DAGMAR Advertising Model Explained

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ABM
Unit-1
DAGMAR Approach
Defining Advertising Goals for Measured Advertising Results abbr. DAGMAR was an advertising model proposed by Russel H. Colley in 1961.
Objectives
Communications
Planning and Decision Making
Measurement and Evaluation of Results
According to DAGMAR, each purchase prospect goes through 4 steps:
 Unawareness to Awareness—the consumer must first be aware of a brand or company
 Comprehension—he or she must have a comprehension of what the product is and its benefits;
 Conviction—he or she must arrive at the mental disposition or conviction to buys the brand;
 Action—finally, he or she actually buy that product.

These steps are also known as ACCA advertising formula. ACCA/DAGMAR is a descendant of AIDA advertising formula and considered to be more
popular and comprehensive than AIDA. Developed for the measurement of advertising effectiveness it maps the states of mind that a consumer
passes through.
Important parts of the DAGMAR model are definitions of target audience, (people whom the advertising message is addressed to) and objectives
(goals of advertising message)
Advantages
 Define advertising objectives and measuring the results
 unawareness to Awareness
 Easy to Understand
Disadvantages
Practicality and costs—DAGMAR is criticized 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 results.
Inhibits creativity—DAGMAR is also criticized on the grounds that it can inhibit creativity by imposing too much influence or structure. The creative
department may become too concerned with “passing the numbers test” rather than developing great ideas that result in unique and effective
advertising. Many advertising people have blamed the lack of great creative ideas and campaigns in recent years on an over quantification of
advertising

Advertising Management
Advertising management is a career path in the advertising industry. Advertising and promotions managers may work for an agency, a PR firm, a
media outlet, or may be hired directly by a company to develop branding for the company's product or service.
“Promotion mix is a specific blend of Advertising, Sales Promotion, Public Relations, Personal Selling and Direct Marketing tools that the company
uses to pursue its advertising and marketing Objectives.”
According to American Marketing Association:
“Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.”
Basic Functions Of Advertising:
Advertising performs 3 basic functions:
1. Inform Function
2. Persuasive Function
3. Reminder Function
Types of Advertising
 Product advertising
 Nonpersonal selling of a particular good or service
 The type of advertising the average person normally thinks of when talking about most promotional activities
 Institutional advertising
 Institutional advertising promotes a concept, an idea, a philosophy, or the good-will of an industry, company organization,
person, geographic location, or government agency
 Corporate advertising

Types of Media Vehicles:
 Print media: Newspaper, magazines, pamphlets, visiting cards, yellow pages etc.
 Broadcast media: Radio, T.V, Cinema.
 Out door Advertising: Bill boards, hot air balloons, wall writings, hoardings etc.
 Transit advertising: buses, loud speakers
 Specialty advertising: T-shirts, caps, cups , Internet
Advertising Strategies
 Comparative
 Emphasizes messages with direct or indirect promotional comparisons between competing brands. Often used by less
dominant firms
 Celebrity Testimonials
 The use of celebrity spokespeople to try to boost the effectiveness of an advertising message

 Accounts for about 20% of all U.S. ads. Improves product recognition
 Retail Advertising
 All advertising by retail stores that sell directly to the consuming public
 Varies widely in effectiveness
 Should be assigned to one person whose sole responsibility and authority is developing an effective retail advertising program
 Cooperative Advertising
 When a retailer and a manufacturer or wholesaler share advertising costs
 Interactive Advertising
 Interactive media are communication channels that induce message recipients to participate actively in the promotional effort.
 Creates a dialogue, providing more material as the user asks.
 Although the term has become nearly synonymous with e-commerce and the web, it also includes shopping mall kiosks, and
text messages on cell phones.
Setting the Advertising Objective
 Message About Product – Details about the product play a prominent role in advertising for new and existing products. In fact, a very large
percentage of product-oriented advertising includes some mention of features and benefits offered by the marketer’s product. Advertising
can be used to inform customers of changes that take place in existing products. For instance, if a beverage company has purchased the
brands of another company resulting in a brand name change, an advertising message may stress "New Name but Same Great Taste".
 Message About Price – Companies that regularly engage in price adjustments, such as running short term sales (i.e., price markdown), can
use advertising to let the market know of price reductions. Alternatively, advertising can be used to encourage customers to purchase now
before a scheduled price increase takes place.
 Message About Other Promotions – Advertising often works hand-in-hand with other promotional mix items. For instance, special sales
promotions, such as contests, may be announced within an advertisement. Also, advertising can help salespeople gain access to new accounts
if the advertising precedes the salesperson’s attempt to gain an appointment with a prospective buyer. This may be especially effective for a
company entering a new market where advertising may help reduce the uncertainty a buyer has about a new company.
 Message About Distribution – Within distribution channels, advertising can help expand channel options for a marketer by making
distributors aware of the marketer’s offerings. Also, advertising can be used to let customers know locations where a product can be
purchased.
Determination Target audience
In marketing and advertising, a target audience, is a specific group of people within the target market at which a product or the marketing
message of a product is aimed at. (Kotler 2000)... For example, if a company sells new diet programs for men with heart disease problems (target
market) the communication may be aimed at the spouse (target audience) who takes care of the nutrition plan of her husband and child.
A target audience can be formed of people of a certain age group, gender, marital status, etc., e.g. teenagers, females, single people, etc. A
combination of factors, e.g. men aged 20–30 is a common target audience. Other groups, although not the main focus, may also be interested.
Discovering the appropriate target market(s)and determining the target audience is one of the most important activities in marketing management
(Niewenhuizen et al. 2000). The biggest mistake it's possible to make in targeting is trying to reach everybody and ending up appealing to no-one.
Step 1
Review the products and services you have available. Consider the features and benefits to a consumer who uses your products so you are able to
narrow down exactly who would benefit from them. For example, a residential cleaning service benefits customers by saving them time; thus the
target audience may be busy professionals or moms who need more time to balance home and family responsibilities.
Step 2

Evaluate your own skills and areas of expertise to help choose a target audience. For example, a caterer with experience in large corporate events
may choose to target that section of the market.
Step 3
Analyze your current customer files to determine who already utilizes your products or services. Look for similarities among your customers in
terms of factors such as age, gender, income, education, job and ethnicity. Use this information to narrow down your target audience.
Step 4
Research to whom your competitors are marketing in their advertising. Look at the type of people who utilize those services and to which groups
the marketing materials may appeal. Identify ways to look for slightly different target customers to attract a different segment of the market. For
example, if another tutoring service markets toward families with young children who need help with math and reading, tailor your service to help
high school students and those preparing to take standardized college entrance exams.
Step 5
Write a basic profile of the type of customers you want to target using your research. Determine the lifestyle, values, background, occupations, age
and location of your ideal customers. If you offer different types of services or products, determine if a second or third target audience is a
possibility for those specific items.
Step 6
Evaluate your target audience periodically to determine if your products or services are still best focused on that type of people. As you add new
products or services, determine if you need to develop a new profile for that core audience.
Advertising & Consumer Behavior
Increased Awareness
Advertising and promotion offer a news function to consumers. Viewers of ads learn about new products and services available to them, much like
they learn about events in the news. This information function has a neutral role. It provides facts without approval or disapproval from
consumers. Customer behavior at this stage encompasses expressions of curiosity.
Analysis of Features
Consumers have a rational response to advertising when they look at the features of a product or service. This response focuses on a logical listing
of all the functional aspects of the offering. This is an intellectual response, rather than an emotional one.
Evaluaton of Benefits

When customers weigh benefits, they become emotionally involved with advertising and promotion. Consumers identify ways the product or
service can make them happier, improve their lives or give them pleasure. This part of the consumer response is irrational and can lead to impulse
buying and competition to obtain the product.
Reminders
Repeated advertising messages affect consumer behavior. This repetition serves as a reminder to the consumer. Behavior that stems from
reminders includes suddenly thinking of a product while shopping and making a decision to buy it, as if it had been on the consumer’s "to-do" list.
Promotion of Loyalty or Alienation
Consumer behavior splits between loyalty and alienation depending on how well the product lives up to its advertised benefits. Corporate behavior
– such as scandals or charity work – can also affect alienation and loyalty responses. Once the consumer makes this choice, advertising and
promotion are not likely to undo that decision.
Information Overload
 With greater amounts of information available, Consumers make poorer choices (Threshold effects)
 Tactic:focus on product information (features) that is important (salient) to consumers
Information Wear out
 Repetition increases consumer learning
 Too much repetition = wear out
(consumers decrease attention over time)
Tactic:
 Change information and/or format
 Pictures are better than words (brain both sides)
DETERMINING THE ADVERTISING BUDGET
Budgeting methods
1. Objective - Task method
- The method looks at the objective for each activity and determines the cost of accomplishing each objective: what will it cost to make
50% of people in the market aware of this products? This method advantages is that it develops the budget from the ground up so that
objectives are the starting point
- After establishing key objectives, the marketer determines the tasks necessary to achieve the objectives and the cost associated with each
task.
- By determining the role of each objective and task and the respective cost, the methods allows for a justification of advertising budget.

2. Percentage –of – sales method
- The method compares the total sales with the total advertising (or marketing communication) budget during the previous year or the
average of several year to calculate the percentage.
- Method to calculate:
Step 1: past advertising dollars: past sales = % of sales
Step 2: % of sales X next year’s sales forecast = new advertising budget
- The method are heavily used because it is easy and does not require a lot of knowledge to implement.
- Company using this approach may under-spend when potential is great and overspend when potential is low
 Advantage:
- Providing managers with a feeling that they can spend what is afforded based on past or potential sales.
- Limiting excess spending and create market stability if competitors spend approximately the same percent.
 Disadvantage:
- Using a percent of past sales is illogical because it assume that advertising is result rather than a cause of sales.
- Being inflexible because it does not allow for the possibility that sales may decline because of too little advertising or that sales do not
take advantage of a rising potential.
- This approach depends heavily on the sales forecast. It does not really attempt to understand or justify advertising contribution
- By focusing on short-term sales, it does not allow for long-range planning.
=>This approach is often seen as a starting point for comparison and used in conjunction with other methods.
Company (1988) Ad spending Sales % of sal
Kellogg 524,865,000 2,491,500,000 21
Campbell Soup 230,708,000 3,644,500,000 6
3. Competitive spending method

- The method uses competitor’s budgets as benchmarks and relates the amount invested in advertising to the product’s share of market.
Advertisers’ media presence affects the share of attention the brand will receive, and in turn, affects the market share the brand can
obtain:
 Advertisers’ media presence = share of consumer mind = market share
- The competitive spending method is often viewed as one consideration in the budgeting decision because it allows for an understanding
of spending relative to other entrants.
 Disadvantages:
 Assume that the company’s objectives are the same as those of competitors => incorrect assumption
 Not allow company to determine its own optimal level of expenditure; assume competitor are advertising effectively, and by following
them, our company will achieve efficiency => wrong
 Information on competitive spending is usually available after it has been spent => just following the past results of another company
4. Affordable and arbitrary method
 - When company allocates whatever is left over to advertising, it is using the “all-you-can-afford” budgeting method. Company using this
approach does not value advertising as a strategic imperative (bat buoc)
 Ex) a company that allocates a large amount of this budget to research and has a superior product may find that the amount spent on
advertising is less important
 This arbitrary method does not rely on any planned system to allocate budget, it is sometimes used by inexperienced marketers who
have not invest the value of advertising
Disadvantage:
 Ignore the role of adverting as an investment in future objectives => leading to an uncertain budget and the lack of long –range planning
5.What is Affordable – Many smaller companies find spending of any kind to be constraining. In this situation, advertising may be just one of
several tightly allocated spending areas and, thus, the level spent on advertising may vary over time. For these companies, advertising may only
occur when extra funds are available.
6.Best Guess – Companies entering new markets often lack knowledge of how much advertising is needed to achieve their objectives. In cases
where the market is not well understood, marketers may rely on their best judgment (i.e., executive’s experience) of what the advertising budget
should be.
Integrated marketing communications

Model and stages

Level 1: Tactical Coordination and Marketing Communications Initial IMC focus is on the tactical coordination of diverse marketing such as
advertising, promotion, direct response, public relations, and special events. This level focuses on delivering “one sight, one sound” via marketing
communication.
[8]
Level 2: Redefining the Scope of Marketing Communication The organization begins to examine communications from the customer’s point of
view. Marketing communication begins to give consideration to all sources of brand and company contact a customer has with the product or
service. Management broadens the scope of communication activities to encompass and coordinate internal marketing employees, suppliers, and
other business partners and align with the existing external communication programs.[8]
Level 3: Application of Information Technology An organization’s application of empirical data using information technology to provide a basis
identity, value, and monitor the impact of integrated internal and external communication programs to key customer segments over time.[8]
Level 4: Financial and Strategic Integration The emphasis shifts to using the skills and data generated in the earlier stages to drive corporate
strategic planning using customer information and insights. Organizations re-evaluate their financial information infrastructure
Components of integrated marketing communications
IMC weaves diverse aspects of business and marketing together. These include:
 Organizational culture
The organization's vision and mission
Attitudes and behaviors of employees & partners
Communication within the company
 Four P's
Price, pricing plans, bundled offerings
Product (product design, accessibility, usability)
Promotion
Place (point of purchase, in-store/shopper experience)
 Advertising
Direct marketing: direct mail, telemarketing, catalogs, shopping channels, internet sales, emails, text messaging, websites, online display ads, fliers,
catalog distribution, promotional letters, outdoor advertising, telemarketing, coupons, direct mail, direct selling, grassroots/community marketing,
mobile
 Online/internet marketing
 E-commerce
 Sales & customer service
 Public Relations
Special events, interviews, conference speeches, industry awards, press conferences, testimonials, news releases, publicity stunts, community
involvement, charity involvement & events
 Promotions

Contests, coupons, product samples (freebies), premiums, prizes, rebates, special events
 Trade shows
Booths, product demonstrations
 Corporate philanthropy
Donations, volunteering, charitable actions
When these diverse aspects of business and marketing are weaved together properly an effective campaign can be achieved
Marketing Communication process
The communication process is sender-encoding-transmission device-decoding-receiver, which is part of any advertising or marketing program.
Encoding the message is the second step in communication process, which takes a creative idea and transforms it into attention-getting
advertisements designed for various media (television, radio, magazines, and others). Messages travel to audiences through various transmission.
The third stage of the marketing communication process occurs when a channel or medium delivers the message. Decoding occurs when the
message reaches one or more of the receiver's senses. Consumers both hear and see television ads. Others consumers handle (touch) and read
(see) a coupon offer.
One obstacle that prevents marketing messages from being efficient and effective is called barrier. Barrier is anything that distorts or disrupts a
message. It can occur at any stage in the communication process. The most common form of noise affecting marketing communication is clutter.
UNIT-2
UNIT-2
Media Planning
 Some Basic Terms and Concepts:
 Media Planning: Is the series of decisions involved in delivering the promotional message to the prospective purchasers/ users of the
product or brand. It is a process in which a number of decisions are made which may be altered or abandoned if reqd.
Media Objectives
 Strategy (Plans of action)
 Medium: is the general category of available delivery systems like broadcasting media, print media, direct mail, outdoor advertising etc.
 Media Vehicle: is the specific carrier within a medium category.
 Reach
 Coverage:Coverage relates to potential audience, reach refers to the actual audience delivered
 Frequency
Developing the Media Strategies
The Media Strategy process has three “W”s to be decided: where to advertise (geography), when to advertise (timing), and what media categories
to use (media mix).

Moreover, they make these decisions in the face of budget constraints. The actual amount of money that an advertiser spends on marketing
communications can vary widely, from billions of dollars for multinational giants such as Procter & Gamble, to a few thousand dollars for local
"mom-n-pop" stores.
Selection of Media Category
Whichever category is selected by the planners of the organization, they should select a proper media to convey their message.
If the product is for a big amount of customers then a mass media option can be selected like TV, radio or newspaper. The best examples for this
type are detergent ads, children health drinks and major regular used products such as soap, shampoo, toothpastes etc.
If the planners want to change the mind of people doing window shopping or just doing shopping for sake of name, then point of purchase type
can be opted by the company. This helps the company to explain their point to the buyers and convince the buyers to go for their product.
If the planners want to sell their product on one to one basis, then the third option is direct response type. Here, the company people directly
contact the customers via emails, text messages, phone calls or meeting for giving demos. The best example of this type of media is the Life cell
Cord Blood Banking. They go to their customers, explain them what it is all about and try to convince them.
Thus, this process of media strategy plays an important and vital role in the field of Advertising
Steps:
I. Market Analysis
II. Establishment of media objectives
III. Media Strategy Development and implementation
IV. Evaluation and follow up.
Step-I
(a) To whom shall we advertise?
Index= %age of users in the demographic segment X 100
%age of population in the same segment
(b) What external and internal factors are operating?
(c)Where to promote?
Using Indexes to determine where to promote:
i. Buying power index
ii. Brand developent Index
iii. Category development index
Step-II
Example: Create awareness in the target market through the following:
a. Use broadcast media to provide coverage of 80% of the target market over a six-month period.
b. Reach 60% of the target audience at least three times over the same six month period
c. Concentrate heaviest advertising in winter and spring, with lighter emphasis in summer and fall.
Step-III
 The media mix

 Target Market coverage
 Geographic coverage
 Scheduling (Continuing, Flighting, Pulsing)
 Reach and frequency
(a) How much reach is necessary?
(b) What frequency level is needed
(c) Establish reach and frequency objectives
 Unduplicated reach
 Duplicated reach
 Program rating
 Gross rating points
 Target rating points
 Determing effective reach
 Creative Aspects and Mood
 Flexibilty
 Budget considerations
 Cost Per thousand
 Cost per rating point
 Daily Inch rate
 Target CPM
 Readers per copy
 Pass along rate
Step-IV
Evaluation and follow up.
Media Evaluation: Print, Television and radio
 Television
Advantages:
a) Creativity and Impact
b) Coverage and cost effectiveness
c) Captivity and attention
d) Selectivity and Flexibility
Limitations:
a) Costs

b) Lack of selectivity
c) Fleeting message
d) Clutter
e) Limited viewer attention (zipping and zapping)
f) Distrust and negative evaluation
Buying television time:
 Network Vs. Spot
Network Advertising:
 Upfront market
 Scatter market
Spot and local advertising
 Spot advertising
 National spot advertising
 Local advertising
 Station reps
 Syndication
Advertisers can also reach the TV viewers by advertising on syndicated programs, shows that are sold or distributed on a station-by-station,
market by market basis
• Types of syndication
a) First-run syndication: refers to shows specially for the syndication market
b) Off-network syndication: reruns of network shows that are bought by individual stations. Like: Seinfeld, friends, everyone love Raymond.
c) Barter syndication/ Advertiser-supported syndication
 Methods of Buying time:
a) Sponsorships
b) Participation
c) Spot announcements
d) Selecting time periods and programs (Dayparts)
Cable Television
 Delivers TV signals through fiber or coaxial wire rather than the airways.
 Superstations: Independent local stations that send their signals nationally via satellite to cable operators to make their programs
available to subscribers.
 Advertising on cable (Interconnects)
Advantages of Cable:
a) Narrowcasting
b) low cost and flexibility

c) spot advertising is also very cheaper on cable TV
Limitations:
a) Overshadowed with major networks
b) Audience fragmentation
c) Still lacks total penetration
d) Major threat by Direct broadcast satellite (DBS) services
Measuring the TV audience:
Audience measures:
 Television Households (UE- universe estimate)
 Program rating
 Households using Television (HUT)/ sets in use: the %age of homes in a given area where TV is being watched during a specific time
period
 Share of audience: %age of households using TV in a specified time period that are tuned to a specific program
Network audience information:
 Nielson Television index
 Audimeter (an electronic measurement device hooked up to the TV sets to continuously measure the channels to which the set was
tuned)
 The people meter
 Local audience Information
 RADIO
Advantages:
a) Cost and Efficiency
b) Selectivity
c) Flexibilty
d) Mental Imagery
e) Integrated Market Opportunities
Limitations:
a) Creative Limitations
b) Fragmentation
c) Chaotic buying procedures
d) Limited Research data
e) Limited Listener attention
f) Clutter
 Buying radio Time:
 Network Radio

 Spot Radio
 Local Radio
Time Classifications
Audience Information:
Arbitron: Three basic estimates in the arbitron report are:
(a) Person Estimates
(b) Rating
(c) Share
 Average Quarter Hour
 Cume (Cumulative Audience)
 RADAR (Radio’s All Dimension Audience Research)
Newspaper
Types of Newspapers:
a) Daily Newspaper
b) Weekly Newspaper
c) National Newspaper
d) Special-Audience Newspaper
e) Newspaper Supplements
Types of Newspaper Advertising:
a) Display Advertising (Local & National/General Advertising)
b) Classified Advertising
c) Special Ads and Inserts (Preprinted Inserts & Free-Standing Inserts)
Advantages:
a) Extensive Penetration
b) Flexibility
c) Geographic Selectivity
d) Reader Involvement and Acceptance
e) Services Offered
f) Timeliness
g) Credibility
h) Cost Effective
Limitations:
a) Poor Reproduction
b) Short Life Span

c) Lack of Selectivity
d) Clutter
The Newspaper Audience:
 City Zone
 Retail Trading Zone
 All other areas
 Measuring newspaper audience (circulation, paid circulation, controlled circulation, readership)
Audience Information:
 SRDS (Standard rate and Data service)
Purchasing Newspaper Space:
 General Advertising Rates:
apply to display advertisers outside the newspaper designated market area (DMA) and to any classification deemed by the publisher to
be general in nature. Example, ads run by national advertisers like automotive, tobacco, packaged goods, pharmaceuticals co’s.
 Local / retail Advertising rates:
Apply to advertisers that conduct business or sells goods / services within the DMA. The rates paid by general advertisers are on avg 75%
higher than those paid by local advertisers.
Newspaper Rates:
Standard Advertising Units (SAU’s)
Rate Structures:
a) Flat rates
b) Open rate Structure
c) Run Of paper
d) Preferred Position Rate
e) Combination rates
Future Of Newspaper:
a) Competition From Other media
b) Circulation
c) Cross- Media Buys
d) Attracting and retaining readers
Magazines
e) Classification of Magazines:
f) Consumer magazines
g) Farm Publications
h) Business Publications

Advantages :
a) Selectivity
b) Reproduction Quality
c) Creative Flexibility (Gatefolds & Bleed Pages)
d) Permanence
e) Prestige
f) Consumer Receptivity & Involvement
Limitations:
a) Costs
b) Limited reach and frequency
c) Long lead time
d) Clutter and competition
Magazine circulation and readership:
 Circulation (Circulation verification, ABC Audit Bureau of Circulation)
 Readership and total audience (Pass along readership)
 Audience Information and Research for magazines
Purchasing Magazine Advertising Space:
Magazine Network
Future For magazines:
a) Stronger editorial platforms
b) Circulation Management
c) Cross magazine and media deals
d) Database marketing
e) Advances in Technology
f) Online delivery methods
Factors to consider when comparing various advertising media
 Reach - expressed as a percentage, reach is the number of individuals (or homes) to expose the product to through media scheduled
over a period of time.
 Frequency - using specific media, how many times, on average, should the individuals in the target audience be exposed to the
advertising message? It takes an average of three or more exposures to an advertising message before consumers take action.
 Cost per thousand - How much will it cost to reach a thousand prospective customers (a method used in comparing print media)? To
determine a publication's cost per thousand, also known as CPM, divide the cost of the advertising by the publication's circulation in
thousands.
 Cost per point - how much will it cost to buy one rating point the your target audience, a method used in comparing broadcast media.
One rating point equals 1 percent of the target audience. Divide the cost of the schedule being considered by the number of rating points
it delivers.

 Impact - does the medium in question offer full opportunities for appealing to the appropriate senses, such as sight and hearing, in
its graphic design and production quality?
 Selectivity - to what degree can the message be restricted to those people who are known to be the most logical prospects?
Media Buying
• Buying is a complicated process
• The American Association of Advertising Agencies (AAAA) lists no fewer than 21 elements in the authorization for a media buy
Providing inside info
• Media buyers are important information sources for media planners
• Close enough to day-to-day changes in media popularity and pricing to be a constant source of inside information
Selecting Media Vehicles
• Choose the best vehicles that fit the target audience’s aperture
• The media planner lays out the direction; the buyer is responsible for choosing specific vehicles
Negotiation
• Media buyers pursue special advantages for clients
• Locate the desired vehicles and negotiate and maintain satisfactory schedule and rates
Preferred Positions
• Locations in print media that offer readership advantages
• Preferred positions often carry a premium surcharge
Extra Support Offers
• Value-added media services
– Contests
– Special events
– Merchandising space at stores
– Displays
– Trade-directed newsletters
Billing and Payment
• It is the responsibility of the advertiser to make payments to various media
• The agency is contractually obligated to pay the invoice on behalf of the client
Monitoring the Buy
• The media buyer tracks the performance of the media plan as it is implemented, as well as afterward
• Poorly performing vehicles must be replaced or costs must be modified
Make-Goods
• A policy of compensating for missed positions or errors in handling the message presentation

• Ensure that the advertiser is compensated appropriately when they occur
Post-campaign Evaluation
• Once a campaign is completed, the planner compares the plan’s expectations and forecasts with what actually happened
• Provides guidance for future media plans
Measuring Advertising Effectiveness
Stages of Advertising Campaign Measurement
• Pre-production/campaign stages - (copy testing, message & symbols testing etc)
• Production/campaign stages - (visibility, awareness research etc)
• Post-production/campaign stages (behavioural change, objectives, effectiveness research)
Feedback is needed at every stage to influence future campaign efforts
Methods of Measuring Advertising Effectiveness
• Checking advertising objectives (AIDA, DAGMAR) set before the campaign with results achieved afterwards
• Measuring the volume of sales before the campaign & the volume afterwards
• Calculating the number of returned coupons & ref no. quotes
• Calculating sales leads and responses as a result of advertising (ad to sales ratio)
• Asking customers directly …How did you hear about us…Were you…
The Testing Process
(A) Concept generation and testing
 Focus group
 Mall Intercepts
(B) Rough art, copy, and commercial testing
 Comprehension and Reaction tests (Use personal interview methods, group interviews, focus group, sample size generally is 50-200
respondents)
 Consumer juries
(C) Pretesting of finished ads: Pretesting finished print messages
 Portfolio Tests:
A laboratory methodology designed to expose a group of respondents to a portfolio consisting of a control ad and a test ad. Respondents are
then asked to what information they recall from the ads
 Readability tests (Flesch formula)
 Dummy advertising vehicles
Pretesting finished broadcast ads
 Theater Tests
 On-air Tests
 Psychological measures

• Pupil dilation
• Galvanic skin response/ electrodermal response
• Eye tracking
 Brain waves
• Alpha activity – degree of brain activation. People are in alpha state when they are inactive, resting or sleeping
• Hemispheric lateralization: to determine electrical frequencies in the brains
(D) Market testing of ads
Posttests of print ads
◦ Inquiry tests (Split run tests, running the ad in successive issues of the same medium, Running the same ad in different media)
◦ Recognition tests
 False claiming
 Interviewer Sensitivities
 Reliability of recognition scores
 Recall Tests
◦ Posttests of broadcast commercials
◦ Day after recall tests
◦ Persuasive measures
◦ Diagnostics
◦ Test marketing
◦ Single source tracking studies
◦ Tracking print/ Broadcast ads
Organizing for Advertising
 An Advertising Agency or ad agency is a service provider that works for clients to create an effective and goal oriented advertising
campaign aimed at representing the Company positively in the eyes of its target customers.
 “An Advertising Agency is an independent organization of Creative people and business people who specialize in developing and
preparing marketing plans, advertisements and other promotional tools.’’

Functions of Ad Agency
• To advertise their products, brands and services to present and prospective customers.
• For planning and creating an effective advertising campaign.
• To take over the process of brand building, strategizing and pushing sales through other promotion techniques like sales promotions etc.
TYPES OF AD AGENCY
 IN HOUSE AGENCY
 FULL-SERVICES AGENCY
 SPECIAL-SERVICES AGENCY
 CREATIVE BOUTIQUES: Provide Only Creative Services……Full-Service Agencies May Subcontract With Creative Boutiques
 SWEAT SHOPS
Factors to be considered in selecting an Ad Agency:-
 Location
 Size

 Agency working for competitors
 Image of agency
 Services offered by Ad Agency
 Rates charged
 Creative skills & New ideas
 Past record of Agency
 Quality & Caliber of Staff
 Financially Sound
 Agency Experience
So Ad-Agency should not be selected hurriedly. The advertiser should first develop its Job description, decide its needs, Ad-budget, & then look
for a suitable agency whose talent. Image, experience & record matches closely with clients description, needs & Budget.
Department based organization structure
 Client Liaison department
 Research department
 Copy Writing Department
 Art Department
 Media Department
 Accounts Department
 Audio-Visual Ad Production Department
 Marketing Service Department
 Public Relations Department
 Evaluation Department
Group Based organization Structure
 Planning of Advertising
 Preparation of Advertisement
 Placement & Execution of Advertisement
 Marketing Services

COMPENSATION OF AD-AGENCY
COMMISSION SYSTEM
 It is the traditional method of compensating Ad-agencies.
 When the agency has sold space or time of media to its client, then media owners pay a commission on their sales to Ad agencies.
 Usually ,this commission is 15% of the amount paid by client to media.
 This commission covers the expenses of services rendered by agency to client & media.
SERVICE CHARGES
 This is the second type of compensation method.
 These service charges are added in the form of a fixed percentage to the cost of material & services purchased for the advertiser.
 Normally this percentage is cost +15%.
FEES SYSTEM

 Agency income is also derived from fees charged by agency form its clients.
Types of Fees-arrangements:-
 Fixed- Fee Method
 Speculative Method
Social, Ethical and Legal Aspects of Advertising
Social aspects of advertising
Advertising as a part of firm’s marketing effort operates in the society. It has to therefore follow the social norms.
Key areas of debate regarding society and advertising are:
 Deception
 Manipulation
 Taste
Deception: it refers not only to the information content in advertising but may also arise from misplace emphasis in presentations.
According to federal trade commission of the USA-

 “Advertising as a whole must not create a misleading impression although every statement, separately considered, may be literally
truthful”
Manipulation :- The freedom of choice of consumers is restricted by the power of advertising since it can manipulate buyers into making a decision
against their will or interest.
Manipulation is done through emotional appeals. These companies can utilize advanced and very scientific advertising techniques and thus make
an impression on consumers.
Taste:- Sometimes ads are offensive, tasteless, irritating, boring and so on.
a) Sources of distaste
b) Sexual Appeals
c) Shock advertising
Some examples of the Advertisements with social aspects:-
 Grow-more-trees advertisements
 Drink milk
 Eat healthy food, eat eggs
 Mother’s milk is best for the baby
 Say no to drugs every time
 Get your child vaccinations in times
Legal aspects of advertising
The government in each country has to make sure that advertisements appearing do not flaunt of their rules & regulations.
It should not:-
 show anti-national feelings
 contain misleading information about the product
 Violate government rules
Some examples of the Advertisements with legal aspects:-
 Get your car checked for pollution
 Drinks & driving do not mix
 Weight, price, manufacturing date, date of expiry should be mentioned on the packing case
Ethical aspects of advertising
Ethics are the moral standards against which behavior is judged
Key areas of debate regarding ethics and advertising are:
 Truth in advertising
 Advertising to children
 Advertising controversial products

Truth in Advertising
 Deception is making false or misleading statements.
 Puffery (commercial exaggeration) is legal.
 Cannot legislate against emotional appeals
Advertising to Children—Issues
 Advertising promotes superficiality and materialism in children.
 Children are inexperienced and easy prey.
 Persuasion to children creates child-parent conflicts.
 What does the literature say about kid’s abilities to process persuasive information?
Advertising Controversial Products
 Critics question the “targeting” of minorities.
► Tobacco, alcohol, gambling and lotteries are product categories of greatest concern.
 How does the concept of “primary demand” provide insights here?
 What does the literature say about advertising’s impact on these product categories?
UNIT-3
Brand
 According to AMA "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of
other sellers."
 A BRAND is symbolic embodiment of all the information connected to a Company, Product or Service.
 It serves to create associations and expectations from products made by a producer, in the mind of the consumer.
 The key objective being “to create a Relationship of TRUST with its consumers”.
Brand elements[edit]
Brands typically are made up of various elements, such as:
[13]
 Name: The word or words used to identify a company, product, service, or concept.
 Logo: The visual trademark that identifies the brand.
 Tagline or Catchphrase: "The Quicker Picker Upper" is associated with Bounty paper towels.
 Graphics: The dynamic ribbon is a trademarked part of Coca-Cola's brand.
 Shapes: The distinctive shapes of the Coca-Cola bottle and of the Volkswagen Beetle are trademarked elements of those brands.
 Colors: Owens-Corning is the only brand of fiberglass insulation that can be pink.
 Sounds: A unique tune or set of notes can denote a brand. NBC's chimes are a famous example.
 Scents: The rose-jasmine-musk scent of Chanel No. 5 is trademarked.
 Tastes: Kentucky Fried Chicken has trademarked its special recipe of eleven herbs and spices for fried chicken.
 Movements: Lamborghini has trademarked the upward motion of its car doors.
 Customer relationship management

Brand Types
: individual products, ranges, services, organizations, individuals, groups, events, places, private labels, media, and e-brands.
The different types of brands include: individual products, product ranges, services, organizations, persons, individuals, groups, events, geographic
places, private label brands, media, and e-brands.
The most common type of brand is a tangible, individual product, such as a car or drink. This can be very specific, such as the Kleenex brand of
tissues or can comprise a wide range of products.
Product brands can also be associated with a range, such as the Mercedes S-class cars or all varieties of Colgate toothpaste.
A service is another type of brand as companies move from manufacturing products to delivering complete solutions and intangible services.
Service brands are characterized by the need to maintain a consistently high level of service delivery. This category comprises the following:
 Classic service brands (such as airlines, hotels, car rentals, and banks).
 Pure service providers (such as member associations).
 Professional service brands (such as advisors of all kinds – accountancy, management consultancy).
 Agents (such as travel agents and estate agents).
 Retail brands (such as supermarkets, fashion stores, and restaurants).
Another type of brand is an organization. This can be a company that delivers products and services. Mercedes and the US Senate are all defined
organizations and each have qualities associated with them that constitute their brand. Organizations can also be linked closely with the brand of
an individual. For example, the U.S. Democratic party is closely linked with President Barack Obama.
A person can also be considered a brand. It can be comprised of one, as in the case of Oprah Winfrey, or a few individuals, where the branding is
associated with different personalities, such as with the American Democratic Party.
Not much higher in detail than an individual is the brand of a group. In particular, when this is a small group and the individuals are known, the
group brand and the individual brand overlap. For example, the OWN brand of the Oprah Winfrey Network and the brand of its known members
(Oprah and her team) are strongly connected.
Brand identity prism

The brand identity prism therefore applies human traits to a brand to recognize what consumers actually think of the brand. The brand identity
prism, as the name suggests comes in the form a prism with 6 different traits at each end of the prism. These 6 traits are
1) Physique – Physique is the basis of the brand. It may include product features, symbols and attributes.
2) Personality – Personality defines what personality will the brand assume if it were a person. Personality includes character and attitude.
3) Culture – Culture takes a holistic view of the organization, its origins and the values it stands for.
4) Relationship – The strength of the relationship between the brand and the customer. It may represent beliefs and associations in the human
world.
5) Reflection – What does the brand represent in the customers mind or rather the customer mindset as reflected on the brand
6) Self image – How does the customer see himself when compared to the brand. Example – A customer might see himself capable or incapable
of buying a BMW car.
Below is a detailed brand identity prism for the brand Pepsi
Pepsi’s brand identity has transformed over the years, but primarily it has remained as a youthful brand which empowers people to enjoy their
youth. The external and internal indicators of Brand Identity have been modified many times. Its logo, trademark, etc have undergone many
changes over time but the distinct identity of Pepsi has been maintained. We also see a consistency in brand positioning for Pepsi as a Youth
oriented brand. Its tagline in India “YEH HAI YOUNGISTAN MERI JAAN” exemplifies that essence. Pepsi’s brand identity using Kapferer’s Identity
prism is as follows
Brand EquityBrand equity is a phrase used in the marketing industry which describes the value of having a well-known brand name,
based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products
with a less well known name, as consumers believe that a product with a well-known name is better than products with less well-known names.

Brand Loyalty -
For any business, it is expensive to gain new customers and relatively inexpensive to retain existing ones, especially
when the existing customers are satisfied or happy with the brand. Competitors may even be discouraged from
spending resources to attract already satisfied customers. Further, higher loyalty means greater trade leverage; since
customers expect the brand to be always available.

• Brand Name Awareness -
People will often buy a familiar brand because they are comfortable with the familiarity or they assume that a brand
that is familiar is probably reliable and of reasonable quality. When consumers feel uneasy about a product's name, they
will avoid the product – and that translates into the loss of sales. Brand names should be easy for customers to visualize,
and this involves pronunciation and spelling.
• Perceived Quality -
A brand will have associated with it a perception of overall quality, which is not necessarily based on knowledge of
detailed specifications. The quality perception may take on somewhat different forms for different types of industries.
Perceived quality means something different for Compaq or IBM than for Coca-Cola or Pepsi. Perceived quality will
directly influence purchase decisions and brand loyalty, especially when a buyer is not motivated or able to conduct a
detailed analysis
Brand Associations -
The underlying value of a brand name often is based upon specific associations linked to it. The associations, for
example, of the car brand Jaguar may make the experience of owning and driving one "different". If a brand is well
positioned upon a key attribute in the product class (such as technological superiority), then competitors will find it hard
to attack. If they attempt a frontal assault by claiming superiority via that dimension, there will be a credibility issue.
They may be forced to find another, perhaps inferior, basis for competition. Thus, an association can be a barrier for
competitors.
• Other Proprietary Brand Assets -
This fifth category represents such other proprietary brand assets as patents, trademarks, and channel relationships.
Brand assets will be most valuable if they inhibit or prevent competitors from eroding a customer base and loyalty.
These assets can take several forms. For example, a trademark will protect brand equity from competitors who might
want to confuse customers by using a similar name, symbol, or package. A patent, if strong and relevant to customer
choice, can prevent direct competition. A distribution channel can be controlled by a brand because of a history of
brand performance.

Customer-based brand equity (CBBE)
is a way of assessing the value of a brand in customers' minds. Branding can increase profitability in large and small-scale
businesses by filling in gaps in customers' knowledge and by offering assurances. The CBBE model centers that value in the
minds of customers. It compels businesses to define their brands according to a defined hierarchy of qualitative, or common-
sense, customer impressions. These impressions are often laid out in pyramid-shaped levels; they consist of salience,
performance, imagery, meaning, judgments, feelings, and resonance.

BRAND LOYALTY
 Brand loyalty is a measurement of how often a customer is disposed to purchase a product (or to utilize a service) from the same brand
when buying from the same product (or service) class.
 This process can come from either a conscious or unconscious decision.
A second dimension, however, is whether the customer is committed to the brand. Philip Kotler, again, defines four patterns
of behaviour:
1. Hard-core Loyals - who buy the brand all the time.
2. Split Loyals - loyal to two or three brands.
3. Shifting Loyals - moving from one brand to another.
4. Switchers - with no loyalty (possibly 'deal-prone', constantly looking for bargains or 'vanity prone', looking for
something different).
Measures of Brand Loyalty
 Attitudinal versus behavioral measures, and
 Brand-oriented versus individual-oriented measures
Behavioral v/s Attitudinal Measures

 Behavioral measures define brand loyalty in terms of actual purchase over a period of time.
 Attitudinal measures are based on preference , commitment or purchase intentions of the consumer
Individual oriented v/s brand oriented
 In individual oriented measures the loyalty of specific customer is estimated.
 In brand oriented measure brand loyalty is derived from each brand (Comparing one brand with other)
Brand Personality
• Brand Personality is a set of human characteristics associated with a brand
• Personality is how the brand behaves
• Gender, age, socio-economic class, psychographic, emotional characteristics
• Axe is ‘masculine’ while Dove is ‘feminine’
• IBM is ‘older’ while Apple is ‘younger’
• India Today is ‘old-fashioned’ while Outlook is ‘trendier’
• Coke is ‘conforming’ while Pepsi is ‘irreverent’
Creating brand personality
• Define the target audience
• Find out what they need, want and like
• Build a consumer personality profile
• Create the product personality to match that profile
5 Dimensions of Brand Personality
1. Sincerity (down-to-earth, honest, wholesome, cheerful)
2. Excitement (daring, spirited)
3. Competence (reliable, intelligent, successful)
4. Sophistication (upper class, charming)
5. Ruggedness (outdoorsy, tough)
Why use brand personality?
Enriches understanding
• Helps gain an in-depth understanding of consumer perceptions of and attitudes towards the brand
• Can provide more insight than is gained by asking about attribute perceptions
• For ex., Microsoft, IBM etc.,
Contributes to a differentiating identity
• Can differentiate brands especially where brands are similar in product attributes
• In fact, it can define not only the brand but the product class context and experience

• Mercedes Vs BMW; Clinic Plus Vs Pantene
Guides the communication effort
• Communicates the brand identity with richness and texture
• If the brand is specified only in terms of attribute associations, very little meaningful guidance is provided
– Is Nike shoes or sports, performance and attitude?
 A brand personality can help a brand in several ways:
– It can provide a vehicle for customers to express their own identity
– A brand personality metaphor helps suggests the kind of relationship that customer has with brand
– Brand personalities serve to represent and cue functional benefits and product attributes well
• Importantly, brand personality is often a sustainable point of differentiation
– Sustainable because it is very difficult to copy a personality
BRANDING STRATEGIES
1. THE PRODUCT BRAND STRATEGY- This strategy involves the assignment of a particular name to one and only one product as well
as one exclusive positioning.
2. THE LINE BRAND STRATEGY- In this strategy the line responds to the concern of offering one coherent product under a single
name by proposing many complimentary products.
3. The RANGE BRAND STRATEGY- Range brands bestow a single brand name and promote through a single promise a range of
products belonging to the same area of performance.
4. UMBRELLA BRAND STRATEGY – The same brand supports several products in different markets. Each of them has its own
advertising tools and develops its own communications.
Product Line'
A good way for a company to try to expand its business is by adding to its existing product line. This is because people are more likely to purchase products from
brands with which they are already familiar. For example, a frozen pizza company may wanted to increase its market share by adding frozen breadsticks and frozen
pastas to its product line.
Line Extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors,
added ingredients, package sizes. This is as opposed to brand extension which is a new product in a totally different product category.Line extension occurs when the
company lengthens its product line beyond its current range. The company can extend its product line down-market stretch, up-market stretch, or both ways.
Down-Market Stretch[edit]
A company positioned in the middle market may want to introduce a lower-priced line for any of the three reasons:
1. The company may notice strong growth opportunities as mass retailers such as Wal-Mart, Best Buy, and others attract a growing number of shoppers who
want value-priced goods.

2. The company may wish to tie up lower-end competitors who might otherwise try to move up-market. If the company has been attacked by a low-end
competitor, it often decides to counterattack by entering the low end of the market.
3. The company may find that the middle market is stagnating or declining.
Up-Market Stretch[edit]
Companies may wish to enter the high end of the market for more growth, higher margins, or simply to position themselves as full-line manufacturers. Many markets
have spawned surprising upscale segments: Starbucks in coffee, Haagen-Dazs in ice cream and Evian in bottled water. Leading Japanese auto companies have each
introduced an upscale automobile: Toyota's Lexus, Nissan's Infiniti, and Honda's Acura. Note that they invented entirely new names rather than using or including
their own names.
Two-Way Stretch[edit]
Companies serving the middle market might decide to stretch their line in both directions. Texas Instruments (TI) introduced its first calculators in the medium-price-
medium-quality end of the market. Gradually, it added calculators at the lower end taking the share from Bowmar, and at the higher end to compete with Hewlett-
Packard. This two-way stretch won Texas Instruments (TI) an early market leadership in the hand-calculator market.
Examples include
 Zen LXI, Zen VXI
 Surf, Surf Excel, Surf Excel Blue
 Splendour, Splendour Plus
 Coca-Cola, Diet Coke, Vanilla Coke
 Clinic All Clear, Clinic Plus
 Reese's Peanut Butter Cups, Reese's Pieces and Reese's Puff Cereal
umbrella branding strategy,
is a marketing practice that involves selling many related products under a single brand name. Unlike individual product branding, which uses
different brand names for different products, umbrella branding uses a single brand name, and in some cases logo, for different products.
Umbrella branding offers several benefits to marketers. They include
 Extra Brand Creation not required
 Single spend on advertising (for all products)
 Dependant perception: The perception depends on the main brand
 Easier launch of new products
 Better response to new products when compared to individual branding
Umbrella branding involves creating huge brand equity for a single brand, and thereafter leveraging that over multiple products. Umbrella
branding is also known as family branding. It is very common to find umbrella branding in FMCG products.
On the flipside, bad reputation of any one product, may affect the equity of all the other products using the same brand name. In India, umbrella
branding is used successfully by Amul for dairy products, Tata for its FMCG products like Tata Tea, and Tata Salt, and Kingfisher for alcoholic

beverages, mineral water(see Surrogate Advertising), and Airlines. Wills also uses umbrella branding for its tobacco products, apparels, accessories,
and soaps & shampoo.

DAGMAR Advertising Model Explained

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