Advertising Flashcards
Advertising: efficiency vs effectiveness
Efficiency: minimize advertising to people that aren’t interested in the product.
Effectiveness: impact of communicating utility.
Reach vs frequency
Reach: how many people hear your message.
Frequency: how often
3 Basis for trading off reach & frequency
1) Advertising goal
2) characteristics of the message
3) constraints environment
Probably gonna do frequency.
Advertising noise
Amount of advertisements a consumer is subjected to. Anything that distracts consumers from your ads.
3 factors that reduce advertising effectiveness
1) Number of ads
2) Low consumer involvement
3) Confusion and market leader attributes
5 tactics used to address noise
1) Huge budgets (scream)
2) Creative execution
3) Scheduling and placement
4) Clear & consistent message/positioning
5) Price Promotion
2 consequences of price promotions in response to advertising gains not being captured soon enough.
1) reduce brand equity
2) invoke competitor price responses.
2 unknowns of online ad environments
1) Ad effectiveness: which platform was ad encountered.
2) Ad relevance: word of mouth or online reviews is replacing the value of advertising.
6 Stages towards purchase
1) Awareness
2) Knowledge
3) Liking
4) Preference
5) Purchase
6) Brand Switching or repeat purchase
Advertising agency claims to be responsible for which Stages toward purchase:
1) Awareness
2) Knowledge
Clients would like advertising agencies to be accountable for which Stages toward purchase:
5) Purchase
6) Repeat Purchase
Potential problems at each stage when working with agency:
1) Awareness & Knowledge not met… Agency should be fired. This is the minimum.
2) Preference not met… product might suck.
3) Trial not met… might be price or place. This one is diagnosable.
4) Repeat not meet… problem is most likely the product.
2 Economic schools of thought of advertising.
1) Advertising = information (optimistic view)
2) Advertising = market power (pessimistic view)
4 beliefs ( advertising = information)
1) Informs consumers about product attributes, but does not alter consumers’ value of attributes.
2) Greater knowledge = easier substitutes. Greater price sensitivity.
3) Allows communication = reduces entry barriers.
4) Increase competition = lower prices.
4 beliefs (advertising is power)
1) Affects preferences = falsely differentiating products.
2) Creates brand loyalty = less price sensitivity.
3) Loyalty = barrier to entry.
4) Less competition = higher prices.
4 assumptions of the market if you believe advertising is “information”
1) Markets are rational
2) Consumers can obtain “full information” about products
3) Advertising does not affect repeat purchases.
4) Deceptive advertising is minimal in the long term.
3 Evidences to support Advertising is information school of thought (Attributes). AKA: Consumers are good learners.
1) Search Attributes.
2) Experience Attributes.
3) Credence Attributes
Search Attribute
Consumer can get all necessary info to make purchase decision about product by “searching”.
Search Attribute
Consumer can get all necessary info to make purchase decision about product by “searching”.
Experience Attribute
Consumer needs to experience the product to understand it. Cannot describe “taste”.
Credence Attribute
Consumer needs an opinion or reference to make purchase decision. Doctor or dentist.
4 evidences to support Advertising is power school of thought. AKA: Consumers are poor learners.
1) Insufficient exposure to evidence.
2) Biased encoding the evidence.
3) Inappropriate use of evidence.
4) Uses of signals and peripheral cues
3 reasons for insufficient exposure to evidence. (Advertising = Power)
1) Consumer lacks motivation to search.
2) Consumer overestimate their knowledge.
3) Consumer overestimate reliability of their experience. (opinion on single experience)
Biased encoding the evidence (Advertising = Power)
Consumers interpreting experience based on prior beliefs, especially when info is ambiguous.
3 causes of ambiguity:
1) Lack of training
2) Credence attributes
3) Information complexity
Inappropriate use of evidence (Advertising = Power).
Misinterpretation involving a failure of logic. The best coffee is mountain grown. Folgers is mountain grown….
5 Uses of signals and peripheral cues (Advertising = Power)
1) Price - Consumer reports
2) Warranty - (Mitsubishi)
3) Amount of Advertising - (Brokerage)
4) Endorsers - (insurance/doctors)
5) Brand name
2 Advertising Ethics
1) Vulnerable populations: (children, geezers, & not-savvy).
2) Need creation: (disease mongering, antibacterial, pickup truck).
2 arguments against Need Creation being unethical
1) Latent needs. Company raises an existing need.
2) Non utilitarian needs are okay. People can be vain.
