Chapter 8 : ADVERTISING EXPENSE

As mentioned in the chapter on Advertising Agencies, the Agency gets a brief from the client or the advertiser. Among other information, the brief
contain the clients budget which has bee ear-marked for spending on advertising. It, therefore becomes the job of the agency to prepare the
advertising campaign keeping in view the allocated budget.

Several times the agency, however, finds that the budget is not exactly adequate for doing justice to the objective/s of the advertisement. If the
difference is minor, the agency can persuade, in the interest of campaigns success, the client for upward revising the budget. In case of major
differences it is necessary that the agency is prepared to defend the extra expenditure on advertising they want the client to incur.

Major expenditure in the campaign is required for the media. In case of below the line media, the agency adds to the percentage on money spent,
usually 15 % towards their cost coverage and profit.

The methods used in deciding the Advertising Budget are given below:-

Launch of the product advertising.

Let us discuss these methods in detail.

Product launches- When firms bring out new products in the market, they have to achieve the following for a success launch of the product:

1. Product awareness among the target market segment.

2. Knowledge of availability of the product.

3. Understanding of main benefits provided by the product for the customers.

4. Service availability for the product.

5. Multiple usage of the product if relevant.

6. Peripheral segments for the product.

Simply, the product can never be purchased unless the customers know of the same. For cottage industry, when production levels are low, word
of mouth publicity helps in making the product known to prospective customers. Word of mouth publicity is an effective form of making people
aware of the product and it happens without any apparent effort on the part of the marketer. And since it is not paid for, it does not fall in the
category of advertising.

Product launches, therefore, require concentrated advertising effort, increasing the budget manifold. However, depending on the product, the
market segment and the geographic area to be covered, the budget can be suitably made.

During the launch stage of the product, availability of the product for the segment has to be ensured. Also, if the customer wants to buy the product
he must know where he can get it. Imagine a situation where a heavily advertised product is not available in the market. It will surely result in the
customer buying competitive product and when the product does become available competition would have taken a march over the advertiser. Of
course, if the product shortage is created as a strategy to generate demand, care should be taken to monitor and watch the situation closely.

Products are purchased for the benefits they offer to the customer. Any advertising has to cover these benefits. Writing the benefit story may take
time and space and increase the advertising budget. Considering the importance of benefit story, especially in the product launch stage spending
the extra Rupee would be well worth it.

Most products need to be serviced to be able to give the benefits promised. Hence, the customer must be told about the availability of service
facility with the advertiser.

There is a bit of a risk factor in over or under budgeting the advertising campaign.

Most FMCG firms spend 7-10 % of their sales revenue in advertising.

Procter & Gamble spends about 6%, while Unilever spends 7.5% on advertising which is considered as an investment by the firms.

Advertising Budgets are made after gathering lot of information like, competitive situation, market growth, product life cycle and test reports of
advertising sample response. Marketing and advertising goals are then framed, which give geographic and demographic coverage of market.
Advertising budget gives the money value of the advertising plan. The budget is approved by the client and only after that any advertising action
like release of advertisements in the media takes place. Depending on the agency-client relationship, sometimes the agency can book the space in
advance. Later on the agency has to maintain control on advertising expenses in line with the approved budget. In case of media rates increase,
prior approval of the client is needed.

There are several methods used in selecting the advertising budget. The most commonly used are given below:

Sales volume percentage - For example, if previous years sales of the firm was Rupees 10 crore, 5% of it would put the advertising
budget at Rupees 0.5 crore. The percentage is worked out on the basis of firm's historical budget, industry norms or on the basis of
prevailing market conditions. If the market has started upward trend, then one percent extra amount could be put for advertising budget.
Following the method without considering market conditions could create major problems. If the firms market share has been going down,
the management may decide to increase the advertising budget. However, if the product is in decline stage of life cycle, the firm could
consider divestment. In such an event, only marginal advertising effort to help clear the stocks may be enough. On the contrary, even in
the decline stage of product life cycle, if the firm finds competitive firms are getting out, they may go for taking the leadership position and
pick up the demand left over by competing firms, before finally closing down.
Unit of sale - Consumer durable firms like car makers use this method as a variant on sales percentage. While mostly it works out same
as the percentage method, here the firm is putting an amount of advertising expense on the car as add on.
Competitive parity method - Competitive information regarding their sales, distribution pattern and advertising must be carefully studied
by the firm. It will provide the correlation between the competitive sales and advertising effort. Depending on the firms strategy of
increasing market share, or steadying the share, decision can be made to have a bigger or smaller budget than competition. However,
instead of reacting to competitive advertising results, firms would do well to be proactive in their approach to marketing by planning their
own goals of marketing and then, the advertising budget would emerge from the same.
Meeting the objectives method - Marketing and advertising people are tuned to the objectives they have made for them to achieve.
Working backwards, taking each item of objective like, increasing geographic sales area, increasing market awareness by a certain
percentage over the figure obtained from advertising research, they add up the amounts needed for each activity. This method is best
accepted by the advertising team, both of the firm and the agency.
Historical method - In this method, last years advertising budget is adopted for the year with a view that practically no change has taken
place in the market and market growth is slow, which does not justify any addition to the budget. As an additional feature to this method,
last years budget could be multiplied by a factor to cover media rates increases.
Affordability method - Some firms believe that advertising is perhaps necessary, and yet not important enough. They make budgets for
all the other expenses, like raw material purchase, salary and wages, power, rents and they consider the balance amount in the budget as
advertising budget.
Total group budget - In case of multiple unit organization a total amount is decided as advertising budget and each unit gets a share
according to the needs. This method helps the group to segregate some amount for corporate group advertising for building the image of
the group.
Percentage of anticipated turn over - This method is useful in markets which are dynamic, the product is in the steep of product life
cycle, as it provides for potential business as well.
Elasticity method - Takes into consideration seasonality of business as also its, periodicity. It has been known that some products have
better sales every two years, or every five years as the economy boom appear with certain periodicity. This method takes in to view the
demand and supply situation and is more used in industrial products.
 Ideal campaign - The firm is in a do or die situation and in order to survive, they resort to the budget which can give them the ideal
advertising campaign, resulting in, turn around of the firm.
Market model or operations research - Market research gives the comparative figures of sales as per advertising effort, and decision is
made in accordance with the desired sales. An example is given below:-
i. for advertising budget of Rupees one lac, the sales would be worth Rupees 15 lac.
ii. for advertising budget of Rupees three lac, the sales would be worth Rupees 40 lac.
iii. for advertising budget of Rupees 5 lac, the sales would be worth Rupees 150 lac.

Per capita population basis - Takes the total population to be served and an amount is fixed for each member of the population. It is
used in generic products which are not differentiated and have large number of common buyers.
Flexi-plan - The budget is not firmed up and is changed as per market demand. In today's world of increasingly severe competition, many
firms resort to this technique of budgeting.

Estimates of advertising expense in some industries as a percentage of their turnover is given below-

Cold drinks 10%

Advertising budget should be kept floating in increasing order as long as the incremental sales generate
profit which off sets the extra money spent on advertising. It must be remembered that finding a direct
relation between extra advertising and additional sales generated is at best a theoretical exercise, as
there are numerous other reasons, other then extra advertising which also help in increasing sales, like
improved distribution network, better availability, promotional plans.

Most widely used approach to advertising budget is percentage of sales, which could result in heavy
advertising of well known established products.

The objective and task based budget helps in focusing on more appropriate advertising plans and these
help in reaching the objectives to a large extent.

Budget finalization, is normally done by interaction between several members of the firm who put forth
their views and justify them. Many times it is the owner of the firm who ultimately prevails over others
rendering the exercise useless.

In the past, historical data was a good indicator of amount required for achieving the objectives. With
increasing competition, it has become imperative that a close watch is kept on the market and
competition.
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Chapter 9 : ADVERTISING AND CREATIVITY

Usually, the advertising consists of art and copy. For written advertising, art and copy are put on the paper. For TV and radio advertising moving
pictures and sound is also required.

The diversity makes the creative jobs interestingly challenging. And therefore people involved are also mostly different experts in their fields.

In print media, copy is usually created with unlimited imagination. Using words in different fonts sizes and designs, numbers, pictures, sketches,
cartoons and placing these as per a design creates a large unlimited variety' of copy. The size of the advertising matter or copy can be also as per
the media. A long worded copy is used to fill the page and also to make information about the product available to the prospective customers. A
short copy can be used for, making a teaser advertisement or to differentiate the advertisement from the usual run of the mill advertising.

The art work can be using pictures, photographs, cartoons, sketches, paintings, with possibilities of placing these at any part of the advertisement,
in any size or shape. Logos, trademarks, brands, firms signatures are used in print advertisements. Sometimes, charts, tables and figures are used
as well. Depending on the target market segment, stress can be on celebrity endorsers of the product, with their photographs in action. In children
products, use of animals is considered as useful. Use of color; open spaces, borders enhances the impact.

For radio or purely audio advertising (it could include pre-recorded cassettes too), the listeners are going to listen and not read or see the
advertising. It becomes important to select the spoken words with care. Besides, the voice of speakers and singers should be suiting the lyrics and
the product. The music, both accompaniments and back ground music are selected with care depending the situation. Special effects can create
the needed ambience of the advertisement.

Television offers the maximum opportunity of creativity. Being an audio- visual media, it offers maximum attractiveness. As a low cost means of
entertainment, a large number of persons get hooked on to the TV. In fact, the term couch potato has been coined for the persons who are-
addicted to the TV.

TV offers the greatest challenge to the creativity of the advertising agency. Not only it offers ability to demonstrate the product, it can keep
sustained interest of the viewers. It naturally calls for specialized people who are experts in their fields and has generated numerous types of jobs,
like the job of Ad-film producer, director, music people, and models. These would be discussed in some detail in this chapter.

Let us examine creativity from the view point of the customer, whom we are trying to attract. Going by Maslow's hierarchy of needs on one side
and the benefits provided by the product, the job of creative person is to match the main and important needs of segment customers with the
appropriate benefits. For example, benefit of lower price in bath soap (from Rupees 60 to Rupees 50) would have little impact on the high income
segment. Perhaps, more important would be the skin care elements of the soap.

Pick up any expensive luxury soap advertisement, you would find that the advertiser is talking about bringing beauty and soft skin to the users, and
only pretty nubile models are chosen to endorse the soap.

THE INDIAN SCENE

A country rich in culture and cultural diversity with year round festivals calendar, the advertisers find the festival time well suited to promote some
of the products. Deepavali time exchange of gifts is considered essential. Gift manufacturers make special efforts just before Deepavali to
advertise their products. Festivities themselves provide various options for catching the attention of target segment, as has been amply proved by
soft drink marketers. Deepavali, Eid, Ganesh Chaturthi are full of advertisements, one because on festivals, people are on holidays and two, they
are in the mood to spend. Firms give annual bonus during Deepavali which helps the buyers to be more flexible with money.

Use of Indian classical music, film and folk music enhances the appeal of radio and TV advertisements. Seven notes of music make the Indian
music resplendent with myriads of subtle variations and certain market segment is definitely appreciative of the same. Indian theatre dates back to
centuries when Banbhat, and Kalidas moved the populace with their dramatic artistry. Today, the theatre movement has again come to the fore
and with it the script writers and other dramatis personae. The element of suspense and surprise, a sure winner in drama is also successfully in
advertisements so also is humor.

Family planning and other social issues like literacy, health and education all use drama, street plays to advantage. As people enjoy the play, the
social message is put across to the captive audience. As the message is built-in the theme, the audience are not likely to walk out of the play.
Rural advertising uses street plays effectively to reach -the message to the audience.
The task before the Copt-writer is to make the copy exciting, original, and easy-to-understand, logical in sequence with movement and unified.

THE DESIGN THEORY

The design concepts as practiced in copy writing are as follows:

Unity in headline of the advertisement, art, copy ,logo and firms signatures
Innovation- variety, as it is said is the essence of advertising.
Balance- the advertisement should look balanced.
Rhythm- it should have a natural flow, lucidity .
Harmony- it should be pleasing to the readers eyes.
Emphasis- it should provide stress at the right places.
Excitement-it should make people look up and notice.
It should be eye catching, as most advertisements are not even seen by the target audience.
Arousing curiosity- use of teaser advertising is a good example.
Repetitive- repetition helps in customer retention and top of the mind recall.
Creating wonderment- awe-inspiring.

Some examples of advertisements covering these aspects are given for ease of understanding.

It may be of interest at this stage to know how some advertisements get killed.

We see many advertisements on television and read in newspapers and magazines which are over done, the repetition is too much rendering
them unpalatable to the target audience. There has to be fine balance in the right amount of exposure and overkill. Wrong timing can kill any
advertisement like nothing else can. Advertising woolen clothes in summer can be a fruitless exercise.

Sometimes advertisements are placed in the media, even before the product is properly made available in the market and the distribution channels
set up.

If the product is not properly priced, it may have poor effect on sales. Lower price may be construed as denoting a lower quality product and high
price could make the product out-priced in the market in the present competitive age.

With suspected quality of the product, and without proper after-sales-service, no amount of advertising can help the product. If the media is
wrongly selected for the target segment it can derail any good advertisement

Similarly, wrong segmentation of the market will cause heart burns to the advertiser.

Esoteric advertising or brash, too high flouting messages would not cut any ice with the target segment.

Creativity in advertising calls for an overview of the market, competitive situation and the firms strengths and weaknesses. In fact SWOT analysis
is done, which provides lot of ideas for creativity. The following areas need special attention:-

The objectives laid down for advertising- advertising is an invaluable aid for informing and persuading the target segment in favor of the
product.
The target market- the copywriter must have a good knowledge of the segment the marketer is targeting. Many times the segment tells as
to what it wants to read or see. The teenagers and young adults are targeted by cold drink makers, like Coke and Pepsi put the words in
copy as spoken by the teens and young adults. Going to any upward mobile college can be a revealing experience as far as the language
spoken there. .It hardly sounds like English with slang and newly coined words like funda, being used continuously.

For getting the right creative message, it is best to find out the most important benefit the product will provide to the customers and build the copy
around it. An example would help understand how this is done.

1. Maruti Esteem cars are being advertised as comfortable family cars.

3. Santro cars as trouble free, state of the art cars.

Once the top benefit is given as head line, other smaller benefits can be put in the body copy along with the distinctive features which help the
product deliver the benefits.

Sale of sewing machines has been dipping as women do not have any time to stitch clothes and ready made garments are easily available in the
market. If I the sewing machine sells, it is because the sellers are making emotional appeal to the women even with less time, if you can stitch your
own designer clothes with embroidery and different types of stitches available in the modem machines you can show off to your friends and
relatives your handiwork with pride.

Thinking and idea generation is the basic function of human brain. And yet, copy writers find that getting the right idea is far from easy. Copy
writers have to follow some of the ideas given below:-

They must, like all creative people, live a full life, understanding the variety and subtle nuances of living.

Advertising deals with people's logic and emotions. When the car maker talks about the acceleration, braking torque, seating capacity, he
is appealing to people's logic or their mind. As the talk transfers to the air-conditioned luxury, magical colors the appeal is to the heart. As
can be seen from most advertisements the appeal is from the heart and the mind, in practically all the advertisements.

Both the human heart and mind are used in the decision making process. The areas in which the appeals are made are the following -
Value for money- this appeal gives the customer the satisfaction of being a careful clever buyer.
Quality appeal transfer is for the Ego boosting. I buy only the top stuff.
Indirect appeals are made by using sponsors and celebrities to endorse the product. Celebrities attract the viewers attention as also
provide help in decision making. Shah Rukh Mayur Khan suiting gives the viewers a chance of personality transfer. If I wear Mayur suiting
I will look like Shah Rukh Khan.
Who says so becomes important in high value products. Top star Tabu endorses Samsung products giving the impression that not only
she uses them, but finds them good to her liking.
Most people believe that they are the best in looks, intellect, appearance, and sense of humor. The top model and ex. Miss India says that
she uses L'Oreal products, “ because I am worth it". Ego satisfaction and personality mindset helps in extending the user acceptance
from the endorser to the customer.
An appetizing dish does more to hunger feelings then any amount of verbose writing. When people see the dish they want to eat it even
on full stomach. A well tailored suit on a Model has bigger appeal than sketches of the suit and I description of the cloth. Human have five
basic senses, sense of touch, taste, hearing, seeing and smelling. Advertisers use all these senses to focus customers mind on their
products.
Social cause advertising uses fear and anger appeals to draw the attention of the target audience. Aids prevention through safe sex,
small family for family health and welfare, drug de-addiction for life, are some of the areas where fear and anger appeal is used to
concentrate on Safety and Security aspect of Maslow's hierarchy of needs. "
Love appeal is used by people making cosmetic products among others. Use AXE deodorant and see the effect on the opposite sex. "
Appeal to the sub-conscious mind is done subtly, in Movie halls when some advertisements are flashed on the screen for a fraction of a
second barely visible to the theatre goers. Even then, the effects of such advertisements have been good. Showing a slide for Coke
increased its sale in the intermission considerably
Anything done in a highly creative manner will have a positive impact on the customers. Sometimes advertisements with negativity like
the Demon advertisement of Onida TV did wonders for the product.
Chapter 10 : ART AND COPY

Art makes the entire advertising eye-catching and full of life. Advertising is made catchy by having a strong and dynamic Copy. At other times it is
done by making attractive art and graphics. Most times it is a combination of the two which helps the advertisement become eye catching. Breath
taking advertisement, attention getting campaign, top of the mind recall, all these come with imaginative art and copy and total visuals.

How to have good art:

Size- It plays a vital role in attracting attention. Depending on the product, head lines can be of strong thick lines to draw people in to
reading it. Medium size lettering can make the advertisement look like news item with its own impact. The idea is to highlight it in bigger
fonts. However, in case of a solitary advertisement on a page perhaps small print could be more useful.
Color -It sets the entire tone of the campaign, creating or generally going with the mood needed for the acceptance of the product.
Persistence of a color scheme helps in faster and easier brand recognition. Color advertisements are twenty times more eye catching and
hence tend to pay for the extra costs involved. In international advertising, care should be taken to ensure that the color scheme matches
with the sensibilities of the country for which the AD Campaign is meant. In China, for instance yellow/gold is associated with purity and
religion. In Mexico, yellow is the color of death.
Line - Straight lines, curves and scratchy lines all have their individual effect. Curves look graceful, while vertical lines provide standard of
decorum, horizontal lines provide peace and dignity, diagonal lines show strength in the Ads.
Shape -Can be used effectively to cover the space of the AD. Rectangle, squares oblongs and circles all have their value in eye catching.
Product cut- outs mainly used in POP Danglers can also be used to focus attention of the viewers.

Advertising designs are planned on the basis of proportion, lucidity and balance. The idea is to have eye-catching visuals to attract the viewer's
attention. These can be shown graphically as follows:

Balance in ads comes from imagining an axis around which the ad has to be made, or around which it should look like moving. Balance gives
grace to the ad and helps in effecting the viewers through their psyche.
Proportion takes into account the objects shown and their physical shapes and dimensions to make the right impact.

Lucidity or flow comes from the order in which the key elements are put in the ad. The ad story should come out without any jarring notes to be
effective.

The AD should look complete in every way, and art and copy should complement each other. For improved recognition the ad should lay emphasis
on the main points of the ad, which is to highlight the benefit story.

Before finalizing the ad it is necessary to know" is it exciting enough?" does it arouse the curiosity of the readers, does carry enough punch?

Print ads are designed in a number of ways:-

Carry a tale, action and its reaction- used the shampoo, and you all can see the results. Pre-use and after use photos, still or in action
have dramatic effect on viewers.
Use the latest news , Be like the Indian beauty queens, all three in a row, Miss Universe, Miss World and Miss Asia Pacific in the year
2001 USE LUX TOILET SOAP.
Teach- you are still living in dark ages using besan for your hair when our hair rejuvenating shampoo is changing lives and hair styles of
all your friends.
Art dominating ads - you can use minimum copy, may be just a word, or at best a sentence.
Copy dominating ads - these ads have lot of information to give, like in industrial product ads.
In copy, different font types and sizes can be used for creating the desired effect.

The page layout in print ads is important. The agencies start by cutting and pasting to create the press ad.

Questions

1. When does it becomes important to fill the ad with a lot of copy?

Use the Knowledge Gained

Prepare a press ad for launch of a new brand of motorcycle. Give reasons for choosing the layout. Is it in line with marketing objective?