Advertising and Marketing Career Field Structure
In 1975, $27.5 billion was spent on advertising in newspapers, magazines, business publications, medical journals, and telephone directories; on billboards and buses, the radio, network television, and cable. In 1998, with the addition of online advertising, that figure had risen to more than $180 billion. Ad spending in 2003 dropped to $128.3 billion, according to TNS Media Intelligence/ CMR (Competitive Media Reporting), a provider of marketing communication and advertising expenditure information. Advertising expenditures have increased since then, however, and TNS Media predicted that total U.S. advertising spending would reach $150.3 billion in 2006.
Today, most national advertising and much of local advertising is prepared by advertising agencies. A modern advertising agency is composed of researchers, copywriters, artists, telemarketers, buyers of space and time, other specialists, and account executives who represent the agency to its clients. The size of an agency is determined by the amount of advertising it bills to its clients. Many agencies are small, billing less than $10 million a year. Part of an agency’s income results from commissions that are equivalent to 15 percent of the advertiser’s cost of placing the ads. While some agencies bill clients on a fee basis, others use a fee/commission combination.
Large advertising agencies usually handle a variety of accounts, while some of the smaller agencies specialize in a single field. They may handle only financial accounts, for example, or hotels, book publishers, or industrial clients. Some agencies are known for their expertise in selling package goods. Others excel in retail and department store promotion or selling on the Internet. Almost every agency develops some distinctive quality to help sell its services.
Along with targeting a well-produced message to its intended audience, the placement of ads in the most effective media is extremely important to the success of an advertising campaign.
The newest mass medium to hit the scene, the Internet, is a worldwide, computer-based network consisting of online services, Web sites, newsgroups, and more. The Internet allows advertisers and marketers to precisely target customers, accurately measure response, and clearly identify consumer needs. Through the Internet’s Web sites, consumers themselves provide companies with information about their interests, demographics, preferences, and needs, either through registration surveys or indirectly by the choice of Web sites they visit. With more than 600 million users, the Internet is drawing advertisers in droves. In the first quarter of 2006, companies spent about $2.3 billion on Internet advertising, and increase of 19.4 percent compared to the first quarter of 2005.
Internet advertising’s mainstay is the banner, a narrow rectangle across the top of the screen that can blink, flash, or be static. An offshoot of the banner is the skyscraper, which is the vertical equivalent and runs in a narrow margin on either side of a Web page. Since surfers have become used to banners and skyscrapers, they get less attention, so some advertisers place their messages in large boxes that are hard to ignore. Another trend in Internet advertising is the pop-up window, a separate window that opens while a Web page is loading.
Many other media also allow advertisers to showcase their offerings. Television, for example, provides opportunities to show products in actual use. Through a TV ad, an advertiser can design a message that appeals to both the eye and the ear at the same time. Advertisers usually include their messages during the course of various television shows to achieve the desired reach and frequency. Rating services like A. C. Nielsen and Arbitron measure the sizes of audiences through the use of home meters and diaries. According to the Television Bureau of Advertising, 98.2 percent of U.S. households had a TV set in 2006 and the average time per household spent viewing TV was eight hours a day in 2006. The reach and frequency of a TV commercial are determined from this raw data. The newest trend in advertising and marketing is the placement of products or mention of services in actual television shows and films. For example, advertisers interested in promoting a specific soft drink might arrange to have it placed in the background of a scene or have a main character drink it.
In addition to network television, advertisers are increasingly turning to cable TV. Developed in the late 1940s simply as a means of improving reception, cable television today reaches more than 67 percent of all American households, with almost 74 million current subscribers. Appealing to specific audiences, such cable channels as MTV, HBO, The History Channel, Cable News Network, and ESPN, allows advertisers to target specific audiences with ease.
There are more than 575 million radios in the United States, according to the CIA: The World Factbook. Radio commercials are designed to deliver messages on behalf of local and national advertisers. While radio production techniques are relatively inexpensive and a radio commercial reaches large audiences, listeners conjure up different pictures in response to radio ads than they do with visual ads.
Magazine advertising offers special values not found in other media. Magazines are kept longer than daily newspapers, for example, and may be picked up and read several times or passed on from one reader to another. Thus, the actual number of readers may be considerably higher than circulation figures indicate.
Many advertisers send direct mail to prospects from carefully maintained lists. Such lists can be bought from firms that compile information about buyers with specific interests and income levels. As a rule, the more specialized the list, the higher the price. Nearly all direct mail seeks to encourage some kind of buying action, often with return cards or coupons, and is frequently used in conjunction with other types of advertising.
Outdoor advertising, such as billboards, posters, and electric signs, is favored by national advertisers, as well as local businesses that want to attract passersby. Those who create outdoor posters design them with the five-second flash in mind, since that amount of time is the estimated exposure of the message to the average motorist. This means that the message must be very short and instantly understood.
Transit advertising is displayed in or on such public vehicles as subway cars, buses, and commuter trains. The messages in transit ads can be longer than those on outdoor signs, because passengers have more time to look at these ads.
Some companies have in-house advertising departments, while others work with agencies. Similarly, many large companies have their own marketing departments, with smaller organizations often using outside marketing services. How a product is marketed can determine its success or failure. Advertising plays a key role in this process.
Marketers work with advertising professionals to determine how ads should look, where they should be placed, and when the advertising should begin. The look and message of an ad are researched by employees in advertising and marketing to make sure that the ad effectively interests the targeted audience. Timing of advertising is extremely important to the success of a marketing strategy as well; launching an advertising campaign too early may create interest well before the product is available. In such cases, by the time the product is released, the public may no longer be interested.
Research usually starts long before a product is developed. Since competition is often intense, marketing department personnel go to work compiling data about similar products in the marketplace. If there is some chance that a product will sell well enough to cover initial expenses, the cost to manufacture and launch the new product is determined. The price of the product to consumers will then equal the overall cost of production plus the desired profit.
The marketing department is also responsible for developing a distribution plan for products. If a product is expected to sell well to a certain group, for example, then marketing professionals must decide how to deliver to members of that group based on when and where they shop. Large companies often handle sales and distribution from inside the company, while smaller companies may sell through wholesalers, who supply retail stores with products from many different manufacturers.
Once markets are evaluated and merchandise is designed, the actual production begins. The marketing department’s work, however, is not yet done. Along with the public relations department, marketing professionals contact members of the press with the aim of getting product information out to the public.
The failure rate for new products is very high. Once a product is released, marketers evaluate sales and look for ways to make improvements in features and designs. Package research studies show how a product looks on the shelf. Designers explore new color combinations, more appealing shapes, interesting patterns, and new materials. If problems can be easily corrected, a company may decide to launch an improved version of the product. If, however, the target audience is not being reached or is not interested, the company might redesign the product or the advertising or discontinue production altogether.
Although it is not an exact science, marketing uses a scientific and statistical approach in answering a client company’s questions about selling a product to the public. The advertising aspect of a marketing campaign must get attention, arouse interest, secure belief, create desire, and stir action. Beauty, comfort, convenience, and quality are the promises that sell all kinds of products, from consumables to cars.