Chapter 2

The Modern Marketplace & "The New Advertising"

In this chapter, not all stories have an easy answer or happy ending. It covers complex business situations

"1984"
This was the name of the commercial that introduced Apple's Macintosh computer. Illusion to a classic novel called 1984. Other companies have dominated the computer market, so Apple attempts to make a splash even though they were a little late to get into the market.
Big Brother represented in the commercial was IBM [2 bubble gums!].

It was a new way of thinking about advertising, TOTAL MARKETING!
Marketing Public Relations (Computer Magazine Reviews, Major Media Coverage)
Sales Promotion (In-store materials)
New Media Products (MacWorld, MacWeek)
and more...

How Advertising Changes:
- Financially-Driven Agency Mergers & The Rise of "Mega-Agencies"
- Agency/Client Relationships
- Effectiveness Questions
- Lower Budgets & More Competition
- The Rise of Regional Agencies

Financially-Driven Mergers: Martin Sorrell
From eighteen big agencies to eight
Saatchi & Saatchi's Big Idea
- Price/Earnings Ratio - London vs. New York
+ Lower for US than it was in England...what if I go and BUY an agency in the US and then bring it to UK and absorb it into my empire in england...Buy Cheap, Sell High
Marin Sorrell buys WPP (Wire Plastic Products) WPP owned stock in the UK, so he acquired that stock?
WPP = JWT + O&M + Y&R and more!

Agency/Client Relationships:
+ A shift of Power
- One, an ad agency AEs usually made more money than Ad Managers
- Now, Ad Managers usually make more money than ad agency AEs

+ Client Mergers
+ A Maturing Industry

< INCREASE in Cost Pressures, but DECREASE in Compensation Pressures >

+ Example "Unbundling"
- Once, Agencies controlled both media and creative within "full-service agencies
- Now, Clients may assign creative and media separately - forcing agencies to "unbundle"
- With each review, clients squeeze fees for both

+ Result #1: Media Agencies
- Mega-agencies spun off their media departments into free-standing "media agencies"
+ Result 2: Client Purchasing Involvement
- Now client purchasing departments are becoming involved in this significant business decision. Agencies have even less control.


Effectiveness Questions:
- Sales Promotion a Growing Cost
- Particularly for consumer products
- Here's How it adds up:
20% Advertising
22% Consumer Promo
58% Trade Promo
(Source Nielson 7/98)

Incentives or Persuasion?
It's better when you do it together...Integrate

Advertising's 3 Big Problems
Media Efficiency (CPM)
- Costs more to reach same number of people
Category Maturity
- Experience makes consumers harder to persuade
Consumer Message Overload
- Unlimited messages. Limited Attention.


Lower Budgets. More Competition
"A smaller piece of a bigger pie"
Survival of the Fittest means.. tougher competitors!!
More Marketing Choices:
- Sales Promotion
- MPR (Marketing Public Relations)
- Event Marketing / Sponsorship
- and now The Internet!

Rise of Regional Agencies:
"The Bernbach Factor"
Downloading of Technology
- Graphics and Video Production
- "Intellectual Software"
New Major Clients
- LA - Japanese Cars [i.e. Nissan]
- SF- Silicon Vally [Apple]
+ Nike, Wal-Mart, etc

Example: Chiat/Day
- Creativity + California
Lee Clow (Surfer, Exec Creative Director

Steve Hayden helped create "1984" (then went to work for IBM)

Terrific Work
Account Planning
- British consumer insight approach [psycho graphics]
- Jay Chiat imports Jane Newman
- Chiat/Day becomes 1st U.S. agency with account planning
Chiat/Day was named "Agency of the Decade" by Ad Age in 1989.

Example: Crispin Porter + Bogusky
- A New Approach
+ Less bothered by controversy
- A Search for "Social Tension"
- "Post-modern" creative attitude
Example: IKEA
+ Problem: people keep furniture long after they're tired of it.
+ CP+B's award winning solution (crazy lamp commercial)

Example: MiniCooper
+ Problem - introduce a very small car with a very small budget
+ Answer: High-impact print and outdoor and more...

VW (Volkswagen)
- Crash commerical

Goodby Silverstein & Partners (SF)
- Superb Design (Silverstein)
- A Search for Story (Goodby)
"Got Milk?" Campaign for the California Milk Processor Board
Unique "deprivation" research ["what if you didn't have milk" research technique]
Halted decline in milk consumption

Excellent
HP
The Computer is Personal Again / Don't Boot, Play.

Chapter 1 (finish)

Pop Quiz today

Positioning (cont'd)
Through the mind of the consumer was overloaded with messages, in most product categories, there were very simple heirarchies...THE PRODUCT LADDER

example in rental car ladder: Hertz, Avis, National

Within each category, there are four basic types of positions:
- The Best Position
+ In most categories, there is a #1 in the consumer's mind
+ The "Best" Position leverages this (example Crest)

- The Against Position
+ The "Against" Position defines itself vs. #1
+ It's an aggressive and competitive position
+ Example: 7Up: "The UnCola" & "Take the Pepsi Challenge"

- The Niche Position
+ The "Niche" position promotes the product along one dimension of superiority.
+ Example: All-temperature Cheer

- The New Category
+ The new category is just that. It defines a category that didn't exist before and then position the (new) product as the best in that new category. Competition follows.
+ Example: Smartphones


Marketers Dominate
- Client personnel (marketers) now better trained; better paid)
- Mergers begin - clients get bigger
- Competition toughens
- Comparative ads [ours vs theirs]
- The tempo increases...

Ad Evolution: 80s & 90s
- Bernback's influence grows
- Client mergers continue
- Agency mergers begin
- Computers and cable
- And the tempo increases even more

-=-=-=-=- End of Chapter 1 -=-=-=-=-=-
Diversion

MKTG > Branding > Creative > Media > PR

GM - 60 second "We All Fall Down" tv spot

Chapter 1 (continued)

The Creative Revolution:
- 1960-1969 - Cultural Forces
+ Countercultural movements
• "Break the Rules"

- 1950-1969 - Business Forces
+ A new breed of agencies
+ A new communication style
+ Three influential individuals

Three Key Individuals:
1. Bill Bernback, Doyle Dane Bernback (DDB)
2. Leo Burnett, Chicago IL
- Hand reaching for the stars.
3. David Ogilvy
- Came from UK to start agency - Ogilvy & Mather
- Wrote books about advertising

Paul Rand -Very Influentional Graphic Designer, ###

Bill Bernbach - started as writer for head of World's Fair. He meets Paul Rand at small ad agency. ### Develope DDB

The DDB Style:
Ohrhach's - their first account AD:It's in, but maybe you shouldn't be in it.
Levy's - diversity with "effective suprise" AD:You don't have to be Jewish to love Levy's
Polariod - dramatic visual demonstratoin
Jamacia - one word anda visual

DDB Style - THREE KEY Campaigns:
1. Mobil - "We Want You to Live" AD:Till death do us part
2. Avis - Helped inspire "Positioning"
3. VW - Campaign of the Century

THe DDB Influence:
- A New Way of Creating Ads
+ Writer/Art Director Team
+ "The Concept" [there was a reason/benefit to the ad]
- A New Industry Standard - in every award show
- "Ad Age" chose Bernbach as their "Adman of the Century"


The Burnett Style
"Inherent Drama" [built up a dramatic personality]
- Here's how Leo's agency captured the wholesome personality of a Kellogg's breakfast.
- The Lonely Maytag Repairman - a dramatic and engagingly human personification of reliably
Cookies? Keebler Elves!
It made Leo's agency's campaigns long-lasting and part of our culture.
- "The glacier-like power of friendly familiarity."
- Time Magazine chose Leo Burnett as their "Ad Man of the Century"

The Ogilvy Approach
He took classic lessons on copywriting and added his own wit and style...The result was ###
Craftsmanship
Research - headline was from a British car magazines
Editing - all copy is tight and bright
Wit - upscale without being a snob

Story Value
Imagery: one small device - the eye patch - adds interest [and easy association]

Repetition - Ogilvy knew advertising takes time to build - this one device let him tell his story over and over.

"Rules"
Find out what works- and repeat it!

Ogilvy grew his agency into a world-class organization, with:
- New Generations of capable management
- world-class clients
- long-term relationships
- over time, his agency was the most successful

Marketing Revolution: (1970-1979
Tougher economic times
New, more "scientific" tools:
- Brand Management
- Market Reserach
- Segmentation
- "Positioning"

Brand Mangagement
Neil McElroy's Idea at P&G (1931)
Competitive brand within a company
Becomes standard for marketing organinization
###

Market Research: The Result
The companies understand their consumers mroe accurately
###

Segmentation
product differentiation is responce to consumers' differing needs
maximizing potential market share
[five or six varieties of Tide detergent, unscented, with bleach, liquid form, etc]

Positioning
Positioning was a new perspective on the marketplace.
There were too many products, and too many messages.
Marketers had to deal with this new marketing reality.
The Positioning authors said advertising had to evolve from hard-sell "reason why" ads...
Through image ads..to advertising based on "the mind of the consumer"
Though the mind of the consumer was overloaded with messagees... in most product categories, ###
Within each category, there are four basic positions.

Chapter 1

He's still stressing that we get the book
Anticipate a pop quiz tuesday
He goes VERY fast, (#) represents that I have missing information.

[Finishing Introduction Notes]

Kinds of Brands:
- Packaged Goods [CPG Consumer Packaged Good) in set packages. [Proctor & Gamble leader in this]
- Durable Goods
- Services [American Express, Travelocity]
- Retailers [Walgreens]
- Organizations [Girl Scouts]
- Entertainment Brands [Spiderman, ESPN]
- Others [Virgin]

Three Key Concepts:
+ Information
- A major change in our economy (Powershift, book)
- A major change in how we work (Knowledge Workers)
+ Ideas
- The Economic Power of Ideas
- Advertising is about Ideas
+ The Challenge of Change
- Ideas can change the game.
- Faster than ever
- Ideas can also destroy
- "Creative Destruction"
- The Speed of Change, Yes it's moving faster
- Think what that means for your Education
- Think of what it means for your career

How Brands manage change: (P.I.E.)
- Planning
- Implementation
- Evaluation

You & Your Career
Right now, you're "job shopping"
This book ends with a Marketing Plan for "The Brand Called You"
Understand yourself as a product, your market, & increase your market value.

(end of introduction)
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

Chapter One: From Advertising to Marketing

2 Key Concepts:
- The Power of Ideas
+ Creation & "Creative Destruction"
- Government Supports Business
+ Benjamin Franklin (Printer, "Idea Person"
+ ###

4 Foundations of Advertising
- Mass Produced Goods
- Mass Communication
- Mass Distribution [get them at your local store]
- Mass Education

Early Media Advertising
- Signs/Signage
- Newspapers/Posters
early advertisers:
- Dept Stores
- Mail Order [Sears]
- Patent Medicines

3 Very Big Ideas:
- Big Product Idea (King Gillette)
Why was it a big idea? He realized that the business to be in, is where the item needed to be replenished. The holder lasts, but you need a new blade. Get people to buy something that they could hang on to, but had to keep replinishing. Make a product that must be re-purchased.

Big Media Idea
J. Walter Thompson
- Sell ad Space in magazines
- Pocket a commission
- JTW becomes key agency
- Magazines become a national ad medium

Cyrus Curtis
Have agencies sell ad space in your magazines for you
Only agencies can pocket a commission (clients can't)
Curtis publishing becomes big & the ad agency business is established!

Early Brands
- Soaps [Ivery, It Floats] differentiation
- Soft Drinks [Coca-Cola]
- Cereals
- Cigarettes [Camel]

Ad Evolution 1900-1920
The "Age of Lasker"
Lasker hears a big idea...
John E. Kennedy "Advertising is salesmanship in print."
Early "Reason Why"

Claude Hopkins "Scientific Advertising" [father of giving people documented evidences for choosing particular products]
Hopkin' "pre-emption"
Baked Beans, Cereal, Shaving Cream, Orange Juice
Note: when products are new, advertising about those products can be very interesting

Lasker's Contributions:
Harding's Landsldie
Other Key Concepts
- Baseball's organiztion, Air Power of WWII, and more
The "Idea" of Advertising

Early "Pull" Advertising
-Elmo Calkins & "Phoebe Show"

Consumers WANT to pull the product.
Creating a desire in the consumer.

Push, advertisers push their product


JTW's Creative / Business Team:
Helen Resor (HS Valedictorian, etc)
###

National Agencies Emerge
- NW Ayer "& Son"
- J.Walter Thompson
- Lord & Thomas (Lasker's agency)
- BBDO
- Still print advertising media only: newspaper, magazines, billboards

Pull vs Push
PULL
-Imagery and 'word magic"
Works best when times are good

PUSH
###
Works best when times are tought


Ad Evolution 1930 - 1947: Golden Age of Radio
New Media Emerges
First FREE Ad Medium
Hard Sell for Hard Times

Ray Rubicam (Young & Rubicam)
- Creative Control of Advertising
- Using Research w. George Gallup
- Writer/Art Director Team - New Standard
- Ethical Behavior
- First Modern Agency

The Consumer Movement
### will not be tested on these anyways

Advertising goes to War!
War Advertising Council
Part of Social Change: women in work force
Image Advertising (product shortages)

Dynamic Agency Growth
Pent-up consumer demand explodes!
International expansion
Increased services (marketing)
Two Visionaries
Alex Osborn "Brainstorming"
Marion Harper ###

A Media Revoluton - Television!
- Increased post-war consumpiton
- Increased ad spending (up 300%)
- Increased agency size
- The "Modern" age begins...

Rosser Reeves & The "USP"
Unique Selling Proposition [what is different about us, that I have to propose to the public. why are we better?]
Repeat, repeat, repeat!!!

"Melts in your mouth, not in your hands" **
"Build strong bodies 12 ways."
"Cleans your breath while it cleans your teeth"
"Fast, Fast, Fast Relief." [ehh, not as good]


note cards - not my work, but should be helpful :)
http://www.studyblue.com/notes/b/advertising-and-the-business-of-brands/11838/0

Introduction

Media is constantly changing.

Freelance Advertising Model
Key resources are outside "the company" (a hired resource)
- copywriter(s) ["creatives"]
- art director(s) ["creatives"]
- Interactive Supplier(s)
- Media Buying Service [does the media planning & media buyers]


In-House agency or Advertising Department
Company Advertising Manager
Creative Dept (Creative Director, Copywriter, Art Director)
Interactive Dpt
Media Dpt (Director, Planner, Buyer)
Production Dpt

Ad Agency
Clients hire the cirlce (on PPT) the whole agency
Account Management Department
Traffic Department (manages the open projects within the agency)
Account Planning / Research (trends, on target)
Creative Dept (creative directors, copywriters, art directors
Interactive Department
Media Department (Director, Planner, Buyer)
Production Dept
Financial / HR / Billing Department

Ad agencies sell ___ (time).
Ad agencies have to have a central person that deals with the client. "The keeper of the knowledge" That's the Account Management Dept.

--

ADV
- Client Relations
- Strategy
- Creative Development
- Campaign Planning
- Production
- Media
- Layouts, Scripts, etc
- Billing

^^^^ All to do with COMMUNICATIONS ^^^^
a very vertical list of responsibilities and involvement


MKTG
- Pricing
- Advertising
- Sales
- Salesforce
- Incentives
- Reports
- Research
- Production [ how are we going to get the raw materials to the factories, to the blah, to the blah, sold at what price verses another price]
- Forecasting
- Distribution
- Naming

^^^^^ more horizontal, involved in more areas ^^^^^


Advertising & The Business of Brands
The textbook:
"If it's in the middle, it's probably going to be on the test"
Concepts and Vocabulary will always be on the test.

Key Concepts:
The Brand
A Few Revolutions
Four Businesses
Info, Ideas, and Change

"Creative Destruction" [Automobile industry crushed the horse & buggy industry]

The Brand
verb - "biernan" to burn
noun - a name, term, symbol, or design (that) identifies products.
concept - a conceptual entity that focuses marketing activities
a meaning system - by adding meaning to objects...advertising performs a role historically associated with religion

Key Concept:
Today...The Business World has Organized Itself around Brands.

10,000 years ago...
The Agricultural Revolution
Primary Economic Activity
This changed how people lived and worked ###

200+ years ago...
The Industrial Revolution
Secondary Economic Activity
Mass Manufacturing (including books), Distribution, Transportation
It changes how people lived and worked together.
Branded Communications
- Identified manufactured goods
- Reputation of manufacturer.

100 years ago...
The beginnings of Modern Advertising:
- Mass Manufacturing
- ###

50 years ago...
The Post-Industrial Revolution
Tertiary Economic Activity
Services and Information
- It changed how people lived and worked.
- Marketing became more important ###

Today...
Almost everything is a Brand
Most manufactured goods
most services
entertaining brands
in some ways, YOU are the brand!

###

What's more...
The media Revolution is changing everything!
- Our Behavior
- Business models
- communication models
- new business opportunities
- new correer oportunies
and new brands

BRANDS are a cultural and business meaning system
MARKETING has become a major business fuction
A major ###

Advertising!
An important part of American culture.
An increasingly important part of global culture
The ORIGINAL Marketing Communication
Still the major type of Brand-Building Communication

4 Types of Businesses:
- Marketers (& Advertisers)
- Advertising Agencies
- Media Companies
- Marketing Services [Keychains?]
- Suppliers

Scott Bedbury (Nike/Starbucks)
GSD&M (Roy Spence & Friends) An Advertising Agency
Robert L. Johnson
Lisa Fortini-Campell (Marketing Services)

Syllabus Day

After a rather entertaining but looong role call, Professor Conner answered student submitted questions via note cards.

Every student wrote out their own individual desk name plate made from a large note card. We must keep these on our desks, I assume.

Question & Answer Session:
- Be digitally minded / keep up with the times "Digital Messiah"
- AdAge: Digital / TalentZoo.com

Syllabus was lightly explained. He's not a fan of computers/phones in class, so I don't know if I will be able to continue these online notes without interference or not...