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The document discusses the importance of setting an advertising budget based on various market conditions such as advertisement frequency, competition, market share, and product life cycle. It outlines different methods for budgeting, the process of creating advertising campaigns, and the scheduling models used for ads, including continuity, flighting, and pulsing. Additionally, it emphasizes the significance of ethics in advertising, urging companies to adhere to principles of truthfulness and responsibility in their advertising practices.
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- 2. “Money does matter a lot.”
- 3. 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 make the sales chart go on the upper side and give reasonable profits to the company.
- 4. Before finalizing the advertising budget of an organization or a company, one has to take a look on the favorable and unfavorable market conditions which will have an impact on the advertising budget.
- 5. The market conditions to watch out for are as follows:
- 6. 1. Frequency of the Advertisement This means the number of times advertise has been shown with the description of the product or service, in the granted time slots. So here, if any company needs more advertising frequency for its product, then the company will have to increase its advertising budget.
- 7. 2. Competition and Clutter The companies may have many competitors for its product. And also there are plenty of advertisements shown which is called clutter. The company has to then increase their advertising budget.
- 8. 3. Market Share To get a good market share in comparison to their competitors, the company should have a better product in terms of quality, uniqueness, demand and catchy advertisements with resultant response of the customers. All this is possible if the advertisement budget is high.
- 9. 4. Product Life Cycle Stage If the company is a newcomer or if the product is on its introduction stage, then the company has to keep the budget high to make 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.
- 10. When the market conditions are studied thoroughly, then the company has to set up its advertising budget accordingly.
- 12. Percentage Of Sales: In this method, the budget is decided on the basis of the sales of the product from previous year records or from the predicted future sales. This is a pure prediction based method and best applicable to the companies which have fixed annual sales. But if in case there is a requirement for more promotional activities then this method has a disadvantage because there will be decrease in advertisements as the budget is fixed.
- 13. Affordability: this method is generally used by the small companies. Only the companies which have funds and can afford advertising opt for this method. The companies can go for advertising at any time in whole year whenever they have money to spend. The amount spent also varies from time to time as per the advertisements takes place.
- 14. Best guess: This method is basically for newcomers who have just entered the market and they have no knowledge or say they are not aware of how the market is and how much to spend on advertising. Thus, this method is applied by the higher level executives of the company as they are the only experienced people.
- 15. Thus, doing the homework and then moving forward, i.e. searching for best market conditions and setting the best advertising budget will have a great impact on improvement and development of the company.
- 16. Advertising Campaigns - Meaning and its Process
- 17. Advertising Campaigns are the groups of advertising messages which are similar in nature. They share same messages and themes placed in different types of medias at some fixed times. The time frames of advertising campaigns are fixed and specifically defined.
- 18. The very prime thing before making an ad campaign is to know- Why you are advertising and what are you advertising ?
- 19. The objective of an advertising campaign is to: Inform people about your product Convince them to buy the product Make your product available to the customers
- 20. The process of making an advertising campaign is as follows:
- 21. 1. Research: first step is to do a market research for the product to be advertised. One needs to find out the product demand, competitors, etc.
- 22. 2. Know the target audience: one need to know who are going to buy the product and who should be targeted.
- 23. 3. Setting the budget: the next step is to set the budget keeping in mind all the factors like media, presentations, paper works, etc which have a role in the process of advertising and the places where there is a need of funds.
- 24. 4. Deciding a proper theme the theme for the campaign has to be decided as in the colors to be used, the graphics should be similar or almost similar in all ads, the music and the voices to be used, the designing of the ads, the way the message will be delivered, the language to be used, jingles, etc.
- 25. 5. Selection of media the media or number of Medias selected should be the one which will reach the target customers.
- 26. 6. Media scheduling the scheduling has to be done accurately so that the ad will be visible or be read or be audible to the targeted customers at the right time.
- 27. 7. Executing the campaign finally the campaign has to be executed and then the feedback has to be noted.
- 28. Mostly used media tools are print media and electronic media. Print media includes newspaper, magazines, pamphlets, banners, and hoardings. Electronic media includes radio, television, e-mails, sending message on mobiles, and telephonic advertising. The only point to remember is getting a proper frequency for the ad campaign so that the ad is visible and grasping time for customers is good enough.
- 29. All campaigns do not have fix duration. Some campaigns are seasonal and some run all year round. All campaigns differ in timings. Some advertising campaigns are media based, some are area based, some are product based, and some are objective based. It is seen that generally advertising campaigns run successfully, but in case if the purpose is not solved in any case, then the theory is redone, required changes are made using the experience, and the remaining campaign is carried forward.
- 31. Scheduling directly refers to the patterns of time in which the advertisement is going to run. It helps fixing up the time slots according to the advertiser so that the message to be delivered will reach target audience in a proper way with proper timings.
- 32. There are basically three models of advertising scheduling as follows:
- 33. Continuity
- 34. This model is very good option for the products or services which don’t depend on season for advertisements. They run ads whole year round. The advertisements under this type run at regular and fixed intervals. The main advantage here is reminding about your products to the customers continuously. This model helps maintain a continuous and complete purchase cycle. This is a best model for the products having continuous demand all the year round. There can be a Rising Continuity in which some specific products are been advertised in the peak seasons for e.g. floaters are advertised more in rainy season while some products fall under a Falling Continuity in which either ads for new products are run or if there is any other change in the existing product. E.g. packaging of Pediasure, a kid’s health drink is recently changed.
- 35. Flighting
- 36. This model is also called bursting. As the name suggests, this an absolute season based products model. The ads here run at very irregular intervals. Advertisements are for very shorter periods and sometimes no ads at all. The ads are in concentrated forms. So, the biggest advantage here is there is very less waste of funds as the ads run only at the peak time when the product demand is on high. Television and radio are the most used media types in this method. So the advertisers who cannot afford the year long ads, this is a best option. E.g. ads for warm clothes in Indian Market.
- 37. Pulsing
- 38. This model is the combination of both continuity and flighting scheduling. Here, ads run whole year round but at a lower sidxe that means less ads, and heavy advertisements are preferred at the peak time. So this model has advantages of both the other models. Generally scheduling is fixed for a month.
- 39. There are six types of scheduling method: Steady pulse has fixed schedule for 12 months. Seasonal pulse has bunches of ads season wise. Period pulse regular basis ads. Erratic pulse refers to irregular ads normally used for changing old patterns. Start up pulse is used for new product with heavy advertisements. Promotional pulse refers to short period single use ads used basically for promoting products or events.
- 40. Using this interface, you can set the time periods in which you want to run your campaign. Then click OK button.
- 41. Thus, points to remember while scheduling an advertisement are: Selecting a proper media type for running ads Selecting a correct time for running ads so that the purpose is solved. Advertisements should be sufficient enough (in number) to deliver the message to the target.
- 42. Industrial Advertising - Business to Business Advertising
- 43. The most popular terminology used for industrial advertising is Business to Business advertising. This type of advertising generally includes a company advertising its products or services for the companies which actually uses same or similar products or services or we can say that the advertising company should produce the products which the other company needs for its productions or functions.
- 44. 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.
- 45. A smaller to smaller and largest of all, every company has to do industrial advertising. For e.g. if a company is making coffee powder, it will sell its powder to the distributors who in turn will sale it to the retailers and wholesalers and also to the big companies who has a coffee machine for their employees. Thus companies manufacturing any products can be advertised to the other companies, like raw materials, the machineries used by other companies, spare parts of the machines which makes it work, anything.
- 46. Role of Industrial Advertising It minimizes the hunt for buyers. It helps in increasing sales of the company. It helps in making more and more distribution channels. It makes company work more efficiently to produce the desired product or service. It creates awareness among the customers or other companies about the products and services.
- 48. The strategies used in industrial advertising differ from company to company, as different companies have different products to be advertised. So, a single rule cannot work for all the companies’ advertisements.
- 49. But the basic process which can lead to a successful advertisement is: knowing the objective for advertising – identifying the target companies – researching about the market conditions and the competitors – creating the ad to be delivered – selecting media to be used – what should be the budget allotted – execution of the advertisement – getting the feedbacks from the customers.
- 51. The media generally used in the industrial advertising is print media and direct marketing.
- 52. Print Media includes business magazines, trade publications, newspapers, technical journals, etc.
- 53. To make print media work efficiently, there are some do’s and don’ts to be kept in mind:
- 54. Visual image of the ad should be very sharp and prominent The ad should be so impressive that readers get attracted towards reading it The highlight should be on the service or product offered and not the source by which it is being offered Let the ad be simple to be read (with no difficult fonts) The picture shown should not be irrelevant with the product.
- 55. The ad should reflect the company’s image. The ad should to be in logical sequence if it is of two or more pages. Headlines should be catchy and suiting the product image. And lastly, at the bottom of the page, the company name, address and phone number of the respected office should be mentioned clearly without fail.
- 56. Direct Marketing includes: 1. Direct Mail - here, the newsletters, data sheets, and the brochures of the company are directly mailed to the customers’ postal address. 2. Telephonic Advertising - the advertising is done by calling up the customers on there telephones, giving messages on mobile phones, etc. 3. Online Advertising - includes companies sending e-mails to the customers or other companies enclosing information about their products ant services, putting online banners, providing e-shopping options, etc.
- 57. The advertisers also use other ways for promoting their products like participating in trade shows, trade expos, and fairs. Thus, the companies can use any or every type of advertising, the important motto being increase in sales, producing best quality products, maintaining good relations with the customers, and achieving the desired goal.
- 59. Ethics means a set of moral principles which govern a person’s behavior or how the activity is conducted. And advertising means a mode of communication between a seller and a buyer.
- 60. Thus ethics in advertising means a set of well defined principles which govern the ways of communication taking place between the seller and the buyer. Ethics is the most important feature of the advertising industry. Though there are many benefits of advertising but then there are some points which don’t match the ethical norms of advertising.
- 61. An ethical ad is the one which doesn’t lie, doesn’t make fake or false claims and is in the limit of decency. Nowadays, ads are more exaggerated and a lot of puffing is used. It seems like the advertisers lack knowledge of ethical norms and principles. They just don’t understand and are unable to decide what is correct and what is wrong. The main area of interest for advertisers is to increase their sales, gain more and more customers, and increase the demand for the product by presenting a well decorated, puffed and colorful ad.
- 62. They claim that their product is the best, having unique qualities than the competitors, more cost effective, and more beneficial. But most of these ads are found to be false, misleading customers and unethical. The best example of these types of ads is the one which shows evening snacks for the kids, they use coloring and gluing to make the product look glossy and attractive to the consumers who are watching the ads on television and convince them to buy the product without giving a second thought.
- 63. Ethics in Advertising is directly related to the purpose of advertising and the nature of advertising. Sometimes exaggerating the ad becomes necessary to prove the benefit of the product. For e.g. a sanitary napkin ad which shows that when the napkin was dropped in a river by some girls, the napkin soaked whole water of the river. Thus, the purpose of advertising was only to inform women about the product quality. Obviously, every woman knows that this cannot practically happen but the ad was accepted. This doesn’t show that the ad was unethical.
- 64. Ethics also depends on what we believe. If the advertisers make the ads on the belief that the customers will understand, persuade them to think, and then act on their ads, then this will lead to positive results and the ad may not be called unethical. But at the same time, if advertisers believe that they can fool their customers by showing any impractical things like just clicking fingers will make your home or office fully furnished or just buying a lottery ticket will make you a millionaire, then this is not going to work out for them and will be called as unethical.
- 65. Recently, the Vetican issued an article which says ads should follow three moral principles – Truthfulness, Social Responsibility and Upholding Human Dignity. Generally, big companies never lie as they have to prove their points to various ad regulating bodies. Truth is always said but not completely. Sometimes its better not to reveal the whole truth in the ad but at times truth has to be shown for betterment.
- 66. Pharmaceutical Advertising they help creating awareness, but one catchy point here is that the advertisers show what the medicine can cure but never talk about the side effects of that same thing or the risks involved in intake of it.
- 67. Children - children are the major sellers of the ads and the product. They have the power to convince the buyers. But when advertisers are using children in their ad, they should remember not to show them alone doing there work on their own like brushing teeth, playing with toys, or infants holding their own milk bottles as everyone knows that no one will leave their kids unattended while doing all these activities. So showing parents also involved in all activities or things being advertised will be more logical.
- 68. Alcohol - till today, there hasn’t come any liquor ad which shows anyone drinking the original liquor. They use mineral water and sodas in their advertisements with their brand name. These types of ads are called surrogate ads. These type of ads are totally unethical when liquor ads are totally banned. Even if there are no advertisements for alcohol, people will continue drinking.
- 69. Cigarettes and Tobacco - these products should be never advertised as consumption of these things is directly and badly responsible for cancer and other severe health issues. These as are already banned in countries like India, Norway, Thailand, Finland and Singapore.
- 70. Ads for social causes - these types of ads are ethical and are accepted by the people. But ads like condoms and contraceptive pills should be limited, as these are sometimes unethical, and are more likely to loose morality and decency at places where there is no educational knowledge about all these products.
- 71. Looking at all these above mentioned points, advertisers should start taking responsibility of self regulating their ads by: design self regulatory codes in their companies including ethical norms, truth, decency, and legal points keep tracking the activities and remove ads which don’t fulfill the codes. Inform the consumers about the self regulatory codes of the company Pay attention on the complaints coming from consumers about the product ads. Maintain transparency throughout the company and system.
- 72. When all the above points are implemented, they will result in: making the company answerable for all its activities will reduce the chances of getting pointed out by the critics or any regulatory body. will help gain confidence of the customers, make them trust the company and their products.
- 74. “When a child writes the examination papers, he has to see the result come what it may be, so that he comes to know where he is wrong and where he should pay more attendance. This will help him work better in future.”
- 75. This is exactly the case of the advertisement. The work is not complete if the effectiveness of advertise is not measured. This is the only way to know how the advertisement is performing, is it reaching the targets and is the goal achieved. It is not at all possible to measure advertisement effectiveness accurately as there are many factors like making a brand image, increasing the sales, keeping people informed about the product, introducing new product, etc, which affect the effectiveness of an advertisement.
- 76. We all know that there are some companies who advertise at very low level but still their products are a hit and some companies indulge in very heavy advertisements but they don’t get desirable results. But then, there are some traditional and modern tools to measure most of the effectiveness of an advertisement through which the advertiser can or may get more and more information about how their ads and product are performing in the market.
- 77. According to Philip Kotler and Armstrong, the Gurus Of Marketing, there are two most popular areas which need to be measured for knowing the effectiveness of advertisement and they are: Communication Effect Sales Effect
- 78. Communication Effect Research consists of three types of researches: 1. Direct Rating Method - here, customers are directly asked to rate the advertisement and then these rating are calculated. 2. Portfolio Tests - here, the customers see the ads and listen carefully to the ads and all the contents of the ads and then they are asked to recall the ad and the contents. Then the calculations are done with help of this data. 3. Laboratory tests - here, the apparatus to measure the heart rates, blood pressure, perspiration, etc are used on the customer after he watches the ad, to know the physiological reactions of the body.
- 79. Sales Effect Research totally depends on the sales of the company. The sales keep varying from time to time. There are some factors affecting sales like: - product availability, the price of the product, contents of the product, and sometimes the competitors.
- 80. So this method is a little difficult than the communication one. The company doing sales effect research generally bothers about the sales of the product, they try to know whether or not the money they are spending on the ads is enough or excess.
- 81. As earlier said, it is not possible to measure each and everything and the chances are at the lower end if the company has many ads running through various mediums at the same time. So suggestion is that the advertiser or the company should use appropriate and different methods which are most suitable for the media under use.
- 82. The company can hold surveys and product recognition tests Questionnaire or feedback flyers can be distributed and customers could be asked to fill it up. Toll free number can be highlighted on the ads so that customers can call up. The response rates can be increased by telling customers what to do. For e.g. some ads have lines in flashy color like “Hurry Up” or “No one can eat just one” or “be the first” etc.
- 83. These are the traditional ways. Now days, internet is the modern tool for measuring the effectiveness of an advertisement. There are some types such as:
- 84. Integrated direct marketing This is an internet based tool where they have a response corner designed on the websites. Whenever the customers visit the sites, they fill up their contact details and give feedbacks. Thus the company supplies more information and sends newsletters and also gets the idea for further action. But then its not that only online advertiser have this facility but then advertisers who don’t work online can use coupons, discount vouchers, etc. to do this.
- 85. Analysis tool there is an analysis tool available on internet by using which the advertiser will know how many customers are visiting the site, who are shopping online, how many pages are viewed, etc. which in turn will help advertiser to measure the effectiveness.
- 86. Internet is the most easy, cheaper and cost effective way to measure the effectiveness because here no money is wasted as the ad is only viewed when the customer want to view it where as in normal print method or using TV, the ad sometimes goes unwatched or unattended and viewed for the sake of viewing.
- 87. Advertising Myths - Ifs and Buts of the Advertising Industry
- 88. Advertising is considered as the best tool to make people aware of the product a company wants to sell. This is the best way to communicate with the audience and to inform them about the product but with a proper media selection and of course timing. But there are some myths which have been creating problems in the path of successful advertising. We have tried to clarify some misinterpretations about the ifs and buts of the advertising industry.
- 90. 1. Advertising works only for some business
- 91. Wrong. Advertising works for each and every company or business it only it is executed properly. But due to bad advertising, many ad campaigns fail to work in desired way and the people think that advertisements are not their cup of tea. They must understand one simple rule of advertising – it should be for right people at right time through right medium on right place.
- 92. 2. Advertising is only needed when business is slow
- 93. Wrong. Who said that the big and successful brands don’t advertise their products? Advertising is a continuous process with some renovations whenever needed. But, yes, when the business really is going slow or at its low, the advertising will have to be heavy and more in number. This will help the product to improve its market value and make people aware of the product.
- 94. 3. If the product is not selling, advertise it
- 95. This is just not true. Just think about it. If you are selling a product which is not at all in vogue, and no one is using it, how will it get clear from the shelf. You need to understand the need of customers and then sell the product. Advertise doesn’t mean selling anything you want but it means selling what customers wants.
- 96. 4. Advertise creates needs
- 97. No. The people already had cassettes to play and listen to music they liked when they didn’t have the option of CDs. It is technology which came in, and it was only then CDs were advertised and sold. Advertise only replaces the old things with new, it doesn’t creates needs.
- 98. 5. Advertise effects persist for decades
- 99. It’s the quality of the product which persists. Advertise no doubt helps increasing sales of the product and stays in memory of the people, but minds are captured by the product itself.
- 100. 6. Humor in ads
- 101. Sometimes humour gets in the way of delivering message properly to the consumers but not every time it creates problems. Many of the times it helps people to remember the ad and the product and helps creating a positive attitude towards the advertise.
- 102. 7. Sex sells
- 103. Not always. Some advertisers use sex for just increasing the sales and forget that the product doesn’t need this type of ad at all. Remember once models Milind Soman and Madhu Sapre posed naked for a shoe brand. It was really irrelevant.
- 104. 8. Creativity is the most important factor
- 105. The ad should be no doubt creative enough to attract consumers but it not the only selling factor. There has to be good message to deliver, best media selection, and best quality of the product to make the product and ad both successful.
- 106. 9. Advertising costs so much
- 107. Advertise needs money but one has to also consider the results in forms of increased sales, increased reputation in industry, recognition for product and also increased market value of product which advertisements brings along. Lets consider advertising as investment and not expense.
- 108. Thus these are the most common myths of the ad industry which are working as hurdles in the way of bright future of advertisers and advertising and we need to overcome these hurdles and rise.
- 110. Advertising is still all about the ‘ifs and buts of a product’, presented in a glowing rainbow like picture trying to attract consumers….but what is the future of advertising in coming years ?
- 111. Lets go way back when the idea of advertising a product was regarded as some kind of a big deal. Then the advertisements were very limited, and it took lots and lots of efforts to make a single advertisement. And the customers then, had no option other than watching those advertisements. Now, time has changed.
- 112. Since last 20 years or lets just consider last 10 years, there has been a dramatic change in the world of advertisement. And this will not have a stopage in coming years. The change doesn’t mean that the advertising agencies will all be shut down and firms will take over. It just means that the existing advertising agencies will have to experience a change in the industry and within.
- 113. They will be redefined and reinvented so that they can survive in the years ahead. The agencies which gave their number of years to this industry will also change for good, be capable to cope up with new challenges, new competition and new attitudes of the consumers. Once a article was written on change in advertising in 1992 and the title then also suits now, it said - Advertising Age : Change or Die and very well said. To understand what is going to change and what will remain the same should be on the top of the list of the advertisers.
- 114. Now is the beginning of the digital era. The agencies had a system of having some few creative people who used to come with ideas for ads. That was the time when giving an ad in radio and television was very expensive. But now no one minds actually about the cost for such ads because consumers are responding well. But now and onwards, internet and technology has taken a front seat.
- 115. Lets talk about the mass media. Today every tv serial, all movies running in theatres and all breaks in the radio channels have fillers called ads. But in the coming years, the ads can be shown to the consumers only if they want to see and not because the advertiser want them to see it. The cost of using internet and digital gadgets is everyday dropping down so the customers don’t mind spending on these things other that fooling themselves with the colorful advertisements.
- 116. The future will be in favour of the advertisers and advertisements but only at the cost of proper management and proper use of digital technologies and internet.
- 117. The Bond Nowdays, no one trusts the ad industry because there is no transparency. The ethics are not being the part of ads anymore. In coming years, the bond of trust has to be again rebuilt between the consumers and the advertisers. The advertisers will have to work hard to gain the confidence of the customers.
- 118. More Creativity The creative people of the agencies should not limit their creativity by only working with the old style menu. This is the time to explore with help of internet and digital tools.
- 119. Differentiated Products The advertisers should launch a product which will be completely different but excellent to use. Then only the voice will be heard.
- 120. Attract Talent More and more quality people should be hired today who will be leaders for tomorrow. They will be the people who will lead the industry in the future with the best quality being coping up will everything. Better HR practices should also be appointed. These are some points which may help advertisers to survive and survive in a better way in the future. The people who will not change can just not stay in this new industry.