
In 1916, J. Walter Thompson, retired and sold his agency to Stanley Resor.
The agency JWT (the new buyers retained the name) developed rapidly
under Resor, who headed the agency and developed the concept of account
servicing. His wife, Helen Resor, developed innovative copywriting
techniques. She is attributed to have introduced ‘sex’ as an appeal, in
advertising in 1909 for an advertisement for a facial soap.
2.3.3 The Age of Technology
During and after the Industrial revolution, technological advances changed

both the speed and form of communication. The invention of photography
gave advertisers a new way of showcasing their products. The telegraph,
telephone, typewriter and motion pictures opened up new avenues for
personal and business communications. Once radio and television became
commonplace, the face of advertising changed forever. Electronic media
expanded the use and impact of advertising.
Advertising has become a major social force. As a consequence,

advertisers are watched closely by regulators and society. There is a
growing awareness among advertisers of their social responsibilities due to
the influential nature of their discipline.
2.4 Media in Historical perspective
2.4.1 Print Media – Newspapers and Magazines
The newspaper is the most enduring medium. It has historically been the
primary medium of information. It was the offspring of Johann Gutenberg’s
invention of printing from movable type. Newspapers reach into the urban
areas and beyond to bring news and advertisements to thousands of
people. Newspapers in 1700s were published once or twice a week. But
with better rail and mail service, newspapers were able to increase their
circulation and carry ads into wider areas. By 1800s, newspapers were a
well-entrenched means of communication and advertising. Indian press too
! !26
passed through various stages of development. In 1972, glossy printing

was introduced.
Newspapers began paying agents to sell space to advertisers, a practice

that started an entirely new business – the Advertising Agency. The
advertisers began paying newspapers for the space they bought from
agents. These agents bought advertising space cheaply from newspapers
and resold it at a profit to advertisers. This practice of paying the media for
space and time and then billing advertisers is still followed widely. Some
pioneering agents started to add value to the business by offering to write
advertisers’ ads. Writing ads soon evolved into an integral function of the
advertising agency. These agencies started controlling the artistic side of
print advertising, specifying type styles and creating artwork for ads. By
the turn of the century, more agencies were conducting research studies to
help the client target their audiences and reach their targets through the
media. Many advertisers and media firms soon established their own
research departments and independent research firms began to appear.
Magazine advertising grew more slowly than newspaper advertising. But

with better printing technology and the ability to print photographs and
detailed illustrations, magazine ads became more attractive to advertisers
as it caught readers’ attention and the revenue angle led to the growth of
advertising in magazine segment. By the dawn of the 20th century,
advertising had become a social and economic fixture. Magazines and
newspapers were filled with ads for all kinds of products as “salesmanship
in print” helped bridge the gap between producer and customer.
2.4.2 Broadcast Media – Television and Radio
The 20th century saw a phenomenal rise in electronic media, primarily by

means of Radio and Television. 1950-80s saw the extraordinary growth in
radio listenership with popular channels being All India Radio, Radio
Ceylon, etc. where programmes like Vividh Bharati ruled people’s hearts.
Early radio advertising was subtle; advertisers linked their product names
to shows like Binaca Geetmala. But what truly became the marvel of the
20th century was – the advent of the Television. TV became the most
successful and powerful ad medium (in the form of national broadcasting)
because it could reach more people more quickly than any other medium.
Television was introduced in India in 1959. Television broadcasts started
from Delhi in September 1959 as part of All India Radio’s services.
! !27
Programmes were broadcast twice a week for an hour a day on such topics
as Community Health, Citizens’ Duties and Rights, Traffic and Road Sense
etc. The first major expansion of television in India began in 1972, when a
second television station was opened in Mumbai (then Bombay). This was
followed by stations in Srinagar, Amritsar (1973), and Calcutta, Madras and
Lucknow in 1975. The national broadcasting soon gave way to the new
marvel of Cable and Satellite Television.
The Indian electronic media industry is among the most vibrant and fastest
growing anywhere in the world after China. The Indian Cable TV
distribution industry had crossed 50 million Cable and Satellite Homes in
2004 while the total number of TV homes in India is estimated at 100
million. An estimated 200 TV channels are available today over Indian
skies. Television covers over 90% of India’s 1.2 billion people. International
satellite broadcasting, introduced in 1991, swept across the country
because of the rapid proliferation of Cable and Satellite systems. By the
end of 1996, Indians could view dozens of foreign and local channels and
the competition for audiences and advertising revenues was one of the
hottest in the world. The television industry in India is expected to grow at
a CAGR of 18% over 2012-17, to reach ` 848 billion in 2017 from an
estimated ` 370 billion in 2012. The penetration of Cable and Satellite
(C&S) television households in India is expected to grow to 173 million by
2017 representing 91% of TV households. The number of TV households in
the same period is expected to increase from 154 million to 191 million
aided by strong growth in the sale of television sets. Approximately 14
million television sets were sold in India in 2012.
2.4.3 Growth of Indian Advertising
Volney B. Palmer started the first Ad agency in Philadelphia, USA, as a

space broker in 1841. He acted as a simple agent, selling space for his
client newspaper on a commission basis. He made no effort to help the
advertiser prepare copy, design a layout and provide the many specialised
services now performed by a modern agency. Since then, the nature of an
Ad agency has changed considerably. The dawn of Indian Advertising
marked its beginning with classified advertising, advertisements for
retailers and patent medicines. Ads started appearing for the first time in
print in the ‘Bengal Gazette’ which was India’s first newspaper. Studios
marked the beginning of advertising created in India as opposed to being
imported from England. Newspaper studios trained the first generation of
! !28
visualisers and illustrators. In 1902, B. Dattaram & Co. claimed to be the

oldest Indian agency came up in Mumbai. By the 1920s, other agencies
like Gujarat Advertising and Allied Advertising had too set up shop. Ogilvy
& Mather and Hindustan Thompson Associate agencies were formed in the
early 1920s. In 1939, Lever’s launched Dalda – the first major example of
a brand and a marketing campaign was specifically developed for India. In
the 1950s, various advertising associations were set up to safeguard the
interests of the many advertisers in the industry. In 1967, the first
commercial was aired on Vividh Bharati and later in 1978, the first
television commercial was seen. Brands then started advertising on
television and sponsoring various shows like Humlog and Yeh Jo Hai
Zindagi. 1995 saw the media boom with the growth of cable and satellite
and increase of titles in the print medium. This decade has been witness to
the ‘Digital Marketing and Media’ boom and many Digital marketing and
advertising agencies have been introduced. Indian advertising industry has
evolved from being a small-scale business to a full-fledged industry and
has carved a niche for itself on the global map.
2.5 Top Advertising Agencies in India
• Ogilvy and Mather

• J. Walter Thompson India
• Mudra Communication Pvt. Ltd.
• FCB-Ulka Advertising Ltd.
• Rediffusion-DY&R
• McCann-Erickson India Ltd.
• R.K. SWAMY/BBDO Advertising Ltd.
• Grey Worldwide (I) Pvt. Ltd.
• Leo Burnett India Pvt. Ltd.
• Contract Advertising India Ltd.
2.6 The way forward – Digital Media
! !29
The Indian Advertising industry now finds itself at a new inflection point
with the Digital revolution. India is among the world’s youngest nations,
with more than half a billion people under the age of 25. It also has
favourable demographics in terms of – age, disposable income and access
to technology – leading to a propensity to spend. Businesses that were
basically offline are establishing online presence these days. Marketers are
being compelled to adopt innovative strategies with digital media as the
driving change. The Digital revolution has changed the way brands are built
and is influencing the traditional marketing framework. Digital marketing is
the use of digital media such as television, radio, internet, mobile devices
and digital signage (indoor and outdoor) for carrying out marketing
activities. Digital Marketing provides businesses with the opportunity to
communicate with a vast domestic and global audience at a low entry cost.
The advantages of digital marketing include:
• Cost-effective medium with a vast reach
• Audio-video content can be created, in a small time frame, for better

emotional connect
• Messages can be personalised to suit a wide range of audience
• Reviews from happy customers can be viewed on the website which

helps to attract business
• Responses to ad campaigns can be measured and monitored at a click of

a mouse.
The challenges of digital marketing include:
• Marketer is dependent on customer’s technology – their computer and

internet connections are beyond the former’s control.
• It would be of no use to customers with limited or no internet

connectivity.
• Purchases only based on vision and not on touch and feel.
• Credibility and payment issues.
! !30
With Indians’ flair for technology, in conjunction with its huge mobile phone
user base (more than 750 million subscribers), the scale and impact of
potential digital content consumption is enormous. There was a time in
Advertising, when copywriters used to typewrite and layout artists took
several days to illustrate advertising copies, but now at the click of a
button, the computer generates accurate graphics from stored artwork and
it takes very little time to illustrate the copy. The e-mail, the Internet, the
mobile phone, desktop publishing, new systems of information storage,
retrieval and dissemination, etc. have changed the functioning of all
departments of the advertising world. This scenario presents a new set of
opportunities for the agencies and new challenges also. The rise of Digital
Marketing is about promoting products and services using digital
distribution and social media channels to reach consumers in a timely,
relevant, personal and cost-effective manner. It is the latest format of
marketing that makes use of digital landscape elements such as
computers, tablets, smartphones, cellphones, digital billboards, and game
consoles to engage with consumers and other business partners. Internet
Marketing is a major component of digital marketing. Traditional forms of
communication are rapidly being complemented by Digital media. We are
headed towards an era of Customer Engagement. Consumers are
increasingly using social media before making the purchase decisions by
communicating with their networks. The future of advertising is not mere
display advertising rather it is utilising the mechanics and dynamics of the
online conversations in order to create buzz, attention and interest among
consumers. Online conversations are not being interrupted rather they are
being ignited. For example, at Dell Idea storm, consumer conversations are
being monitored by Dell employees who ensure that they find and follow up
on good ideas. The digital landscape is moving at a lightning fast pace.
Every industry has been affected by the advances in the digital area, from
retailers to brands and agencies. This presents the advertising and media
industry with an exciting opportunity to develop digital businesses that
cater to a new generation of Indian digital consumers. While there are
many opportunities to tap, there are also unique challenges in the areas of
infrastructure, distribution, pricing and regulations. The future will see
digital technologies increase their influence across the industry and
influence consumer behaviour.
! !31
Exhibit 3
Future of Advertising as seen by Microsoft CEO Steve Ballmer
2.7 Summary
In this chapter, we have looked at the evolution of advertising in India.

Even as this book takes shape, advertising is undergoing fundamental
changes. We looked at changes in advertising from the Early Days (late
1400s) to the Industrial Revolution and then to Age of Technology. The
chapter sheds light on the journey on various media categories like Print
media and broadcast media. The period, ‘Post Year 2000’ has witnessed a
huge spurt in Digital Marketing activities. The rapid growth of e-commerce
backed by government initiatives like Digital India, increase in penetration
of high speed Internet connecting Tier II and III cities and rural areas of
the country besides urban centres are propelling the reach of digital across
the country. The internet and mobile technology have proved to be the
pillars of marketing and advertising support for digital marketers. Content
has become the key to branding and audiences are taking greater control
of what they want to see and hear. Likewise, advertisers will have to adapt
creative messages to the specific needs of smaller groups of homogeneous
consumers. Marketers have to coordinate a host of available
communication and distribution channels to reach this new age buyer.
! !32
Traditional retailers will increasingly utilise direct selling techniques such as

the Internet while e-commerce companies and cataloguers will establish
retail outlets to serve specific segments of their prime prospects. In this
uncertain advertising atmosphere, it is clear that the next decade will bring
fundamental changes to marketing and mass communication not seen
since the advent of high speed presses and the introduction of
broadcasting. Nevertheless, it is difficult to determine exactly when and in
what form this new marketing and media revolution will take place. In this
text, an effort has been made to explain the current practices of
advertising while offering insights in this fast changing field.
1. Trace the history of advertising in India, enumerating at least three

major milestones.
2. Write a note on Digital Advertising.
3. How did advertising evolve in India?
4. Elaborate on the developments in broadcast media.
5. What issues in your view concern advertising in general?
! !33
1. Which of the following is an example of a marketing exchange?
a. The waitress gave Ram a menu, and he placed his food order.
b. Ramesh helped Madhur replace the air filter in her lawn mower.
c. Ken and Maggie gave their son an MP3 player for his birthday.
d. In return for painting her fence, Mrs. Jain gave Kamal a box of
homemade custard.
2. Which of the following statements is true about marketing?
a. Most marketers are seeking a one-time exchange or transaction with

their customers.
b. The focus of production-driven companies is on developing and

sustaining relationships with their customers.
c. Successful companies recognise that creating and delivering value to

their customers is extremely important.
d. Though marketing plays an important role in developing relationships

with customers, it cannot do much to maintain them.
3. The basic elements that are used to accomplish an organisation’s

marketing communication objectives are referred to as __________.
a. the marketing mix

b. marketing strategy tools
c. persuasive marketing mix
d. the promotional mix
e. public relations
4. The best-known and most widely discussed form of promotion is

__________.
a. personal selling
b. sales promotion
c. direct marketing
d. advertising
[Answer: 1. (d), 2. (c), 3. (d), 4. (d)] 
! !34
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !35
THE ROLE OF ADVERTISING AND SALES PROMOTIONS IN BUILDING BRANDS
Chapter 3
The Role of Advertising and Sales
Promotions in building Brands
Objectives
• Understand the concept of Branding and its evolution

• Appreciate the role of advertising in creating perception
• Know about Brand Management
• Have an overview of the Positioning strategies
• Understand the meaning of Brand Equity
Structure:
3.1 Introduction
3.2 History of Brands
3.3 Brand Management
3.3.1 Defining Brands – What Does a ‘Brand’ Mean?

3.3.2 Role of Advertising and Sales Promotions in Branding
3.3.3 Process of Building Brands
3.4 How Brands Create Equity?

3.5 Brand Extensions
3.6 Co-branding
3.7 Ingredient Branding
3.8 Summary
! !36
3.1 Introduction
In the battle for consumers, a strong brand is an invaluable asset for a

company. It’s important to invest time in researching, defining, and
building the Brand. After all, the Brand is a promise to your consumer.
People don’t have relationships with products, however they are loyal to
brands. Looking out into the world today, it’s easy to see why brands are
more important now than at any time in the past. When Tata
Motors bought Jaguar and Range Rover from Ford or when Mahindra &
Mahindra bought Ssangyong, Korea’s third largest car company, what did
they buy? Factories? Technical Know-how? Raw Materials? Employees? No,
they bought the brands. When we say that Brands are more important
today than in the past, there are a few reasons for this. Firstly, the world
has come online and there are many new markets and a growing middle
class in places like India, China, Brazil, Russia, South Africa, Indonesia and
in many more places. These consumers buy brands. In the face of the
current economic challenges, it’s worth noting that brands do better in
tough times compared to unbranded products. The benefit to the brand
owner is that forecasting cash flows becomes easier, and it becomes
possible to plan and manage the development of the business with greater
confidence. Secondly, building brands builds incredible value for companies
termed as Brand Equity. Brands with strong equity embed themselves
deeply in the hearts and minds of consumers. The real power of successful
brands is that they meet the expectations of those that buy them or, to put
it another way, they represent a promise kept. Reputation is paramount,
and companies that are known for the quality of their products and
services, their integrity and the transparency of their actions are the ones
best placed to sustain a competitive advantage. Thirdly, in consumer
marketing, brands often provide the primary points of differentiation
between competitive offerings, and as such, they can be critical to the
success of companies. The value of businesses owning strong brands is
incontestable. Brands that keep their promise attract loyal buyers who will
return to them at regular intervals.
3.2 History of Brands
The word “brand” is derived from the Old Norse brandr meaning “to burn”.
It refers to the practice of producers burning their mark (or brand) onto
their products. It was by burning that early man stamped ownership on his
livestock, so as to distinguish it from others. A farmer with a particularly
! !37
good reputation for the quality of his animals would find his brand much
sought after, while the brands of farmers with a lesser reputation were to
be avoided or treated with caution. With the development of trade, buyers
would use brands as a means of distinguishing between the cattle of one
farmer and another. Thus, the utility of brands as a guide to choice was
established, a role that has remained unchanged to the present day.
Some of the earliest manufactured goods in mass production were clay

pots, the remains of which can be found in great abundance around the
Mediterranean region. There is considerable evidence among these remains
of the use of brands, which in their earliest form were the potter’s mark. A
potter would identify his pots by putting his thumbprint into the wet clay
on the bottom of the pot or by making his mark: a fish, a star or cross, for
example. These symbols (rather than initials or names) were the earliest
visual form of brands. From the customer’s point of view, a symbol or a
mark meant that they were buying what they wanted from a plethora of
products. The early brands that used distinct names and sought legal
protection for these names were pharmaceutical brands. However, the wide
scale use of brands is essentially a phenomenon of the late 19th and early
20th centuries. Many of today’s best-known consumer brands date from
this period: Singer sewing machines, Coca-Cola soft drinks, Quaker oats,
Sunlight soap, Kodak film, Heinz and Prudential Insurance are just some
examples. The birth of advertising agencies such as J. Walter Thompson in
the late 19th century gave further impetus to the development of brands.
In developed economies, consumers have an immense array of choice.
There are, for example, dozens of car manufacturers, hundreds of car
models and thousands of different vehicle specifications to choose from.
The days when Henry Ford offered “any colour you want as long as it’s
black” are now long gone. This diversity of choice puts pressure on those
making products to find more potent ways of differentiating themselves
and securing competitive advantage. Branding is the only unique
differentiator between companies.
Activity 1
Trace the journey of your favourite brand. For example – Brand

‘Starbucks’ has undergone a change in look in the following
sequence. Do an online search for the brand you admire the most.
! !38
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
3.3 Brand Management
3.3.1 Defining Brands – What Does a ‘Brand’ Mean?
A brand by definition is a sign of identity, the mark or label which

differentiates one product from another. A brand name helps distinguish
between rival brands especially when they provide nearly the same
benefits. A brand is a promise of quality that the company stands for. The
American Marketing Association (AMA) defines a brand as a “name, term,
sign, symbol or design, or a combination of them intended to identify the
goods and services of one seller or group of sellers and to differentiate
them from those of other sellers. Another definition of the brand states
that a “Brand is a perception resulting from experiences with, and
information about, a company or a line of products”.
! !39
Exhibit 1
Rank Brand Logo Ran Brand Logo

k
1 Apple 6 McDonald’s
! !
2 Microsoft 7 General
! Electric
!
3 Google 8 Samsung
!
!
4 Coca-Cola 9 Toyota
!
!
5 IBM 10 Louis Vuitton
!
!
According to Interbrands, one of the top Brand Consulting firms in the

world, a Brand is “a mixture of tangible and Intangible attributes
symbolised in a trade mark, which, if properly managed creates influence
and generates value”. Why does one brand have a huge market share
when there is no difference in the product attributes. The answer is the
difference in brand perception. A brand is basically a perception that exists
in the minds and hearts of the consumers. A brand differentiates a product
from its competitors and makes a promise to its customers. Therefore, it
makes sense to understand that branding is not about getting the target
market to choose the brand over the competition, but it is about getting
the prospects to see the brand as the only one that provides a solution to
their problem.
To succeed in branding, one must understand the needs and wants of the
customers and prospects. The brand resides within the hearts and minds
of customers, clients, and prospects. It is the sum total of their
experiences and perceptions, some of which can be influenced and some
can’t be. We usually associate the term ‘brand’ with a product that has a
! !40
unique, consistent and well-recognised character, e.g., Nike, Domino’s,

Frito Lays, etc. These brands conjure up images in the minds of
consumers. A great brand is built on a compelling brand promise based
upon a clear, penetrating and own able idea. It evolves from the core
truths of an organisation and helps a company transform perceptions of
itself.
A brand and what it represents can affect what people are willing to pay for
a product. In blind taste tests, respondents were asked which of two
samples of cornflakes tasted better. Unknown to the respondents, the
samples were identical, yet the number of those who chose sample A over
sample B increased from 47% to 59% when respondents were told that
sample A was Kellogg’s (sample B was not given a recognisable brand
name). People perceived the “branded cereal” as tasting better even
though both the cereals were identical.
3.3.2 Role of Advertising and Sales Promotions in Branding
In terms of consumer purchases, the essence of a brand is a promise. This

promise sets expectations for what a person considers likely to occur when
using a product. Knowledge of what a brand stands for allows customers to
make a quick and easy decision. That’s what a promise means—you know
what to expect. Advertising is a key element in brand building. Brands are
supported and nurtured by advertising and promotional initiatives. Brands
use advertising to help them break through people’s wall of indifference.
Advertising creates a perception of what the brands represents. From
Brands, the emphasis has now shifted to ‘Power Brands’. A great brand is
much more than a flashy logo and clever advertising. To consistently meet
customer expectations from the brand, companies must constantly monitor
the expectations that are defined by the messages carried out through
advertising and promotional tools, to make sure there is no gap between
them or that there is a positive gap and the product surprises customers
by delivering more than they expected. When a negative gap exists, either
the brand promises (brand communications, advertising) need to be
restrained, or the managers responsible for product performance need to
be made aware that their products are not meeting expectations. Before
we get into the details of this concept, try the Activity given below.
! !41
Activity 2
Identify the Tagline of the Brand logos given below.
! ! ! !
! !
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
I’m sure your answers are:
Thums Up……………………………Taste the Thunder/Aaj Kuch Toofani Karte Hai

Asian Paint’s Gattu………………………….....Har Ghar Kuch Kehta Hai
Amul Girl………………………………………...Utterly Butterly Delicious
Surf………………………………………………Daag Acche Hai
Maggi Noodles………………………………....Fast to Cook and Good to Eat
You could guess them all correctly because all of these are iconic brands.
There are many such brands which we interact with on a regular basis like
Pantene, Nescafe, Mondelez, Dettol, etc. These have become almost
generic for the categories that they represent. The strong, instantly
recognisable names, logos and colours of the brands symbolise their
makers’ promise that consumers’ expectations will be fulfilled. These
brands have become all-pervasive. Do you realise we don’t drive cars any
more, we drive our Hondas and Toyotas, we don’t wear sports shoes, we
! !42
wear our Pumas and Nikes, we eat Domino’s pizza and McDonald’s burgers.
It has taken these successful brands a long time and huge investments in
advertising and promotions to reach where they are and command loyalty
of the consumers. The loyal consumer base raises the entry barriers for
competitors and enables the company to enjoy benefits like premium
pricing and sustained market share over longer periods of time. Advertising
and sales promotions, therefore, lead to the creation and maintenance of
the Brand.
Customers and prospects are influenced by a wide variety of messages that

are sent by both the tangible and intangible attributes of the brand.
Tangible attributes are the ones that you can observe or touch like the
product’s design, components, size, shape, colour and price. The intangible
attributes that influence customers are the brand’s perceived value, image
memories associated with the brand, perceptions, etc. The intangible
elements are very important in brand building because they are hard for
competitors to copy, and they are more likely than tangible attributes to
involve consumers emotionally. Advertising and promotions play a major
role in creating positive intangible attributes for the brands.
3.3.3 Process of Building Brands
Building a successful brand requires strategic planning and major

investments. Three steps lead to successful brand strategies: (1) selecting
the desired brand position, (2) repositioning the brand and (3) creating
brand awareness cues.
I. Brand Positioning
In their book Positioning: The Battle for Your Mind (1981), Al Ries with Jack
Trout described the concept of Positioning. Positioning means the process
by which certain aspects of the brand are actively communicated by
marketers to create an image or identity of the brand in the minds of their
target market, differentiated from the competition. Historically, brand
parity or a lack of brand differentiation in consumer perception, has been a
consistent problem in the field brand marketing. Positioning, therefore, is
not what you do to the product, but what you do to the mind of the
consumer by situating the brand into the psyche of the consumer in a way
that it is distinctive than the position occupied by the competitor. For
instance, if we take bathing soap category, Dove soap is an interesting
! !43
example of brand positioning. Despite being a soap, it is positioned as a

skin moisturiser. The position of this brand is in line with its premium
pricing. It is seen as a premium product that is perceptually closer to skin
moisturising creams than to soaps.
Exhibit 2
Positioning the Brand
An example of very successful positioning was the launch of Maggi noodles

in the Indian market in 1982 by Food Specialties Ltd. The company toyed
with many options regarding positioning such as ‘Chinese dishes at home’,
‘mini meal’, or as a ‘TV dinner’. Consumer research, however, made the
company choose the most profitable position as a tasty, instant snack,
made at home, and aimed at children. Maggi noodles’ competitors were
biscuits, wafers, and peanuts. Its direct competitors were fried peanuts,
papads, sandwiches, and pakoras. Chinese noodles and macaroni were
invariably used for meals, requiring a fair amount of cooking time and
garnishing. Maggi noodles became an instant hit with children. “Mummy,
mummy bhook lagi. Bus do minute” became almost a nursery rhyme for
children of a certain age group.
Some common approaches to creating brand positioning are as given:
1. Product Attribute or Benefit Approach  

 
A product attribute is a specific feature or benefit of the product vis-
à-vis others in the category. Positioning in this way focuses on one or
two of the product’s best features/benefits, relative to the
competitive offerings. For instance, various car brands stand for
clearly different consumer benefits as expected from a car. In the
Indian context, in the small car segment, if a Alto stands for ‘smooth’
driving experience, then a Swift stands for ‘fuel efficiency’, Santro
stands for ‘powerful’ driving experience, a Nano for ‘Value for money’,
and a Maruti 800 for ‘economy’ and so on.
2. Price-Quality Approach  
 
Marketers often use price/quality characteristics to position their
brands. One way they do it is with advertising that reflects the image
! !44
of a high quality brand where cost is considered secondary to the

quality benefits derived from using the brand. Premium brands
positioned at the high end of the market use this approach for
positioning the product. Another way to use price/quality
characteristics for positioning is to focus on the quality or value
offered by the brand at a very competitive price. Although price is an
important consideration, the product quality must be comparable to,
or even better than, competing brands for the positioning strategy to
be effective. A case in point is Parle Bisleri’s Bada Bisleri, same price
advertising campaign.
3. User Approach  
 
This positioning approach highlights the user (the ideal or
representative target consumer) and suggests that the product is the
ideal solution for that type of person and may even contribute to
their social self-identity. This is a positioning approach where a user’s
image or association rubs off on the brand image. Often lifestyle
brands use this approach. The user could be a celebrity, or an expert,
or an ordinary user. Most cosmetic brands use different celebrity
profiles to position their brands, like L’Oreal Paris hair colours with
Aishwarya Rai Bachchan, Nescafe, which uses film actor Deepika
Padukone and TV actor Purab Kohli, Thums Up reinforce its ‘for
grown-ups’ image by using a ‘macho’ celebrity route with Akshay
Kumar and Salman Khan as the face of the brand.
4. Product Category Approach 

 
The brand is positioned against the entire category as a new or
superior alternative. This positioning strategy tends to take a
leadership position in the overall market. Statements with the general
message of “we are the best in our field” are common. One example
of this approach is Dove soap’s positioning as ‘moisturiser’ against
regular soaps.
5. Competitor approach 
 
It is generally a comparative positioning taken against some specific
competitive brand in the category. With this approach, the firm would
directly compare (or sometimes just imply), a comparison against
! !45
certain well-known competitors (but generally not the whole product

class as above). For instance, Avis car rentals took the ‘No. 2’
position against Hertz car rentals, Burger Kings took the position of
‘make your own’ burgers against the pre-assembled ‘standard’
burgers of McDonald’s.
II.Repositioning a Brand
In the classic model of the Product Life Cycle, over a certain time frame, a
brand moves through the stages of Introduction, growth, maturity and
decline. The cycle begins with the introduction of a brand. This is followed
by growth in its sales and profits as the brand gains market acceptance.
The brand then reaches the stage of maturity as customer expectations
and demands change. To remain relevant to its target consumers, the
company has to change in a way that it meets these new demands.
Competition too intensifies and it becomes difficult to maintain brand
differentiation. Competition accelerates the Product Life Cycle, leading to a
decline in the sales as the brand begins to look old and it gets edged out
with better competitors and substitutes. At this stage of the life cycle, a
repositioning process can be a great strategy. Repositioning can create new
appeal for existing consumers or attract new consumers. “A brand which
does not change with times fossilizes and loses its relevance” said Jean-
Noel Kapferer. Repositioning can create a new appeal for existing
customers or attract new customers. In order to ascertain if the brand
repositioning has really demonstrated its desired impact, it is imperative
that the brand managers have a reliable methodology to measure this
change. Let us elaborate this theory with the case studies of Moov and
Livon.
1. Repositioning Moov – “Aah se Ahaaa tak”
! !46
In 1986, Paras pharmaceuticals launched Moov. The market was then

dominated by multipurpose brands like Iodex (GlaxoSmithKline),
Amrutanjan and Zandu (now an Emami product). These mature
brands promised relief from headache, body ache and sprains. Moov
was launched as a white, aromatic cream in a slick tube as opposed
to the old fashioned black glass jar of Iodex. It was positioned as a
balm for relieving joint pains that trouble older people. This product
differentiation and its positioning helped Moov gain an initial share of
the market but it didn’t translate into market leadership.
Subsequently, based on research into the usage habits of rubs and
balms, Paras got certain important consumer insights. The first was
that the largest group of users was women suffering from perpetual
lower backaches. The second was that while strains and sprains were
occasional occurrences from accidents, backaches were everyday
problems caused by routine activities. In 1993, the company, based
on these insights, repositioned the brand as a “backache specialist”
that addresses a problem that housewives frequently encounter. This
repositioning led to a significant increase in the sales of Moov and the
brand quickly replaced Iodex as the market leader. The tag of a
specialist balm for backache repositioned Moov as a means to reunite
the family and as an indispensable remedy for her backache. Their
advertising agency Triton captured this in a new tagline “Aapke ghar
mei kaun rehta hai – kamardard ya Moov?” The communication
graduated Moov from a pain reliever to a housewife’s soulmate. By
smart repositioning, Moov displaced Iodex and became the market
leader.
2. “Live Life Doll Size” – Livon
! !47
Paras Pharmaceuticals had developed Livon, as a non-greasy hair

serum. The launch in early 2000, positioned the brand on a platform
for providing ‘great looking hair’. The concept was new, the product
resembled neither shampoo nor hair oil. There was a big advertising
blitzkrieg when it was launched but Livon had not been too active on
the advertising front for the last few years and soon the brand
suffered from the fact that the category of silky potions has low
recognition in India.
If one were to look at the category of post-shampoo hair products,

Livon enjoyed good times during its launch. Competition was limited
to Silk & Shine, and the category of conditioners too, was rather
inactive. But with time, conditioners caught the consumer’s fancy.
Competition within the liquid hair potions category also heated up
with the entry of more players, and Livon lost its footing somewhat.
Since most shampoos and hair oils promised great looking hair
anyway, Paras needed to redefine a clear category for Livon to
occupy. The attempt to gain market leadership and mind share was
twofold – to address the challenge of people not using post-shampoo
products, i.e., category expansion and to counter conditioners, which
are eating into Livon’s share.
Paras undertook extensive research, which provided some very clear

insights. Every woman wanted great looking hair. All women feared
hair loss, and most believed it to be a genetic problem, an act of
God, or the result of stress and pollution. They also recognised that
the forceful combing of tangled hair was the main cause of hair
breakage that then lead to hair loss. These insights then led us to
create a new category – Hair Detanglers. The new commercials by
Livon, made use of dolls to tell its ‘beautiful, manageable hair’ story.
The commercials showed various dolls placed in real-life situations
and while each of them sports a different hair do, what ties them
together is that each one has luscious hair. The advertisements had
dolls in different set-ups such as a cafe, a hilltop or a presentation in
an office, while a jingle, sung in a jazzy style, talks of breezy things
like making your dreams come true and letting your hair run free. “I
love my hair” goes the punch line.
Livon was, thus, repositioned as a hair detangling fluid that

prevented hair breakage and hair loss and gave great looking hair.
! !48
Livon was a runaway success and dominated its category even after
Marico entered with a large clone, ‘Hair & Care’s Silk-n-Shine’.
Activity 3
Cadbury’s is another successful of Brand repositioning. Collect

information about this brand and write your own case study.
!
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
3. Developing Brand Identification Cues 

 
Brand names and logos are the cues which the customers look for
when they shop. The more memorable and relevant the brand names
and symbols are, the easier it will be to develop the brand position in
the customers’ mind. Making it easy to find and repurchase a brand is
an important factor in customer retention. Although choosing a
memorable name is more art than science, successful brand names
generally are the result of extensive research. We live in a visual
world. Having a symbol for a brand can greatly increase a brand’s
recognition. A distinctive logo is used to indicate a product’s source or
ownership. Brand names and logos should be distinctive, simple, and
consistent with the desired image and positioning of the brand. Large
organisations work hard to raise the power and status of their brands
and guard them carefully against unlicensed use or unfair imitation. A
brand usually carries a logo or trade mark by which it is recognised.
Developing a corporate brand is important because a positive brand
image will give consumers, and other interested stakeholders,
! !49
confidence about the full range of products and activities associated

with a particular company. Giving a brand an identity and a position
creates an image of the brand. A brand image is an impression
created by brand name, logo and perception or impression of the
brand. An image makes a statement about a brand’s personality.
What comes to the mind when you think of each of the following:
Colgate, Lux, Lifebuoy, Bournvita and Ponds. The following images
are what flash before the eyes when we think about the mentioned
brands.
Exhibit 3
! ! !
! !
3.4 How Brands create Equity?
Recall from the beginning of this chapter that Tata Motors and Mahindra &
Mahindra paid billions of dollars for Jaguar, Land Rover and Ssangyong
respectively. What determines the value of a brand? Two basic components
determine a brand’s value. One is physical assets, such as plants,
equipment, and land. The other is brand equity, which is the intangible
value of a company beyond the value of its physical assets. Brand equity is
sometimes called goodwill. It is the value of the brand in the marketplace.
Simply put, a high equity brand has high value in the marketplace. A brand
with high equity means that the brand is easily recognisable when
encountered. It means that the brand has high recall and that individuals
would be willing to pay a premium price for your brand’s offering. It could
! !50
mean that when someone asks for a referral, the brand is the first one that
is recommended to others. All of these are positive responses to the brand
– a readily recognisable brand, a brand that is recalled quickly and easily
when needed, one that individuals are willing to pay a premium price to
acquire, and a brand that is recommended to others. These are all
characteristics of a high equity brand. The importance of brand equity is
increasing for most companies.
Brand Guru, David Aaker, identified brand name awareness, brand

associations, perceived brand quality and brand loyalty (measure of the
attachment that a customer has to a brand) as elements of Brand Equity.
Marketing communication directly impacts three of the brand equity
building elements (brand name awareness, brand associations and
perceived brand quality) that Aaker identified. So, it’s easy to see the
critical role of advertising and promotions in brand building. A promotional
strategy is often successful in increasing brand equity because it improves
awareness, brand associations, and perceived quality lead to greater brand
loyalty and trust. A brand’s equity can be leveraged by using a brand
extension strategy, co-branding strategy or ingredient branding. (Refer to
Exhibit 4)
Exhibit 4
! !51
Brand extension is a strategy in which an established brand name is

applied to a new product offering. Brand extension is generally most
successful when it involves similar products. The brand name Amul began
with milk and has been extended to butter, curd, cheese, ghee, chocolate,
ice creams, condensed milk, etc. The advantages of extending a successful
brand are savings in time and money when a company introduces new
products because the brand is already known and instantly communicates
a certain level of trust.
3.6 Co-branding
Kotler defines co-branding as, “two or more well-known brands combined

in an offer” and each brand sponsor expects that the other brand name will
strengthen the brand preference or purchase intention and hope to reach a
new audience. Co-branding is a strategy that capitalises on using two
brand names (owned by separate companies) and provides customers
value from both brands. For exampke, Indian Oil Corporation and Citibank
(Petro Card).
Activity 4
What co-brands do see around you? Do a quick search and mention

it here. How does one brand add value to the other?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
Another way to add value to a brand (and to a brand message) is through

ingredient branding—using the brand name of a product component in the
promotion of another company’s product. The “Intel Inside” message used
by various computer hardware manufacturers is a good example. The
manufacturers hope to reinforce the quality of their finished products by
featuring the maker of the most important component in the computer: the
! !52
processing chip. Ingredient branding is also used by food products

manufacturers. Priyagold Biscuits (Surya Foods & Agro Ltd.) promote
themselves by claiming that they use Amul butter in the biscuit making
process. For ingredient branding to be successful, the ingredient brand
must have a high level of brand awareness. When it does, an ingredient
brand adds value to the products in which it is used. Manufacturers who
use such ingredient branding have found that they can sell their products
at premium prices.
3.8 Summary
In this chapter, we looked at the evolution of brands and brand building

where advertising and promotions play a key role. A brand differentiates a
product from its competitors and makes a promise to its customers. In the
battle for consumers, a strong brand is an invaluable asset for a company.
A brand is a mixture of tangible and intangible attributes, which if properly
managed, creates influence and generates value, termed as Brand Equity.
The chapter looked at how to build a successful brands using strategies
such as positioning, which means the process by which certain aspects of
the brand are actively communicated by marketers to create an image or
identity of the brand in the minds of their target market, repositioning,
which can create a new appeal for existing customers or attract new
customers and creating brand identification cues, which the customers look
for when they shop. The chapter also gave insights on creating brand
equity.
! !53
1. What is a brand?
2. How is a brand more than just a product?
3. Evaluate possible brand extension opportunities for Mercedes Benz.
4. Elaborate on the brand positioning strategies.
5. What is Brand Repositioning?
6. What are the strategies by which brands equity is leveraged?
1. __________ is defined as the art and science of fitting the product or

service to one or more segments of the broad market in such a way as
to set it meaningfully apart from competition.
a. Target marketing
b. Undifferentiated marketing
c. Demographic segmentation
d. Positioning
2. Big Bazar has been very effective in positioning itself as a store that
offers quality products at a very good price. Their strategy reflects
positioning based on __________.
a. benefit segmentation
b. demographic segmentation
c. psychographic segmentation
d. price/quality
3. __________ consists of the combination of the name, logo, symbols,

design, packaging, and image of associations held by consumers.
a. Marketing mix
b. Promotional mix
! !54
c. Brand identity
d. Positioning
4. __________ is the intangible asset of added value or goodwill that

results from the favourable image, impressions, differentiation, and/or
strength of a consumer’s attachment to a company’s name or
trademark.
a. Product affiliation
b. Product symbolism
c. Brand equity
d. Brand symbolism
5. __________ involves altering or changing a product’s or brand’s

position.
a. Market segmentation
b. Market targeting
c. Positioning
d. Repositioning
[Answer: 1. (d), 2. (d), 3. (c), 4. (c), 5. (d)]
! !55
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !56
THE ADVERTISING AGENCY – STRUCTURE AND FUNCTIONS
Chapter 4
The Advertising Agency – Structure and
Functions
Objectives
• Understand the business of advertising agencies

• Know about evolution of advertising agencies
• Have an overview of the structure and functions of ad agencies
• Appreciate the types of advertising agencies
• Understand the various means of compensation of ad agencies
Structure:
4.1 Introduction
4.2 Major Players of the Advertising Process
4.3 The Continuing Evolution of The Agency
4.4 Types of Advertising Agencies
4.4.1 Full Services Agency

4.4.2 Creative Boutiques
4.4.3 Agency of Records
4.4.4 Media Buying Services
4.4.5 In-house Agencies
4.4.6 Specialty Agencies
4.5 Advertising Agencies – Other Services

4.6 Agency Compensation
4.7 Summary
! !57
4.1 Introduction
An advertising agency, as defined by the American Association of

Advertising Agencies, is an independent business, composed of creative
and business people, who develop, prepare, and place advertising in
advertising media for sellers seeking to find customers for their goods or
services. The agency comprises of a team of experts who, produce and
place advertising campaigns in the media. It acts in the capacity of a
consultant to its client (the advertiser) in formulating the advertising plans
and translating them into advertising campaigns. The other role of the
agency is placing the ad in relevant media. As per Philip Kotler, Advertising
agency is a marketing service firm that assists its clients in planning,
preparing, implementing and evaluating various activities of advertising
campaign.
The perception of an ad agency is that of glamour and fun, but in reality,

the ad agency functions as a high pressure work zone with constant
deadlines to meet. Ad agencies are brands unto themselves, but their
ultimate common goal, is to promote and sell the products that they
advertise for. A typical advertising agency is made up of a CEO, account
executives, a creative team, client servicing executives, media specialists,
copywriters, visualisers, etc.
Activity 1
Take this little quiz. Guess the brands for these ad lines:
• Pal bhar mein tayyar, khane mein mazedaar ……………………………………

• Neighbour’s envy, owner’s pride…………………………………………………………
• Just do it………………………………………………………………………………………………
• The complete man………………………………………………………………………………
• Har ghar kuchch kahta hein……………………………………………………………….
You could guess it correctly – Maggi 2 minute Noodles, Onida, Nike,

Raymonds and Asian Paints. The above brands and their ads have been
etched in memory due to the iconic work done by their ad agencies. Great
creative lines and images have the power to position a brand in the mind of
the consumer.
! !58
4.2 Major Players of the advertising PROCESS
Advertiser
The advertiser is the key participant in the advertising process. It is the

advertiser that uses advertising to send out a message about its product.
The advertiser initiates the advertising process by identifying a marketing
problem that advertising can solve and makes the final decisions about the
target audience, the budget and approves the advertising plan. The
advertiser hires the advertising agency, becoming the agency’s client
responsible for monitoring the work and paying the bills for the agency’s
work on its account. The Advertiser or the ‘Client’ is also referred to as an
‘Account’ in ad agencies.
Exhibit 1
Top Advertisers in India – 2014
Big Spenders – Traditional Big Spenders – Digital Age
Hinustan Unilevers Ltd. OLX
Reckitt Benckiser India Ltd. Flipkart

ITC Quikr
Mondelez India Foods Private Limited Snapdeal

(Formerly Cadbury India Ltd.)
Coca-Cola India Ltd. Jabong
! !59
Advertising Agency
The Ad agency creates the advertising. Outside agencies are often more
efficient in creating an advertisement or a complete campaign than the
advertiser would be on its own. Some large advertisers participate in the
advertising process either through their advertising departments or
through their in-house agencies. Advertising departments act as a liaison
between the marketing department and the advertising agency and other
vendors. In-house agencies perform most, and sometimes all, of the
functions of an outside advertising agency.
Exhibit 2
Top 10 Advertising Agencies in India 2014
1 Ogilvy & Mather 6 McCann-Erickson
2 JWT India 7 FCB-Ulka Advertising

3 Rediffusion – DY&R 8 RK SWAMY/BBDO Advertising
4 Mudra Communications 9 Trikaya Grey Advertising

5 Lowe Lintas & Partners 10 Chaitra Leo Burnett
Activity 2
From the list of top agencies mentioned, find out 5 major ads created by
them in the Indian advertising context. Mention at least one from each
agency.
1. ___________________________________________________
2. ___________________________________________________
3. ___________________________________________________
4. ___________________________________________________
5. ___________________________________________________
! !60
Media
Media is composed of the channels of communication that carry the

message from the advertiser to the audience. Media are referred to as
channels of communication or media vehicles, with mass media being the
most cost-efficient form. Media is classified as Broadcast media, Print
media, Out-of-home Media etc.
Suppliers
Suppliers are the group of service providers that support the advertisers,
ad agencies, and the media in creating and placing ads by providing
specialised services. This group include artists, writers, photographers,
directors, etc. Suppliers are basically vendors who provide expertise, when
the ad agency and media personnel are overloaded or when they need a
fresh perspective, and cost efficiency.
Target Audience
The process of advertising starts with the identification of the customers or

the audience for the advertising that is meant to receive the advertisers’
message.
4.3 The Continuing Evolution Of The Agency
! !61
‘A telegram landed at the desk of marketing correspondents across

newspapers in Mumbai, sometime in April 2005. It stated sadly that an ad
agency was ill. That was soon followed by a death certificate announcing
the demise of a 59-year-old ad agency. Everest Integrated
Communications. Within days, though the ad agency was reborn as Everest
Brand Solutions – that may sound like a happy ending, but it’s not. Indian
advertising has been in a state of flux and it’s not only the small players
who’re being affected. Everest had billing of close to ` 150 crore and
worked on memorable campaigns such as Parle Frooti and Tortoise
mosquito coils. Then billing started reducing. The situation Everest faced is
one that more ad agencies could be up against – being downgraded from a
partner in brand communication to a supplier of TV Commercial scripts and
ad layouts for clients’.
Traditionally, agencies were trusted custodians of the brand. They would be

key in developing products, serving as marketing and media experts.
Today, most major corporate marketing departments have the ability to
manage these functions. Many agencies feel they are treated more like
vendors than partners as clients seek solutions from any place, once the
exclusive territory of agencies. Under the traditional structure, an account
executive would meet creatives regularly to discuss strategy and
advertising copy, or with media people to review scheduling, or separately
with the public relations person. But in the changing advertising milieu,
advertising agencies are discovering that the strategies they implemented
with such élan just a few years ago coming apart at the seams. How did
this change come about?
Till the 1990s, ad agencies in India followed the model of a full service
agency – offering creative, media planning and media buying. But over
time, they switched from the Full Services Model to the International model
of splitting across functions, in the hope that decentralisation would lead to
specialisation.
In the new set-up, agencies like Ogilvy & Mather, JWT and Lowe (formally
Lintas) retained their creative function (creating ads and devising brand
strategy) while the media functions were hived off as separate profits
centers. One of the biggest such restructuring was when the WPP Group
(which controls Ogilvy & Mather, JWT and Contract among other Indian ad
agencies) merged the media buying operations of all three agencies into a
separate media buying entity, now called Group M. How did this set-up
! !62
work? The media specialists bought space in bulk from the media houses
and then distributed it among their clients. There were several advantages.
First it saved the agency from negotiating space for every new campaign.
Instead, the media buyer signed quarterly or annual contracts with the
media houses, for which it could negotiate hefty concessions, now even
small clients could get lower rates.
The trouble was, while mushrooming of the media function helped agencies
in making profits but the creative function lost out in the process. Earlier,
creative and media worked in tandem. Each needed the other to survive
and thrive. Today, there is a divide and that results in a dilution of the
brand message. As the creative and media functions operate
independently, in many cases, they’ve lost sight of each other’s
requirements and goals. The creative agency lacks an in-depth
understanding of the media offerings, while the media agency does not
understand the finer points of creative execution. The media agency’s lack
of understanding manifests itself in different ways.
Creative directors point to instances when 30-second commercials are

cropped to 15-second spots to optimise spends, or a colour print ad
appears as black and white. The problem was bad enough when media
buying was restricted to television spots, column cm and hoardings. But
after ad agencies became 3600 communications outfits, it has
exacerbated. With the emergence of newer media options such as internet
advertising and mall promotions, the need to offer clients 3600
communications choices was growing. According to estimates, the
expenditure on alterative avenues of advertising has climbed from 10% of
the total marketing budget a few years ago to about 25% now. To get
these services, clients started looking at direct marketing specialists and
event marketing companies, leading to more changes in the structure and
functions of advertising agencies.
Activity 3
In context to the facts given above, who do you think is the real brand
custodian – the creative agency, the whole host of specialist
communication units, the media buying house or the the client?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
! !63
4.4 Types of Advertising agencies
4.4.1 Full Service Agency
An agency that handles planning, creation, production, and placement of

advertisements for clients is termed a Full Service Agency. It may also
handle sales promotion and other related services as needed by client. In
the simplest terms, a full-service agency offers its clients all the services
necessary to handle the total advertising function, i.e., creativity,
production, placement of ads and evaluation. Many have expanded this to
include a variety of functions like – Customer Relationship Management
(CRM), Online Advertising, Direct Marketing, Public Relations, etc. so that
the brand image is reinforced every time the consumer is exposed to the
communication. Large ad agencies handle the entire range of activities –
Account Management, Creative, Media, Research and Account Planning.
I. Full Service Agency Structure
A traditional advertising agency has the following functional departments:

(1) the Creative Department, (2) Account Services, (3) Media Services and
(4) Management and Finance. Let us discuss briefly how each department
is organised.
(a) Creative Department 

 
The Creative department is the ‘Core’ of the Advertising Agency.
Although every department is essential in an agency, but the Creative
department provides the essence of the agency. The creative work is
the outcome that is developed by the talented people who work in the
creative department. Everything from print ads and direct mail, to
broadcast ads, websites, etc. are conceived here. The creative
department works under the guidance of the Creative Director. The
Copywriters and Art directors usually work as an exclusive team under
the Creative director. This team works together to craft copy and
create visuals for a campaign. These teams are assisted by many
types of designers and production artists, who give a polished and
finished look and feel to the ad.
! !64
Exhibit 3
(b) Client (Account) Services 

 
The Client/Account Services department is responsible for the
interrelationship between the agency and the client. The Account
Services Executives also called as the Client Servicing Executives, act
as the channel between the agency and the clients. It is the job of this
department to be proactive and maintain a good working relationship
between the agency and the clients. They are most knowledgeable
about the client’s business, marketing problems, and advertising
objectives. This department is responsible for seeing that the proposed
advertising prepared by the agency is on target, and for presenting the
total proposal—media schedules, budget, and early drafts of
advertisements or storyboards—to the client for approval. These
executives makes sure that the agency produces the work to the
client’s satisfaction.
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(c) Media Department 

 
The Media department is responsible for media planning and media
buying. The Media Planning Director is responsible for the planning of
the use of media and for the selection of specific media. The Media
Planners are ably assisted by a team of Media Buyers. The Media
Buyers negotiate and get the best deals in buying space and time (in
print and broadcast media respectively). The media planner must
evaluate media reach, rates, plus demographics and Socio-economic
Classification (SEC) relating to the advertiser’s marketing objectives.
The Media Buyers work with media planners to make the best
purchase decisions. They research the intended target audience and
determine what mediums will be most effective in reaching the largest
amount of prospective customers. The difference between the two is
that media planners select media to meet a client’s marketing goals,
while media buyers negotiate the best media rates and purchase the
media. The media buyer has a vast selection of media to choose from
both traditional media options like – Radio, Television, Magazines,
Newspapers, Out-of-home Media, and new media options like – Social
Media and Digital Advertising.
(d) Management and Finance 

 
Like all businesses, an advertising agency needs an administrative
head to take charge of financial and accounting control, office
management, and personnel.
II.Functions of Full Service Agency
Let’s take a look at the functions full service agencies perform. When a new
account or a new product is assigned to a full service agency, work on it
will generally proceed along the following lines.
(a) Diagnosing the Marketing and Brand Strategy 

 
The process begins with the collection of information about all that is
known about the product category, the brand, and its competitors.
Research takes the lead, looking at consumer attitudes to develop
penetrating insights into the prospects and defining the brand’s core –
Who are the likely customers? Where are they? What are their
! !66
demographics and psychographic characteristics? What Socio-

economic Class (SEC) do they belong to? How does the product fit into
their lifestyles? How do they regard this type of product, this particular
brand, and competitive products? What one benefit do consumers seek
from this product and this particular brand? In what distinctive way
can the product solve the prime prospects’ problems? What media will
best reach this market? They help finalise the decisions regarding what
it will take to reach the target audience.
(b) Setting Objectives and Developing Strategy 

 
Using the answers to the questions asked in the previous section, a
strategy is formulated that positions the product in relation to the
customers and emphasises the attributes that will appeal to them.
Account management is responsible for leading this phase. Here, it is
defined what is to be accomplished strategically, such as intensifying
brand imagery and recapturing prior users, and plan how to carry it
out. These strategic stage involve teams of account, creative, media,
and research departments.
(c) Creating the Communication 

 
Once the overall strategy is determined, the agency decides on the
creative strategy, writes the content (copy), and prepares the rough
layouts and storyboards. In advertising, the creative strategy
determines the persuasive expression of the selling strategy. As given
above in ‘Section 3: Continuing Evolution of the Agency’, the clients
may have separated the media function to a separate media service
agency. In this event, both the creative and media agencies have to
collaborate in developing the media plan. Then media selection takes
place and media schedules are prepared with costs and release dates.
(d) Billing and Payments 

 
When advertisements are run, the agency bills the client and pays the
bills to the media and production vendors.
4.4.2 Creative Boutiques
Copywriters and art directors, instead of being tied up with a single agency,
set up their own shop to sell the Creative function at a fee. These shops
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have come to be known as creative “boutiques.” Some advertisers seek top

creative talent on a freelance, per-job basis. Many creative people do
freelance work in their off hours. Some make it a full-time job and open
their own creative shop or creative boutique. In general, the creative
boutique has no media department, no researchers, and no account
executives. Its purpose is strictly to develop creative ideas for its clients.
4.4.3 Agency of Records
When an advertiser does not employ a Full Service Ad Agency and instead
works with a separate creative agency, it hires an entity called The Agency
of Record (AOR). The AOR is an advertising firm authorised to represent an
advertiser in the media buying process. Advertisers work through this
agency in negotiations in regards to ad placement and other activities. It
also provides consulting services to its clients to help them develop
effective and appropriate ad campaigns for a given market. The AOR
discusses the campaign with the client, which media it wants to place the
advertising in and seeks appropriate advertising spots. The agency
negotiates prices and other details of the contract. Advertising material and
payments go through this AOR, which places them appropriately. In some
instances, large advertisers may employ a number of agencies to handle
their advertising for various divisions and products. To coordinate the total
media buy and the programming of products in a network buy, the
advertiser will appoint one agency as the Agency of Record. This lead
agency will make the corporate contracts under which other agencies will
issue their orders, keep a record of all the advertising placed, and
communicate management’s decisions on the allotment of time and space
in a schedule.
Activity 4
Search the best known creative Boutiques online along with the
famous campaigns they have created.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
! !68
4.4.4 Media Buying Services
There have been major changes in how advertisers handle their media
since the mid-1990s. Some major advertisers chose to unbundle media or
give their media purchase function to independent media-buying agencies
to try to gain buying efficiencies. Many of the large agencies have made
their media services independent of other agency services to better
compete. Large advertising holding companies like Omnicom and WPP
Group have pulled together their media departments into a single, more
efficient, separate companies called Omnicom Media Group and MindShare,
a mega media planning and buying agency to serve advertisers better.
Both the Omnicom Media agency and WPP’s media agency are free to seek
clients that want to consolidate their media regardless of who handles their
creative.
4.4.5 In-house Agencies
Did you know that Adbur is Dabur India’s In-house agency and Mudra was
Reliance Group’s In-house agency? An In-house advertising agency
basically means an organisation or team owned by a company which
handles the entire process of the company’s advertising and promotions
campaigns. These types of agencies were born in the early days of
advertising that primarily focused on the purpose to save media
commissions and also to achieve total control over the companies’
advertising needs. An in-house advertising agency is owned and operated
by the advertiser. Instead of a company outsourcing its advertising to an
agency, its ad campaigns are mainly handled by its own in-house agency.
Some part of the creative process may still be directed to outside agencies,
usually on a per-project basis. The in-house agency can employ a creative
service to develop advertising for a fee or markup. It can buy the space or
time itself or employ a media buying service to buy time or space and
place the advertisements. The in-house agency is an administrative center
that gathers and directs varying outside services for its operation and has a
minimum staff. In-house agencies are generally created to save money or
give advertisers more control over every aspect of their business. Many
companies have highly technical products that constantly undergo
technological changes and advances, it is more efficient to have in-house
technical people prepare advertisements. A few large advertisers have
taken the media-buying function in-house so they will have more control
! !69
over the buying operation. Some clients employ an experienced media

consultant to manage media services.
4.4.6 Specialty Agencies
Most advertising agencies are primarily general consumer agencies.

However, some agencies primarily specialise in certain kinds of business.
Each of these operates more or less like any other agency, but their
expertise is narrower than reaching all consumers. Some examples are of
agencies dealing in financial ads, health care, real estate and the latest
entrant on the block - Digital.
4.5 Advertising agencies – Other Services
(a) Research Services
Large agencies sometimes have in-house research departments. In some

agencies, the research role is being handled by the Account Planner.
Account planning has a crucial role during strategy development, driving it
from the consumer’s point of view. The account planners are responsible
for all research, including quantitative research (usage and attitude
studies, tracking studies, advertisement testing, and sales data) as well as
qualitative research (talking face-to-face to their target, focus groups, in-
depth interviews). In addition to the syndicated research which regularly
reports the latest findings on buyers of a product, agencies also hire
professional research companies which provide custom-made research
reports about emerging trends, customer behaviour, brand positioning,
product usage, media preferences etc. Research is conducted to cover such
subjects as advertising effectiveness, advertising testing, customer
satisfaction, concept and product testing, premium or package design
testing, image and positioning, brand equity measurement, market
segmentation, strategic research, purchasing patterns, and similar
problems affecting product and advertising decisions. A variety of
techniques are available to gather such information, including consumer
field surveys (using personal or telephone interviews or self-administered
questionnaires), focus groups, consumer panels, electronic questionnaires,
opinion surveys, shopping center intercepts, etc.
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(b) Managing Integrated Brands
A brand needs a custodian, someone who will implement and coordinate a

cohesive strategy across multiple media and markets. According to David
Aaker, the advertising agency is often a strong candidate for this role. It
regularly develops brand strategy and gains insights due to exposure to
different brands. An advertising agency inherently provides a strong link
between strategy and executions because both functions are housed under
the same roof. Strategy development in an agency is more likely to include
issues of implementation.
(c) Brand Strategy In-house
Many advertisers choose not to rely on the Advertising agency for

managing brand strategy. Their view is that agencies may be great at
creating advertisements, but brand strategy is better planned by a
professional brand management team. They hire a team of specialised
communication firms, which have expertise in the fields of research, media
buying, and strategy consulting.
4.6 Agency Compensation
Historically, Ad agency compensation has been fairly standardised. An

agency received a commission of 15% from the media for advertising
placed in it by the Ad agency. The commission would cover the agency’s
copywriting and account services charges. Now, the straight 15%
commission format remains typically in theory. In most instances, there
are fixed commissions less than 15%. There are two basic forms of
advertising agency compensation: commissions and fees.
(a) Media commissions
The traditional 15% commission remains a form of agency income,

especially for modestly budgeted accounts. Clients and agency may agree
to a relationship in which the rate is fixed at less than 15%. This generally
applies to large budget accounts—the larger the budget, the lower the rate
for the agency.
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(b) Production commissions or markups
Advertising agencies subcontract production work (all outside purchases

such as type, photography, or illustrators) and charge the client the cost
plus a commission.
(c) Fee arrangements
At times, the 15% commission is not enough for agencies to make any
profit. For example, it may cost an agency more to serve a small client
than a large one. The agency and client may negotiate a fee arrangement.
In some cases, it is a commission plus a fee. There are a number of
options: a cost-based fee includes the agency’s cost for servicing the
account plus a markup, a cost-plus fee covers the agency cost and a fixed
profit or a fixed fee is an agreed-upon payment based on the type of work
being done.
(d) Performance fees
A predetermined performance goal may determine the compensation fee.

For example, advertising recall scores, unit sales, or market share may
determine the level of compensation. If the agency meets the goals,
compensation may be at the 15 per cent level. If it exceeds them, a bonus
could give the agency a 20% level. If it fails to meet the goals,
compensation could be much less than 15%.
Many marketers have replaced the traditional commission system of paying

media commissions with performance-based compensation. Agency
payments are calculated on predetermined, measurable goals like growth
in sales, increasing awareness of a brand, or gaining broad distribution for
a new product. In some agreements, compensation is determined by sales
objectives, with agencies being paid more if a brand’s sales increase and
less if sales decline.
4.7 Summary
An Advertising agency is a service business dedicated to creating, planning,

and handling advertising (and other forms of promotion) for its clients. An
agency provides an outside point of view to the effort of selling the client’s
products or services. Advertising is a complex job. It requires specialised
! !72
knowledge and skills. Ad agencies have a group of people who have

specialised skills and expertise in their particular fields. Agencies have a
team of different people for different functions like copywriters, art
directors, planners, etc. Advertising agencies started in the late 1800s and
were limited in scope. They did not create ads but simply served as brokers
of advertising space in newspapers and magazines. Over time, agencies
added creative services to increase revenue. Even till date, the agencies
are in a state of transition. They are being reengineered to be more
responsive to clients’ needs. Full service agencies are organised into four
divisions: creative department, account services, media and management
and finance. They work on many aspects of a client’s marketing problems,
diagnosing the marketing and brand strategy, creative response, media
planning, and creating communication. Advertising agencies need to be
remunerated for the services that they provide to their clients and
generally work on a commission basis.
! !73
1. What is a full service agency?
2. What services does a full service provide to its clients?
3. Why might a company choose to use a creative boutique rather than a

full service agency?
4. What is an Agency of Records?
5. Write short notes on:
a. Creative boutiques
b. In-house agency
c. Media buying services
d. How are agencies compensated?
1. __________ are the major participants in the integrated marketing

communications process.
a. Advertising agencies and new product development firms

b. Advertisers and media organisations
c. Media organisations and marketing information systems
d. Travel agencies and public relations firms
2. A(n) __________ is an advertising agency that is set up, owned, and

operated by the advertiser.
a. creative boutique
b. full service agency
c. in-house agency
d. self-sufficient agency
3. Which type of ad agency is most likely to assist the client in areas such
as marketing strategy and research, campaign planning and execution,
and media planning and buying?
! !74
a. A creative boutique
b. A full service agency
c. A media buying service
d. A collateral agency
4. The __________ is responsible for understanding the advertiser’s

marketing and promotional needs and interpreting them to agency
personnel.
a. account executive
b. database manager
c. media specialist
d. Copywriter
5. A(n) __________ is an agency that specialises in and provides only

creative services.
a. creative boutique
b. full service agency
c. in-house advertising agency
d. decentralised organisational system
[Answer: 1. (b), 2. (c), 3. (b), 4. (a), 5. (a)]
! !75
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !76
THE COMMUNICATION PROCESS
Chapter 5
The Communication Process
Objectives
• Understand the need for marketing communications

• Assess the role of promotion in the context of the marketing mix
• Get familiar with the basic elements of the communications mix
• Identify the key characteristics of each major tool in the communications
mix
• Know the process of communication
• Know about the various Response Hierarchies
• Appreciate the concept of Integrated Marketing Communication
Structure:
5.1 Introduction
5.2 Defining Marketing Communications
5.3 The Marketing Communications Mix
5.3.1 Advertising
5.3.2 Sales Promotions
5.3.3 Public Relations and Publicity
5.3.5 Direct and Interactive Marketing
5.4 The Marketing Communication Process
5.4.1 Source and Encoding

5.4.2 Brand Messages
5.4.3 Media Channels
5.4.4 Noise
5.4.5 Receiver and Decoding
5.4.6 Feedback
5.5 The Consumer Response Models
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5.5.1 AIDA Model

5.5.2 Hierarchy of Effects Model
5.5.3 Innovation Adoption Model
5.5.4 The Information Processing Model
5.6 Evaluating Traditional Response Hierarchy Models

5.7 Integrated Marketing Communications (IMC)
5.8 Summary
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5.1 Introduction
Modern marketing is something more than developing a good product,

good pricing and making it available to target consumers. It is about
communicating with their present and potential customers, as well as
internally, making communications very important in the marketing
process. A modern company manages a complex marketing communication
system. It communicates with its customers, distributors, suppliers,
consumers and various publics. However, for most companies, the issue is
not whether to communicate, but rather what to say, where, to whom, and
when. The primary role of marketing communications is to engage
audiences and promote both the organisation and its offerings through
different communication tools. Marketing communications efforts include:
understanding the customers, establishing an identity of the company,
using cost-effective advertising, publications, and publicity to generate
awareness and interest and building relationships in the community and
among key influencers.
Marketing communications is a management process through which an

organisation engages with its various audiences. The function of all
elements of the marketing communications tools is to communicate.
Organisations send communications and messages in a variety of ways,
such as through advertisements, brand names, logos and graphic systems,
websites, press releases, package designs, promotions, and visual images.
Traditionally, there are five main marketing communication tools:
advertising, sales promotion, personal selling, public relations and direct
marketing. In addition, there are media in which time and space can be
bought or used to deliver messages to target audiences. The appropriate
mix of these tools has been utilised to reach out to different audiences.
Essentially, in the consumer markets, advertising is used to build brands,
sales promotions is used to encourage customer action, public relations to
generate goodwill and interest about the company, and personal selling is
regarded as the primary tool to promote the brand in various trade
channels. In the 1990s, direct marketing became a more prominent tool in
the mix because technology had enabled a form of communication by
appealing personally and directly to the target customer. This change
introduced new media formats, and the subsequent development of the
Internet and related digital technologies has accelerated change in the
marketing communications industry. There are now a myriad of
! !79
opportunities to reach audiences, with the Internet representing a new and

exciting form of communication channel.
Communication has been variously defined as “the passing of information,

the exchange of ideas, or the process of establishing a commonness or
oneness of thought between a sender and a receiver.” These definitions
suggest that, for communication to occur, there must be some common
thinking between two parties and information must be passed from one
person to another (or from one group to another). But establishing this
commonality in thinking is not as easy as it seems. The communication
process is often very complex. Success depends on such factors as the
nature of the message, the audience’s interpretation of it, and the
environment in which it is received. The receiver’s perception of the source
and the medium used to transmit the message may also affect the ability
to communicate, as do many other factors.
Activity 1
Write down your own understanding of the meaning and

importance of communications. Elaborate with examples.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
This chapter reviews the fundamentals of communication and examines

models regarding how consumers respond to advertising and promotional
messages. The objective of this chapter is to demonstrate how valuable an
understanding of the communication process can be in developing,
executing and evaluating a marketing communications programme.
5.2 Defining Marketing Communications
Marketing communication or promotion is one of the elements of the

marketing mix which is responsible for putting the marketing offer to the
target market. It is the planned activity that communicates with an
organisation’s stakeholders. Picton et al. (2001) defines marketing
communications as “all the promotional elements of the marketing mix
which involve the communications between an organisation and its target
! !80
audiences on all matters that affect marketing performance.” The concept

‘target audience’ is defined by describing it as “those individuals or groups
that are identified as having a direct or indirect effect on business
performance, and are selected to receive marketing communications”.
Wells et al. (2000) agree about it being an element in the marketing mix,
the final element to be exact, and define it as “persuasive communication
designed to send marketing related messages to a selective target
audience.” There are several reasons why managers want to communicate
to markets and audiences:
• Inform
• Persuade
• Image creation
• Reinforcement.
5.3 The Marketing Communications Mix
The Marketing Communications or the promotional mix consists of five

main elements of communications – Advertising, Sales Promotion, Public
Relations, Direct Marketing and Personal Selling. These elements can be
used in various combinations to communicate with the consumers. In
addition to these elements of communication, there are the Media, or the
means by which marketing communications messages are conveyed.
However, the digital media space has given rise to new media scenario. The
internet and digital technologies have made possible new interactive forms
of communication. The promotional mix has developed such that the
emphasis on mass communication (Above-the-line) campaigns has given
way to more direct and highly targeted promotional activities using direct
marketing and the other tools of the mix. Using the jargon, Below-the-line
Communications are used much more these days.
Exhibit 1
Above-the-line (ATL) and Below-the-l Line (BTL) Communications
ATL communications use media that are broadcast and published to mass
audiences, such as television, cinema, radio, print, and out-of-home to
promote brands or convey a specific offer. This type of communication is
conventional in its nature and is considered impersonal to customers while
BTL communications uses media that are more niche-focused. ATL differs
! !81
from BTL advertising, which uses unconventional brand building and

promotional strategies, such as direct mail, sales promotions, flyers, point-
of-sale, telemarketing and printed media (for example, brochures).
Conceptually, communication is a fairly simple process: someone—a person

or an organisation—creates and sends a message to an individual or
organisation. Marketing communications normally covers personal selling,
advertising, direct marketing, sales promotion and public relations. The
tools available to an organisation to communicate with its target audience
are called the elements of the marketing communications mix. According to
Kotler (2003), the marketing communications mix consists of five major
modes of communication:
1. Advertising: Any paid form of non-personal presentation and

promotion of ideas, goods or services by an identified sponsor.
2. Sales promotion: A variety of short-term incentives to encourage trial

or purchase of a product or service.
3. Public relations and publicity: A variety of programmes designed to

promote or protect a company’s image or its individual products.
4. Personal selling: Face-to-face interaction with one or more prospective

purchasers for the purpose of making presentations, answering
questions, and procuring orders.
5. Direct and interactive marketing: Use of mail, telephone, e-mails, or

Internet to communicate directly with customers.
Let us now discuss in detail these five principal marketing communication

tools.
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5.3.1 Advertising
Advertising is a non-personal form of mass communication. The prime

objective of advertising is to build or maintain awareness of a product or
organisation. Advertising plays a significant role in the development of
competitive advantage. In consumer markets, advertising is the dominant
form of communication for many organisations. It is a good marketing
communication tool to inform and persuade people whatever product,
service or idea is being promoted. It can be used to strengthen the brand
image and its products and so reinforce buyer loyalty. Regardless of the
target audience, all advertising requires a message and a carrier to deliver
the message to the receiver.
5.3.2 Sales Promotions
If advertising is used for creating brand identity, then sales promotion

delivers a call to action. Advertising and sales promotions complement
each other as advertising seeks to work over the long term to create
awareness, while sales promotion works in the shorter term to create
sales. Sales promotions cost much lower than advertising. The main
characteristics of sales promotions are that they cause response
immediately and are used as a part of a company’s push strategy (meaning
that they are trying to ‘push’ sales through distribution channels).
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5.3.3 Public Relations and Publicity
Public relations is concerned with the management of relationships

between organisations and their stakeholders. PR influences opinions about
the company and works towards closing the gap between how its key
public sees the organisation and how the organisation would like to be seen
by its key public. Public relations differ from marketing communications in
several ways. Marketing communications tend to be commercial and short
term, while PR is more concerned about the long-term goodwill and
reputation of the company as a whole. An important role of PR is to guide
the company through crises without too much damage to its reputation. It
is relatively cost-effective because it generates free media coverage and it
enables the company to reach a large number of people compared to what
it would cost to create an advertising campaign. The major weakness of PR
is that there is little control over the media content. Media can publish
stories that may be quite different from the information coming from the
PR department.
Personal Selling is a two-way communication tool used to inform, give

demonstrations to, maintain and establish a long-term relationship with
customers. This is the only communication tool which has a possibility of
feedback and evaluation of messages that have been transmitted so that
these messages can be further modified and personalised, compared to
any of the other communication tools. The major advantage of personal
selling is the impact it has, meaning that a salesperson has the possibility
of adapting the message to the type of customer he or she is dealing with.
S i n c e t h e c o m m u n i c a t i o n i s t w o w a y, t h e r e i s l e s s r i s k o f
misunderstandings and as stated earlier, the salesperson gets immediate
feedback. There are, however, also disadvantage with personal selling,
such as high costs, high turnaround time, etc. As a consequence of this,
the company cannot afford to send a salesperson to customers too often,
therefore reach and frequency will remain limited.
5.3.5 Direct and Interactive Marketing
‘Direct’ means using direct media such as mailings, telephone, Internet,

press and posters, and not through intermediaries such as dealers,
retailers or sales staff. It is a tool that is used to create and sustain a
! !84
personal communication with customers, potential customers and other

important stakeholders. Direct marketing communications can be used as a
direct sales channel meaning that, for example, direct mail is used and
orders are taken by phone or mail. It is also used to support the sales
team, dealers or retailers since direct marketing tries to prepare and
stimulate sales. It can also be used to follow-up sales. Direct Marketing
helps in customer retention and building customer loyalty. Customer loyalty
is important in many ways – loyal customers stand for a large amount of
sales figures and the positive word-of-mouth publicity from them leads to
new customers.
5.4 The Marketing Communication Process
It was Wilbur Schramm (1955) who developed what now is called the basic
communications model. It simply consists of a sender, a message and a
receiver.
Exhibit 2
Schramm’s Model of Communications
But, communication is more than sending a message. In order to

understand the communications process, the model in figure above needs
to be expanded further. This will introduce elements such as encoding,
decoding, channel and feedback. Once a company decides what it wants to
say, it starts the communication process, thus becoming the Source, or
Sender—the initiator of a message. In the basic model of communication,
this process of creating a brand message to convey an intended meaning
and elicit a certain type of response is called Encoding. A message is an
idea encoded in a combination of words, pictures, actions, symbols, and/or
events. A communication channel, or media vehicle, is the means by which
a message is delivered – e-mail, radio, television, newspaper, telephone,
and an event. The receiver is anyone who is exposed to a message. Once
receivers, usually customers and prospects, receive a message, they must
decode it. Decoding is the process of interpreting what a message means.
! !85
After customers decode a message, they respond in some way, indicating

to what extent the message was received, properly decoded, and
persuasive. This response is called feedback, which is a response that
conveys a message back to the source. The communication process occurs
in an environment where other things are going on – other brand
messages, people walking by, a telephone ringing, as well as thoughts
inside customers’ heads. These “other things” are called noise—
interferences or distractions that can affect the transmission and reception
of a message. Companies and their MC agencies go to great lengths to
create brand messages that have impact—that are attention getting as well
as memorable.
Consider the basic communication model of communication to understand

how marketing communication works.
Exhibit 3
Elements in the Communication Process
5.4.1 Source and Encoding
Marketing communication starts with the ‘Sender’ of the message. The

Sender and its brand name appear in these messages. An exception of
course, is Publicity. Although a company or its PR agency often provides
the information and ideas for a publicity story, and these stories include the
! !86
company name, the perceived source of these messages are third parties—
the media. A credible third party source like media brings integrity to the
company’s message. An important factor in customers decoding a message
and forming attitudes about a brand is the perceived integrity of the
sender. But with Advertising, customers know that the sources of ads are
companies that are trying to sell them something and thus the level of
trust is lower. This does not mean customers don’t believe anything they
see in ads, but rather that they decode ads with caution. This natural
consumer skepticism is the reason why building brand trust is so
important.
The ‘encoding’ step is generally the responsibility of marketing

communication agencies. Once the brand position and target audiences
have been agreed upon, agencies create the promotional messages. This is
where advertising agencies play an important role. Depending on the
choice of the sender, the creative ad agencies encode the message in the
proper format. The format depends on the type of media vehicle being
used to deliver the communication message. Thus, a radio message, a TV
message and a print message are all encoded differently as all of them
have their own pros and cons. Agencies must have a thorough
understanding of the target audiences to ensure that the words, pictures,
and other communication cues used in messages will be decoded with the
meanings intended.
5.4.2 Brand Messages
The brand message is all the information and experiences that impact how
customers and other stakeholders perceive a brand. There are various
ways in which the message can be sent to the end customers. Television
and print, radio, internet, PR and publicity, sales promotion, direct
marketing, etc. are the popular modes of carrying the advertising
messages. The important point here is that the message should reach to as
large a target audience as possible. A proper message can immediately
connect you with the target group, build a better brand positioning, and
thereby engage with the customers. Marketing communications messages
are used to introduce new products, create awareness, building brand
image, make promotional offers, etc.
! !87
5.4.3 Media Channels
The channel is the method by which the communication travels from the
source or sender to the receiver. Media channels link companies to their
customers. Promotional messages are carried by media channels like TV,
radio, newspapers, magazines, internet, mail, and out-of-home media
(OOH) besides messages appear in movies and TV shows (which have
product placements), packaging besides word-of-mouth that happens when
people talk about a product.
5.4.4 Noise
Noise interferes with or disrupts effective communication. All

communications takes place within an environment that contains
distractions. Throughout the communication process, the message is
subject to extraneous factors that can distort or interfere with its reception.
Errors or problems that occur in the encoding of the message, distortion in
a radio or television signal, or distractions at the point of reception are
examples of noise. Another kind of noise is clutter, which is the competition
among commercial messages and it makes it difficult for a particular brand
message to get attention. It is important, therefore, to know what
competitors are saying, as well as when and where they are delivering
their messages.
5.4.5 Receiver and Decoding
In marketing communication, the intended receiver is the target audience.

All the sender can do is to encode the message as best as he can and
ensure that it reaches the receiver. The receiver then decodes the
message. For effective communication to occur, the receiver must
understand and correctly interpret what the source is trying to
communicate. The receiver is the one making the decision after decoding
or interpreting the message. Thus, the receiver is a very important entity
in the marketing communications process. Decoding a message is not in
the hands of the sender. It is instead done by the receiver. Decoding is the
process of transforming the sender’s message back into thought.
Communication agencies, therefore, put in a lot of effort in pre-testing
messages to make sure consumers understand and decode them in the
manner the advertiser intended.
! !88
5.4.6 Feedback
The receiver’s set of reactions to marketing message is known as a

response. Marketers are very interested in feedback, which is that part of
the receiver’s response that is communicated back to the sender. Feedback
is important with the noise that happens due to too many products being
advertised. Feedback, which may take a variety of forms, closes the loop in
the communications flow and lets the sender monitor how the intended
message is being decoded and received. While the ultimate form of
feedback is sales, it is often hard to show a direct relationship between
advertising and purchase behaviour. So, marketers use other methods to
obtain feedback, among them customer inquiries, store visits, etc. besides
research-based feedback analyses recall of ads, message comprehension,
attitude change, and other forms of response. With this information, the
advertiser can determine reasons for success or failure in the
communication process and make adjustments. Thus, after an ad
campaign for increasing awareness of a product, the company can take
market feedback to know what percentage of target customers are aware
of the new product. This feedback will tell the company whether its
advertising strategy was right or wrong.
In the end, you have to understand that marketing communications is not

just an interaction between the company and the end customer. Rather it
involves the presence of numerous entities. Marketing communications is
an art in itself. Successful communication is accomplished when the
marketer selects an appropriate source, develops an effective message or
appeal that is encoded properly, and then selects the channels or media
that will best reach the target audience so that the message can be
effectively decoded and delivered. If a message is received but
misinterpreted, the message may have been poorly encoded. If a message
was received and properly decoded but there still is no response, the
message may not have been persuasive enough, or receivers may not have
been potential customers. Occasionally, very useful feedback comes from
brand messages that were not initiated by the brand itself. Some
companies, for example, monitor category-related chat rooms on the
Internet to see what people are saying about the company and brand.
! !89
Activity 2
In one of the magazines you read, find an advertisement that you

think is confusing. Explain why decoding the meaning of this ad
gave you problems.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
5.5 The Consumer Response Models
The most important aspect of developing effective communication

programmes involves understanding the response process the ‘receiver’
may go through in moving toward a specific behaviour (like purchasing a
product) and how the promotional efforts of the marketer influence
consumer responses. In many instances, the marketer’s only objective may
be to create awareness of the company or brand name, which may trigger
interest in the product. In other situations, the marketer may want to
convey detailed information to change consumers’ knowledge of and
attitudes toward the brand and ultimately change their behaviour. A
number of models have been developed to depict the stages a consumer
may pass through in moving from a state of not being aware of a company,
product, or brand to actual purchase behaviour. Exhibit 4 shows four of the
best-known response hierarchy models.
Exhibit 4
Traditional Response Hierarchy Models
! !90
The Response Process

Traditional Response Hierarchy Models
5.5.1 AIDA Model
The AIDA model represents the stages a salesperson must take a customer
through in the personal selling process. The model depicts the buyer as
passing successively through – Attention, Interest, Desire, and Action.
AIDA, thus, describes what happens when a consumer engages with an
advertisement. The term and approach are attributed to American
advertising and sales pioneer, E. St. Elmo Lewis. In marketing, grabbing
the attention of potential customers or clients is imperative to gaining
interest in the product. Once that interest is established, a business must
make potential customers or clients desire the product enough to take
action, generally by purchasing the product. Once the marketer has the
attention of the consumer, they must craft their interest through product
demonstrations, information and ads. Companies must then build desire by
focusing on creating a want for their specific brand, and lastly, consumer
action through promotions, discounts and calling out of features or
benefits. The AIDA model of advertising which stands for Attention,
Interest, Desire and Action is perhaps the simplest formula you’ll ever find
anywhere, yet also the most powerful.
! !91
5.5.2 Hierarchy of Effects Model
Perhaps, the best known of these response hierarchies is the Hierarchy of

Effects Model developed by Robert Lavidge and Gary Steiner in 1961 for
setting and measuring advertising objectives. This marketing
communication model suggests that there are six steps from viewing a
product advertisement to product purchase. The job of the advertiser is to
encourage the customer to go through the six steps and purchase the
product. Their model shows the process by which advertising works, it
assumes a consumer passes through a series of steps in sequential order
from initial awareness of a product or service to actual purchase. This
model is known as a “hierarchy” because the number of consumers moving
from one stage to the next reduces, as you move through the model. There
may be a lot of consumers that see the product advert but not everyone
will make a purchase. It takes a lot of work to take a consumer from
awareness to the final stage of purchase, so businesses need to ensure
that they try their utmost to get customers from conviction to complete the
final stage of purchase. The six steps are as follows: Awareness,
Knowledge, Liking, Preference, Conviction and Purchase.
The customer becomes aware of the product through advertising. The

customer begins to gain knowledge about the product, for example,
through the internet, retail advisors and product packaging. In today’s
digital world, this step has become more important as consumers expect to
gather product knowledge at the click of a button. Consumers will quickly
move to competitor brands if they do not get the information they want.
The advertiser’s job is to ensure that product information is easily
available. The liking step is about ensuring that the customer likes the
product. Consumers may like more than one product brand and could end
up buying any one of them. At this stage, advertisers will want the
consumer to disconnect from rival products and develop a preference of
their particular product. Advertisers will want to highlight their brand’s
benefits and unique selling points so that the consumer can differentiate it
from competitor brands. The next step is Conviction. This stage is about
creating the customer’s desire to purchase the product. Advertisers may
encourage conviction by allowing consumers to test or sample the product.
Examples of this are inviting consumers to take a car for a test drive or
offering consumers a free sample of a food product. This reassures
consumers that the purchase will be a safe one. Having proceeded through
the above stages, the advertiser wants the customer to purchase their
! !92
product. A basic premise of this model is that advertising effects occur over
a period of time. Advertising communication may not lead to immediate
behavioural response or purchase, rather, a series of effects must occur,
with each step fulfilled before the consumer can move to the next stage in
the hierarchy.
5.5.3 Innovation Adoption Model
This model represents the stages a consumer passes through in adopting a

new product or service. Like the other models, it says potential adopters
must be moved through a series of steps before taking some action (in this
case, deciding to adopt a new product). The steps preceding adoption are
awareness, interest, evaluation, and trial. The challenge facing companies
introducing new products is to create awareness and interest among
consumers and then get them to evaluate the product favourably. The best
way to evaluate a new product is through actual use so that performance
can be judged. Marketers often encourage trial by using demonstration or
sampling programmes or allowing consumers to use a product with
minimal commitment. After trial, consumers either adopt the product or
reject it.
5.5.4 The Information Processing Model
The Information Processing Model was developed by William McGuire. He

suggested a series of steps a receiver goes through in being persuaded
which constitutes a response hierarchy. The stages of this model are
similar to the hierarchy of effects sequence – attention and comprehension
are similar to awareness and knowledge, and yielding is synonymous with
liking. McGuire’s model includes a stage not found in the other models:
retention, or the receiver’s ability to retain information that he or she
accepts as valid or relevant. This stage is important since most promotional
campaigns are designed not to motivate consumers to take immediate
action but rather to provide information they will use later when making a
purchase decision.
5.6 Evaluating traditional response hierarchy models
The four models presented the response process as consisting of

movement through a sequence of three basic stages – the Cognitive,
Affective and Conative.
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The Cognitive (Thinking) Stage represents what the receiver knows or

perceives about the particular product or brand. This stage includes
developing awareness that the brand exists and knowledge, information, or
comprehension about its attributes, characteristics, or benefits.
The Affective (Feeling) Stage refers to stimulating receiver’s feelings for

the particular brand. This stage includes developing affects such as desire,
preference, or conviction.
The Conative (Behaviour) Stage refers to the consumer’s action toward

the brand – trial, purchase, adoption, or rejection.
All four models assume a similar ordering of these three stages. Cognitive
development precedes affective reactions, which precede behaviour. One
might assume that consumers become aware of and knowledgeable about
a brand, develop feelings toward it, form a desire or preference, and then
make a purchase.
5.7 Integrated marketing communications (IMC)
In the past, the promotional tools were seen as separate functions that
were handled by separate departments. This resulted in uncoordinated
communication, and in some cases, inconsistent communication. Today,
the concept of coordinating all promotional tools – advertising, sales
promotion, public relations, personal selling, and direct marketing – to
provide a consistent message across all audiences is referred to as
Integrated Marketing Communications (IMC). All promotional campaigns
will use multiple tools to achieve the objectives and therefore, it is
important that the communication or promotional strategies work in
harmony and are well planned. In other words, IMC is an attempt to
ensure that all communication from the organisation tells the same story.
Creating a process that makes it easier to use and design programmes is a
key for developing successful IMC programmes. In an integrated approach,
advertising can be used for building awareness, sales promotions to
generate inquiries, direct mail for providing additional information to
individual prospects, and personal sales to complete the transaction. The
benefit from integrated marketing communications is synergy. Synergy
refers to working together, therefore all marketing elements have to work
in the same direction, and not conflict with each other. By doing this, it can
create a competitive advantage, boost sales and profits. IMC can increase
! !94
profits through increased effectiveness. Basically, a unified message has

more impact and is able to cut through the noise of thousands of
commercial messages customers are faced with every day. So, IMC is able
to boost sales by stretching a message across several communication
tools. Even though IMC has many advantages, it also has a number of
barriers. It is said that IMC can limit creativity, since it should fit into the
overall marketing communications strategy. Integrated marketing
communications is not something that happens automatically. All elements
of the communications mix must be planned in such a way that they form
a consistent integrated communications plan(s).
Activity 3
How are the messages delivered using the IMC programme?

Explain with examples.
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5.8 Summary
Advertising has emerged as a very important communication tool in recent

years. It is considered as the most effective way of communicating to the
customers. It is also an important tool used to influence and persuade the
customers to buy particular products/services. This chapter seeks to
explain how advertising becomes a very important part of the marketing
communication process and how advertising through its influence and
persuasion moves the consumers through various stages in the buying
process. For a communication to be successful, message, media, and how
customer understands it, plays a key role. The sender encodes the
message in a way that it will be decoded by the receiver in a manner
desired by the encoder. Noise plays a role in the communication process.
Noise can interfere with the feedback and the decoding may not occur the
way it is intended. The communication process is the perfect guide towards
achieving effective communication. When followed properly, the process
can usually assure that the sender’s message will be understood by the
receiver.
! !95
The Response Hierarchy Models also have implications for the advertisers.
These models describe the stages individuals go through when making a
purchase, or consumption decisions. Any stage in the response hierarchy
may serve to establish advertising objectives and the effects can be
measured. The target audience may be at any stage in the hierarchy and
the advertiser’s tasks may be different in each stage. For instance, if
advertising research reveals that a significant number of target customers
have low level of awareness about the brand and its benefits then the
advertising task is to increase awareness of the brand, its attributes and
the resulting benefits. In a situation where the target audience has product
awareness but does not know much about the product, product knowledge
must be imparted through communications. In cases where target
audience has product knowledge but is not fully convinced to buy the
product, consumer conviction should be built by promoting quality, value,
performances and other features. Still if some consumers do not make a
purchase or plan to act later, they must be led to take the final step
perhaps by offering the product at a lower price, or coming up with an
exciting sales promotion scheme.
Thus, the models reveal that advertising cannot induce immediate

behavioural response; rather a series of mental effects must occur with the
fulfillment at each stage before progress to the next stage is possible. The
advertiser’s task is to move the target customer to that next stage.
! !96
1. What is Marketing Communication?
2. What are the various elements in the communication process?
3. What is the difference between encoding and decoding?
4. Describe the various stages defined in the AIDA model.
5. What are the stages that a consumer goes through as per the Hierarchy
of Effects Model?
a. Innovation Adoption Model

b. The Information Processing Model
1. __________ is defined as the passing of information, the exchange of

ideas or process of establishing a commonness of thought between a
sender and receiver.
a. Advertising
b. Sales promotion
c. Encoding
d. Communication
2. The __________ of communication is the person or organisation that

has information to share with another person or group of people.
a. essence
b. source
c. message
d. decoder
3. Putting thoughts, ideas or information together in symbolic form is

called __________.
! !97
a. Encoding
b. Deciphering
c. Shaping
d. Flighting
4. The encoding process leads to the development of __________.
a. a message
b. noise
c. a channel
d. feedback
5. The __________ is the method or medium by which communication

travels from the source to the receiver.
a. channel
b. receiver
c. feedback mechanism
d. source
[Answer: 1. (d), 2. (b), 3. (a), 4. (a), 5. (a)]
! !98
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !99
ADVERTISING OBJECTIVES AND BUDGETING
Chapter 6
Advertising Objectives and Budgeting
Objectives

• Recognise the importance of setting objectives for advertising and
promotion
• Understand the role of objectives in the promotional planning process
• Know the differences between sales and communication objectives
• Understand the process of budgeting for IMC
• Understand theoretical issues involved in budget setting
• Know various methods of budget setting
Structure:
6.1 Introduction
6.2 Importance of Promotional Objectives
6.3 Classification of Advertising Objectives
6.4 Types of Advertising Objectives
6.4.1 Sales Objectives

6.4.2 Communications Objectives
6.5 DAGMAR (Defining Advertising Goals for Measured Advertising
Results) Approach to Objective Setting
6.5.1 Step by Step Approach to DAGMAR

6.5.2 Criticisms of DAGMAR Advertising Budget
6.6 Advertising Budget
6.6.1 Factors to be Taken into Consideration While Determining the

Advertising Budget
6.6.2 Establishing and Allocating the Promotional Budget
6.7 Summary
! !100
6.1 Introduction
Every advertisement has a business objective behind it. It could be to

create awareness about the brand, to increase likeability and preference for
the brand, to persuade people to buy the product, repurchase or develop
loyalty towards the brand. Marketing objectives are often listed as SMART
Objectives. This acronym stands for Specific, Measurable, Achievable,
Realistic and Time-sensitive. An example of a SMART marketing goal is to
increase sales by 10% in six months through 20 week-long product
awareness campaigns held in six target cities. Advertising goals and tactics
follow the road map created by the marketing strategy and objective.
This Chapter focuses on an issue that has mystified marketers and

advertisers the world over – What are the specific Objectives of
Advertising? There is a perpetual debate on this topic and opinion is
strongly divided on what the objectives of advertising are – Is it marketing
or is it communications? Conflicting perspectives regarding what
advertising and other promotional mix elements are expected to
accomplish, and uncertainty over resources make the setting of marketing
communications objectives, a challenging task. Determining these goals is
the most critical step in the promotional planning process. Objectives
provide a standard against which performance can be benchmarked and
measured. Budgeting for advertising and other promotional strategies
evolve from these objectives. Setting advertising objectives is the starting
point of developing an advertising campaign. Many marketers believe that
the goal of their company’s advertising and promotional programme is
simply to generate sales. They fail to recognise the specific tasks that
advertising and other promotional mix variables must perform in preparing
customers to buy a particular product or service. As we know, advertising
and promotion are not the only marketing activities involved in generating
sales. Moreover, it is not always possible or necessary to measure the
effects of advertising in terms of sales. Consider the advertisements for
ITC’s Aashirwaad brand of wheat and flour, Sunfeast biscuits and
Classmate stationery, which have supported rainwater harvesting,
afforestation and rural education, besides HUL’s Surf Excel and Pond’s
Facial Cream advertisement which have promoted education through
scholarships and fought for women’s empowerment through collaboration
with the United Nations Development Fund for Women.
! !101
Activity 1
What objectives (other than generating sales) might the companies

have had for the advertisements mentioned above? How can their
effectiveness be measured?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
All these ads have a broader goal of Corporate Social Responsibility and
social upliftment. Their results cannot be directly measured in terms of
sales or profits, though eventually the goodwill generated by these
campaigns do add to the brand equity of these companies.
6.2 Importance of Promotional Objectives
For effective advertising, setting the objectives of the promotional mix is

very important. Well-defined objectives, serve as standards with which
actual performance can be measured. According to R.S. Davar, “Advertising
aims at educating the customers, supplementing the salesmen, enabling
the dealers to face competition but above all it is a link between producer
and consumer”.
According to Philip Kotler, “The objectives of advertising are to inform, to

persuade and to remind the target audience about the advertiser’s
products”. Advertising and promotional objectives are needed for several
reasons, including the functions they serve in communications, planning
and decision-making, and measurement and evaluation. It is important to
have clearly defined objectives because:
(a) Objectives serve as a communications and coordination devise 

 
Many people are involved in the planning and development of an
advertising campaign. Specific objectives for the promotional
programme facilitates coordination of these various groups working on
the campaign. Many vendors involved in the promotional campaign,
such as public relations firms, sales promotion firms, research
specialists, or media buying services, must also know what the
company hopes to accomplish through its marketing communications
! !102
programme. Many problems can be avoided if all parties have written,

approved objectives to guide their actions and serve as a common
base for discussing issues related to the promotional programme.
(b) Objective provide a criterion for decision-making 

 
All phases of a promotional strategy are based on the established
objectives. Meaningful objectives can also be a useful guide for
decision-making. Promotional planners are often faced with a number
of strategic options in terms of choosing creative ideas, selecting
media, and allocating the budget among various elements of the
promotional mix. Choices should be made based on how well a
particular strategy matches the firm’s promotional objectives.
(c) Evaluation of advertising effectiveness 

 
An important reason for setting specific objectives is that they provide
a benchmark against which the success or failure of the promotional
campaign can be measured. Without specific objectives, it is extremely
difficult to evaluate what the firm’s advertising and promotion efforts
accomplished. One characteristic of good objective is that they are
measurable. Most organisations are concerned about the return on
their promotional investment, and comparing actual performance
against measurable objectives is the best way to determine if the
return justifies the expense.
Activity 2
Look at the brands around you and collect advertisements where the
objectives are the following:
To create awareness and interest about the brand and change

customers’ attitudes favourably towards the brand.
____________________________________________________________
____________________________________________________________
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____________________________________________________________
Activity 3
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To increase sales and increase market share by stimulating action

(buy, call, click, visit, etc.).
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____________________________________________________________
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Activity 4
To develop brand loyalty and image.

____________________________________________________________
____________________________________________________________
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Activity 5
To remind about the brand.

____________________________________________________________
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6.3 Classification of Advertising objectives
Objectives of advertising is to inform, to persuade, to remind or to

reinforce, says Marketing legend Philip Kotler. Advertising objectives can be
classified as per the various stages in the Product Life Cycle. The
advertisements can be informative, persuasive or reminder ads.
I. Informative: Objective during Informative advertising is to inform its

target audience about introduction of new products, update the
customers about the changes in existing products, and provide
information to customers regarding new offers and schemes.
Informative advertising seeks to develop initial demand for a product.
The promotions related to any new market entry tends to pursue this
objective because marketing success at this stage often depends simply
on announcing product availability. Informative advertising is common in
the Introductory stage of the Product Life Cycle.  
 
! !104
Note: A quick recap – The four major stages of the Product Life Cycle
being – Introduction, Growth, Maturity and Decline.
II. Persuasive: Objective of Persuasive advertising is to increase demand

for existing product by persuading new customer for first-time purchase
and existing customers for repurchases. Persuasive advertising attempts
to encourage the target audience to switch brands, create a preference
in the market for the product and increase demand for an existing
product. Persuasive advertising is a competitive type of promotion
suited to the Growth stage and the early part of the Maturity stage of
the Product Life Cycle.
III.Reminder: The objective of Reminder advertising is to maintain

interest and awareness of a well-established product in the market,
remind customers about its existence of product with ongoing
promotional activities. It is also often used at the point-of-purchase to
remind consumers of the brand. Reminder advertising strives to
reinforce previous promotional activity by keeping the name of a
product before the public. It is common in the latter part of the Maturity
stage and throughout the Decline stage of the product life cycle.
6.4 Types of Advertising Objectives
Promotional objectives evolve from the company’s marketing plan and are
rooted in the firm’s marketing objectives. A thorough situation analysis
leads to the identification of the promotional problems and opportunities
for promotions are identified. Marketing objectives are a part of the firm’s
marketing plan and are statements of what is to be accomplished by the
overall marketing programme within a given time period. Marketing
objectives are usually defined in terms of specific, measurable outcomes
like sales volume, market share, profits, or return on investment. But such
objectives are not suitable as promotional objectives. The achievement of
marketing objectives depends upon the coordination of all the marketing
mix elements, not just promotion. Whereas, advertising objectives are
statements of what various promotional mix elements will accomplish.
They are based on particular communications tasks required to deliver the
appropriate messages to the target audience. Many marketers and
promotional planners approach promotions from a communications
perspective and believe the objective of advertising and other promotional
mix elements is usually to communicate information about a product or
service. Other managers argue that sales or some related measure, such
! !105
as market share, is the only meaningful goal for advertising and promotion
and should be the basis for setting objectives.
Let’s discuss the two sides of this debate further – Sales versus
Communications Objectives.
6.4.1 Sales Objectives
Many marketers believe that the only important objective of advertising is

sales. They take the position that the basic reason a company spends
money on advertising and promotion is to sell its product. They ignore a
pertinent fact that promotion is only one of the elements of the marketing
programme. Lack of sales can be due to any of the other marketing mix
elements. Advertising can make consumers aware of and interested in the
brand, but it can’t make them buy it since sales of a product depends on
many factors like competition, technology, packaging, price, distribution,
product quality and features and changing consumers’ tastes. All the
marketing elements must work together if a brand has to be successful.
Another problem with sales objectives is that the effects of advertising
often occur over an extended period. This is known as the ‘carryover effect’
of advertising. For example, a prospective customer might be exposed to
an advertisement today but the resultant purchase might take place six
months hence advertising does not necessarily have an immediate impact
on sales.
However, there are situations where sales objectives are appropriate. For
example, Sales Promotions, a major objective of most sales promotions is
to generate increases in sales. Direct response advertising is another
promotional tool whose effectiveness can be measured on the basis of
sales. Retail advertising (contests and discounts) also seeks a direct
response, particularly when sales or special events are being promoted.
Sales-oriented objectives are also used when advertising plays a dominant
role in a firm’s marketing programme and other factors are relatively
stable. For example, for certain products with established channels of
distribution, stable competitive prices and promotional budgets, and
products of similar quality, in such cases success or failure can be
attributed to advertising.
6.4.2 Communications Objectives

Some marketers believe that objective of a promotional programme is to
communicate. Advertising and other promotional efforts are designed to
! !106
achieve communication goals like building brand awareness, brand image,

and purchase intentions. Consumers must be given information and create
favourable bias toward the brand before purchase behaviour will occur. The
underlying logic of Communications objective is that as consumers pass
through successive stages of the Response Hierarchy theory (refer Chapter
– Communications Effect Pyramid), they move closer to purchase, and
advertising’s purpose is to help move them through the different stages.
These stages are – Awareness, Knowledge, Liking, Preference, Conviction
and Purchase.
Exhibit 1
Effect of Advertising on Consumers: Movement from Awareness to Action
! !107
Advertising and promotion perform communications tasks by first

generating awareness and knowledge about the brand and subsequently
moving the consumers towards trial and repurchase. If awareness levels
for a brand is low, the communications objective should be to increase
them but if liking or preference is low, the advertising goal may be to
change the target markets’ image of the brand and move consumers
through to purchase.
However, not all marketing and advertising managers accept

communications objectives. Accomplishing communication objectives is
seen as being of value only if this results in sales.
Many marketing and promotional managers recognise the value of setting

specific communications objectives. Communications objectives are the
criteria used in the DAGMAR approach to setting advertising goals and
objectives, which has become one of the most influential approaches to the
advertising planning process.
Activity 6
What are advertising objectives?

____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
Here is a list of objectives mixed up together. Read through this list and
write against each objective:
A – if you believe it to be an Advertising (Communication) objective, or

M – if you believe it to be a Marketing (Sales) objective.
Marketing (M) or Advertising (A) objectives?
1. To make attitudes more favourable to a particular product.

2. To build an image for the product.
3. To stop existing users turning to competitive products.
4. To get across the idea of a unique product.
5. To create a brand leader to help the launch of additional products at a
future date.
! !108
6. To win back previous product users who have defected to a competitive

product.
7. To expand the whole market.
8. To reduce existing negative attitudes.
9. To keep building loyalty.
10.To establish the brand and position it in a particular way, e.g., as warm
and friendly.
11.To create a brand leader in a particular market.
12.To increase sales among existing users.
13.To improve the frequency of purchase.
14.To keep new entrants out of the market.
15.To convey the idea that the product is ‘value for money’.
16.To say how much people like the product.
17.To improve market share compared with competitors.
18.To maintain brand distribution.
The answers to Activity 6 are as follows:
Advertising objectives: Numbers 1, 2, 4, 8, 9, 10, 15 and 16.

Marketing or other objectives: Numbers 3, 5, 6, 7, 11, 12, 13, 14, 17
and 18.
6.5 DAGMAR (Defining Advertising Goals for

MeasuredAdvertising Results) approach to Objective
setting
Russell H. Colley (1961) pioneered an approach known by the acronym

DAGMAR – Defining Advertising Goals for Measured Advertising Results, to
establish a measurable link between advertising goals and advertising
results. DAGMAR is used to monitor and evaluate promotion campaigns. It
is a planning and control tool. Colley distinguished 52 advertising goals
that might be used with respect to a single advertisement or a year’s
campaign for a product. These goals may pertain to sales, image, attitude,
and awareness. Some of the goals are:
• Persuade a prospect to visit a show room and ask for a demonstration.
• Build up the morale of the company’s sales force.
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• Facilitate sales by correcting false impression, misinformation and other

obstacles.
• Announce a special reason for buying now (price, discount, premium and
so on).
• Make the brand identity known and easily recognisable.
• Provide information or implant attitude regarding benefits and superior

features of brand.
According to DAGMAR approach, the communication task of the brand is to

gain:(a) awareness, (b) comprehension, (c) conviction, (d) image and (e)
action. Advertising goals should be consistent with these communication
tasks. Performance on these counts and projected goals is compared to
evaluate the effectiveness of the campaign. There are three parts to the
DAGMAR advertising model. The first part is to define advertising goals so
that results and therefore campaign effectiveness can be measured. The
second part of the model comprises four stages that customers pass
through before they buy a product or service. The four steps in the
DAGMAR advertising model are: awareness, comprehension, conviction and
action. The third and the final part of the model is to measure advertising
results.
Exhibit 2
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6.5.1 Step by Step Approach to DAGMAR
Step One: Defining Advertising Goals
It is important to understand that DAGMAR is aimed at setting Advertising

Goals. Characteristics of good advertising goals include them being –
written, measurable tasks involving a starting point, a defined audience,
and a time limit. To measure the effectiveness of advertising, a business
must know the current state before advertising starts and then the new
state after the campaign has finished. This means surveying the target
audience to measure current awareness, comprehension and conviction.
This helps to establish realistic goals for the campaign. For example, to
increase product awareness from 10% to 35%.
Step Two: Awareness Comprehension Conviction and Action
The second part of the DAGMAR model attempts to explain the process
customers go through before they buy a product. The process is as follows:
The first step in advertising is to raise awareness of the product. If

customers do not know the product exists, then they will not buy it. To
ensure that an advertising campaign is effective, it is vital to identify the
target audience for the campaign – not everyone will be interested in every
product.
Comprehension is the next step and the aim is that customers

understand what the product will do for them. Advertising that helps a
customer understand the benefits and features of the particular product
offered will increase comprehension about the product.
Once a customer is aware of and understands a product, then building

conviction and a positive attitude to the product is the next phase.
According to David Mercer in the book Marketing, this stage is about
persuading the customer to adopt a positive attitude to the product.
Action – The whole point of marketing and advertising for business is to

generate increased revenue. That means the customer must buy or take
any action which is a step towards buying.
Step Three: Measure Advertising Effectiveness
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In step one of this advertising model, goals were established for the
campaign. The final step is measure the results and effectiveness of the
campaign by evaluating whether the goals were met or not. This may
require another survey to measure awareness comprehension and
conviction levels.
The DAGMAR approach to setting objectives has had considerable influence

on the advertising planning process. Many promotional planners use this
model as a basis for setting objectives and assessing the effectiveness of
their promotional campaigns. DAGMAR also focuses advertisers’ attention
on the value of using communications based rather than sales-based
objectives to measure advertising effectiveness. Colley’s work led to
improvements in the advertising and promotional planning process by
providing a better understanding of the goals and objectives toward which
planners’ efforts should be directed. This usually results in less subjectivity
and leads to better communication and relationships between client and
agency.
6.5.2 Criticisms of DAGMAR Advertising Budget
One of the major criticisms of DAGMAR is on its reliance on the hierarchy

of effects theory. Customers do not necessarily pass through the stages in
a linear way. Another criticism made towards the DAGMAR approach is that
it focuses too much on strategies and inhibits creativity. The creative
department may become too concerned with quantitative measurements in
terms of numbers rather than developing great ideas that result in unique
and effective advertising. On the other hand, supporters of sales objectives
argue that communication objectives advocated by DAGMAR are a way of
ignoring the basic goal of advertising which is to generate sales. DAGMAR
is also criticised for being difficult to implement and practical only for big
companies with large marketing and advertising research budgets who can
afford to establish quantitative benchmarks and measure communication.
6.6 Advertising Budget
One of the most difficult marketing decisions is determining how much to

spend on promotion. According to Kotler (2003), John Wanamaker, a
department-store magnate, once said, “I know that half of my advertising
is wasted, but I don’t know which half.”
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6.6.1 Factors to be Taken into Consideration while Determining the

Advertising Budget
Advertising Budget is the amount of money which can be or has to be

spent on advertising of the product to promote it, reach the target
consumers and give reasonable profits to the company. Before finalising
the advertising budget, one must consider the market conditions which will
have an impact on the advertising budget. The market conditions to watch
out for are as follows:
• The advertising tasks to be achieved: The expenditure on advertising

depends on the advertising task that a marketer is trying to achieve. For
example, a large amount of advertising spending will be required if the
task is to create brand awareness and brand persuasion to generate trail
purchase in case of new brand.
• Frequency of the advertisement: This means the number of times an

advertisement has to be shown with the description of the product or
service, in the given time period. If any company needs more advertising
frequency for its product, then the company will have to increase its
advertising budget.
• Competition and clutter: The companies may have to fight many

competitors for the consumers’ attention. When plenty of advertisements
shown are shown, it is called clutter. The company has to then increase
their advertising budget. The huge advertising spending by Coke and
Pepsi in their famous marketing warfare.
• Market share: To acquire a substantial market share in comparison to

their competitors, the company should have a better product in terms of
quality, uniqueness, demand and catchy advertisements to get a
resultant response of the customers. All this is possible if the
advertisement budget is high.
• Product life cycle stage: If the company is new or if the product is in

its introduction stage, then the company has to keep the budget high to
carve a place in the market with the existing players and to have
frequent advertisements. As the time goes on and product becomes
older, the advertising budget can come down as then the product doesn’t
need frequent advertising.
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• Product differentiation: The closer the product is to the competitive

products in terms of functions and benefits, the greater the need is to
invest in brand differentiation through advertising. Advertising aims at
establishing the brand’s equity.
• Support from retailers: The lesser the support from the retailers, the
greater the need to advertise and to “pull” the consumer to the brand. If
the brand enjoys good “push” by the retailers, then the burden on
advertisers gets reduce to some extent.
• Financial resources: If more funds are available, the organisation can

afford to have a large advertising budget. However, if financial resources
are limited, the size of the advertising budget will have to be curtailed.
6.6.2 Establishing and Allocating the Promotional Budget
While establishing objectives is an important part of the planning process,

decisions regarding the budget are important too. No organisation has an
unlimited budget, so objectives must be set with the budget in mind. The
budgeting decisions have a significant impact not only on the firm itself but
also on numerous others involved either directly or indirectly. Essentially,
we focus on two primary budgeting decisions: establishing a budget
amount and allocating the budget.
I. Establishing the Budget 

 
The size of a firm’s advertising and promotions budget can vary widely.
One of the most critical decisions facing the marketing manager is how
much to spend on the promotional effort. Unfortunately, many
managers fail to realise the value of advertising and promotion. They
treat the communications budget as an expense rather than an
investment. Instead of viewing the money spent as contributing to
additional sales and market share, they see budget expenses as cutting
into profits. As a result, when times get tough, the advertising and
promotional budget is the first to be cut—even though there is strong
evidence that exactly the opposite should occur.
II. Budgeting Approaches 

 
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There are basically two approaches used by the marketers in

establishing their budgets:
A. Top-down approach,
B. Built-up approach.
A. Top-down Approaches 
 
In the top-down approach, budget is fixed and is passed on to
various departments. These budgets are predetermined without
theoretical basis. Top-down approach includes: (a) Affordable
Method, (b) Arbitrary Allocation, (c) Percentage of Sales, (d)
Competitive Parity and (e) Return on Investment.
a) The Affordable Method:In this approach, the firm determines

the amount to be spent in various areas. It allocates fund for the
production and operations departments. Whatever left, is allocated
to advertising and promotion as the amount the company could
afford. The task to be performed by advertising is not considered.
b) The Arbitrary Allocation: Here, the budget is determined solely

by the management on the basis of what is felt as necessary.
There are no objectives or purpose for advertising and promotion.
In this method, the managers feel that some money should be
spent on advertising and promotion. There is no logic with respect
to the amount of money spent.
c) The Percentage of Sales: This approach is the most commonly

engaged method of setting budgets. One approach uses past sales
histories, while the second—a percentage of projected future sales
—uses projected sales figures. Many firms employ both methods,
with a projection used for planning, and the final budget adjusted
according to actual sales.
d) The Competitive Parity: In this method, budgets are set by

matching the percentage advertising to sales ratios of competitors.
This is a very conservative way of fixing the budget.
e) The Return on Investment: This is the idealistic approach and

very good in theory but the ROI method is rarely used. The basis
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of this approach is that advertising expenditures should be

considered as an investment, returning sales as a result.
Unfortunately, the ability to display this relationship is very
difficult.
B. Build-up Approaches  
 
In build-up approaches, specific objectives are established, and
budgets are determined based on the costs required to attain these
goals. Build-up approaches include the Objective and task method
and the Payout Planning method.
a) The Objective and Task Method: The process involves

establishing the communication objectives, determining the
strategy associated with attaining these objectives, and
determining the costs associated with these tasks.
b) The Payout Planning: By projecting the revenues that a product

is expected to return over a period of two to three years, the
marketer can develop a payout plan.
6.7 Summary
Specific objectives are needed to guide the development of a promotional

programme, as well as to provide a benchmark against which performance
can be measured and evaluated. It is important to set clear objectives for
an advertising campaign. This chapter focuses on the process of setting
objectives and budgeting for the Advertising and Sales Promotion
programme. Objectives for promotions evolve from the organisation’s
overall marketing plan and are based on the roles various promotional mix
elements play in the marketing programme. Many managers use sales or a
related measure such as market share as the basis for setting objectives.
However, many promotional planners believe the role of advertising and
other promotional mix elements is to communicate. The most challenging
aspect in advertising is proper budget allocation. Companies use various
methods to arrive at the budget. Either top-down approach or built-up
approach is employed. The top-down approach includes affordable method,
arbitrary allocation, and percentage of sales, competitive parity and ROI
method. Objective and task method is built-up approach. Each promotional
tool has unique consideration in the budgeting process.
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1. What do you mean by advertising objectives?
2. Explain different advertising objectives.
3. Explain why sales objectives may be appropriate for some ads while
communications objectives are for others.
4. What are some of the problems associated with using sales objectives?
5. In meeting with your new boss, he informs you that the only goal of
advertising and promotion is to generate sales. Present your argument
as to why communications objectives must also be considered.
6. Discuss the role of DAGMAR for defining measurable advertising

objectives.
7. Discuss some of the reasons that managers continue to set budgets

using “top down” budgeting methods.
8. Discuss the factors to be taken into consideration while determining the

advertising budget.
a) Top-down approach to budgeting

b) Built-up approach to budgeting
1. Many marketers believe that the only goal of their company’s

advertising and promotional programme is to __________.
a. position the company and its brands

b. create a positive corporate image
c. generate sales
d. create memorable advertising
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2. __________ objectives are types of objectives that are usually stated in

terms of specific, measurable outcomes such as sales volume, market
share, or return on investment.
a. Sales
b. Marketing
c. Communication
d. Advertising
3. Financially oriented managers who view marketing communications as

an expense rather than an investment are likely to prefer __________
objectives for advertising and other promotional areas.
a. sales-oriented
b. communication
c. Positioning
d. image
4. DAGMAR is __________.
a. a philosophy of advertising goal setting

b. a model of consumer behaviour
c. a method of setting sales objectives
d. the most often used method of setting objectives
[Answer: 1. (c), 2. (b), 3. (a), 4. (a)]
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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THE CREATIVE STRATEGY
Chapter 7
The Creative Strategy
Objectives
• Understand the importance of advertising creativity

• Examine the various steps in the creative process
• Know what the advertising message should communicate
• Identify various types of appeals used in advertising
• Know the various creative execution styles used in advertising
Structure:
7.1 Introduction
7.2 Creative versus Effective Advertising
7.3 The Creative Process
7.4 Creative Strategy Development
7.5 Advertising Appeals and Execution Styles
7.5.1 Advertising Appeals

7.5.2 Additional Types of Appeals
7.5.3 Advertising Execution Styles
7.6 Summary
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7.1 Introduction
The media and advertising world often talk about creativity, but what does
it really mean? As per Stephan Vogel, Ogilvy & Mather Germany’s chief
creative officer: “Nothing is more efficient than creative advertising.
Creative advertising is more memorable, longer lasting, works with less
media spending, and builds a fan community…faster.” Creativity is the
marriage of imagination and execution, thinking and doing.
Creativity is critical to effective advertising. Creativity means being novel

and appropriate in context to the brand and the target audience. It has the
ability to generate fresh and unique ideas that can be used as solutions to
communication problems. Creativity is essentially about putting ideas,
things or associations in some new and unexplored way than they existed
before. It is about originality and appropriateness of an idea along with its
ability to change people’s life positively. Great creative ideas get talked
about, change behaviour and ultimately build brands. Creative advertising
has been accepted as stimulus to encourage people towards a product.
Numerous examples or cases can be cited on how good creatives are an
important factor in determining the success of a product or service.
Cadbury Dairy Milk’s ‘Kuch meetha ho jae’, Amul Butter’s ‘utterly butterly
delicious’, Raymonds ‘the complete man’, Lux ‘the beauty soap for the film
stars’ are great examples of creativity in advertising. Most memorable
advertisements convey their message in an entertaining and engaging way.
There are many viewpoints on defining creativity but originality, ingenuity,
inventiveness, and imagination have been considered as some of the basic
attributes of creativity. Creativity is one of the basic reasons, producers
solicit or otherwise work with advertising agencies.
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Underlying all of these brand messages, is a Creative Strategy that

determines what the advertising message will say and Creative Tactics for
how the message strategy will be executed. In this chapter, we will develop
an understanding about Creative Strategy and Creative Tactics.
We will also pay attention to the issue of Creative versus Effective

Advertising. Many ads may be critically acclaimed from a creative
perspective but fail to help the sales of the brand.
Activity 1
What do you understand by advertising creativity? Choose a print

advertisement and a television or radio commercial you like and
analyse them in terms of creativity.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
7.2 Creative versus Effective Advertising
Just because an ad or commercial is creative or popular does not mean it

will increase sales or revive a declining brand. Many ads have won awards
for creativity but failed to increase sales. In some instances, the failure to
generate sales has cost the agency the account. Many advertising and
marketing people are skeptical towards, and in some cases even critical of,
award winning ads. They argue that creative people in ad agencies are
often more concerned with creating ads that win awards than ones that sell
their clients’ products. As we saw in Chapter 6 (Advertising Objectives),
the success of an ad campaign cannot always be judged in terms of sales.
However, many people believe advertising must ultimately lead the
consumer to purchase the product or service. Finding a balance between
creative advertising and effective advertising is a challenge.
Perspectives on what constitutes creativity in advertising differ. At one

extreme are people who argue that advertising is creative only if it sells the
product. At the other end of the scale are those who judge the creativity of
an ad in terms of its artistic value and originality. They contend that
creative ads can breakthrough the competitive clutter, grab the consumer’s
attention, and create an impact. What constitutes creativity in advertising
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is probably somewhere between the two extremes. To breakthrough the

clutter and make an impression on the target audience, an ad often must
be unique and entertaining. Marketing and brand managers must know
that imposing too many Marketing Communication objectives on the
creative team can result in mediocre advertising, which is often ineffective.
At the same time, the creative specialists must recognise that the goal of
advertising is to assist in selling the product or service.
It can, therefore, hardly be denied that any ‘creative’ advertisement,

stands a better chance of working than the ones that are not. Since it is
more likely to be noticed, therefore better recalled. Creative ads are more
likely to be refreshing and memorable, therefore more enjoyable and
longer lasting. But care needs to be taken to make the ‘brand’ an essential
part of the creative solution. If only the ad is recalled and remembered and
not the brand along with it, then the creative solution is not a good one. It
is a must that creativity in advertising should work towards building brand
identity and brand preference. Creating brand preference is the ultimate
objective of advertising. Any advertising that does not do so, no matter
how creative, is a failure from the brand building and long-term marketing
perspective.
Activity 2
In a debate on Creative vs. Effective advertising, take your stand

and write out your position with examples.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
7.3 The Creative Process
Creativity is the ability to generate fresh, unique, and appropriate ideas

that can be used as solutions to communications problems. To be
appropriate and effective, a creative idea must be relevant to the target
audience. Many ad agencies recognise the importance of developing
advertising that is creative and different yet communicates relevant
information to the target audience. Creativity in advertising is best viewed
as a process and creative success is most likely when some organised
approach is followed.
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Stages of the Creative Process
Some experts propose that Creativity is a three-step process:
(a) Preparation, which involves reading and thinking about the problem
(The problem could be about creating brand awareness, persuade
consumers to buy the product or develop brand loyalty and brand
equity)
(b) Creation, which involves generation of relevant ideas
(c) Judgment, which involves evaluation of ideas, generated in the

previous step and then to select the most relevant and promising idea.
Another very popular approach to creativity in advertising was developed

by James Webb Young, a former creative Vice President at J. Walter
Thompson (JWT) Agency and by English sociologist Graham Wallas, even
earlier to Young. According to them, the creative process has four steps:
Preparation:Gathering background information needed to solve the

problem through research and study.
Incubation: Getting away and letting ideas develop.
Illumination: Seeing the ‘light’ or solution. The birth of an Idea!
Verification: Refining and polishing the idea and seeing if it is providing

an appropriate solution.
Preparation, Incubation, Illumination
The creative team begins by finding out as much as possible about the
client’s product or service, the target market, the competition, etc. They
scout for information on general trends, conditions, and developments in
the marketplace by reading anything related to the product or market, they
interview and meet people involved with the product for information. They
are also provided product specific quantitative (surveys) and qualitative
(focus groups, in-depth interviews, etc.) reports and other research inputs.
Based on all these inputs, the creative teams develop an idea or a
campaign theme.
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Inputs to the Creative Process: Verification, Revision
The ideas generated, during the Illumination stage, undergo verification

and revision in this stage to reject inappropriate ideas, and finalise the
selected ones. At this stage of the creative process, members of the target
audience are sometimes asked to evaluate rough creative layouts and
storyboards (a storyboard is a graphic organiser in the form of illustrations
or images displayed in sequence) and indicate what meaning they get from
the ad. The verification/revision process includes formal, pre-testing of the
ad before an idea is finalised for the campaign.
Activity 3
Which ads you see as Creative Ads and those which are Run-of-the-
Mill. Identify five ads of each category and give your comments.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
7.4 Creative Strategy Development
One of the first tasks in outlining the Creative Strategy is to fix the
advertising theme or the core brand story around which the entire
advertising will be built. This is essentially ‘one’ word or meaning that will
catch the consumer’s key expectation from the category, in a way that will
compel him or her to not only to sit up and notice the brand, but also to
desire and own it. The main task of creative strategy is deciding on the
central theme that will become the major selling point of the ad campaign.
Different kinds of idea generation techniques like brainstorming, role-
playing, consumer research, etc. are used to arrive at the possible ideas.
All the ideas generated are then evaluated to arrive at the ones that sound
promising. Only the shortlisted ideas are then evolved further and
developed into ad campaigns using audio-visual and text imagery and
presentation.
The Search for the Major Selling Idea
The major selling point or the ‘Big Idea’ is the strongest singular appeal
that the brand makes to attract the consumer’s attention besides
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differentiating the brand from competitors. While shortlisting promising

ideas often the focus is on, to crack the Big Idea. A ‘big idea’ has the
potential to not only make the brand stand apart in the consumer’s minds
but also to sustain it for a long time. While ideating or brainstorming,
numerous creative ideas are generated. A few examples of big advertising
ideas that come to mind readily are the ‘thanda matlab Coca-Cola’ from
Coke, ‘just do it’ from Nike, ‘yeh dil maange more’ from Pepsi, ‘the
complete man’ from Raymonds, ‘dar ke age jeet hai’ from Mountain Dew,
‘kuchh khas hai zindagi mein’ from Cadbury chocolates, and ‘Sprite bujhae
pyaas, baaki sab bakwaas’ from Sprite. It is difficult to pinpoint the
technique to reach to the central theme or big idea. However, several
approaches can guide the creative team’s search for the central theme for
developing effective advertising.
Some of the best-known approaches are as follows:
(a) Using a Unique Selling Proposition.

(b) Creating a Brand Image.
(c) Finding the Inherent Drama.
(d) Positioning.
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(a) Unique Selling Proposition: Rosser Reeves, in his book Reality in

Advertising, proposed the concept of the Unique Selling Proposition
(USP). The unique selling propositions should be such that each
advertisement must make a single deliverable proposition to the
consumer, the proposition must be one that the competition either
cannot or does not offer.
(b) Creating a Brand Image: In product categories where there is no

actual differences based on functional benefits, it is not possible to find
or create a unique differentiation to use as the major selling idea. The
creative strategy used to sell these products is based on the
development of a strong, memorable identity for the brand through
image advertising. The greater the similarity between brands, the less
part rational thinking plays in brand selection. Image advertising has
become increasingly popular and is used as the main selling idea for a
variety of products and services.
(c) Finding the Inherent Drama: Finding the inherent drama or

characteristics of the product that makes the consumer purchase it, is
the next approach in determining the major selling idea. The inherent
drama approach is based on the advertising philosophy proposed by
Leo Burnett. He said that advertising should be based on a foundation
of consumer benefits with an emphasis on the dramatic element in
expressing those benefits.
(d) Positioning: Jack Trout and Al Ries introduced the concept of

Positioning as a basis for advertising strategy in the early 1970s.
Positioning has become a popular basis of creative strategy
development. The basic idea is that advertising is used to establish or
“position” the product or service in the mind of the consumer.
Positioning Strategies have been covered in ‘Chapter 3- The Role of
Advertising and Sales Promotions in building Brands’
7.5 Advertising Appeals and Execution Styles
After detailing what the advertising message should communicate, the next
area of focus is on how the message will be executed. There are various
appeals and execution styles that can be used to develop an effective
advertising message. The advertising appeal refers to the approach used to
attract the attention of consumers and to influence their feelings toward
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the brand. An advertising appeal can also be viewed as ‘theme of

advertising to create a positioning of the brand in the mind of the
consumer or to use a metaphor, it is the ‘script’ in terms of a movie. The
creative execution style is the way a particular appeal is turned into an
advertising message. The advertising appeal can be said to form the main
substance or the core message of the advertisement, and the execution is
the way in which that content is presented.
7.5.1 Advertising Appeals
Advertising appeals are generally fragmented into two categories:

Informational/Rational Appeals and Emotional Appeals.
Informational/Rational appeals are informative. Their objective is to

influence the target audience to buy the brand because it is does a best job
of meeting consumers’ needs. Rational appeal ads provide a cost-benefit
analysis or layout in concrete terms what problem a product solves and
why you should buy it. This is when the advertiser simply lays out one or
more reasons why you should buy the product.
! !
For example, Horlicks and Colgate uses a rational appeal to focus on the
core benefits (Nutrition and Cavity protection respectively) for the whole
family. Many rational motives can be used as the basis for advertising
appeals, including comfort, convenience, economy, health, and sensory
benefits such as touch, taste, and smell. Other rational motives or
purchase criteria commonly used in advertising include quality,
dependability, durability, efficiency and performance.
On the other hand, emotional appeals are designed to persuade using

emotional responses. Creatives believe that emotional appeals have a
better consumer connect. They say that rational ads go unnoticed whereas
Emotional ads can capture attention. These are viewed by creatives as key
to developing brand loyalty.
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(a) Rational or Informational Appeals
Informational or Rational appeals are generally product-oriented. They

highlight the functional benefits of the product like quality, economy, value,
or performance of a product. Following are different types of rational
appeals:
Feature Appeal: Advertisements based on such an appeal are highly

informative. They provide information of product attributes or features that
can be used as the basis for rational purchase decision. Technical and high
involvement product often uses this appeal.
Competitive Advantage Appeal: Such an appeal is used to compare the

product with the competitor’s product directly or indirectly. The advertiser
tries to present its brand as better as compared to the competitor’s
product.
Favourable Price Appeal: As the name suggests, the price offer is

considered as the dominant point of the message, in this appeal.
News Appeal: Some type of news or announcements about product or

company dominates the advertisement in News appeal.
Product Popularity Appeal: Product popularity appeal uses the

popularity of the brand as the highlight of the message. It emphasises on
the increasing number of users who have switched to it.
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High Quality and Performance: Some products are preferred for their
quality and superior performance. Such products are advertised by
highlighting the quality attribute in advertisement.
Economy and Low Price: Many people prefer economically priced goods
or savings while operating the product. To target such audience, products
are advertised by highlighting the value for money benefit of the brand.
Long Life: Many consumers want products of durable nature that can be
used for a long period. In advertisement of such product, durability is the
dominant point of the message.
Scarcity: Another appeal that is occasionally used is scarcity. When there

is a limited supply of a product, the value of that product increases.
Scarcity appeals urge consumers to buy a particular product because of a
limitation.
Other Rational Appeals: Other rational appeals include purity, more

profits, time saving, multifunction, more production, regular supply and
availability of parts, limited space required, artistic form, etc. that can
make advertising effective.
(b) Emotional Appeals
An emotional appeal is related to an individual’s psychological and social

needs for purchasing certain products and services. Many advertisers use
emotional appeals in selling brands that are not differentiated from
competing brands and there is barely any rational difference between
competing products. Ads using humor, sex, and other appeals that are very
engaging and entertaining, putting the consumers in a favourable frame of
mind. Research shows that positive mood and feelings created by
advertising can have a favourable effect on consumers’ evaluation of a
brand. Many TV advertisers create ads that evoke feelings of warmth,
nostalgia, and sentiment.
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The Dabur Vatika ad, regarding a cancer survivor, arouses strong emotions
in people. Marketers use emotional appeals in hopes that the positive
feeling they evoke will transfer to the brand.
Types of emotional appeals are as follows:
Positive Emotional Appeal: Positive emotions like humour, love, care,

pride, and joy are shown in advertisements to appeal audience to buy that
product. For example, Jonson and Jonson baby products.
Negative Emotional Appeal: This includes fear, guilt, and shame to get
people to do things they should or stop.
• Fear: Fear is an emotional response to a threat that expresses some sort

of danger. Ads sometimes use fear appeals to evoke this emotional
response and arouse consumers to take steps to remove the threat. This
style banks on the fact that the fear of loss looms larger in human minds
than gain. This style of advertising is often used by brands in the life and
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accidental insurance category. Anti-smoking, Anti-Drugs, AIDS

awareness, Anti- Drunk Driving campaigns also commonly use this
appeal. Among the commercial brands, Burnol had used the style at
times. Ceasefire fire extinguishers’ ‘it can happen to you’ ad campaign is
another example.
• Anxiety: Most people try to avoid feeling anxious. To relieve anxiety,

consumers might buy mouthwash, deodorant, a safer car and get
retirement pension plan.
• Sex: Sensuous advertising attracts consumers and is often used by

brands to attract attention. Some examples of relevant and successful
use of sexual imagery in advertising are Durex, Kamasutra condoms and
Axe deodorants and sprays. Some examples where use of sex in
advertising was not relevant or did not work for the brand are MR coffee
and Tuff shoes.
• Humour: Humour causes consumers to watch advertisement, laugh on

it, but the most important aspect is to remember advertisement and also
the product connected with humour. For example, Happydent and
Mentos.
(c) Transformational Appeals
Another reason for using emotional appeals is to influence consumers’

interpretations of their product usage experience. One way of doing this is
through what is known as Transformational advertising. Transformational
ads create feelings, images, meanings, and beliefs about the product or
service that may be activated when consumers use it, transforming their
interpretation of the usage experience. Transformational ads make the
experience of using the product more exciting and enjoyable.
(d) Combining Rational and Emotional Appeal
Few purchases of any kind are made for entirely rational reasons. Even a
purely functional product such as laundry detergent may offer an emotional
benefit—say, the satisfaction of seeing one’s children in bright, clean
clothes. In some product categories, the rational element is small. These
include soft drinks, cosmetics, certain personal care products, etc. In many
advertising situations, the decision facing the creative specialist is not
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whether to choose an emotional or a rational appeal but, rather,

determining how to combine the two approaches. Consumer purchase
decisions are often made on the basis of both emotional and rational
motives, and attention must be given to both elements in developing
effective advertising.
7.5.2 Additional Types of Appeals
• Moral Appeals: Moral appeals are directed to the consumer’s sense of

what is right and proper. These are often used to encourage people to
support social and ethical causes like Clean and Safe Environment, Adult
Literacy, Equal Rights for Women, and Protection of Consumer Rights.
• Teaser Advertising: Advertisers introducing a new product often use

this appeal. It is designed to build curiosity, interest and excitement
about a product or brand.
• Musical Appeals: Music and Jingles are an extremely important

component in advertising. It captures the attention of listeners. For
example, Airtel.
• Comparison Appeal: In this appeal, a brand’s ability to satisfy

consumers is demonstrated by comparing its features to those of
competitive brands. For example, Tide and Surf.
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7.5.3 Advertising Execution Styles
Once the specific advertising appeal message has been finalised, the
creative team begins its execution. Advertising execution refers to the
manner in which an advertising appeal is carried out or presented. A
particular advertising appeal can be executed in a variety of ways and a
particular means of execution can be applied to a variety of advertising
appeals. Some of the more commonly used execution techniques include:
a) Straight sell or factual message

b) Scientific/technical evidence
c) Demonstration
d) Comparison
e) Testimonial
f) Slice of life
g) Animation
h) Personality symbol
i) Fantasy
j) Dramatisation
k) Humour
We now examine these execution styles.
(a) Straight Sell or Factual Message: This type of ad relies on a

straightforward presentation of information concerning the product or
service. This execution is often used with appeals where the focus of
the message is the brand and its specific attributes and benefits. It is
often used with rational appeal.
(b) Scientific/Technical Evidence: Scientific or technical evidence is

presented in the ad. Advertisers cite technical evidence, laboratory
studies, or endorsements by scientists and experts to support their
advertising claims.
(c) Demonstration: This style is designed to illustrate the key

advantages of the brand by presenting it in actual use.
(d) Comparison: The comparison execution style is popular among

advertisers. We have all seen ads of Sprite and Thums Up taking digs
at Pepsi and vice versa. Detergent cake and soap brands often claim
that their brands last longer than the competing brands. Shampoo
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brands also consistently come up with claims of better dandruff

removing and cleaning abilities than the competition.
(e) Testimonial or Endorsement: Many advertisers prefer to have their

messages presented by way that a person praises the product based
on personal experience. Examples of ads showing expert testimonials
are Ponds with beauty experts of Ponds Institute, ads of Saffola using
a doctor and discussing heart health, Sunsilk shampoo with hair
stylists, etc. A related execution technique is the Celebrity
endorsement, where a well-known person or a celebrity speaks highly
regarding the brand. It is assumed that using celebrities increases the
consumer interest in the advertising as well as the brand. This
happens because of aspiration, prestige enhancement and role model
effects.
(f) Slice of Life: This is a style which is generally based on a problem/

solution approach. It portrays a problem commonly faced in daily life
with the brand solving the problem.
(g) Animation: An advertising execution style where animated characters

may be used.
(h) Personality Symbol: This type of advertising execution involves

developing a central character or personality symbol that delivers an
advertising message and with which the brand can be identified.
(i) Fantasy: An execution technique that is where the product or service

becomes a central part of the situation created by the advertiser.
Cosmetics ads often use fantasy appeals to create images and symbols
that become associated with the brand.
(j) Dramatisation: This execution technique focuses on telling a short

story with the product or service as the star. Dramatisation is
somewhat akin to slice-of-life execution as it also relies on the
problem/solution approach, but it uses more excitement and suspense
in telling the story. The purpose of using drama is to draw the viewer
into the action it portrays.
(k) Humour: Like comparisons, humour is also used as a way of

presenting advertising appeals. Some good examples of funny ads that
have worked for the brands are ‘utterly butterly’ ads for Amul butter,
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Sprite with ‘khali bujhai pyass, baki sab bakwaas’, Fevicol adhesive,
Fevikwik ‘chutki me chipkai’, Happydent ad and so on.
(l) Combination: Use of more than one execution style.
The list of Advertising Execution styles given here are only some of the
more popular ones. Many more creative styles exist like Kids-led
advertising, Culture-based advertising, Subliminal advertising, and so on.
Activity 4
Which is the most effective style of advertising execution for a

Corporate ad?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
7.6 Summary
The creative strategy of the advertising message is crucial to the success of

a marketing campaign. Marketers generally turn to creative specialists for
developing an effective way to communicate the marketer’s message to the
customer. The challenge is to be creative and come up with fresh, unique,
and appropriate ideas that can be used as solutions to communications
problems. Creativity in advertising is a process of several stages, including
preparation, incubation, illumination, verification, and revision. An
important part of creative strategy is determining the major selling idea
that will become the central theme of the campaign. There are several
approaches to doing this, including using a unique selling proposition,
creating a brand image, looking for inherent drama in the brand, and
positioning. In this chapter, we also examined how the advertising message
is implemented and executed. Once the creative strategy that will guide
the ad campaign has been determined, attention turns to the specific type
of advertising appeal and execution format to carry out the creative plan.
The appeal is the central message used in the ad to elicit some response
from consumers or influence their feelings. Appeals can be broken into two
broad categories, rational and emotional. Numerous types of appeals are
available to advertisers within each category. The creative execution style
is the way the advertising appeal is presented in the message. A number of
common execution techniques were examined in this chapter.
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1. What is a Creative process? Write in detail along with its various stages.
2. What is Creative Strategy Development?
3. Describe USP, Brand Image, Inherent drama and Positioning strategies.
4. What is the difference between Rational advertising and Emotional

advertising?
5. Evaluate Fear as an appeal.
6. Write short notes on the following advertising styles:
a) Demonstration
b) Testimonial
c) Slice of life
d) Fantasy
e) Humour
1. Many marketers believe that the only goal of their company’s

advertising and promotional programme is to __________.
a. position the company and its brands

b. create a positive corporate image
c. generate sales
d. create memorable advertising
2. __________ objectives are types of objectives that are usually stated in

terms of specific, measurable outcomes such as sales volume, market
share, or return on investment.
a. Sales
b. Marketing
c. Communication
d. Advertising
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3. Financially oriented managers who view marketing communications as

an expense rather than an investment are likely to prefer __________
objectives for advertising and other promotional areas.
a. sales-oriented
b. communication
c. positioning
d. image
4. DAGMAR is __________.
a. a philosophy of advertising goal setting

b. a model of consumer behaviour
c. a method of setting sales objectives
d. the most often used method of setting objectives
[Answer: 1. (c), 2. (b), 3. (a), 4. (a)]
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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MEDIA PLANNING
Chapter 8
Media Planning
Objectives
• Understand the concept of Media Planning

• Understand the terminology used in Media Planning
• Examine the role of media in delivering messages to customers and
potential customers
• Know the strategic development of a media plan in response to a
marketing/advertising
• Get a view on the complex interrelationships among important factors of
media decision-making process
Structure:
8.1 Introduction
8.2 Definition – What is Media Planning?
8.3 Decisions Involved in Developing a Media Plan
8.3.1 Identifying Target Markets

8.3.2 Establishing Media Objectives
8.3.3 Developing and Implementing Media Strategies
8.3.4 Target Market and Geographic Coverage
8.3.5 Scheduling
8.4 Evaluating Media Plan Effectiveness

8.5 Advertising Budgeting Approaches
8.6 Summary
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MEDIA PLANNING
8.1 Introduction
Once an advertisement is created, the focus shifts to how best can it be

taken to the target audience. Who are the people the ad need to reach,
how can we reach them, where and when can we deliver our ads to them,
how often do we need to reach them, and what will it cost us to do so?
These are some of the key issues that need to be analysed, understood
and decided upon in Media Planning. The essential task is to deliver the
advertising to the target audience in a way that is visibly effective and
cost-efficient. The two basic tasks of marketing communications are
message creation and message dissemination. Media planning works in the
area of message dissemination. Media planning helps to determine which
media should be used – mass media such as television, newspapers, radio,
and magazines (and the choices available within each of these categories),
banner ads on the Web, or a flyer on Facebook or support media such as
direct marketing, digital media, promotional products advertising, in-store
point-of-purchase options, etc. It also tells when and where to use media
in order to reach the desired audience. Simply put, media planning refers
to the process of selecting media time and space to disseminate
advertising messages in order to accomplish marketing objectives. The
media environment is changing due to rapidly evolving technology.
Perhaps, at no other time in history have so many changes taken place
that have significantly altered the media decision process. The
primary objective of the media plan is to develop a framework that will
deliver the message to the target audience in the most efficient, cost-
effective manner possible. The media planning process is not an easy one.
The role of media planners has also expanded as media planning has
moved beyond planned messages to take advantage of unplanned
messages as well. Planned messages are what advertisers initiate like an
ad, press release or sales promotion, unplanned messages are often
initiated by people and organisations other than advertisers themselves.
Word-of-mouth, both online and offline, is one form of unplanned message.
Although advertisers have little direct control over the flow of unplanned
messages, they can facilitate such a flow. Media planners are playing an
increasingly important role in today’s advertising industry because of the
continuing proliferation of new media options and the increased complexity
of media and audience research.
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8.2 Definition – What is media planning?
The word Media came from the Latin word “Middle”. Media carry message
to or from a targeted audience and can add meaning to the message.
Media Planning, in advertising, is a series of decisions involving the delivery
of message to the targeted audience. Media Plan carries the details of the
usage of media in an advertising campaign. It includes costs, running
dates, markets, reach, frequency, rationales, and strategies.
Media Planning is the process of choosing the vehicle of mass

communication in which to place an advertiser’s message, purchasing that
time or space, and insuring that the advertising message runs as
purchased.
It is a series of decisions made to answer the question, “What are the best
means of delivering advertisements to prospective purchasers of a brand or
service?” Some specific questions related to the creation of a media plan
are:
• How many prospective customers do we need to reach?

• In which medium or media?
• How many times a month?
• In which months?
• In which markets and regions should ads appear?
• How much money should be spent in each medium?
Activity 1
What do you understand by Media? What all media are you exposed
to in a regular day?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
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8.3 Decisions Involved In Developing a Media Plan
If creating ads is a qualitative process, then delivery of these ads through

various available media is the quantitative process. The media planning
starts with looking at what objectives the media plan needs to achieve, and
what kind of media budgets are available to do so. Very often, it involves
deriving how many people in the target audience can be reached and with
what regularity within a given media budget. The media plan is the guide
for media selection. It determines the best way to get the advertiser’s
message to the market. It requires development of specific media
objectives and specific media strategies (plans of action) designed to attain
these objectives. Once the decisions have been made, the objectives and
strategies formulated, this information is organised into the media plan.
The kind of media budget available is a major input into creating a media
plan. Other factors which effect the media plan are inflation, the cost of
media, changes in technology, the availability of new media, competitor
factors, timing of the campaign and where to promote the brand.
The media planning process comprises of the following steps:
1. Identifying target markets,

2. Establishing media objectives, and
3. Developing media strategy and Implementing the strategy.
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MEDIA PLANNING
8.3.1 Identifying Target Markets
“I don’t know the key to success, but the key to failure is trying to please
everyone,” said Bill Cosby Comedian, emphasising the importance of
selecting a target market.
The key concern at the first stage of creating a media plan is: Who is the
target market? Where geographically are they located and when should we
focus our efforts to reach them? The first objective of a media plan is to
select the target audience – the people whom the media plan attempts to
influence through various forms of brand contact. Because media
objectives are subordinate to marketing and advertising objectives, it is
essential to understand how the target audience is defined in the
marketing and advertising objectives. A common marketing objective is to
increase sales by a specific amount. But this marketing objective does not
specify a target audience, which is why the media objective is needed. A
variety of inputs helps media planners take this decision regarding the
target audience – like primary research and data from secondary sources.
The target audience in a media plan can be either primary or secondary. A
primary target audience is one that plays a major role in purchase
decisions, while a secondary target audience plays a less decisive role. In
the case of online gaming devices, children’s requests often initiate a
purchase process and parents often follow through their children’s brand
selection. Thus, it is reasonable to consider children as the primary target
audience and their parents as the secondary target audience. If the
parents are aware of the advertised brand, it will be easier for children to
convince them of the purchase. Media planners need to examine and
identify the role of consumers in shopping, buying and consuming a
product or service to target the right groups of consumers effectively.
8.3.2 Establishing Media Objectives
Media objectives are the goals for the media programme which are
accomplished through media strategies. The Media Objectives are related
to what advertising is trying to achieve – is it trying to increase brand
awareness level or trying to increase brand persuasion level or striving for
a combination of both. Therefore, depending on the advertising task, the
media task will either focus on achieving better advertising ‘exposure’ if
brand awareness is more critical, or focus on achieving better ‘penetration’
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if brand persuasion or reinforcement is more critical. Put simply, it will

either try to achieve more ‘Reach’ or try to achieve more ‘Frequency’.
(a) What is Reach?
The number of different persons or households exposed to a particular

media vehicle or media schedule at least once during a specified time
period. Reach indicates the size of the unduplicated audience. Media
planners often define the communication goals of a media plan using the
interrelated concepts of reach and frequency. Media planners use Reach to
set their objective for the total number of people to be exposed to the
media plan. Reach is one of the most important terms in media planning
and has three characteristics. First, Reach is calculated as a percentage,
although the percentage sign is rarely used. When reach is stated, media
planners are aware of the size of the target audience. For example, if a
media plan targets the roughly 5 million women who are in the age bracket
of 18-25 years, then a Reach of 50 means that 50% or 2.5 million of the
target audience will be exposed to some of the media vehicles in the media
plan. Second, Reach measures the accumulation of audience over time,
because Reach is always defined for a certain period of time; the number
of audience members exposed to the media vehicles in a media plan
increases over time. For example, Reach may grow from 20 (20%) in the
first week to 60 (60%) in the fourth week. The pattern of audience
accumulation varies depending on the media vehicles in the media plan.
Third, Reach doesn’t double-count people exposed multiple times if the
media plan involves repeated ads in one media category or ads in multiple
media categories. Media planners use reach because it represents that
total number of people exposed to the marketing communication.
(b) What is Frequency?
The number of times within a given time period that a consumer is

exposed to a message. Like Reach, Frequency is also for a specified period
of time. Frequency can be attained through repetition of ads during the
campaign run dates, and/or by rotating advertisements between media
types.
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Activity 1
In Media Planning, what is more important – Reach or Frequency?

____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
(c) Reach × Frequency gives the Total Ad Exposure
If the brand is in launch stage, building brand awareness is critical,

therefore ‘Reach’ dominates. If it is in the maturity stage, brand persuasion
is important than Frequency’ takes over. However, both ‘Reach’ and
‘Frequency’ are important and the task of media planning is then to finely
balance the two. The objective of any media plan is to optimise the
combination of Reach and Frequency in as cost-effective manner. The
challenge of the media plan is to maximise the advertising exposure by
deriving the optimum combination of reach and frequency for a given
budget. The media objectives of a media plan often call for some
combination of Reach and Frequency. Media planners want the highest
reach possible because that means more people will be exposed to the
campaign, which should lead to more brand awareness, customer loyalty,
sales, and so on. Media planners also seek high Frequency if they feel that
consumers will only take action (that is, buy the product) after multiple
exposures to the campaign. For example, launching a new brand or
teaching consumers about the features of a product may take several
impressions. Thus, Reach indicates the media dispersion while frequency
shows the media repetition.
(d) The Qualitative Issues in Setting Media Objectives
Setting most cost-effective media plan on the basis of Reach and

Frequency calculations is not always the best way forward. There are
certain qualitative issues in setting media objectives. They primarily
originate from three areas: Innovation and creative advertising, brand
image and competitive environment.
i. Impact of Innovation and Creativity: Ask a professional in the

business what is the key to success in advertising, and you’ll most
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likely get an answer that echoes the mantra of Stephan Vogel, Ogilvy
& Mather Germany’s chief creative officer: “Nothing is more efficient
than Creative Advertising. Creative advertising is more memorable,
longer lasting, works with less media spending, and builds a fan
community…faster.” Creativity as a tool is important in advertising,
and a brand cannot exist without creativity. Creativity is the core of
branding and advertising. Advertising creativity is the artistic way to
combine new and meaningful relationship, between unrelated things
in a manner that is relevant, believable, and present the product in a
fresh way. Research reveals that, money invested in a highly creative
ad campaign had nearly double the sales impact than that of money
spent on a non-creative campaign. Innovative and Creative ads are
more effective in inspiring people to buy products than ads that
simply catalogue product attributes or benefits.
ii. Brand Image: Luxury and premium brands need to advertise in

media which is premium. This is required not just because premium
media cater to the right audience but also because being seen in
those mediums reinforces the premium image of the brand. Luxury
brands and high-end retail brands are creating their own apps
(digital) to cater to the select demographic that they cater to. Though
highly relevant from the image perspective, these mediums are
expensive and may not fall within the limitations of reach, frequency
and optimum exposure. Thus, a cost efficiency based plan will again
not do justice to such brand image and compromise on the
effectiveness of the campaign.
iii. Competitive Environment: In categories that are highly

competitive, the sheer clutter of advertising and ‘noise’ level might
force you to advertise more than what ‘cost efficiency’ requires. It
may mean advertising more frequently or using bigger size ads, even
if they are cost inefficient, just to get seen. In less competitive
categories, the opposite might be true.
Therefore, it is absolutely critical to consider these qualitative issues and

account for them while setting the media objectives. Though it is extremely
important to balance the reach and frequency equation in a media plan, it
is equally important to balance the qualitative and quantitative aspects as
well. Having both a visibly effective and a cost-efficient media plan would
be the ideal solution.
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8.3.3 Developing and Implementing Media Strategies
Next, the media planners consider how to achieve these objectives. They
develop and implement media strategies, which evolve directly from the
actions required to meet objectives. The media planner determines which
target markets should receive the most media emphasis. The goal of the
media planner is to extend media coverage to as many of the members of
the target audience as possible while minimising the amount of waste
coverage. The most important aspect of this stage is to take decisions
regarding the marketing mix.
(a) What does Media Mix mean?
Which media should the advertiser use? Media planners craft a media mix
by considering a budget-conscious intersection between their media
objectives and the properties of the various potential media vehicles. That
is, they consider how each media vehicle provides a cost-effective
contribution to attaining the objectives, and then they select the
combination of vehicles that best attain all of the objectives. A wide variety
of media vehicles are available to advertisers. Media mix refers to the
various advertising channels through which a company communicates with
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its audience. Generally, a media mix includes Broadcast Media (Television

and Radio), Print Media (Newspapers and Magazines), Out-of-home Media
and Online Media. The media mix is the total amount of advertising that an
ad agency or media buyer has budgeted for a specific advertising strategy
and media plan. The advertising objective (refer to Chapter 6 Advertising
Objectives and Budgeting), target audience preference, the budget, etc.
are some of the factors that determine what media will be used. The goal
of any campaign is to get the right message to the target audience in the
fastest and most efficient way possible. Therefore, the best media mix for
any given campaign depends greatly on the demographics of the target
market. By combining media, marketers can increase coverage, reach, and
frequency levels while improving the likelihood of achieving overall
communications and marketing goals.
(b) Mix Strategy: Media Concentration vs. Media Dispersion
Media Concentration: A media planner’s first media mix decision is to

choose between a media concentration approach or a media dispersion
approach. The media concentration approach uses fewer media categories
and greater spending per category. This lets the media planner create
higher frequency and repetition within that one media category. Media
planners will choose a concentration approach if they are worried that their
brand’s ads will share space with competing brands, leading to confusion
among consumers and failure of the media objectives. If one looks at the
world of television and written press today, the clutter (numerous ads) is
overwhelming. If you carefully look at these ads, you will see that 80% of
the advertising spend is being expended by 20% of the brands. These 20%
ads happens to be from the top brands. The best brands are the ones that
are advertising the most. At the same time, strong brands often take care
of their ‘quality’ of advertising first creating a higher Share of Voice. There
is a direct connection between share of voice and market share. If the
media plan for a brand is efficient in maximising its ad exposure and takes
care of the creative and image impact issues, then a higher ad spend will
ensure higher visibility. The higher share of voice, when combined with
creative, impactful end meaningful ads gets a better Top-of-the-Mind recall
of the brand. Share of voice is the percentage of spending by one brand in
a given media category relative to the total spending by all brands that are
advertising in that media category. A company can create a high share of
voice with a concentrated media strategy.
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Media Dispersion: In contrast, media planners choose a media dispersion

approach when they use multiple media categories, such as a combination
of Television, Radio, Newspapers, Out-of-home media and the Internet.
Media planners use dispersion when they know that no single media outlet
will reach a sufficient percentage of the target audience. For example, a
Concentrated Approach may use only ads on the Internet and reach only
30% of the target consumers because some consumers don’t use the
Internet. Similarly, a concentrated approach could use a national news
magazines and reach only 30% of the target audience, because not every
target customer reads these magazines. But a dispersed approach that
advertises in print magazines as well as on websites might reach 50% of
the target audience. Media planners also like the dispersion approach for
the reinforcement that it brings consumers who see multiple ads in
multiple media for a given brand may be more likely to buy.
8.3.4 Target Market and Geographic Coverage
The media planner determines which target markets should receive the
most media emphasis. Developing media strategies involves matching the
most appropriate media to the preference of the target market. If media
coverage reaches people who are not sought as buyers and are not
potential users, then the effort is wasted. This term is used for coverage
that reaches people who are not potential buyers and/or users. Some
consumers may not be part of the intended target market but may still be
considered as potential—for example, those customers who buy the
product for someone else.
The usage of certain products is driven by the climate inherent to the area.
Brands make their presence felt accordingly. It would not be the wisest of
strategies to promote Room Heaters in coastal regions like Mumbai or Goa.
Media planners must allocate advertising by geography. In general, a
company that sells nationally can take one of three approaches to
geographic spending allocation: a national approach (advertise in all
markets), a spot approach (advertise only in selected markets), or
a combined national plus spot approach (advertise in all markets with
additional spending in selected markets). Media planners will choose a
national approach if sales are relatively uniform across the country. A
national approach will reach a national customer base with a national
advertising programme. For many other products, however, a company’s
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customers are concentrated in a limited subset of geographic areas, which

makes a spot approach more efficient.
8.3.5 Scheduling
Being more visible may mean selling more! Obviously, companies would
like to keep their advertising in front of consumers at all times as a
constant reminder of the brand. But it is not practical for numerous
reasons. Having decided how to advertise (the media mix) and where to
advertise (allocation across geography), media planners need to
consider when to advertise. Given a fixed annual budget, should all months
receive equal amounts of money or should some months receive more of
the budget while other months receive less or nothing? The primary
objective of scheduling is to time promotional efforts so that they will reach
the maximum people of the target audience at the right time. Three
scheduling methods available to the media planner – Continuity, Flighting,
and Pulsing.
(a) Continuity: Continuity refers to a continuous pattern of advertising,

which may mean every day, every week, or every month. In the
Continuity schedule, the advertising runs steadily with little variation
over a campaign period. This pattern of advertising is prevalent in
Services and Packaged goods that require continuous reinforcement on
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the audience for top-of-the-mind recollection at point of purchase. This

pattern of advertising works as a constant reminder. It covers the
entire purchase cycle. It also takes advantage of volume discounts in
media buying. However, because continuity scheduling usually requires
a large budget, it may not be practical for small advertisers.
(b) Flighting: The Flight Scheduling approach alternates advertising

across months, with heavy advertising in certain months and no
advertising at all in other months. At some time periods, there are
heavier promotional expenditures, alternating with shorter periods of
no advertising at all. The advantages of flighting are that advertisers
buy media with optimal reach, compared to competitors for a relatively
shorter period of time and commercials appear as a unified campaign
on different media vehicles.
(c) Pulsing: Pulse Scheduling combines the first two scheduling methods,
so that the brand maintains a low level of advertising across all months
but spends more in selected months. The pulse scheduling method
takes advantage of both the continuity and flight scheduling methods.
How Do Media Planners Select among Continuity, Flight, and Pulse

Scheduling Approaches?
The timing of advertising depends on three factors: seasonality,

consumers’ product purchase cycle, and consumers’ interval between
decision-making and consumption.
The first, and most important, factor is Sales Seasonality. Some products
sell faster around specific holidays, such as Fire Crackers and traditional
mithai (sweets) on Diwali, festive clothes on all festivals like Gudi Padwa,
Onam, Lohri, Vishu, etc. Companies with seasonal products are more likely
to choose flight scheduling to concentrate their advertising for the peak
sales season. Other goods, however, such as everyday products like milk
and toothpaste, may lack a seasonal pattern. Everyday, goods are better
served by a continuity approach. Media planners generally allocate more
money to high-sales months and less to low-sales months.
The second factor that affects when advertising is scheduled is the Product
Purchase Cycle: the interval between two purchases. Fast-moving
consumer goods such as bread, soft drinks and detergents probably require
continuous advertising in a competitive market to constantly reinforce
brand awareness and influence frequently made purchase decisions.
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A third factor that affects media scheduling is the Time Interval between
when the purchase decision is made and when a product or service is
actually bought and consumed. For example, many families who take
summer vacations may plan their trips months before the actual trips. That
is, they make purchase decision in advance. Thus, travel industry
advertisers will schedule their ads months before the approaching season.
8.4 Evaluating Media Plan Effectiveness
There are definite inherent strengths and weaknesses associated with each
medium. In addition, it would require extensive primary research, either by
the advertiser or their advertising agency in order to assess how a
particular message and the target audience would relate to a given
medium. Accountability is increasingly important in media planning, as
more advertisers expect to see returns on their investments in advertising.
Although sales results are the ultimate measure of the effectiveness of an
advertising campaign but the sales result is a function of multiple
attributes, such as price, distribution and competition, which are often out
of the scope of the advertising campaign. It is important, therefore, to
identify what measures are most relevant to the effectiveness of media
planning and buying. Because of the hierarchical nature of the media
effects, the effectiveness of media planning should be measured with
communications indicators. The elements of the Hierarchy of effects model
like Brand Awareness, Comprehension, Conviction and Action, are also
used to evaluate the effectiveness of the Media Plan.
Brand awareness: How much of the target audience was aware of the
advertised brand?
Comprehension: Does the target audience understand the advertised
brand?
Conviction: Is the target audience convinced by ads? How do they like the
advertised brands?
Action: How many of the target audience have purchased the advertised
brand as a result of the media campaign?
The measured results of brand awareness, comprehension, conviction and

action are often a function of both advertising creative and media planning.
Even effective media planning may not generate anticipated cognitive,
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affective and conative responses if the ads are poorly created and not
appealing to the target audience. On the other hand, ineffective media
planning may be disguised when the ads are highly creative and brilliant.
Thus, these measures should be reviewed by both creative directors and
media planners to make accurate assessments of the effectiveness of the
media plan. The measurement of the effectiveness of a media plan can be
conducted by the advertising agency or by independent research services,
using methods such as surveys, feedback, tracking, and observation.
Surveys can be conducted among a sampling of the target audience in the
different periods of a media campaign, such as in the beginning, the middle
and the end of the campaign. Surveys can ask questions about the target
audience’s media behaviour, advertising recall, brand attitudes and actual
purchase. Besides surveys, feedback can be collected to measure the
media and ad exposure of the target audience. Feedback devices such as
reply cards, toll-free numbers, coupons and Web addresses can be
provided in ads. Tracking is measurement method that media buyers use to
track the effectiveness of online ads. When a user visits a website or clicks
on a banner ad, Web servers automatically log that action in real time. The
logs of these visits and actions are very useful for media buyers, because
the buyers can use them to estimate the actual interaction of audience
members with the interactive media. Finally, in the physical world, media
buyers can use observation to collect audience reaction information at the
points of purchase or during marketing events.
8.5 Advertising Budgeting Approaches
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The media planning process starts with looking at what objectives the
media plan needs to achieve, and what kind of media budgets are available
to do so. While deciding the Advertising Budget, the marketers need to
take into account a whole lot of marketing factors – Product Life Cycle
Stage, Product Differentiation, Competition, etc. More money needs to be
allocated in the Budget for advertising when the brand is in the Launch
stage (Introductory Stage of the Product Life Cycle) in order to establish
the brand and educate the consumers about the product. In the Growth
stage, advertising needs to establish stronger brand differentiation due to
increased competition. Once the consumers have used the product and are
satisfied with its use, they would require less convincing to generate repeat
purchase. In maturity stage with an existing consumer base, the ad spends
are likely to be relatively less. In the Maturity stage, more ad expenditure
is required to defend market shares whereas in Declining stage, some
minimal ad spend is required. Another consideration is that of Product
differentiation in the category. The more similar the products are, the
greater the need to invest in brand ‘differentiation’ through advertising. In
fact, relatively higher ad spends might be required even to achieve average
results. Level of competitive advertising is another factor that is considered
while Budgeting. The more the competition in the market, the greater is
the choice of brands available to the consumers. This often leads to higher
spending in advertising. Example is Soft drinks ad wars in summers.
With so many variables to consider, deciding on an advertising budget is a

complicated task. Marketers often use certain approaches to arrive at the
required advertising budgets. Some of the commonly used Advertising
Budgeting Approaches are outlined here.
(i) The Percentage of Sales: This approach is the most commonly used
approach for setting advertising budgets. It uses past sales’ histories
and projected sales’ figures. This method keeps advertising in
consistent relation to the sales volume.
(ii) Category Average Approach: This approach is also a variation of the

percentage of the sales method. The difference is that here the
percentage that is derived is not for the company but for the entire
product category. The total sales revenue generated by the entire
category is divided by the total ad spend in the category to arrive at
the required figure. Once the ‘average percentage’ for the category is
known, the company can use it as a benchmark to decide on its own
ad budget.
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(iii) The Affordable Method: In this approach, the firm determines the
amount to be spent in various areas. It allocates fund for the
production and operations departments. Whatever left, is allocated to
advertising and promotion as the amount the company could afford.
The task to be performed by advertising is not considered.
(iv) The Arbitrary Allocation: Here, the budget is determined solely by

the management on the basis of what is felt as necessary. There are
no objectives or purpose for advertising and promotion. In this
method, the managers feel that some money should be spent on
advertising and promotion. There is no logic with respect to the
amount of money spent.
8.6 Summary
Almost all media plans today are multi-dimensional, utilising numerous

elements rather than just one. The chapter has presented an overview of
the media planning process, determination of media objectives,
development of the media strategy, and formalisation of objectives and
strategy in the form of a media plan. The media strategy must be designed
to supplement and support the overall marketing and communications
objectives. The objectives of this plan are designed to deliver the message
the programme has developed. The basic task involved in the development
of media strategy is to determine the best matching of media to the target
market, given the constraints of the budget. The media planner attempts
to balance reach and frequency and to deliver the message to the intended
audience with a minimum of waste coverage. At the same time, a number
of additional factors affect the media decision. Media strategy development
has been called more of an art than a science because while many
quantitative data are available, the planner also relies on innovation and
creativity. This chapter discussed many factors, including developing a
proper media mix, determining target market and geographic coverage,
scheduling, and balancing reach and frequency. Consumers, today, do not
get all their information from just one element but from many. It is
important to teach students that there are many choices and many reasons
why certain media are effective in reaching a specific target audience. No
one media can solve the communication problem in today’s market. The
chapter also touched upon the Budgeting approaches for media planning.
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1. What is Media Planning?
2. Discuss the major steps in creating a media plan.
3. Explain the concept of ‘Reach’ and ‘Frequency’ in context to Media

Panning.
4. Describe the three methods of promotional scheduling.
5. In what ways do Flighting, Pulsing and Continuous scheduling differ?
6. Discuss the Budgeting approaches mentioned, to plan advertising

outlay.
1. The __________ determines the best way to get the advertiser’s

message to the market.
a. distribution plan
b. coverage
c. frequency level
d. media plan
2. __________ is the series of decisions involved in delivering the

promotional message to the prospective purchasers and/or users of the
product or brand.
a. Creative strategies
b. Media planning
c. Distribution strategy
d. Media vehicles
3. __________ is the measure of the number of different audience

members exposed at least once to a media vehicle.
a. Frequency
b. Reach
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c. Viewer number
d. Coverage
4. __________ is the number of times a receiver is exposed to a message

in a given time period.
a. Potency
b. Reach
c. Coverage
d. Frequency
5. In terms of advertising, scheduling constant advertising without

variation is referred to as __________.
a. Flighting
b. Continuity
c. Geographical weighting
d. Circulation
e. Pulsing
[Answer: 1. (d), 2. (b), 3. (b), 4. (d), 5. (b)]
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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Chapter 9
Media Vehicles
Objectives
• Know about the different media available to carry advertising messages

• Evaluate of Broadcast Media
• Evaluate of Print Media
• Evaluate Digital Media
• Evaluate Out-of-home (OOH) Media
• Examine the pros and cons of each media option
Structure:
9.1 Introduction
9.2 Broadcast Media
9.3 Print Media
9.4 Digital Media
9.5 Out-of-home Media
9.6 Summary
9.9 Exhibit
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9.1 Introduction
For marketing managers, decisions in media planning and consequently the

media selection are becoming increasingly complex and challenging as
more and more media options are becoming available. The category is
exploding due to the rapid developments taking place in digital media.
Technological advances are driving this change, such as different printing
techniques, the iPad and new forms of advertising, smartphones, and the
customisation of content. This has led to numerous ways in which
companies can communicate with consumers. The main factors that
influence media selection are product type, target group, type of ad
campaign, budget, and availability of media space. Media vehicle refers to
specific methods of media used by companies to deliver advertising
messages to the targeted customers.
To understand a media vehicle, you need to compare it with the concept

media class. A media class is a general category of media, such as
television, radio, newspapers, magazines and the Internet. The vehicle is
the specific TV or radio station, newspaper or print publication, or online
website. Picking the right class based on benefits and drawbacks is an
important first step. Then you need to select the right vehicle to reach your
prospects. Selecting the right mix of media vehicles is critical to reaching
your audience and getting them to respond well to your ads. Over the
years, the word media has become closely associated with the word
“Advertising”, leading many to think that media are used only for
advertising. However, the fact remains, that all marketing communication
messages are carried by some form of media. Brand publicity, sales
promotion offers, direct response offers, etc. – all use various media to
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deliver messages to customers. These media include not only the

traditional media like Radio, TV, Out-of-home media, Newspapers and
Magazines—but also the internet, package labels, company stationery and
business cards, etc. These are all touchpoints, and they offer a marketer a
medium to connect with the customer. The role of media is not only to
deliver brand messages but also to help create, sustain, and strengthen
brand relationships by connecting companies and customers. The
difference between delivery and connection is significant. To deliver means
“to take something to a person or place” and to connect means “to join
together”. Delivery is only the first step in connecting, it opens the door to
touching a customer in a meaningful way with a brand message. In a
media plan, each media vehicle has a significant role to play. Having the
right mix of vehicles ensures meeting the advertising and media objectives.
If print generates awareness and disseminates information, television is a
vehicle to build the brand awareness and persuasion with its visual and
emotional appeal. Outdoor and radio work as reminder media, although
outdoor advertising has been used heavily recently for creating initial
awareness at the time of product launch. The internet is being used
increasingly to engage with customer with customised content. An
advertising medium is, thus, a channel of communication through which a
message is spread to the target customers. Advertising becomes effective
when suitable media is used to carry the message. A major portion of
advertising budget is spent on buying media time and space. Therefore,
choice of advertising media is a critical decision in the area of advertising.
Media scholar Marshall McLuhan once said that “the medium is the
message.” He meant that the medium, or manner, through which the
message is transmitted, shapes the meaning of the message. Different
types of media have different strengths and weaknesses, and how people
perceive a story depends on how they receive it. For example, television is
primarily a visual media. Strong pictures and video affect television viewers
more than words, and pictures convey emotion better than script. Print
media, in contrast, are better than visual media at communicating details
and information. An average newspaper story, for example, contains
substantially more facts than a comparable television story. This is not to
say that television is in any way inferior to print media, just that the two
media simply communicate information differently. The term ‘broadcast
media’ covers a wide spectrum of different communication methods such
as television and radio.
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The different media available to advertisers for advertising their products

are outlined as under. Let us consider the strengths and weaknesses each
of these advertising media one by one.
• Broadcast Media – Radio, TV and Cinema

• Print Media – Newspapers and Magazines
• Out-of-home Advertising – Billboards and Neon Displays
• Digital Media – Internet
• Direct Mail Advertising
• Point-of-purchase Advertising
• Other Media — Yellow Pages, Product Placements and Infomercials
9.2 Broadcast Media
Television and Radio are the most well-known broadcast media.

Broadcasting is the distribution of audio-video content via any
electronic mass communications medium. On average, people spend 85%
of their media time with broadcast media and only 15% with print media.
However, compared to print messages, broadcast messages are fleeting.
Once a message appears, it is gone until it runs again. Broadcast
commercials are more intrusive than brand messages in print media.
Programming and commercials are presented in a stream, one after
another. Readers of print media can select stories and ads in whatever
order they want and completely ignore whole sections.
(a) Television
The television is a convenient and flexible advertising medium. Advertising

on Television is one of the most popular ways of conveying messages with
ease since it can reach millions of viewers internationally and nationally.
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Cable and Satellite networks and 24-hour programmes have further

increased television viewership, making the television a substantially
lucrative mode of conveying an advertisement. Television advertising
allows advertisers the flexibility to use various approaches and different
combinations of audio, video and text to make ads memorable and
emotional, depending on the product or service or the target audience. The
use of colour, sound, sight, drama and motion ensures that message is
strong and persuasive. Additional tactics and props, such as attractive
models, elaborative sets, enchanting graphics and audio-visual effects
further enhance impact. However, television as an advertising medium has
certain limitations that inhibit its effectiveness. Television is often criticised
due to the intrusive nature of the advertisements. Consumers find ways to
avoid commercials by surfing programmes on other channels. Technological
innovations are now enabling consumers to block advertisements all
together. This limits the effectiveness of television advertising. Another
limitation is the high cost of advertising as compared to other media like
radio, magazine, newspaper and Internet. Quality commercials are
expensive to produce. These costs can prevent detailed messages from
being delivered and most advertisements end up being brief and fleeting.
Advantages
1. Television is a high impact, creative medium. It appeals to the most

important sense organs – sight and sound, with impressive images,
dialogue, jingles and actors besides the brand at the centre stage.
2. It has a very wide reach as majority of the population watches

television. The audience pans across all demographic segments of age,
gender, income and literacy levels. Due to its wide coverage and reach,
it is the most cost-effective medium.
3. The advertisements can be directed at both the masses as well as a

particular target audience by broadcasting the ad during a particular
programme on a particular channel and at a particular time.
Disadvantages
1. Television advertising is very costly. Television commercial slots are sold

at very high rates and the cost of production of a television commercial
is also very high, though its per capita cost is low due to its wide reach.
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2. There is so much clutter of advertisements on television that many

advertisements escape the attention of the viewer.
3. In case of television advertising, the message has to be repeated again

and again to have a lasting impression else, it is easily forgotten.
4. Due to the intrusive nature of the ads between programmes, people

have a tendency to surf the channels during commercial breaks. Thus,
there are many ads which the viewer may not view at all.
Summary – Television
Medium Advantages Disadvantages
Television • Creativity • Broad audience

• Impact – sight, sound, motion • Clutter
• Good reach and cost effective • High production cost
• Coverage – local and national • Intrusive
• Cable and Satellite channels • Messages short-lived
(b) Radio
Radio used to be a very popular broadcast media but now it is very local in
its reach, with local advertisers filling the airwaves. Although TV and the
Internet have eclipsed it as the dominant form of broadcast media, radio
still offers opportunities for businesses to promote their products and
services. There are two types of radio broadcasts – Amplitude modulation
(AM) and Frequency modulation (FM). AM is easily blocked by buildings,
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and has poorer quality whereas the new Frequency modulation (FM) which
has excellent transmission. Radio can be a vital part of any media mix and
can be highly effective when used correctly. There is a wide variety of
programme formats available that will allow reaching the target targeting
audience with great precision. But the reach of radio as a medium is
limited because the overall audience is quite fragmented. Listeners are
divided among many stations. To compensate for the lack of reach (defined
as the number of potential customers, it is possible to reach through an
advertising campaign), a radio advertiser must increase the frequency of
ads. Fortunately, radio spots are usually priced relatively low per unit
compared to other forms of advertising. Another factor that planners need
to consider is that radio listeners are spread out over the course of the day
(called “Dayparts” – morning drive, mid-day, afternoon drive, evening, and
overnight), making the target even more diluted. This is where frequency
comes in – the more spots run, the more the message will be remembered.
Radio is an excellent complementary medium for any ad campaign, and
can generate buzz and hype about a business or product. Radio is probably
the most flexible of all the advertising media because its content can
usually be produced and scheduled on very short notice. Radio advertisers
can easily adjust their messages to local market conditions and marketing
situations. Whether used concurrently with other media, or used as a
stand-alone advertising method, radio has proven time and again to be a
cost-effective, powerful choice. It is effective both for increasing brand
awareness and driving direct sales, and can be targeted to both national
and local audience. To make the best of radio advertising, however,
businesses should know the pitfalls, as well as the advantages.
Advantages
1. Radio is a low-cost advertising medium. It requires only a script of the

commercial to be read by the radio announcer or a copy of a
prerecorded message that can be broadcast by the station. The cost for
radio time is also low.
2. The low cost of radio means advertisers can build more reach and
frequency into their media schedule within a certain budget.
3. Radio offers a high degree of audience selectivity available through the

various radio stations.
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4. Radio lets companies focus their advertising on specialised audiences

such as certain demographic and lifestyle groups.
5. Radio advertising commands high attention. A potential advantage of

radio is that it encourages listeners to use their imagination when
processing a commercial message, leading to high level of customer
engagement.
Disadvantages
1. A major drawback of radio as an advertising medium is the absence of a

visual image. The radio advertiser cannot use any type of visual appeal.
2. Another problem is the high level of audience fragmentation due to the

large number of channels/stations. The percentage of the market tuned
to any particular station is usually very small.
3. Radio advertisements need frequent repetition, otherwise people will

forget the message. At the same time, frequent repetition of
advertisements may cause boredom.
4. These days, there is a lot of clutter in radio advertising, and so, the
listener may lose interest in the commercials being broadcast.
Summary – Radio
Radio • Relatively low product cost • Lack of visual images

• Audience selectivity • Messages short-lived
• Better engagement with customers • Audience fragmentation
• Frequency builder • Low reach
Activity 1
Compare the media characteristics of Radio versus Television.

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9.3 Print media
The print media includes newspapers and magazines, brochures, etc. Print
messages are relatively permanent compared to broadcast messages,
which are fleeting.
(a) Newspapers
In India, newspaper advertising is one of the oldest means of promotion for

any product or service. Reading newspaper is a daily practice of many
people in India, and due to this popularity of newspaper in India, it is
known to be a good medium of advertising. Although readership
newspapers has been in a slow decline relative to the increase in
population, newspapers are still a major medium, especially for carrying
advertising. To fight the readership decline and competition from other
media, many daily newspapers have redesigned their content. All major
papers now have websites that contain past stories as well as news
updates throughout the day. Newspaper advertising has been around
longer than any other form of advertising we see today. The success of
newspaper advertising in India is due to its wide reach and visibility. Like
all forms of advertising, the print ad costs depend on a lot of things – the
size of the ad, the readership and circulation of the publication, the
frequency with which you run the ads, and whether you use colour in your
ads. When it comes to price, daily papers are the costliest and are best
handled by media buyers of advertising agencies, with annual contracts.
The newspaper is divided into columns. The newspaper ads are sized
according to a very set formula – a certain number of columns wide and a
certain number of inches long. Multiplying the two numbers together will
give you the number of “column centimeters” of your ad, which determines
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the ad’s cost. Another beneficial factor of newspaper advertising in India is

that it has different newspapers in different languages, and in this way, it
can easily capture the target audience and advertise accordingly to meet
advertising objectives.
Advantages
1. No other advertising vehicle has the reach of newspapers. Because most

newspaper circulation is daily, frequency can be quickly built among
those who regularly read the newspaper.
2. Newspaper readers are above average in education and income. People

who are typically labelled upscale meaning upper income, higher
education and professional/ managerial occupations – all count
themselves as newspaper readers.
3. Newspapers have a quick production process, which allows a company

to change the content of its advertising before the paper is published.
Newspaper advertising is among the fastest forms of advertising with
extremely short deadlines that allow ads to be created and run in a
matter of days.
4. Newspapers, unlike most other media, allow the advertiser to build an

ad in any size.
5. More than any other medium, consumers believe in newspaper

advertising. The newspaper editorial environment typically adds
credibility and legitimacy to the brand being advertised.
6. The fact that newspapers are tangible allows customers and prospects
to be exposed to brand messages when and where they prefer, and to
read and re-read ads at their own pace for better comprehension.
7. Selective vs. Intrusive – Shoppers are less willing today to accept

advertising that intrudes onto them. They seek out advertising on their
own. Newspapers allow prospects to look at them at their convenience.
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Disadvantages
1. In newspapers having high readership and circulation, advertising space

is expensive.
2. Clutter is also a problem in newspapers. Not only does a brand message

compete with other ads for attention, but it must also compete with all
the editorial content.
3. They are printed on low-quality porous paper (called newsprint). Poor

photo reproduction, especially for colour ads, limits creativity.
4. Their average life span is only one day, as newspapers are usually read
once and then discarded.
5. You may be paying to send your message to a lot of people who will
probably never be in the market to buy from you. This means that there
can be a high percentage of media waste.
With the increasing popularity of the Internet, newspapers face declining

readership and market penetration. A growing number of readers now skip
the print version of the newspaper (and hence the print ads) and instead
read the online version of the publication. This means that there can be a
high percentage of media waste.
Summary – Newspapers
Newspaper • Reader education and • Expensive medium

s income • Clutter
• Reach and circulation • Poor reproduction, especially
• Short lead time and low colour
production cost • Decreasing readership
• Credibility and trust • Media waste (mass audience)
• Selective rather than
intrusive
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(b) Magazine
Magazines are classified by frequency of publication (weekly, monthly,

bimonthly, and quarterly) and by type of audience (consumer, business,
trade, and professional). The strength of Magazines as a medium lies in the
active way in which readers choose magazines. Magazines are an active
medium, with the reader in control. Since different categories of magazine
fulfil different needs, each title has its own unique positioning. Readers
become deeply engaged with their magazines. As a result, a strong
relationship, a bond of trust, grows up between the reader and his or her
chosen magazines. Readers spend substantial time reading and the copies
are read thoroughly and sometimes repeatedly. More than 90% of all pages
are opened by the typical reader. Magazines offer better printing
quality and colour ads. Many special magazines are made for well-defined
consumer segments. The ads that appear there are especially for these
groups. Over the past several decades, magazines have grown rapidly to
serve the educational, informational, and entertainment needs of a wide
range of readers in both the consumer and business markets. Magazines
are the most specialised of all advertising media. A computer magazine, for
instance, may have many ads related to computers, printers or scanners.
Trade magazines and journals are published for the professional use of
auditors, company secretaries, doctors, bankers, teachers, lawyers, etc.
Special magazines for women and children are also published. Magazines
like Outlook, Business India, Femina, Cosmopolitan, Readers Digest, etc.
are some of the popular magazines in India.
Advantages
1. One of the most valued attributes of magazine advertising is the

reproduction quality of the ads.
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2. These higher production values, however, mean that production takes

longer than in newspapers, so more lead time is required to place ads in
a magazine (one to three months depending on the magazine).
3. In addition to their excellent reproduction capabilities, magazines also

offer advertisers a great deal of flexibility in terms of the type, size, and
placement of the advertising material.
4. One of the main advantages of using magazines as an advertising

medium is their selectivity, or ability to reach a specific target audience.
Subject-specific magazines are seen as being authorities on their
respective subject areas. Therefore, brands that advertise in them can
benefit from this expertise halo, an added value for a brand message.
5. Like newspapers, magazines are tangible and thus allow readers to read
them at their own pace.
6. Magazines are even more permanent than newspapers, they are

frequently picked up and read more than once, providing additional
opportunities for a brand message to be seen, read, and have an effect.
Disadvantages
1. Magazine ads are more costly to produce than newspaper ads. The costs
of advertising in magazines vary according to the size of the audience
they reach and their selectivity.
2. Consumer magazines, although highly targeted, have relatively limited

reach of a brand’s target audience.
3. Magazines also have a long lead time, which means the closing date,
the date by which advertising materials must reach the publisher, is up
to three months before publication. Consequently, magazines do not
offer the scheduling flexibility of newspapers and some other media.
4. Another drawback is their lack of frequency. Many appear only once a

month or even less often; especially industry magazines and trade
journals. `
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5. Magazines also suffer from the drawback of clutter. The more successful
a magazine becomes, the more advertising messages it attracts, and
this leads to greater clutter.
Summary – Magazines
Magazines • High-quality reproduction • Costly production

• Flexibility • Low “mass” reach
• Audience selectivity • Long lead time
• Expertise environment • Low frequency (weekly,
• Long shelf life monthly, or quarterly)
Activity 2
Compare the media characteristics of Newspaper versus Magazine.

____________________________________________________________
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9.4 Digital Media
The Internet provides a cost-effective way to connect with prospects and

customers. It provides a reach to a global audience at a low cost. Besides
being cost-effective, the Digital media has become even more relevant
since the younger generation spends less time watching TV and more time
on the Internet. Many customers research businesses online before
deciding whom to buy from. A well-designed website is the first point of
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contact for many customers. Business can be using various Digital media
services like social media sites, banner ads, sponsorships, pop-ups, blogs,
search engines and other websites that the target audience visits besides
improving search engine rankings. Social media is the new form of
communication whether it is LinkedIn, Facebook, Twitter or Instagram.
People are constantly checking these channels because of how easily
accessible they are. Digital media is being used effectively to enhance and
support the selling effort. The Web has become a primary source of
information for millions of customers in the consumer and business-to-
business markets. The Web can also be used to stimulate trial. For many
companies, personal salespersons can reach only a fraction of the potential
customer base. Through trial demonstrations and/or samples offered
online, customers can determine if the offering satisfies their needs and if
so, request a personal sales call.
Advantages
1. For many companies, with limited budgets, the internet enables them to
gain exposure to potential customers at a fraction of the investment
that would be required using traditional media.
2. The Internet has the ability to target specific groups of individuals with
minimum waste coverage since only those who are interested in the
products or services will visit the site.
3. As a result of precise targeting, messages can be designed to appeal to

the specific needs and wants of the target audience.
4. Because the Internet is interactive, it provides strong potential for

increasing customer involvement and satisfaction and almost immediate
feedback for buyers and sellers.
Disadvantages
1. As the number of ads proliferates, some ads may not get noticed.
Consumers may also become irritated by the clutter. Especially banner
ads may be losing effectiveness for this very reason.
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MEDIA VEHICLES
2. While the Internet numbers are growing, its reach is still far behind that
of television. One of the greatest disadvantages of the Internet is the
lack of reliability of the research numbers generated.
3. At times, downloading information from the Net takes a long time.

When there are a number of users, the time increases and some sites
may be inaccessible due to too many visitors. Broadband is helping to
reduce this problem.
Summary – Digital Media
Medium Strengths Weaknesses
Digital Media • Extremely low cost • Clutter

• Target marketing • Limited reach
• Can be personalised • Web jam
• Interactive capabilities
9.5 Out-of-home media
In addition to print and broadcast, another large group of media is the out-
of-home media. Outdoor advertising dates back at least to the Roman
Empire, when commercial signs were painted on city walls. Using outdoor
boards in a local market is a good way to extend reach and, even more so,
extend frequency of a brand message. Outdoor boards also provide
geographical flexibility for targeting. Out-of-home message delivery
includes a wide range of locations where brand messages can be posted.
Outdoor billboards can be signs by the road or hoardings at prime locations
besides posters on buses, bus shelters, local trains, taxis, etc. Modern
outdoor advertising comes in the form of bulletins, billboards, posters and
Neon displays. Large billboards can get message across with a big impact.
Besides traditional outdoor boards, OOH includes shopping bags and even
uniforms serve as vehicles for brand messages. Other OOH media include
malls, stores, health clubs, etc. Advertisers commonly purchase space from
public transit authorities.
Advantages
1. With proper placement, a broad base of exposure is possible in local

markets. This level of coverage is likely to yield high levels of reach.
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MEDIA VEHICLES
2. Outdoor can be placed along highways, near stores, or on mobile

billboards, almost anywhere that laws permit. Local, regional, or even
national markets may be covered.
3. Outdoor ads can be very creative. Large print, colours, and other
elements attract attention.
4. Ability to create awareness. Because of its impact (and the need for a
simple message), outdoor can lead to a high level of awareness.
5. Outdoor advertising can have a significant effect on sales, particularly

when combined with a promotion.
6. Modern technologies have reduced production times for outdoor

advertising to allow for rapid turnaround time.
Disadvantages
1. In many cases, the out-of-home media results in a high degree of waste

coverage, since not everyone driving past a billboard is part of the
target market.
2. Due to the speed with which most people pass by outdoor ads, exposure
time is short, so messages are limited to a few words or illustrations.
3. Because of the high cost associated with it, outdoor advertising is an

expensive option.
4. In many vantage points, OOH Media are restricted citing high rates of
distraction to drivers resulting in accidents.
Summary – Out-of-home Media
Outdoor • Wide coverage • Waste

• Localised • Short exposure time
• Frequency builder • Cost
• Creativity • Zoning restrictions
! !176
MEDIA VEHICLES
Activity 3
What do you understand by Media? What all media are you exposed
to in a regular day?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
9.6 Summary
An advertising medium is a channel of communication through which ads

are transmitted to the target group. Advertising can become effective only
when suitable media is used. A major proportion of advertising budget is
spent on buying space and time on various media. Therefore, choice of
advertising media is a critical decision. Before the choice is made, it is
necessary to compare and evaluate the different media. Advertisers may
use a mix of two or more media to get their message across to the target
customers. In this chapter, we have looked at the pros and cons of each
element of the communication mix. Each communication situation warrants
a unique mix of media elements. The media plan must include those media
vehicles which will provide an effective reach to the target audience. We
considered the broadcast media as well as print media besides OOH (Out-
of-home media) and the game changer in today’s rapidly evolving media
scenario – the Internet. Low entry barriers and high rates of penetration
have made Digital, the most preferred medium. For most products,
Television and Radio advertising are the most popular among the broadcast
media. These have proven themselves to be excellent media, if advertisers
want to reach the mass consumers. Television has a wide reach and can
deliver messages with a highly dramatic effect. Print media includes
newspaper and magazine. Newspapers have credibility and great reach.
Magazines can be national or cater to the regional tastes. The greatest
advantage of magazines is a strong reader involvement, because the
readers have selected and paid for the magazine. In this complex scenario,
the endeavour of the media planners is to make use of the most effective
media vehicles in a cost efficient manner. The first step of the media
selection exercise is to understand the characteristics of each medium.
! !177
MEDIA VEHICLES
1. You are designing a marketing communication programme for a football

club near your campus. Would you recommend any out-of-home media?
Why or why not?
2. What are the greatest strengths and weaknesses of Out-of-home Media?
3. Discuss the advantages and disadvantages of advertising on radio.
4. What are the advantages of using Television as a medium to advertise?

Mention the drawbacks that it suffers from.
5. Digital has emerged as a very popular medium of advertising. What are

the advantages and disadvantages of using this advertising medium?
6. Which media would you use for advertising the following products? Give
reasons.
a. Smartphones
b. Books
c. Sports shoes
d. iPad

1. Which promotional mix would a firm use if it wanted to reach a large
consumer audience while keeping cost per contact low and create a
symbolic image or appeal for a new brand?
a. Advertising
b. Personal selling
c. Sales promotion
d. Coupons
2. __________ is a system of marketing by which organisations

communicate directly with target customers to generate a response
and/or a transaction.
a. Advertising
b. Sales promotion
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MEDIA VEHICLES
3. Which of the following is true about the Internet media?
a. It is considered as traditional media.

b. It essentially allows for one-way communication.
c. It enables marketers to gather valuable personal information from
customers and prospects.
d. The effect of using Internet media can be closely and precisely
measured by advertising and other forms of promotion.
4. __________ includes those marketing activities that provide extra value

or incentives for purchasing a product such as coupons and premiums.
a. Direct marketing
b. Advertising
c. Public relations
d. Sales promotion
5. __________ is non-personal communication neither directly paid for nor

run under identified sponsorship.
a. Advertising
b. Sales promotion
c. Publicity
d. Public relations
6. __________ is a promotional mix element that allows for direct contact

between a buyer and seller and allows a message to be modified
according to the needs or reactions of the customer.
a. Advertising
b. Public relations
c. Sales promotion
d. Personal selling
[Answer: 1. (a), 2. (c), 3. (c), 4. (d), 5. (c), 6. (d)]
! !179
MEDIA VEHICLES
9.9 Exhibit
Strengths and Weaknesses of Major Media
Medium Strengths Weaknesses
Newspapers • Reader education and income • Expensive medium

• Reach and circulation • Clutter
• Short lead time and low • Poor reproduction, especially
production cost colour
• Credibility and trust • Decreasing readership
• Selective rather than intrusive • Media waste (mass
audience)
Magazines • High-quality reproduction • Costly production

• Flexibility • Low “mass” reach
• Audience selectivity • Long lead time
• Expertise environment • Low frequency (weekly,
• Long shelf life monthly, or quarterly)
Television • Impact: sight, sound, motion • Broad audience

• Good reach • High production cost
• Local and national • Intrusive
• Cable and Satellite channels • Messages short-lived
Radio • Relatively low product cost • Lack of visual images

• Audience selectivity • Messages short-lived
• Better engagement with • Audience fragmentation
customers • Low reach
• Frequency builder
Internet • Extremely low cost • Clutter

• Target marketing • Limited reach
• Can be personalised • Web jam
• Interactive capabilities
Internet • Mass and addressable • Clutter

• Can be personalised • Limited reach
• Extremely low cost • Limited creative options
• Can be interactive
Outdoor • Localised • Low attention

• Frequency builder • Short exposure time
• Directional signage • Poor reputation (visual
pollution)
• Zoning restrictions
! !180
MEDIA VEHICLES
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !181
LEGAL AND ETHICAL ASPECTS OF ADVERTISING
Chapter 10
Legal and Ethical aspects of Advertising
Objectives
• Have an overview of advertising ethics and how important they are in a

country like India
• Understand the major legal provisions concerning advertising
• Know how these legal provisions helped certain companies to fight
communication
• Understand the self-regulatory framework and its effectiveness in
advertising
• Understand how to deal with misleading advertising
Structure:
10.1 Introduction
10.2 Ethical Issues Concerning Advertising and Marketing
Communications
10.3 Regulatory Authorities in India
10.3.1 Advertising Standards Council of India (ASCI) Guidelines

10.3.2 Regulatory Laws in India
10.3.3 Case Studies
10.4 Legal Actions Can be Taken against Advertisements that Encourages

the Following Practices
10.5 Insightful Case Studies from ASCI
10.6 Summary
10.9 Annexure I
10.10 Annexure II
! !182
10.1 Introduction
Advertising is growing at a considerable rate. Currently, India is the 14th

largest Entertainment and Media (E&M) market in the world with E&M
industry contributing about 1% of its GDP. Globally, the Indian E&M
industry (which broadly comprises four segments, i.e., Television, Print,
Radio and other media (such as Internet Access, Film, Out-of-home
Advertising (OOH), Music, Gaming and Internet Advertising)), is one of the
fastest growing, followed by countries such as China, Russia and Brazil. As
per industry estimates, the Indian E&M industry, with revenues of about `
80,500 crore (US$ 17.2 billion) in 2011, is set to grow robustly over the
next few years on the back of steady macroeconomic growth, rising
spending power and positive demographic indicators. The industry
revenues are expected to reach ` 1,76,400 crore (US$ 37.6 billion) by
2016. The advertising spend in the industry was estimated at ` 27,900
crore in 2011, contributing approximately 35% of total E&M revenues. The
revenue from advertising is expected to grow at a CAGR of 13.4% to reach
` 52,500 crore in 2016. Television and print dominate the advertising
segment in India, with 85% share of advertisement revenue and are
expected to remain the primary contributors, accounting for 84% of the
total advertising revenue in 2016.
The business of advertising and marketing communications is to inform

and persuade customers to buy their products. They are under constant
scrutiny for possible deception, misrepresentation and making misleading
claims to meet their objectives. If the companies are fighting marketing
and advertising ‘warfare’, then there will be times when supposedly unfair
means are used. Companies in their attempt to woo consumers may
advertise in ways that might seem to cross ethical or moral boundaries.
What is ethical, what is morally correct, what constitutes misrepresentation
or deception, or what is fair or unfair are extremely tricky, subjective and
controversial issues.
Every country has its own code of ethics and legislations determined by
their culture and value system. In the United States, false advertising and
health-related ads are regulated the most. Sweden and Norway prohibit
domestic advertising that targets children. Some European countries don’t
allow sponsorship of children’s programmes, no advertisement can be
aimed at children under the age of twelve, and there can be no
advertisements five minutes before or after a children’s programme is
! !183
aired. In the United Kingdom, advertising of tobacco on television,

billboards or at sporting events is banned. Similarly, alcohol advertisers in
the United Kingdom are not allowed to discuss in a campaign the relative
benefits of drinking, in most instances, therefore choosing to focus around
the brand image and associative benefits instead of those aligned with
consumption. There are many regulations throughout the rest of Europe as
well.
To reach target markets and build brand equity in cluttered markets,

advertisers sometimes overstep social and legal norms. There are various
types of unethical advertisements with obscenity and sexual overtone, ads
directed to children, surrogate advertising, subliminal advertisements, false
and misleading advertisements, etc. This chapter will attempt to explore
the ethical concerns in advertising. It will also discuss regulation of
unethical advertisements and establishment of self-regulatory bodies like
ASCI to tackle the problem.
Activity 1
How often, if ever, do you trust that advertising is honest in its

claims?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
10.2 Ethical Issues concerning Advertising and Marketing

Communications
Ethics mean a ‘conduct which is right in view of the society and the time
period’. In other words, we can say that Ethics are moral principles and
values that govern the actions and decisions of an individual or group. It is
governed by a set of principles of morality at a given time and at a given
place and in a given society. A particular action may be within the law and
still not be ethical. If an advertisement is misleading, the credibility of the
organisation is lost. To view the truth in advertisement, it has to be seen
from to consumer’s point of view rather than from legal point. Advertising
is persuasion, creatively personified and is very impactful. It affects society
and it is therefore, necessary to use this weapon with caution. The
advertising industry has been frequently criticised for putting out
! !184
misleading or exaggerated claims in respect of product, goods and services

advertised. However, the advertising industry has evolved a Code of Ethics
to govern the profession, keeping in view the culture and ethos of Indian
society. Some ethical issues that often come under scrutiny from moral or
ethical perspective are mentioned here.
• Untruthful and misleading claims made in the ads.
• Use of obscenity and of sex in advertising.
• Advertising directed towards tempting children.
• Advertising of products that are commonly assumed to have harmful

effects like alcohol, cigarettes, drugs, weapons, etc.
• Racial or gender bias, and other such issues.
• Surrogate advertising with hinted or hidden messages.
• Media issues like use of billboards and other outdoor advertising (for
traffic and safety reasons).
• Advertisements cannot be directed towards any religious or political end,

or to gain mileage of any form.
• Copyright, trademark and issues of making unfair competitive claims.
• Civil rights or rights of privacy of citizens.
10.3 Regulatory Authorities in India
Unfortunately, despite several laws meant to protect consumers against

unfair trade practices, false and misleading advertisements continue to
! !185
exploit the consumer. A number of institutions are involved in regulating

advertising. These are:
1. Self-regulation by the industry

2. Regulation by the Government
In India, the government assumes the role of regulating the business

activity by bringing a number of laws, regulations and codes. Depending on
the nature of the case, the power to regulate advertisements may be
exercised by the authorities like the Courts, Central and State
Governments etc. In addition to these authorities, the Press Council of
India established under Press Council of India Act 1978 is empowered to
regulate advertisements.
In 1985, a self-regulatory mechanism of ensuring ethical advertising

practices was established in the form of the Advertising Standards Council
of India (ASCI). It is an independent body under the aegis of Advertising
Agencies Association of India (AAAI). ASCI has created a Code of
Advertising Practice (ASCI Code). Adhering to the ASCI Code was made
compulsory for TV advertisements by amending the Cable Television
Networks (Amendment) Rules, 2006, which says “No advertisement which
violates the Code for Self-regulation in Advertising, as adopted by the ASCI
for public exhibition in India, from time to time, shall be carried in the
cable service.”
10.3.1 Advertising Standards Council of India (ASCI) Guidelines
• To ensure the truthfulness and honesty of representations and claims

made by advertisements and to safeguard against misleading
advertising.
• To ensure that advertisements are not offensive to generally accepted

standards of public decency.
• To safeguard against indiscriminate use of advertising for promotion of

products that are regarded as hazardous to society or to individuals to a
degree or is of a type that is unacceptable to society at large.
• To ensure that advertisements observe fairness in competition so that

consumer’s need to be informed on choices in the marketplace and the
! !186
canons of generally accepted competitive behaviour in business are both

served.
Under the ASCI Code, complaints against the advertisements can be made
by any person who considers them to be false, misleading, offensive, or
unfair. The complaints are evaluated by an independent Consumer
Complaints Council (CCC). CCC decides on complaints from the general
public including government officials, consumer groups, etc., complaints
from one advertiser against another and even suo moto complaints from
the member of the ASCI Board, CCC, or the Secretariat.
Beyond the self-regulatory authorities, there are also government laws

relating to such issues. Competition Commission of India (CCI) looks after
the issues of unfair competition and trade practices. Public Pressure groups
and Consumer Protection groups also exist to put social, political and
business pressures. Last but not the least is the power that consumers
exercise themselves at their individual level. They can do so by refusing to
buy a brand that they feel does not match up to their expectations of
fairness, ethics, decency and quality. For the marketers and advertisers,
annoying their consumers and losing their goodwill is a setback they can
ill-afford. It could be a matter of life and death for the brand. At the same
time, consumer laws and public mechanisms of regulation are also needed
to make sure that marketers and advertisers stay on their toes all the time
and not dare to slip up on such issues.
The Code of Advertising Practice has been appended as an Annexure.
10.3.2 Regulatory Laws in India
! !187
The following are the statutory provisions which regulate advertisements in

India.
1. Sec. 292(2)(d) of Indian Penal Code, 1860, makes it a punishable

offence to publish, distribute, sell, hire or circulate any obscene
advertisement.
2. The Young Persons (Harmful Publications) Act, 1956 provides penalty for
a person who sells, lets to hire, distributes, publicly exhibits or in any
manner puts into circulation any harmful publication or for purpose of
sale, hire distribution, public exhibition or circulation, prints, makes
known by any means whatsoever, that any publication harmful for
young people.
3. The Emblems and Names (Prevention of Improper Use) Act, 1950

prohibits the use of certain emblems and names of national or
international significance for commercial purposes.
4. The Drugs and Magic Remedies (Objectionable Advertisements) Act,

1954 prohibits publication of objectionable advertisements in
newspapers and magazines or otherwise relating to alleged cures for
venereal diseases, sexual stimulants and alleged cures for diseases and
conditions peculiar to women. In this case, an advertisement includes
any notice, circular, label, wrapper or other documents and
announcement made by any means or producing or transmitting light,
sound or smoke.
5. The Indecent Representation of Women (Prohibition) Act, 1986 prohibits

the publication of advertisements containing an indecent representation
of women.
6. The Prenatal Diagnostic Techniques (Regulation and Prevention of

Misuse) Act, 1994 prohibits advertisements related to prenatal
determination of sex.
7. The Transplantation of Human Organ Act, 1994 makes it a punishable

offence to issue advertisements inviting persons to supply human
organs for payment.
! !188
8. The Drugs and Cosmetics Act, 1940 makes it an offence to use any
report of a test or analysis made by Central Drugs Laboratory for the
purpose of advertising any drug or cosmetics.
9. The Motor Vehicles Act, 1998 entitles the State Government to empower
police to remove advertisements which can obscure a traffic sign or
misleading advertisements which appears to be a traffic sign or which
distract the concentration or attention of a driver.
10.The Prize Chits and Money Circulation Schemes (Banning) Act, 1978
prohibits the printing or publication of advertisements of prize chits and
money circulation schemes.
11.The Cigarettes and Other Tobacco Products (Prohibition of

Advertisement and Regulation of Trade and Commerce, Production,
Supply and Distribution) Act, 2003 prohibits the advertisements of
cigarettes and other tobacco products.
12.The Representation of People Act, 1951 prohibits political advertising 48

hours prior to polling time.
13.The Cable Television Networks (Regulation) Act, 1995 prohibits the

transmission of advertisements on the cable network which are not in
conformity with the Advertisement Code.
14.Monopolies and Restrictive Trade Practices Act, 1984, popularly known

as the MRTP Act – this Act had special provisions for regulating
misleading advertisements regarding unfair trade practices, etc. MRTP
Act has since been repealed and Competition Commission of India Act
(CCI Act) handles the affairs unfair competition and trade practices.
The provisions of the law imposing limitations on message/content in the

print media apply mutatis mutandis (Latin phrase meaning “the things
being changed which need to be changed” or more simply “the necessary
changes having been made”) to advertising. In fact, most of the provisions
governing the print media are applicable to advertising as well, with such
modifications as the context may require. The All India Radio Code for
Commercial Advertising originally covered advertising on television also. It
lays down standards of conduct for advertisers. The Code of Commercial
! !189
Advertising on Doordarshan, published in 1986, now lays down standards

of conduct for advertisers on Indian television.
It is interesting to note that there is a slight difference in the degree to

which the constitutional guarantee of freedom of speech and expression
can be enjoyed by the advertising industry as compared to other branches
of the mass media. Article 19(1)(a) states simply “All citizens shall have
the right to freedom of speech and expression”. The companion Article
19(2) qualifies this right by providing that the State can impose reasonable
restrictions on its exercise “in the interest of the sovereignty and integrity
of India, friendly ties with foreign states, public order, decency and
morality or in relation to contempt of court, defamation or incitement to an
offence”.
As far back as 1960, the Supreme Court, in the case Hamdard Dawakhana
vs. Union of India, ruled that a distinction needed to be made between
commercial advertising and advertising aimed at expression and
propagation of ideas. It was only the latter form of advertising, opined the
apex court, that could legitimately claim the frill protection of Article 19(1)
[a]. The effect of the Supreme Court judgement, thus, is that although an
advertisement is a form of speech, its true character is reflected in the
object for the promotion of which it was employed. The right to publish and
distribute a commercial advertisement, promoting an individual’s personal
business is not a part of the freedom of speech guaranteed by our
Constitution.
Misleading advertisements were prohibited under the “Monopolies and

Restrictive Trade Practices” provision of the MRTP Act, 1969. This Act has
been replaced by the Competition Commission of India Act (CCI Act). The
previous Act defined unfair trade practice to cover several acts aimed at
promoting the sale, use or supply of any goods, or the provision of any
services, which cause loss or injury to the consumers of those goods and
services. The MRTP Commission, established under the Act, had powers to
adjudicate upon complaints of such practices and issue injunctive orders.
Now, we have the Competition Commission doing the similar role under
Competition Commission of India Act (CCI Act) that has the jurisdiction on
cases related unfair trade practices and unfair competition. The MRTPC,
while in its existence, passed some landmark orders covering various
aspects of advertising in the past.
! !190
Let us have a look at some of the cases to understand the scope and ambit
of such issues. It is worth highlighting that here we should focus ourselves
on the content of the dispute rather than the specifics of the legal parlance
of various provisions of the law.
Activity 2
In a democracy where people have freedom of speech and

expression, why do we need laws governing advertising? Discuss
with arguments.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
10.3.3 Case Studies
Case I: P&G vs. HLL
! ! !
Procter & Gamble and Hindustan Lever Limited (now Hindustan Unilever
Ltd., HUL), both multinational companies manufacturing consumer
products have often locked horns, each criticising the other for
exaggerating claims in advertising. They had their infamous fights over
Surf and Ariel, rival products of both the companies. In one such instance,
Procter & Gamble (P&G), complained to the MTRPC against an
advertisement by HLL (now Hindustan Unilever Ltd., HUL) by the brand
name “Ceramides Sunsilk”. According to the complainant, “such an ad
would amount to adoption on the part of the respondent (in this case, the
HLL) of unfair trade practice within the meaning of Section 36A of the
MRTP Act, 1969. The advertisement captioned “rebuilds damaged hair back
to life” was followed by the phrase “New Ceramides Sunsilk Extra
! !191
Treatment Shampoo”, which continued “the breakthrough in the hair repair

for Elide Hair Institute”.
The MRTC, while analysing the case, commented that the “New Cermaide
Sunsilk Extra Treatment Shampoo” claimed to be the first shampoo that
not only repaired but also rebuilt damaged hair. According to the
complainant (P&G), the hair can be repaired if damaged, but cannot be
rebuilt. The respondent argued that the phrase “rebuilds damaged hair
back to life has to be understood in the context of the dull and lifeless hair
to be made in a proper form so as to look natural and bouncy”. HLL
brought a number of advertisements from foreign magazines making
practically similar claims with respect to similar products. After hearing
arguments from both the sides, checking the claims/data presented in
support or against the contention, the MRTPC went into the literal and
metaphorical meaning of the words “repair” and “rebuild”. As the
respondents themselves chose to answer: “Rebuilding damaged hair back
to life is in the sense of revitalising and making the hair healthy and
revitalising them is aptly described as bringing back to life”.
The Commission, hence, contended that “the phrase ‘back to life’ as

understood by the respondent is different from what it is understood in
common parlance”. Giving their opinion about how the common man
perceives advertisements, the Bench commented thus: “Most people read
ads in the language they commonly use. They would not try to read
something which is not there. Most people, unlike critics, are not used to
reading between the lines; they would read in a plain manner. For them,
the words they use convey the literal meaning and not the metaphorical
meaning”. Hence, the bench ordered: “In that view of the matter, the
phrase “back to life’ would convey the meaning to the effect that the
product in question would be able to bring back to life the dead hair. To
that extent, we are prima facie of the opinion that the claim in that regard
is not only tall but also highly exaggerated and can be styled as
misleading”. An interim injunction was ordered on M/s HLL “restraining it
from campaigning in any manner through any media with respect to its
product by the brand name of Ceramide Sunsilk to the effect that “it can
rebuild the damaged hair by bringing the same back to life”. It further
clarified that “the objection is against the use of the expression ‘back to
life’, and not against the whole or any other part of the advertisement in
question”. The company was directed to “implement this order as
! !192
expeditiously as possible but in any case not later than 15 days from
today” (31 March 1997).
In a couple of cases, the MRTP Commission passed orders with respect to

trade practices concerning the Weights and Measures Act, 1976.
Case II: Maggi Ketchup
! !
Maggie Ketchup, a product of Nestle, was being sold by the company in

packages of 400 gm, which the MRTP Commission alleged was in
contravention of the provisions of the Weights and Measures (Packaged
Commodities) Rules, 1977, hence, the company had indulged in an unfair
trade practice. The logic was that uniform packaging with other brands
would permit a reasonable comparison of price by the consumer. The
proceedings were, however, dropped after hearing the arguments as there
was no financial loss or injury to the consumers involved. The packaging of
the ketchup could not be equated with that of medicine where an incorrect
size of dosage could lead to injury. The member, therefore, held that the
company had not indulged in an unfair trade practice and dropped the
proceedings.
Case III: KMP Oils
! !
In yet another case, the Ahmedabad-based Public Interest Issues Research

Academy complained to the Commission against KMP Oils, engaged in the
manufacture and marketing of coconut oil. It was alleged by the
! !193
complainant that the company’s volumetric packaging constituted an unfair

trade practice as one litre of oil was 10% less than one kilogram by weight,
resulting in a wrongful loss of 10% in quantity to the unwary customer. The
company had to comply with the law. Sanjeev Sachar, a specialist in MRTC
law, thus analysed that although Food Specialties (now Nestle) had
violated the packaging rules, the practice was held to be fair since there
was no financial loss to the consumer. On the other hand, KMP Oil was
“rapped on the knuckles” because there was a loss involved. Companies,
hence, would have to bear in mind that “what is contemplated in law is not
only the actual loss or injury but, the capacity and tendency of the trade
practice to cause loss and injury to the consumer.
Activity 3
Collect some advertisements in which you think that either facts

are presented in a distorted manner or the copy is misleading.
Identify some legal provisions on the basis of which the advertiser
can be sued.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
10.4 Legal actions can be taken against advertisements

that encourages the following practices
• Ridicule caste, race, nationality, colour and creed.
• Goes against any provision of the Indian Constitution.
• Incite people towards criminal activity, provocative, cause disorder and/

or violence in the country.
• Breach laws and/or glorify obscenity or violence in any form.
• Glorify terrorism, communal massacres, and criminality and so on.
• Ridicule the father of the nation, the national emblem, part of

Constitution or the image of a national leader or a state dignitary.
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• Depict women in a deprecating manner. Females should not be portrayed

in a manner that is obscene, exploitative or vulgar.
• Display distasteful visual content that goes beyond the established norms
of good taste and decency.
• Exploit and encourage social evils like child marriage, bride burning and
dowry system.
10.5 Insightful case studies from ASCI
The Advertising Standards Council of India (ASCI) invites complaints from

the public about advertisements which violate its code, which encompasses
a number of areas. It receives complaints from time to time that may be
lodged by competing firms, the general public, consumers, or members of
the ASCI Council. Discussed below are some insightful case studies that
would reflect the influence that ASCI has on the advertising industry.
Case Study I – Rasna Pvt. Ltd.
Rasna Private Limited issued an advertisement for its various products with
the statement ‘Rasna—ghar ka swad’, with visuals ‘Rasna—ghar ka nimbo
pani’, ‘Rasna—ghar ka ampanna’, ‘Rasna—ghar ka jaljira’, etc. The packs
showed pictures ‘fruits, vegetable, nuts, etc.’ Brought up by an ASCI
member, the ad was felt to ‘clearly mislead the consumers by means of
implication and visual presentation and falsely exaggerate the fruit
contents in the products, unless it is substantiated that the actual fruit
component. The Council suo motu decided against the advertisement. The
advertisement made by Mudra Communication was withdrawn.
Case Study II – Indian Oil’s Servo
Public Sector Company Indian Oil also came under the ASCI’s scanner. Its
advertisement for Servo depicted a man jumping onto a moving train—a
dangerous feat. The advertisement was created by Leo Burnett. The
company withdrew the commercial immediately.
Case Study III – Fena Ltd.
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A Delhi-based firm Fena Ltd., which manufactures and markets Fena

detergent, was taken by multinational Hindustan Lever Ltd. to the ASCI for
using film comedian Johnny Lever to play a spoof on the company. Fena in
its TVC featured Johnny Lever saying, Aab Lever Bhai ka bhi hai kahana
‘Fena hi lena’. Fena defended its position arguing that their protagonist in
the TVC was a celebrity artist and there was no allusion to HLL.
Case Study IV – JK Tyres vs. MRF Ltd.
In another instance, the ASCI upheld the complaint filed by JK Tyres on a

‘false’ claim by MRF Ltd. in an advertisement, declaring itself to be the
‘only supplier of truck tyres to Volvo, Ashok Leyland and Telco’. This
according to the complainant created a wrong impression that MRF was the
only truck tyre supplier to these commercial vehicle manufacturers. JK
Tyres claimed that it had supplied large quantities of radial tyres to Volvo
over a period of last one-and-a-half years, besides supplying tyres to
TELCO and Ashok Leyland over a long time. MRF, on the ASCI’s advice,
discontinued the campaign. The Consumer Complaint Council (CCC) also
said that the claims by MRF, namely, ‘always the favourite choice of Indian
truckers’ and ‘standard and quality unmatched in the world’ were
unsubstantiated.
10.6 Summary
In this chapter, we looked at two aspects that are of great concern to the
profession of advertising, i.e., laws and ethics. Ethics means “good
conduct” or “conduct which is right in view of the society and the time
period”. The chapter outlined some rules of ethical conduct as acceptable to
the culture and values of the people where they are being implemented. A
number of laws and enactments were discussed to safeguard of
consumers. The right of free speech and its interpretation was also
discussed under the context of the rules and regulations applicable in
India. The MRTP exerted a lot of influence for many decades but now it has
given way to the Competition Act under the Competition Commission of
India. The self-regulatory body Advertising Standards Council of India and
its code of conduct were also discussed.
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1. Throw light on the various laws to control the erring advertisements.
2. How would you define ethics?
3. Why are ethics important in a developing country like India?
4. What was the role of MRTP when it existed?
5. What are some of the code of ethics given by ASCI?
1. __________ are moral principles and values that govern the actions and
decisions of an individual or group.
a. Regulations
b. Guidelines
c. Policies
d. Ethics
2. Which of the following statements on the social influence of advertising

is true?
a. There is general agreement that advertising is an important social

influence agent.
b. Advertisements cannot create needs in the society.
c. Advertising often attempts to discourage the materialism in the

society.
d. Advertising has a more positive social influence rather than a

negative impact.
3. Advertisements often seek to create needs rather than merely showing

how a product or service fulfills them. Many critics claim that this aspect
of advertising has an adverse effect on consumer values. What is the
main logic behind this claim?
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a. Creating needs is an anti-natural process and should be avoided.

b. Such activities would increase the competition in the market.
c. Creating needs would encourage materialism among people.
d. Creating needs to gain market is an anti-competitive conduct.
4. Advertising plays an important role by __________.
a. making consumers aware of products and services

b. creating needs that do not even exist
c. encouraging materialistic values in the society
d. alerting the collective values of the society
5. Which of the following product categories is most likely to be criticised

for creating needs rather than responding to needs?
a. Automobiles
b. Milk
c. Canned soup
d. Designer jeans
[Answer: 1. (d), 2. (a), 3. (c), 4. (a), 5. (d)]
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10.9 Annexure I
Code of the Advertising Standards Council of India
Chapter – I
To Ensure the Truthfulness and Honesty of representations and claims

made by Advertisements and to safeguard against misleading
Advertisements.
1. Advertisements must be truthful. All descriptions, claims and

comparisons, which related to matters of objectively ascertainable fact,
should be capable of substantiation as and when called upon to do so by
the Advertising Standards Council of India.
2. Where advertising claims are expressly stated to be based on or

supported by independent research or assessment, the source and date
of this should be indicated in the advertisement.
3. Advertisements should not contain any reference to any person, firm or

institution without due permission; nor should a picture of any generally
identifiable person be used in advertising without due permission.
4. Advertisements shall not distort facts nor mislead the consumer by

means of implications or omissions. Advertisement shall not contain
statements or visual presentations, which directly or by implication or
by omission or by ambiguity or by exaggeration are likely to mislead the
consumer about the product advertised or the advertiser or about any
other product or advertiser.
5. Advertisements shall not be so framed as to abuse the trust of

consumers or exploit their lack of experience or knowledge. No
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advertisement shall be permitted to contain any claim so exaggerated

as to lead to grave or widespread disappointment in the minds of
consumers. For example:
(i) Products shall not be described as ‘free’ where there is any direct
cost to the consumer other than the actual cost of any delivery,
freight or postage. Where such costs are payable by the consumer,
a clear statement that this is the case shall be made in the
advertisement.
(ii) Where a claim is made that if one product is purchased another

product will be provided ‘free’, the advertiser is required to show as
and when called upon by ‘The Advertising Standards Council of
India that the price paid by the consumer for the product which is
offered for purchase with the advertised incentive.
(iii) Claims that use expressions such as “Up to five years guarantee” or
“Prices from as low as Y” are not acceptable if there is a likelihood
of the consumer being misled either as to the extent of the
availability or as to the applicability of the benefits offered.
(iv) Special care and restraint has to be exercised in advertisements

addressed to those suffering from weakness, any real or perceived
inadequacy of any physical attributes such as height or bust
development, obesity, illness, importance, infertility, baldness and
the like to ensure that claims or representations, directly or by
implication, do not exceed what is considered prudent by generally
accepted standards or medical practice and the actual efficacy of
the product.
(v) Advertisements inviting the public to invest money shall not contain
statements which may mislead the consumer in respect of the
security offered, rates, of return or terms of amortisation; where
any of the foregoing elements are contingent upon the continuance
of or change in existing conditions, or any other assumptions, such
conditions or assumptions must be clearly indicated in the
advertisements.
(vi) Advertisements inviting the public to take part in lotteries or price

competitions permitted under the law or which hold out the
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prospects of gifts shall state clearly all-material conditions so as to

enable the consumers to obtain a true and fair view of their
prospects in such activity. Further, such advertisers shall make
adequate provision for the judging of such competitions,
announcement of the results and the fair distribution of prizes or
gifts according to the advertised terms and conditions within a
reasonable period of time. With regard to the announcement of
results, it is clarified that the advertiser’s responsibility under this,
section of the Code is discharged adequately if the advertiser
publicises the main results in the media used to announce the
competition as far as is practicable, and advises the individual
winner by post.
6. Obvious untruths or exaggerations intended to amuse or to catch the

eye of the consumer are permissible, provided that they are clearly to
be seen as humorous or hyperbolic and not likely to be understood as
making literal or misleading claims for the advertised product.
Chapter – II
To ensure that Advertisements are not offensive to generally accepted

standards of Public Decency. Advertisements should contain nothing
indecent, vulgar or repulsive, which is likely, in the light of generally
prevailing standards of decency and property, to cause grave or
widespread offence.  
 
Chapter – III
To safeguard against the indiscriminate use of Advertising in situations or

for the promotion of products that are regarded as hazardous to society or
to Individuals to a degree or of a kind that is unacceptable to society at
large.
I. No advertisement shall be permitted which:
a. Tends to incite people to crime or to promote disorder and violence or

intolerance.
b. Derides any race, caste, color, creed or nationality.
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c. Presents criminality as desirable or directly or indirectly encourages

people, particularly children to emulate it or conveys the modus
operandi of any time.
d. Adversely affects friendly relations with a foreign state.
II. Advertisements addressed to children shall not contain anything,

whether in illustration or otherwise, which might result in their physical,
mental or moral harm or which exploits their vulnerability. For example,
no advertisement
a. Shall encourage children to enter strange places or to converse with

strangers in an effort to collect coupons, wrappers, labels or the like.
b. Should depict children leaning dangerously outside windows, over

bridges or climbing dangerous cliffs and the like.
c. Should show children climbing or reaching dangerously to reach

products or for any other purpose.
d. Should show children using or playing with matches or any

inflammable or explosive substance; or playing with or using sharp
knives, guns or mechanical or electrical appliances, the careless use
of which could lead to their suffering cuts, burns, shocks or other
injury.
e. Advertisements shall not, without justifiable reason, show or refer to

dangerous practices or manifest a disregard for safety or encourage
negligence.
III.Advertisements should contain nothing, which is in breach of the law, or

omit anything, which the law requires.
IV. Advertisements shall not propagate products, the use of which is

banned under the law.
Chapter – IV
To ensure that advertisements observe fairness in Competition such that

the Consumer’s need to be informed on choices in the market place and
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the canons of generally accepted competitive behaviour in business is both

served.
I. Advertisements containing comparisons with other manufacturers or

suppliers or with other products, including those where a competitor is
named are permissible in the interests of vigorous competition and
public enlightenment, provided:
a. It is clear that aspects of the advertiser’s product are being compared

with what aspects of the competitor’s product.
b. The subject matter of comparison is not chosen in such a way as to

confer an artificial advantage upon the advertiser or so as to suggest
that a better bargain is offered than is truly the case.
c. The comparisons are factual, accurate and capable of substantiation.
d. There is no likelihood of the consumer being misled as a result of the

comparison, whether about the product advertiser or that with which
it is compared.
e. The advertisement does not unfairly denigrate attack or discredit

other products, advertisers of advertisements directly or by
implication.
II. Advertisements shall not make unjustifiable use of the name or initials
of any other firm, company or institution, nor take unfair advantage of
the goodwill attached to the trademark or symbol of another firm or its
product or the goodwill acquired by its advertising campaign.
III.Advertisements shall not be so similar to other advertisements in

general layout, copy, slogans, visual presentations, music or sound
effects as to be likely to mislead or confuse consumers.
IV. As regards matters covered by section 2 and 3 above, complaints

plagiarism from advertisements predominantly viewed abroad will lie
outside the scope of this code except in the under mentioned
circumstances –
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a. The complaint is lodged within six months of the first general

circulation of the advertisements/ campaign complained against.
b. The complainant provides substantiation regarding the claim of prior

invention/ usage abroad.
10.10 Annexure II
ASCI’s Mission
ASCI has one overarching goal – to maintain and enhance the public’s
confidence in advertising.
ASCI seeks to ensure that advertisements conform to its Code for Self-
Regulation which requires advertisements to be -
• Truthful and fair to consumers and competitors.
• Within the bounds of generally accepted standards of public decency, and
• Not used indiscriminately for the promotion of hazardous products to a

degree unacceptable to society at large.
ASCI propagates its Code and a sense of responsibility for its observance
amongst advertisers, advertising agencies and others connected with the
creation of advertising, and the media. ASCI encourages the public to
complain against advertisements with which they may be unhappy for any
reason and ensures that each complaint receives a prompt and objective
consideration by an impartial committee which takes into account the view
point of the advertiser and an appropriate decision is communicated to all
concerned. ASCI endeavours to achieve compliance with its decisions
through reasoned persuasion and the power of public opinion. ASCI have
also established a Consumer Complaints Council (CCC), a sub-committee
of ASCI consisting of people from various walks of life – medicine, law,
media, to examine complaints received. The committee hears a complaint
from a member of the public and examines it on the basis of the code.
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
! !205
BREAKTHROUGH THE DIGITAL HORIZON
Chapter 11
Breakthrough the Digital Horizon
Objectives
• Develop an overview of Digital Advertising

• Understand the opportunities and challenges related to Digital
Advertising
• Be acquainted with advantages and limitations of Online Advertising
• Know about the type of online ads
• Understand how various promotional tools are used online
• Find out how revenues are generated through online ads and their pricing
mechanism
Structure:
11.1 Introduction
11.1.1 Meaning of Digital Advertising

11.1.2 Advantages of Digital Advertising
11.1.3 Disadvantages of Digital Advertising
11.2 Profile of Internet Users in India

11.3 The Digital and Conventional Marketing Space
11.3.1 Difference between Traditional and Digital Advertising

11.3.2 Similarities between Internet and Other Mass Media
Advertising
11.4 Types of Online Advertisements
11.4.1 Banner Ads

11.4.2 Pop-ups and Pop-unders
11.4.3 Interstitials
11.4.4 Corporate Advertising Websites
11.4.5 Sponsorship
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11.4.6 E-mail
11.4.7 Social Networking Sites
11.5 Promotional Tools on the Digital Horizon

11.6 Revenue Models in Online Advertising
11.7 Pricing Mechanism
11.8 Summary
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11.1 Introduction
‘After building a sizeable fashion retailing business that includes a bouquet

of foreign labels such as US Polo, Calvin Klein and Nautica, Arvind Ltd. is
now planning to create high speed Internet networks some apparel,
fashion and footwear brands that will be mostly sold through online
channels to tap the growing potential of e-commerce in India.’ –
November, 2014, Business Standard
‘The retail arm of Mukesh Ambani’s Reliance Industries has taken baby
steps towards e-commerce. Reliance Retail has launched a website to
deliver fresh grocery products in select neighbourhoods of Mumbai.
RelianceFreshDirect.com will sell fruits and vegetables, dairy products,
groceries, packaged food, confectionary items and personal care products
to residents of South Mumbai, Navi Mumbai and parts of Thane.’ –
November, 2014, Economic Times
Cruising on India’s highways could, within two years, turn into a driving
experience that has so far been restricted to developed countries,
according to German marquee carmaker Mercedes-Benz. If Prime Minister
Narendra Modi’s vision of providing high-speed internet across the country
translates into reality, drivers will have on tap information on approaching
restaurants and fuel pumps. – November 2014, Economic Times
Have you heard of US-based eatfeastly.com, Brussels headquartered

bookalokal.com or closer home MealTango.com and Once upon my
Kitchen? These are a part of an international trend known as ‘social dining’.
The availability of digital platforms like Facebook are connecting hosts and
guests, giving guests the chance to sample some authentic home cooked
cuisine. – November 2014, Indian Management, A Business
Standard Publication
An enterprising group of volunteers at IIT-B, created a research tool in

November with the specific purpose of trawling tens of thousands of social
media posts to measure public opinion to help Aam Admi Party’s election
campaign by doing a ‘sentiment analysis’ – February 9, 2014, Mumbai
Mirror
The snapshots of the news appearing on various media indicates Digital is

not only revolutionising how business gets done but also giving rise to new
! !208
services. The business of brands is transforming due to a sweeping digital

wave. The industry, academia and the government are recognising this
transformation and are gearing up to meet this challenge. The rapid growth
of e-commerce backed by government initiatives like Digital India, increase
in penetration of high speed Internet connecting Tier II and III cities and
rural areas of the country besides urban centers are propelling the reach of
the Digital Media across the country. The consumers are actively using
social media and the internet to make purchase decisions. Brands have
been shifting money to online advertising to meet this new age consumer
offering more choice and reach. The consumer footprint on Digital
platforms has almost doubled. Industry estimates put the total digital
audience in the country at 279 million.
Digital has changed the way brands are built and has influenced traditional
marketing. The core of what makes a brand is the same – people perceive
some premium value in the product or service that they ascribe to the
brand, and that brand comes to encompass that value. What has changed
is that brands are now built online by consumers. Brands are what people
say about the brand in their living rooms, and that room is now in the
digital space. Today, you have to join, guide, and lead conversations that
shape your brand perception.
In a short span of time, something that started as a US defense initiative

has developed into a major communications mechanism for the academic
and research community and most recently has expanded into a major
business tool for the commercial sector. The Digital World, as we have now
come to call it, has evolved during this period from being a robust and
effective way of exchanging information to providing a delivery mechanism
for massive amounts of multimedia information and products to global
audience. Simply defined, the Digital Space operates on the Internet.
There appears to be no consensus on precisely when advertising on the

Internet began. Tim O’Reilly, founder of the web portal Global Network
Navigator (GNN), claims that the first advertising appeared in 1993 on
GNN and required “special dispensation from the National Science
Foundation.” Others cite a banner ad sold to AT&T and displayed on the
HotWired site in 1994. Tim Berners Lee is credited with creating the World
Wide Web (www), which is often used interchangeably for the internet. His
creation has transformed the way business is conducted in more than one
way. Since its inception, internet has covered a long way and there seems
no stopping for the newer application being found of the internet.
! !209
Online Advertising Growing Fast
Although still a fraction of total media spending, online advertising is

growing faster than any other type of advertising. Online advertising comes
from online companies as well as from offline retailers who want customers
and prospects to visit their websites. Once a company decides to advertise
online, it must decide on which sites to place its ads. Some common
guidelines are used to select these sites – (1) visitors to the sites must
match the company’s customer profile, (2) the site must have good
viability (it is established and promises to be around for a while), (3) site
content must be compatible with the image of the company and (4) the
site must have performed well for similar companies in the past. Hewlett-
Packard spends approximately 75% of its online advertising budget on
sites that have produced results and the remaining 25% on sites that were
not used before but meet the other criteria listed above.
Exhibit 1
Digital Ad Spend vs. TV Ad Spend in India, 2013(E) – 2018(P)
Source: KPMG in India Analysis
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Activity 1
What is the reach of Internet in India? Do you think it can affect

the reach of traditional press or television, as an advertising
medium?
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
11.1.1 Meaning of Digital Advertising
Online advertising, also called Digital or Internet advertising, is a form of

advertising which uses the Internet to deliver promotional marketing
messages to consumers and increase sales. Online or the Digital medium
acts as information provider or a direct response media, whereby
consumer engage across the internet to communicate, buy and sell
products and services. It has a worldwide linked computer network which
acts as an interactive communication media. Two-way communication is
possible on account of which the companies can interact with customers,
suppliers, channel members, etc.
11.1.2 Advantages of Digital Advertising
Digital Advertising is a marketing strategy that involves the use of the

Internet as a medium to obtain website traffic, target and deliver
marketing messages to the right customers. Since
the communication software reveals sufficient information about
the site’s visitors, it gives advertisers the opportunity to precisely target an
audience, enabling them to deliver advertisements that are customised to
each user’s particular interests and tastes. Another major advantage of
online advertising is the quick promotion of product information without
geographical boundary limits. Examples of online advertising include
banner ads, search engine results pages, social networking ads, online
classified ads, pop-ups and contextual ads. Internet advertising has the
following advantages:
(a) Targetability: Online advertisements have the capacity of customer

engagement by providing customised content and focus on users from
specific customer segments. A consumer can interact with product,
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test the product, and if he or she chooses to, buy the product.
Messages can be designed to appeal the specific needs and wants of
the target audience. Customers who are interested in the company will
interact to know more.
(b) Interactivity: Companies and customers can engage in a dialogue.
(c) Tracking: This provides an unprecedented opportunity to measure the

effectiveness of the advertising and to know about their viewers.
Internet is far superior compared to other media in terms of measuring
the impact of advertisement. Marketers can track how users interact
with their brands and learn what is of interest to their current customs
and prospective.
(d) Deliverability and flexibility: Because people are online 24/7, as

soon as an offer is placed online, it has a potential audience that can
immediately reply. Brand messages can be instantly changed/revised if
not producing desired results.
11.1.3 Disadvantages of Digital Advertising
(a) A d v e r t i s i n g f a t i g u e : C o n s u m e r s a r e s o u s e d t o s e e i n g
advertisements on television, hearing radio commercials and flipping
through advertisements in magazines, they’ve developed an aversion
to all forms of advertising. This is also the case with online advertising,
where consumers can avoid clicking banner advertisements, bypass
ads in online videos they watch and close pop-up advertisements as
soon as they come up on their screens. Customers are in control of
which advertising messages they want to click and respond to. Most
browsers now block pop-ups. Technologically savvy consumers are
increasingly using these methods to limit the advertising that they see.
(b) Website downtime: Slow internet connections, lags in website or

video loading and browser complications can reduce the number of
times consumers see online advertisements. Viewing problems can
occur because of problems with a website or if a consumer is using a
smartphone or other mobile device to view a website, which has a slow
connection speed or does not have the correct applications installed on
his or her computers for proper viewing.
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(c) Expensive ad prices: Pricing for advertising online can range from
inexpensive at one end to exorbitant on popular sites. The cost for
banner, text and video ads vary depending on the amount of traffic a
website or blog receives. Online advertising through pay-per-click
campaigns and social media sites can also wreak havoc on a
company’s marketing budget, potentially yielding little to no return on
investment.
(d) Too many options: The Internet offers a wide range of websites on
which companies can place advertisements. This can be overwhelming,
especially for small business owners. With so many options, it’s
difficult to narrow down the choices to the websites that will attract the
most potential customers and sales. Once a company selects a
website, it is then presented with a variety of ways it can advertise its
products or services on the site, such as through banner
advertisements, video marketing or by sponsoring a post. Companies
have to determine which type of advertisement yields the best
response from their target markets.
11.2 Profile of Internet users in India
India has surpassed Japan to become the world’s third largest Internet
user after China and the United States, and its users are significantly
younger than those of other emerging economies. There were an estimated
243 million internet users in the country in June 2014, overtaking the US
as the world’s second largest internet base after China. India now has
! !213
millions of users with seven out of eight accessing the Internet from their
mobile phones. Three-fourths of India’s online population is under 35 as
against just over half worldwide.
Activity 2
Create profiles of Internet users in you city who uses internet at

the office and/or at home.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
11.3 The Digital and Conventional Marketing Space
The pace at which Digital marketing and e-commerce have grown is

amazing. The growth it has registered is impressive by any standards.
Proctor & Gamble (P&G) forecasts that it will spend 80% of its global
advertising budget on the digital media. Products that fall in this category
are daily use products which are frequently purchased, such as, soaps and
detergents. Many companies complain that internet has failed to live up to
their expectations. There’s no reason why internet should not work, if
approached properly. This happens when, for a company, web presence
itself becomes the objective. Such companies don’t know what to make of
their web presence beyond a website. It needs to be understood here that
web presence can be a good beginning but not an end in itself. Web
presence is an evolving presence which should stem from marketing
strategy.
A critical thing to be kept in mind when going online is that the brand is
meeting the consumers directly. A relationship is being developed between
the two. Hence, the web presence of a company should work to enhance
the existing brand values. Consumers have varied expectations from the
websites they visit. These expectations can either work for or against the
company. Either they will strengthen the existing brand values or dilute
them. To strengthen the existing brand values, there should be an attempt
by the company to match the consumer expectations and their online
experience. Websites must offer online experience that corresponds with
the offline experience. Marketers should treat web presence as a part of
the brandscape. And, it should be made to work in tandem with other
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elements of the brandscape and create synergies. One of the main duties
of the website is to communicate the brand identity.
11.3.1 Difference between Traditional and Digital Advertising
The fundamental difference between all of the traditional means of

advertising and that provided by the internet is the process by which the
observer of the advertisement can translate their interest into action. This
needs to be explained. Having seen an advertisement of interest, you can
be taken immediately to the advertiser’s internet site by simply clicking the
mouse button on the caption or graphic. From this point onwards, it
depends on the inventiveness of the advertiser to convert the visitors’
interest into whatever outcome they were seeking. This might be to get the
visitor to purchase the product directly or to browse through the details of
the company and its products. Certainly, the objective of advertising should
be to make sufficient impact on the visitor that they will return to the site
in near future.
The delay between observing the advertisement, registering interest and

experiencing the fulfillment of that interest has been reduced to a matter
of seconds, rather than the days that are involved with traditional
advertising. Even in the most responsive companies, in case of traditional
advertising, the delay between receiving a telephone response to an
advertisement and the point when the inquirer receives the information
requested can be measured in days.
11.3.2 Similarities between Internet and Other Mass Media

Advertising
While there are many differences, there are a number of similarities also
between internet advertising, and conventional advertising. In many cases,
the site where the advertisement is placed will have a particular audience
and hence a relevance to promoting certain products. Matching the
medium to message and audience is just as important in the virtual world
as it is in conventional advertising. Rather than seeking to advertise on one
large website, it may be more appropriate to have the same message
conveyed on a number of smaller sites with similar audiences. This is
equivalent to diversifying traditional advertising expenditure over a number
of different publications. The creativity of the images and copy of the
advertisements will be just as important to its success or failure. This does
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not imply that a good conventional advertisement can make a direct

transition to the internet. In fact, it is almost certain that what works in
“real world" will not be effective when transferred to the internet. The
consumer connect on the digital platform commands real-time engagement
and constant content update.
11.4 Types of Online Advertisements
The creativity of the message design is an important factor in attracting

attention to digital advertisements. The year 2014 had seen a number of
long format, ‘digital-first’ advertisements from Fortune cooking oil to Airtel
to Pepsi’s popular Diwali campaign about returning home and Dabur Vatika
Cancer Survivor ad. The duration of the shortest commercial is a little over
a minute and the longest can go up to seven! A few years ago, this would
have been unbelievable but with the rise of Digital Advertising, all of it has
changed. Brands want to engage with people. They don’t want to impose
or sell. People habitually tend to switch channels or go off to take break
during a commercial break. Brands have realised that to engage with
consumers, they need to create interesting content. There are many
alternatives available to the marketers to post advertising message on the
web. Creativity of the message design is important to draw customers’
attention. Some of the online advertisement are Banner ads, Interstitials,
Pop-ups and Pop-unders, Corporate Homepage, Sponsorship and E-mails.
11.4.1 Banner Ads
Banner advertisement is a small, graphic links placed on a webpage. User

can click on the ad. Banners are configured so that users can click on the
ad and be taken to a brand’s website. Tracking technology can now be used
to instantly identify website visitors and select from a variety of banners to
display, depending on the visitor’s profile. Usually, banner advertisements
are placed in a high traffic websites where many visit. Two people may
! !216
view the same page at exactly the same time. One can be shown an ad for
financial services, the other an ad for an online bookstore. Banner ads that
appear vertically on a screen are known as “skyscrapers.” The banner
should be attractive with colours, graphics, logos, cartoons, etc. Banners
are usually made small so that they can be loaded as rapidly as possible.
The following are the “Golden Rules of Online Branding" regarding banner
ads:
• Keep banner simple—the more creative elements (graphics and

words), the less ability a banner has to raise brand awareness.
• Maximise size of logo—the bigger the logo, the more likely the banner
will send a clear message to customers.
• Maximise size of banner—just as with print ads, larger the size,

greater is the impact.
• Include a human face—the presence of a human face was found to

increase attention more than other design elements.
11.4.2 Pop-ups and Pop-unders
When a user accesses the Internet, a small window appears carrying an

ad. Such windows are called pop-ups and pop-unders. The idea used here
is similar to TV, wherein the TV viewer must watch the commercial before
witnessing the serial show.
11.4.3 Interstitials
Another category of Pop-ups is the Interstitials. Similar to a banner ad, an

interstitial is an ad that pops up in a separate frame on a screen page. The
user has to stop reading and click on interstitial to eliminate them.
Activity 3
‘Interstitials, pop-ups and pop-unders’ have the downside of

getting too intrusive. What is your view on this? Comment.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
! !217
11.4.4 Corporate Advertising Websites
Over the last decade, Corporate Advertising Websites have evolved from
simple advertising content carriers to advanced interactive multimedia
applications that incorporate multiple promotional, advertising and
communication strategies. Corporate Websites are able to combine multiple
functions such as providing information and image building strategies for
companies and their brands as well as direct and indirect selling functions.
Corporate Websites are also able to address multiple audiences from a
single umbrella site. There are various types of corporate websites –
serving a variety of purposes. At the simplest level, there are websites that
present the basic information about the company, often in the form of an
online version of the corporate brochure.
11.4.5 Sponsorship
This is another form of advertising. There are two types of sponsorship,

viz., regular sponsorship and content sponsorship. In the latter case, the
content is provided by the sponsor. Sponsorships fall into several
categories:
• Spotlights – are custom-built pages incorporating an advertiser’s brand

and housing a collection of content usually around a theme.
• Advergaming – can range from an advertiser buying all the ad units

around a game or a “sponsored by” link to creating a custom branded
game experience.
• Content and Section Sponsorship – is when an advertiser exclusively

sponsors a particular section of the site or e-mail (usually existing
content) re-skinned with the advertiser’s branding.
• Sweepstakes and Contests – can range from branded sweepstakes on the

site to a full-fledged branded contest with submissions and judging.
! !218
11.4.6 E-mail
Through e-mail, customising the message is possible. It is inexpensive.

Customer’s permission is a must for an e-mail campaign. Customers who
opt-in give permission for e-mail from a particular company or brand to be
sent to them, don’t consider this as an unsolicited e-mail. In order to get
customers for opt-in, companies offer sweep stakes, or some reward. Opt-
in strategies have two benefits. First, they have a person interested in the
product category. Second, when the person gets into opt-in category,
companies ask questions, so that they have a better idea about the
customer’s lifestyle, demographic details so that the needs and wants could
be anticipated.
11.4.7 Social Networking Sites
Many companies post their ads on Social Media sites, like Facebook,
LinkedIn, Twitter, Pinterest, Google Plus+, etc. People can ‘Like’ the ads
and visit the links to know more about the products advertised.
! !219
11.5 Promotional Tools on the Digital Horizon
Digital Advertising can be used to support other promotional activities.

Personal selling being very expensive, use of the internet to increase sales
can go a long way in cutting the cost. Web provides two distinct
advantages over personal selling: (a) Lower cost and (b) Better reach. Web
provides repository of information to the customer about company’s
product and services. The company in turn gets useful leads, which a sales
force can follow. The Internet also helps the company to maintain
relationship with its customers. Not many companies use net for Public
Relation. However, it can be used to carry on public relation activities such
as providing information about the company, its contribution to society,
social work undertaken, future plans, etc. Internet can be used to target
specific group customer (Direct marketing) by messages specially meant
to the target group. The Internet can be used for Sales Promotion. It
may offer different types of incentives to promote the product, contest,
sweep stakes, discount, rebate, coupons, etc. The above mentioned are
the different forms of promotions that can be offered.
Activity 4
Suggest a promotional plan using the Digital landscape for a new

brand of ‘Ready to Eat’ food product.
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
11.6 Revenue Models in Online Advertising
a) Revenue from subscription access to content: A range of

documents can be accessed for a period of a month or typically a year.
b) Revenue from cost per impression: Payment occurs for every

single access to a document, video or music clip which can be
downloaded. Advertiser pays each time the ad is displayed.
c) Revenue from CPM display advertising on site (e.g., banners

ads and skyscrapers): CPM stands for “cost per thousand” where M
denotes “Mille”, where advertisers pay for exposure of their message
! !220
to a specific audience. The site owner charges advertisers a rate card

price according to the number of its ads shown to site visitors.
d) Revenue from CPC advertising on site (pay per click text ads):
CPC stands for “Cost Per Click”. It is also known as Pay Per Click (PPC).
Advertisers are charged not simply for the number of times their ads
are displayed, but according to the number of times they are clicked.
Advertisers pay each time a user clicks on their listing and is redirected
to their website. This system allows advertising specialists to refine
searches and gain information about their market. Under this pricing
system, advertisers pay for the right to be listed under a series of
target words that direct relevant traffic to their website, and pay only
when someone clicks on their listing which links directly to their
website.
e) Revenue from sponsorship of site sections or content types

(typically fixed fee for a period): A company can pay to advertise a
site channel or section. For example, HSBC Bank could sponsor the
Money section on a media site. This type of deal is often struck for a
fixed amount per year.
f) Affiliate revenue (CPA, but could be CPC): Affiliate revenue is

commission based, for example, I display Amazon books on my
personal blog and receive around 5% of the cover price as a fee from
Amazon. Such an arrangement is sometimes known as Cost Per
Acquisition (CPA).
g) Subscriber data access for e-mail marketing: The data, that a site
owner has about its customers, is also potentially valuable since it can
send different forms of e-mail to its customers if they have given their
permission that they are happy to receive e-mail either from the
publisher or third parties.
11.7 Pricing Mechanism
In traditional media, one advertising goal or objective is pursued at a time,

e.g., changing consumer attitudes. On the Internet, several different goals
are pursued simultaneously. In the same way, the standard price used in
traditional media is CPM (Cost of Exposing a Message to thousand viewers
of TV or newsprint). However, there are several pricing mechanism on the
! !221
Internet. For example, Pack Per Click through lead, the transaction
generated or conventional CPM. Therefore, it can be said that Internet
advertising is multi-tiered based on the results and tied to marketers’
objective. There can be three pricing mechanism: (a) Exposure, (b)
Response and (c) Action.
a) Pricing per Exposure: In this system, the advertisers pay only for
the number of impression or ad view on their target customers.
Publishers eagerly search for ways to extract premium exposure rates.
b) Price per Response: In this system, the price is established based on

consumer responses such as click-through. The prices will vary
according to the types of user for the attractive site, and how much
advertisers are willing to pay in their accession.
c) Pricing per Action: A site publisher might charge an advertiser more

for a consumer who downloads than for one who merely clicks on a
banner. How much a web publisher charges the advertisers for the
value they receive is likely to make the difference between profit and
loss. When a lead is generated, the site would charge the advertiser/
manufacturer. Risk sharing is an important aspect in Internet
advertising. Result or action based pricing gives the marketers the
opportunity to shift some of the risk of failure to sites or agencies.
Broadcasters in traditional media usually are not inclined to take this
kind of risk. However, Internet publishers should find risk sharing
attractive, if it is properly priced. This could boost the advertising
revenue on which their success depends.
Exhibit 2
Navigating through the Hyper Connected World
Digitisation of media products and services is associated with the increase

of Internet usage by customers and businesses alike. Digital convergence
has heralded the age of customer experience and now experience plays the
role of differentiator. Buyer-seller exchanges moving from passive
transactions to active and interactive relationships. The opportunity to
access and consume media services anywhere, anytime and on any
connected device has led to ‘hyper convergence’. Hyper convergence tries
to seamlessly integrate various media forms, content, commerce and social
! !222
networks. It has helped draw virtual aspects of infrastructure together with

the physical.
With the increase in mobile device adoption and usage rates, customers
seek highly personalised and compelling responses to their needs.
Consumer devices and technologies have turned into an important enabler
to help meet fast-growing customer expectations, especially connecting
with the ‘always-on’ and connected customer. Multi-screen interaction has
provided an opportunity for innovation for companies to engage customers
across the marketing, sales and service touchpoints.
The phenomenal growth of digital touchpoints including mobile and social

networks indicates a strong need for consumers to connect and converse
with the product or service provider. The need of the hour is
personalisation, with the focus shifting towards establishing long-term
relationships and tailor-made solutions based on real-time consumer
needs. For instance, organisations that recognise the enormous
opportunities in India’s hinterlands are concentrating on vernacular content
for personalisation and creating a brand experience that is focused on
localising the brand. The digital revolution has altered the balance of power
between the customer and the business. Customer expectations have risen
considerably; they spend more of their time online and want businesses to
reach out to them at their convenience through multiple touchpoints.
Digital transformation is gaining ground in India and the web is
increasingly establishing itself as a mass market medium for products and
services. In the year gone by, digital and social media revolution has been
embraced by people across all strata of society. Politicians have made new
media as an integral part of their campaign strategies. Businesses turned
to result-oriented options including geo-targeting and location-based
services and data targeting was rich, layered and highly nuanced. Looking
ahead, India can expect to see a host of new technology innovations and
advancements in marketing techniques with the key drivers of this growth
being the need for better connectivity, device. In a short span of time,
digital media in India has come a long way from being an information
provider to an engagement enhancer.
(FICCI-KPMG Indian Media and Entertainment Industry Report

2014)
! !223
11.8 Summary
This chapter deals with the use of Internet, as one of the tool for
promoting brands. Meaning, important components of Internet, and
objective sought while using the net have been explained. A key
characteristic of Internet is that it is a two-way communication tool which
makes it especially important in IMC. Because of interactivity and
effectiveness, the measurement is more accurate in case of net advertising
as compared to the conventional method. Building brand relationship
becomes easier. Net advertising when used intelligently has more
advantages such as ability to target markets, building relationship, etc.
Pricing mechanism in net advertising is quite different from the traditional
conventional advertising. There are different types of web advertising such
as banner ads, pop-ups, e-mail and corporate homepages. Rewards or
incentives have to be offered by the companies to lure the customers to
visit the site. Lastly, the Internet can be used in conjunction with other IMC
programme elements for achieving best results. The dynamics of how the
internet can be best used for marketing and advertising are still far from
clear and are, indeed, becoming more complicated as new variants and
options appear. Irrespective of future developments, there is one truth that
will remain constant. Unless the organisation’s site that receives the traffic
generated by the advertising is capable of exploiting the visitor’s interest, it
will be totally wasted expenditure.
! !224
1. What is the meaning of Online Advertising?
2. What are the fundamental differences between Digital advertising and

Conventional forms of mass media advertising?
3. What are the advantages and disadvantages of Online Advertising?
4. Explain the various types of online advertisements on the web.
5. What is a Banner Advertisement?
6. How do ‘Opt-in and Opt-out’ e-mail differ?
7. Write a note on the various revenue models in online advertising.
8. How the pricing mechanism work in Online Advertising?
1. Which of the following statements is true about the Internet?
a. Internet is interactive.
b. Internet allows for a one-way flow.
c. The increase in low speed internet connections has led users to spend
more time online.
d. Internet is a unidirectional medium.
2. When major corporations first began to conduct business on the

Internet, they put up websites primarily for __________.
a. information purposes
b. creating brand awareness
c. increasing interest
d. inducing trial.
3. The most common form of advertising on the Web is __________
a. pop-ups
! !225
b. Interstitials
c. banners
d. links
4. Banner ads are also known as __________.
a. interstitials
b. paid searches
c. pop-ups
d. side panels
5. While one uses the Internet, __________ are a small windows or a

creatures of some sorts that appears on the screen in an attempt to get
one’s attention.
a. pop-ups
b. interstitials
c. links
d. banner ads
6. __________ are ads that appear underneath the webpage and become
visible only when the user leaves the site.
a. Links
b. Interstitials
c. Banner ads
d. Pop-unders
[Answer: 1. (a), 2. (a), 3. (c), 4. (d), 5. (a), 6. (d)]
! !226
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
! !227

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Advertising and Sales Promotion

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Prof. Kanu Doshi Prof. B.N. Chatterjee

Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Prof. B.N. Chatterjee Prof. Vineel Bhurke

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Prof. Sandeep Kelkar Mr. Anuj Pandey

Prof. Dr. Swapna Pradhan Course Editor

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Mr. P.M. Bendre Course Coordinators

Mr. Ajay Prabhu Ms. Kirti Sampat

Mr. A.S. Pillai Mr. Kishor Tamhankar

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

1st Edition( May, 2015). 2nd Edition (Feb, 2016)

1 Introduction to Advertising and Sales Promotions – 3-19

2 Background to Today’s Advertising 20-34

4 The Advertising Agency – Structure and Functions 56-75

After completing this chapter, the learners will:

• Know about Marketing Communication

The business of Advertising is to attract attention. The word Advertising

Here are some interesting quotations ascribed to Advertising:

• “You can’t save souls in an empty church.” – David Ogilvy

• “Doing business without advertising is like winking at a girl in the dark,

• “In our factory, we make lipstick. In our advertising, we sell hope.” –

The purpose of this opening chapter is to provide the students with an

This chapter introduces the concept of Marketing Communications, its

of technological change and business consolidation have had significant

1.2 Growth of Advertising and Sales Promotion

Advertising dates back to 3000 BC when people used to write messages on

Lux Soap – The Journey of Change from 1934-2014

Can you track the advertisements of any of your favourite brands?

The ability of advertising and other promotional methods to deliver brand

The growth in promotional expenditure reflects the important role that

The digital media has occupied a prominent space in the ad spends

Top 10 Global Advertisers

Rank Company Worldwide Measured US Measured -

2 Unilever, Rotterdam, 7,413 7,317 1.3 858 678 26.5

3 L’Oreal, Clichy, France 5,643 5,593 0.9 1,507 1,386 8.8

6 Coca-Cola Co., Atlanta 3,029 2,913 4.0 385 391 –1.7

7 Nestle, Vevey, Switzerland 2,987 2,937 1.7 840 837 0.4

8 Volkswagen, Wolfsburg, 2,971 2,857 4.0 546 533 2.3

9 McDonald’s Corp, Oak 2,693 2,656 1.4 957 965 –0.8

10 PepsiCo, Purchase, N.Y. 2,470 1,837 34.5 844 658 28.3

1.3 Marketing – It’s all about Creating a Brand

1.3.1 Marketing Mix

These marketing mix elements need to be understood well by marketers to

• Product: Variety, brand name, quality, design, packaging, and services.

• Price: List price, discounts, allowances, payment period, and credit

• Promotion: Advertising, sales promotion, public relations, and personal

What makes you decide on the Brands which you buy?

Marketing builds a relationship between consumers and brands using the

The American Marketing Association offers the following formal definition:

The underlying theme across the various definitions of Marketing is

1.4 Marketing Communications – The basic element of

What is a brand? It is not just a name on the packaging of the product. It

Let us discuss some prominent elements of the marketing mix.

1.5 Elements of Promotional Mix