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Notes for Midterm 1

by: Emma Dahlin

Notes for Midterm 1 3444

Marketplace > Ohio State University > 3444 > Notes for Midterm 1
Emma Dahlin
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All notes for Midterm 1
Advertising and Society
Amy Nathanson
Class Notes




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This 10 page Class Notes was uploaded by Emma Dahlin on Tuesday March 8, 2016. The Class Notes belongs to 3444 at Ohio State University taught by Amy Nathanson in Spring 2016. Since its upload, it has received 23 views.


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Date Created: 03/08/16
COMM 3444: Advertising in Society  What is advertising? o How do you define an ad? What counts? o “to give notice, to inform, to notify, to make known” o “a paid, non-personal message from an identifiable source delivered through a mass-mediated channel that is designed to persuade” o Distinguish from related concepts  Public Relations (PR): for the organization, how company represents themselves, not paid  Personal Selling o Successful Advertising  Information  Reasoning  Emphasis  Advertising is Everywhere o We are literally bombarded by advertising  We see b/t 250-5000 ads PER DAY  The amount of money spent on advertising has grown:  1900 = $500 million  1940= $2 billion  1980= $60 billion  2000=$200 billion  Result: Ad Clutter  More than just traditional media placement  Ambient advertising  “Ad creep”  Naming Rights  Product placement  Goals of Advertising (intended effects) o Awareness: breaking through the clutter o Influence attitudes & behavior  Opinion Creation: create opinion in consumer where they didn’t have one before  Canalization: channel existing needs to the product  Opinion Conversion: changing or converting an opinion  Action  But immunization can occur too: we can become immune to it o Product Differentiation  Distinguish from competition  Relevant differences  Perception of difference o Branding  Product vs. Brand  Crucial to a product’s success  Positioning & identity  Recognition and loyalty  Does it work? o Preference for advertised brands o What proportion of consumers buy the brand name?  80% o Better product or better branding?  Video: The Persuaders o Clutter o Paradox for advertiser  Vicious cycle  Criticism: Advertising makes people materialistic o But how much is too much? 1. Strive for more  Buy, buy, buy 2. Perhaps less is more:  Satisfaction through other means  Conservation  Criticism: Advertising is deceptive o What is deceptive? 1. Better world 2. Puffery  “The beset of its kind”  “The most beautiful”  “The finest”  Linguistic Devices used by True but Deceptive Advertising o Hedges (ex: “May help lower cholesterol”) o Elliptical comparatives (ex: “Now Tastes Even Better!”) o Implied causation (ex: “Make some body happy” implying that you will lose weight and be happy) o Implied slur on competition (ex: Allstate “You’re in good hands”) o Pseudo-science (when an ad presents the claims as if they are based on scientific evidence, ex: More doctors smoke camels than any other cigarette”)  Advertising is Manipulative o Subliminal advertising  Advertising is Invasive o Invades our privacy o Tracking products  Advertising is a poor source of information o Bias o Inefficiency o Survey  80% of Americans believe TV advertising offers primarily deceptive persuasion  Only 17% say it’s a good source of info  Advertising Literacy o Awareness of exposure o Building knowledge structure o What is the ad really selling? o What are your needs?  Where did they originate? History of Advertising  Where did advertising come from?  Early history o Traces back to 3000 BC  Ancient signs carved in stone and wood  Town cities  History of Advertising in America o 1600s-1850s o Rural communities, small towns  One blacksmith  One general store  People were self-reliant  Knew how items were produced  The industrial revolution o U.S population doubled  Labor force-more people working  Consumer market o From rural to urban society  Less sufficient individuals o Mass production o Mass communication era  Printing press  Industrial Revolution=Branding o Manufacturers begin to focus on branding  Brand identity  Customers ask for it by name  Move beyond price competition  Distinguish  Perhaps the single largest triumph of advertising o Quaker Oats  The first cereal company to register a TM  A Consumer Society Developed o Enormous assortment of goods o Constant change in the goods themselves o Rise in income, discretionary spending, and leisure time o Advertising efforts: devoted to human desires that are not directly tied to basic necessities  Became the “lifestyle” images we have today The Culture of Consumption  Advertising began to address consumers as individuals  Criteria for success varied over time o No longer measured against strict behavioral codes o No longer measured against fixed standards of achievement and moral worth  Income became most important status indicator in US o An individual achievement o Provides access to tokens of success that are prized at any given moment  Creating and maintaining the “self” became a lifetime task o Self-improvement, personal development, selling oneself, self-assertion o A response to uncertainties introduced by urbanization o Erosion of older cultures created a void in personal life  Advertisers jumped in o Linked products with imaginary states of well-being o Advertising provided guideposts for social/personal identity  The Consumer vs. The Product o Ads provide cues about new styles of personal behavior (Enjoli) o Ads link new goods with traditional images o Consumers find comfort with this o Transfers positive feelings to the product  The 1920s & Radio o Radio  Literacy  Music, jingles  Drama o Programs were branded  Kraft Music Hall  Colgate Comedy Hour  Radio stars delivered the commercial message during the shows  The 1950s o Postwar marketplace surge o TV took over  Emotion  Imagery  Demonstrating the product in action o Early days: single sponsorship model  TV programs produced by advertising agencies  Paid for by a single sponsor (The Flintstones Winston Cigarettes) o Shift to: participation advertising  Single sponsorship struggled  Don’t sell whole shows to advertisers, but small blocks of time  Enter the commercial break  Colgate toothpaste  The research era o From 1950 to present o Cost of advertising  Understand what works  Target more precisely o Parallel industry develops  Marketing research  The science of selling (fill in notes) Economic Effects of Advertising  Two schools of thought 1. Advertising=market power 2. Advertising=market competition  Market Power Model: advertising persuades consumer to select brand (differentiation) o Advertising leads to brand loyalty o Higher prices o Increased profits o Higher barriers to entry and more market power o Less competition o Fewer available products; higher price  Market Information Model: advertising provides info o Informed consumers; increased price sensitivity o Lower prices o Reduced market power; more competition o Lower barriers to entry o More competition; more innovation o More product alternatives; lower price  Problems with market power model? o Assumes advertising as sole cause of purchase decisions  Problems with market information model? o Assumes rational consumers o Assumes quality info  What do you think? o Advertising=market power o Advertising = market information o Or both? o Depends on product  Convenience or nonconvenience goods o Some evidence  Retail advertising  Can lead to more competition, lower prices  National advertising  Price sensitivity decreases  Brand loyalty  Cost of doing business increases  Does advertising influence aggregate consumption? o Research is mixed on this o Bottom line  Is advertising beneficial to the economy? Harmful? Social waste?  No clear answer to this question – strong disagreement among experts  Now you have the info to draw your own (informed) conclusion  Estimating Your Personal Expenditures on the Media o Estimate: How much money do you spend on all forms of media per year? o Now itemize:  Cable bill (monthlyX12)  Magazine subscriptions/individual purchases  Newspapers  Movie tickets  Movie rentals and/or Netflix  Buying DVDs  Buying CDs or Itunes  Buying video/computer games  Internet service  Buying hardware (computer, TV, DVD player, ipod) o How much do you spend on media?  Average person spends $800/year directly to media companies (buying books, music, movie tickets, cable, etc)  $1600/year indirectly (buying advertised products)  The Role of Mass Media o What do we use media for?  News/information  Political speech  Entertainment o Why is a mass communication important for democracy? o Blurring the line between content and advertising?  The Media Industry o Players  Consumers  Advertisers  Media companies  Media employees o Interrelated system of players o Suppose a radio station needs to increase revenue  What might they do?  Sell more ad space  Will this increase profits?  Consider short and long term  Audience response  Consumers  Give: time, money  Receive: entertainment & information  Aggregate power (high)  Individual power (low)  Media employees  Bring: talent/skill  Receive: income  Type o Creative o Technical o Administrative  Advertisers  Give: money  Receive: media time/space to reach target  Seek: lowest cost/relevant audience member, audience structure becomes extremely important  Media companies  Give: money, media content, audiences  Receive: profit  Their primary customer? o Advertisers! o $ comes from advertisers, not viewers o create content to deliver the right audience  Advertising is the engine o Media revenue linked to audience  Audience size  Audience composition o Bottom line:  TV=Bait  TV business=selling audiences to advertisers  Constructing Audiences o Media construct audiences and rent them out o Various strategies  Maximize total eyeballs  Attract a niche audience  Advertising & Ratings o Nielsen rating based on size & composition o Rating: percentage of people watching out of whole TV population o Share: percentage of people watching out of the people watching TV at the time o Advertisers pay based on CPMs  CPM: cost per thousand people reached  Example: total cost=15K, estimated audience=2.4 million  Nielsen Media Research & Ratings o Sampling and recruiting o Meters: “People Meter” o Diaries (self-record viewing) o “Sweeps” periods  Ratings data collection o Viewing information-what’s being viewed by whom o Process 10 million viewing minutes/day based on 25,000 metered households o Relayed via phone lines to the Nielsen operations center o In addition, 1.6 million diaries during sweeps  New developments in ratings data o Integrating TV and Internet  Nielsen/NetRatings o Tracking portable media devices o TV outside the home: at work, the gym, airports, etc  Its not all about audience SIZE o In 2002, ABC made a bid to replace Nightline with David Letterman, even though Nightline had higher ratings  Why did ABC want Letterman to replace Nightline? 1. Letterman audience is younger; more valuable  Early adopters/trend setters  Lifetime potential  Hard to reach 2. The humorous content of Letterman  More conducive to consuming  Nightline is serious and serious is riskier for advertisers This happens fairly regularly o Popular TV shows cancelled for having “wrong” audience o Financial news shows have low ratings but continue: affluent audience o Potentially offensive content  Media Companies o Give: money, media content, audiences o Receive: profit o Their primary customer?  Advertisers!  $ comes from advertisers, not viewers  create content to deliver the right audience  Seth Godin and the “right” audience  Seth Godin Notes o Otto ____ invented sliced bread-for first 15 years no one bought it/knew about it (failure) o Until Wonder came along and figured out how to spread idea of sliced bread, no one wanted it o Success is about can you get your idea to spread or not o TV industrial complex: At the heart of spreading ideas is TV and mass media  Buy adsget more distributionsell more productsmake a profit (circular cycle) o Consumers don’t care about you at all- they have way more choices than they used to and way more time o You have to find a group that desperately cares about what you want to say and say it to them and they’ll share it  Effect of advertising on media content 1. General aversion to risk  Repeat what has worked  May avoid offensive content 2. Avoid negative portrayal of advertisers  News, magazines, entertainment  Example: NYT and Tiffany’s  In Summary o Advertising influences our economy o Economic effects of advertising have particularly salient influence on the media industry


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