Module - 2

Types of Advertising
BBA VI Sem Advertising Management Lecture Notes
Module 2 Types of Advertising

Table of Contents
1. Types of Advertising ..............................................................................................................................2
1.1. Product Advertising.......................................................................................................................2
1.2. Service Advertising ........................................................................................................................4
1.3. Institutional/Corporate Advertising ..............................................................................................4
1.4. Public Service Advertising .............................................................................................................7
1.5. Financial Advertising .....................................................................................................................7
1.6. Industrial Advertising ....................................................................................................................8
2. ADVERTISING AGENCY .......................................................................................................................9
2.1. ADVERTISING AGENCY DEPARTMENTS AND THEIR FUNCTIONS ............................................... 11
3. Question Bank .................................................................................................................................... 16

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Module 2 Types of Advertising

1. TYPES OF ADVERTISING

Product Service Institutional

Advertising Advertising Advertising

Public Services Financial Industrial

Advertising Advertising Advertising

1.1. Product Advertising

• When the company tries to sell its products through advertising, it may be referred to as
product advertising.
• Basically the objective of this type of advertising is to promote the product and
communicate the distinctive features and benefits of the product to the target customers.
• Most of the advertising is product advertising, designed to promote the sale or reputation
of a particular product that the organization sells.
• The marketer may use such promotion to generate exposure attention, comprehension,
attitude change or action for an offering. It deals with the non-personal selling of a
particular good or service.
The stage of the Product Life Cycle (PLC) often determines the type of advertising that is used
by advertisers for a particular product.
The types of product advertising that marketers can choose from are:
i. Pioneering
ii. Competitive
iii. Retentive

i. Pioneering Advertising
This form of advertising is designed to stimulate “primary” demand for a new product or
product category. It is heavily used in the introductory stage of product life cycle when a
new product is launched.
This type of product advertising provides in-depth information of the benefits of using a
product or service. It is often used to create interest and to increase the public‘s awareness.
For example, the initial advertisement for black – and – white television and colour
television. Such advertisements appeal to the consumer’s emotions and rational motives.

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ii. Competitive Advertising
It is useful when the product has reached the market-growth and especially the market-
maturity stage. It stimulates “selective” demand. It seeks to sell a specific brand rather
than a general product category.
It is of two types:
A. Direct Type: It seeks to stimulate immediate buying action.
B. Indirect Type: It attempts to pinpoint the virtues of the product in the expectation that
the consumer’s action will be affected by it when he is ready to buy.
Example: Airline Advertising Air India attempts to bid for the consumer’s patronage either
immediately -direct action-in which case, it provides prices, time tables and phone numbers
on which the customer may call for reservations; or eventually – indirect action – when it
suggests that you mention Air India’s name when talking to your travel agent.

iii. Retentive Advertising

This may be useful when the product has achieved a favourable status in the market – that
is, maturity or declining stage. Generally in such times, the advertiser wants to keep his
product’s name before the public. A much softer selling approach is used, or only the name
may be mentioned in “reminder” type advertising.

Relation of Product Advertising to Product Life Cycle

Product life cycle is four basic stages- introduction, growth, maturity and decline through which
a successful product progresses.
Advertising and product life cycle both falls into one of three categories based on whether the
ads are intended to INFORM, PERSUADE OR REMIND.
A. Informative Product Advertising
This form of advertising tends to characterize the promotion of any new type of product
to develop an initial demand. It is usually done in the introductory stages of the product
life cycle. It was the original approach to advertising.
B. Persuasive Product Advertising
Persuasive product advertising is to develop demand for a particular product or brand.
It is a type of promotion used in the growth period and, to some extent, in the maturity
period of the product life cycle.
C. Reminder-Oriented Product Advertising
The goal of this type of advertising is to reinforce previous promotional activity by
keeping the brand name in front of the public. It is used in the maturity period as well as
throughout the declining phase of the product life cycle.

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1.2. Service Advertising

• Advertising that promotes a service rather than a product is known as Service
Advertising. Services are activities, benefits or satisfaction offered for sale. They are
intangible, inseparable, variable and perishable in nature. Require strict quality control,
supplier credibility and adaptability.

• Personalised services like laundry, hair-grooming, beauty salon, automotive repairs,

when advertised, place greater emphasis on the congenial environment, quickness and
promptness of service, economy, exclusiveness, and status significance.

• Luxury hotels and airlines, when advertising their services, attach greater importance to
service with a smile, courtesy, thoughtfulness and claim that they offer a home away
from home.

1.3. Institutional/Corporate Advertising

• Institutional advertising is any type of advertising intended to promote a company,
corporation, business, institution, organizational image or to build goodwill. Such
advertising does not attempt to sell anything directly. It informs the public about what
the institution is doing for the society and the country in areas like literacy, health,
employment generation etc.
• It aims at building for a firm a positive public image in the eyes of shareholders,
employees, suppliers, legislators, or the general public. This sells only the name and
prestige of the company. This type of advertising is used frequently by large companies
whose products are well known.

Examples of Institutional Advertising

Some popular global examples of institutional advertising are mentioned below:

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An example of institutional advertising would be tobacco giant Philip Morris where they
promote quitting smoking. The idea behind this was to target a social issue to grasp public eye.
But, in reality the company was improving its brand image

IDEA cellular is another example of institutional ad. ‘What an idea Sirjee’ went viral on Indian
market. What they did was target the on growing issue of Corruption in India and ways to
tackle it. They launched a massive online campaign to collect a pool of ideas from general
public, thus collection public loyalty and at the same time, creating a public image for
themselves

ITC tied hands with CRY to promote their classmate stationery. ITC donated 1Rs for every
register they sold to CRY. Also, all of their stationery carries an environmental message with it

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about how the company cares for the society. The reality? None of you would be knowing that
the main business that ITC carries on is of Cigarettes. But because of their explosive corporate
advertising strategies, they have earned a good public image for themselves!!

Adidas, one of the world’s most renowned sports company started the campaign to donate
10% of their sales proceeds to the poor orphans in AFRICA.

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1.4. Public Service Advertising

• Public Service Advertising (PSA) is done as a part of social responsibility by the advertising
agencies or business organization or government or social service institutions.
• PSA is used to create awareness for social issues and encourage/influence customers to
contribute and also educate/motivate target audiences to undertake socially desirable
actions.
• The examples of such social issues which have been promoted are:
o Handicapped Children and Their Help
o Female Foeticide
o Drug Addiction
o Blood Donation
o AIDS
o National Integrity
o Deforestation
o Illiteracy
o Poverty
o Energy Conservation
• Public Service Advertising is considered to be one of the most effective means to create
social awareness and bring about a change/shift in the mindsets of people.
• PSAs are usually emotional since it touches people’s deepest fears, anxieties, and values.
• It is also called Public Awareness Advertising, Social Service Advertising, and Social
Awareness Advertising

1.5. Financial Advertising

• When an advertising message is directed to attract for raising capital, it is called financial
advertising. The banks, insurance companies and commercial undertakings collect required
funds from the savings of the people by motivating them to post-pone present expenditure
to future-period.

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• Financial advertising is the specialized practice of advertising which promotes capital

issues to the investor, loan, banking, and mortgage customer.
• Some private and public limited companies invite people to deposit money in the company
as a loan or sell bonds and offer shares to the general public.
• The public is motivated to invest by a slogan, a promise of dividends/returns, profile of the
product, etc.
• The positive image of the financial corporation is largely promoted to turn it into a trusted
name for general investors.

1.6. Industrial Advertising

• This type of advertising is used by manufacturers and distributors of industrial goods*. Such
as, raw materials, machinery, tools, equipments, spare parts and components, and are
directed at industrial users or customers.
• Such advertisements usually appear in trade journals, trade dictionaries, business
magazines and so on.
• This is also called Business to Business (B2B) advertising.
*Note: Industrial goods are those products that either become a physical part of another
product, or used in manufacturing other goods.

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For e.g. some mineral water companies which work on a smaller scale outsource the packaging
bottles, the caps for bottles, the cover with name printed on it, etc. so for this, the
advertisements of the manufacturers of bottles, caps and outer packaging paper can work.

2. ADVERTISING AGENCY

An Advertising Agency is selected by a manufacture or trader to present the advertisement

on his behalf. The advertiser who does not have the capacity of carrying out advertising
activities take the help on services of advertising agencies who are specialized in those
fields.

MEANING AND DEFINITION

 According to American marketing Association, "An Advertising agency is an
independent business organization composed of creative and business people who
develop, prepare and place advertising in advertising media for sellers seeking to find
customers for their goods and services."
 These are independent business organizations that develop, prepare and place
advertisements in media for clients who want to communicate to customers about their
goods or services. Advertising agencies offer potential advertisers (clients) a variety of
specialized service, which result in a finished advertisement

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The advertising agency carry out the activity on behalf of their client against remuneration
called fees. They conduct market research, consumer research, product research etc. They
advice the manufacturer on product design or package design, pricing of product channels of
distribution. Besides, they advice on the market condition from time to time.
Advertising agency conduct the production activities of visualization, layout, illustration,
headlines, copy etc. They also help in the selection of proper media and the frequency at which
the advertisement should be presented.
Thus, the advertising agency relieves the burden of the trader or manufacturer of the
responsibility of advertising, production and distribution

2.1. TYPES OF ADVERTISING AGENCIES

Advertising Agencies can be classified by the range of services that they offer. Also, advertising
agencies range in size from one man shows to large firms that employ thousands of people.
Accordingly, different types of advertising agencies are:

1.) Full service Agencies

2.) In house Agency
3.) Creative Boutique
4.) Media buying agencies
5.) Specialized Agencies:

1) Full Service Agency - Such Advertising Agencies offers its clients a full range of marketing,
communication, and promotion services including research, planning, creating, producing
the ad, and selecting media. Full service agency also offers other services like- strategic
market planning, sales promotion, direct marketing, package design, public relation, and
publicity.
2) In House Agency - In house Agency is the advertising department of the firm which is
responsible for planning and preparation of advertising materials. Big organizations like-
Gap, Calvin Klein, Revlon, and etc can manage in house advertising department and can
take the advantage of proper coordination and greater control in all phase of advertising
and promotion process.
3) Creative Boutique - A creative boutique is an agency that only provides creative services.
Their expertise includes creating interesting and innovative advertising themes. Any
advertiser wants to infuse greater creativity into the message theme or individual
advertisement can approach a creative boutique. Such agency provides only creative
services. GingerCup is a perfect example of a creative boutique agency.
4) Media Buying Services – It is an organization that specializes in buying radio and television
time and reselling it to advertisers and advertising agencies. The services sells time to the

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advertisers, orders the spots on the various stations involved and monitors the stations to
see if the ads actually run.
5) Specialized Agencies: As the name suggests, a specialized agency offers its services only
within a certain industry such as real estate, recruitment, medicine, finance, outdoor
advertising, social advertising, etc. These agencies specialize in providing valuable insights
on investment decisions and proper communication of financial results.

2.2. ADVERTISING AGENCY DEPARTMENTS AND THEIR FUNCTIONS

The organisation of an advertising agency may be divided in various departments entrusted

with a specialised function to be performed under each departmental manager who is
specialised in the task allotted to him. The main departments of a large sized or reasonably
sized advertising agency are as follows:
1. Art & Visualization Department
2. Media Planning and Purchase Department
3. Public Relations(PR) Department
4. Research Department
5. Production Department
6. Creative Department
7. Copy Department
8. Accounting and Finance Department
9. Contact Department
10. Office Management
Now let's discuss main departments of advertising agency along with specialized functions
assigned to each of them.

Art and Visualization Department

 The art department is concerned with the overall look and feel of the advertisement
from choosing the headline, text, size and type of the font to the pictures, visuals, logo,
and the photographic treatment of the commercials with originality and extraordinary
talent.
 The art department and the creative department work together guided by the vice-
president of creative services and devise the final copy of the advertisement.
 An art director heads the Art and Visualization department, assisted by a team of
artists, layout men, and visualizers.
The functions of the Art & Visualization department are:
 It develops visuals and layouts, billboards and calendars for advertisements.
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 Transform the ad message into a self-communicating and mind-stimulating imagery
 To work closely with the copywriters for developing the visual messages.
 Making painted bulletins, posters, car cards, illustrations, slogans, etc.

Media Planning and Purchase Department

 The fundamental function of the media planning and purchase department is to
choose the best outlet or a suitable medium for advertising the products and services
based on the budget, market competition, nature of the product, and client
specifications.
The functions of the Media department are:
 The department chooses the appropriate channels for advertisements through which
the message is communicated to the targeted consumers.
 The media planning and buying department analyse the category of potential
consumers for a particular product and then adopt a specific medium for advertising.
 This department is responsible for planning, scheduling, booking, and buying space in
the media. The media planning involves research to analyse the number of viewers or
readers of a particular ad medium.
 This department also supervises the execution of the advertisement.

Public Relations Department

 The chief responsibility of a public relations (PR) department is to maintain a cordial
relationship among three parties, namely, advertising agency, clients, and media
 The public relations officer heads the public relations department in an ad agency.
The functions of the PR department are:
 The PR department acts as a mediator between the agency, media, and its clients
 The PR department addresses and untangles the grievances of the clients.
 It also promotes goodwill and retains the reputation of the agency.

Research Department
 Without knowing the 5 W’s and 1 H of the market, you can never run a successful
advertisement campaign. The research department in advertising collects information
about the market, market competition, market trends, products and services,
competitors, consumer behavior, media trends, new trends in advertising, so on.
 A research director heads the research department.
 The research team consists of investigators, analysts, statisticians and field workers.

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The functions of the Research department are:
 The research department carry out research and collects information about:
o Market, Market competition, Market trends, Products and services,
Competitors, Consumer behavior, Media trends, New trends in advertising, so
on.
 Agency makes use of above information and engage in a rigorous and critical analysis
for executing an excellent ad campaign
 Use the findings (results) in different ways to achieving objectives.

Production Department
 Once the advertisement copy is ready, the agency goes ahead with production. The
primary function of the production department is to process and generate the final
advertisement.
 Production department comes under creative services and It is headed by the
production manager.
The functions of the Production department are:
 The department stays in touch with the press, typographers and photoengravers, and
congregates typographic designs, engraved photos, and illustration copies.
 It presents the final ad to the client and once approved by him, sends it to the media
for release.

Creative Department
 The creative department taps the right words, appropriate visuals and everything that
grabs the attention of the consumers and promotes sales.
 The creative team comprises of a creative director, copywriters, editors, artists, and
web designers.
The functions of the Creative department are:
 Creating a concept is the first step in the production process, where a general theme or
idea is formulated.
 The creative team also organizes focus groups and conducts surveys to obtain
consumer feedback.
 Creative teams often experiment with their advertisements before releasing to ensure
the effectiveness of the ads. For example, a small business house may issue ads in 3 of
their ten markets and track the number of sales and leads created.

Copy Department

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 The fundamental responsibility of this department is to generate an attractive ad copy.
The ad copy is very significant and is called the heart of the ad because it conveys the
ad message to its consumers without any deviation.
 The copy team includes copywriters and supervisors who use their creative skills while
preparing an ad copy.
 The copy director heads this department who directs the functioning of it.
 The copy department is mostly the largest department of an advertising agency which
consists of dedicated, qualified and experienced team members.
The functions of the copy department are:
 Preparing an attractive copy for its clients and customers.
 Participate in brain- storming sessions and come up with ideas.
 Using their extraordinary skills of putting flair and fluent language while preparing a
copy.

Accounting and Finance Department

 The role of accounting and finance department of an advertising agency is to look after
its financial and accounting matters.
 This department is responsible for billing, maintaining accounts, and collecting the
payments due from its clients.
 The accounting and finance department is headed by the vice-president of accounting
services.
 The accounting team comprises of a chief financial officer, accounts receivable and
payable managers, accounts supervisors and accounts executives.

The functions of the Accounting and Finance department are:

 It generates invoices and sends regular reminders to its clients for the collection of
unpaid dues.
 The department books the expenses and issues payments to the vendors on a timely
basis.
 The accounts department also deposits government dues on a timely basis in the
authorised banks.
 This department takes care of all the routine matters related to accounting.

Contact Department

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 This department bring new clients and also supports and retains the existing ones,
which is crucial for increasing the revenue, expansion, and growth of the agency.
 The contact department is headed by the accounts executive.
 Effective contact department contributes to the quick growth of the agency.
The functions of Contact Department are as follows:
 Contact Department supplies the necessary information to the clients.
 It tries to increase and retain the number of clients of the agency.
 It brings new customers, and this is crucial for increasing revenue, expansion, and
growth.
 It acts as a liaison authority (connection) between the advertising agency and its
clients.

Office Management
 The office management department can also be called the HR department of the
advertising agency.
 This department is responsible for hiring office staff, training and developing the newly
joined team, issuing salaries and perks to the staff, extending welfare facilities, and
filing and maintaining records of all the prime documents.
 The office management in an ad agency functions under its management services.

The functions of Office Department are:

 Recruit office staff.
 Train and develop newly joined staff.
 Promote existing staff.
 Transfer of a timely salary and perquisites (perks) to staff.
 Provide welfare facilities to staff.
 Correspond to various internal and external parties.
 Filing and record keeping of all the essential documents.

An advertising agency mostly manages all the above departments but the name and number of
departments may differ from one company to another based on the capacity of its business,
besides the functions of two or more departments may be consolidated and fulfilled by one
department. The agency may also consider outsourcing specialists instead of creating all the
departments.

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3. Question Bank

1. What is an Advertising Agency? State and explain the functions of an Advertising

Agency.
2. What is meant by an Advertising Agency? What are its main functions?
3. Explain the different departments of Advertising Agency
4. Differentiate between product, service, institutional and public service advertising?
5. Differentiate between Publicity and Advertising
6. Define the term ‘Advertising’
7. Critically examine the objections of advertisement.
8. What are the main objectives of advertising? Explain briefly.

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