Advertising Management

The basic intent of advertising is to persuade a potential customer to purchase the goods or services of the advertiser or to otherwise respond in the way that the advertiser desires. Advertising management is the application of the principles, concepts, and research of management science, marketing, and communications to the design and evaluation of advertising. Advertising management comprises three general types of activities. Strategic planning comprises activities that help determine ways in which the advertising department can support the organization in meeting its goals. Research and evaluation comprises efforts to determine how best to reach a target market, including general research efforts as well as specific pre- and post-testing. Design and development comprises the actual design and development of the ad or advertising campaign, including writing copy and designing artwork and layouts.

Advertising management is the application of the principles, concepts, and research of management science, marketing, and communications to the design and evaluation of advertising. Advertising management comprises research to determine the needs and characteristics of the target market, strategic planning to determine advertising goals and objectives and how to reach them, advertising design, and evaluation of advertising and campaign effectiveness. Advertising is just one element of the integrated marketing communications process, which is an approach to marketing communications that combines and integrates multiple sources of marketing information (e.g., advertising, direct response, sales promotions, public relations) to maximize the effectiveness of a marketing campaign.

Sending the Message

In order to understand how to manage the advertising function, one must first understand the nature of advertising as a communications process. Figure 1 shows a simplified model of how advertising attempts to communicate a message to potential customers in an effort to persuade them to purchase the organization's products or services. At its most basic, the communication process begins when the organization (i.e., the sender) decides to transmit a message to potential customers (i.e., receivers). After the organization decides what it wants to convey to the customers (e.g., Acme Corporation produces superior widgets), the message is transmitted to the potential customers using a medium or mix of media that the organization thinks will best reach the target market (e.g., television commercial, newspaper advertisement).

However, this information does not reach the prospective customer directly; it first goes through a series of filters that screen the message. These filters may alter the meaning of the intended message. For example, in the figure below, Acme Corporation is not the only organization that is trying to reach the customer. Two competitors are also sending messages that their widgets are superior and less expensive. The customer may unconsciously screen the message for other reasons, as well. For example, the customer may be a loyal customer of Gizmo Corporation and, therefore, only consider Gizmo's ads for widgets. Or, the customer may not like the background music played in the commercial or the layout of the print advertisement run by Acme and so chooses to ignore them. The potential customer then decodes the filtered message rather than the intended message and encodes an appropriate response. This leads to either positive or negative feedback to the organization that sent the message (e.g., the customer does or does not buy a widget).

Part of the function of advertising management is advertising communication. Research gives advertising managers the data that they need in order to understand how best to communicate with the members of the target market. For example, a local company wanted to advertise its products in its area. They designed two radio ads: one for the local rock station and one for the local classical station. The message of both advertisements was the same. However, the accompanying music was chosen to appeal to the target audience of each station. Unfortunately, someone mixed the ads, and the rock ad was sent to the classical station and the classical ad to the rock station, and the ads were aired. Not only did the advertiser not receive the influx of business that it had expected, but it had to pull the ads and pay for new messages of apology to be aired on both stations.

Further Insights

Although there are numerous activities that fall under the aegis of advertising management, these can be grouped together into three general functions:

• Strategic planning,
• Research and evaluation, and
• Design and development.

Strategic Planning

In most organizations, the strategic planning function is the process of determining the long-term goals of an organization and developing a plan to use the company's resources -- including materials and personnel -- in reaching these goals. One of these resources is the advertising personnel and the ads that they develop. One of the purposes of strategic planning within the advertising management function is to determine ways in which the advertising department can support the organization in meeting its goals.

In general terms, the purpose of advertising is to persuade potential customers to purchase the products or services of the organization. Another part of the strategic planning function of advertising management, therefore, is to create an advertising campaign that will meet this goal in terms of the higher-level strategy of the organization. Traditionally, this has meant determining the best way to persuade potential customers to purchase the product or service offered by the organization. However, increasingly, advertising is becoming more closely aligned with public relations. Therefore, advertising departments may be called upon to develop ads that manage the public image or reputation with outside agencies and groups.

Budgeting

Another aspect of advertising management is developing the advertising budget (Egelhoff, 2004). For the most part, the greatest proportion of the budget needs to be allocated with those areas that have the highest potential return on investment. For example, one would probably not spend a significant proportion of one's advertising budget to purchase ad space in a professional scientific journal to advertise skateboards. To determine how the budget for an advertising campaign should be allocated, therefore, one needs first to determine what the expected outcome of the ads will be both in the short term and in the long term. Although one might not advertise skateboards in a scientific journal, one might advertise skateboards on a website that is targeted to adolescents and that does not already carry similar advertising in order to build a new market. Similarly, one must estimate the revenue that the ad will produce. It is typically bad strategy to spend more on an advertising campaign than the campaign will generate in revenues in the short and long terms. Another question to ask when developing an advertising budget is what kinds of ads competitors are using. For example, if one's main competitor is taking out a half-page ad in the local paper to sell their similar product, buying one column-inch in that paper to advertise one's own product is likely to do little good (and may even do harm). The monies would be better allocated to a larger competitive ad or to another part of the ad campaign.

Media Selection

Another aspect of strategic planning for advertising management is the development of a media strategy. This is often done as part of an integrated marketing communications approach in which multiple sources of marketing information are combined and integrated in order to develop an effective marketing campaign. For example, advertisements for skateboards might be placed in periodicals that are read by likely customers, on websites frequently viewed by likely customers, and on the radio stations listened to by likely customers. The specific media used to advertise skateboards, however, are likely to be different than those used to advertise scanning technology to scientists. Media selection models are available to help advertising managers select the appropriate media for an effective advertising campaign.

Research & Evaluation

Research and evaluation for advertising management consists of a number of different types of activities. First, research takes place continually at universities and in research and advertising firms to determine the best ways to develop and implement an advertising campaign. This level of research can be used to great profit by an advertising manager in setting research strategy, selecting media, and designing advertising materials and campaigns. Research is also part of the strategic planning process. Research is necessary in order to determine the characteristics of the average consumer in the target market and to determine what would make members of the target market want to purchase the organization's products or services.

In order to get feedback from members of the target demographic about the effectiveness of the materials, research is typically conducted in-house to determine the effectiveness of messages and advertising materials before they are generally released. Although the above example of the misplaced musical ads stems from a clerical error, it illustrates the importance of research to understand how best to reach one's target market. Pretesting an ad helps advertising managers determine how effective the copy may be in the intended market, point out weak spots in the ad copy, and select the appropriate images or music. Advertising research pretesting also includes pretesting of the entire ad campaign, not just an isolated advertisement. The reason for this expansion of pretesting is because ads designed for one medium (e.g., print) do not necessarily translate precisely into another medium (e.g., television). Research pretesting can be used to determine the effectiveness with which the intended message comes across to the potential customer, to compare alternate draft ads to determine which one is more effective, and to obtain feedback from representative members of the target market to determine how and if an ad or advertising campaign needs to be refined.

Research can be used not only on the front end of a management campaign, but also during the research campaign and on the back end as well. Tracking research is often used after an ad campaign is launched to determine how well the campaign is working, including whether members of the target market are showing an increased preference for the product or brand. This information can help advertising managers make better decisions about the ad or advertising campaign, including whether or not to extend the run of the ad or to pull it. In addition, post-testing can be used to evaluate the effectiveness of an ad or advertising campaign. This information can be used to help design future campaigns.

Design & Development

The third major group of activities in advertising management is the actual design and development of the ad or advertising campaign. Once the strategy -- including the product concept and media selection -- has been determined and the target market analyzed, the next step is to craft the message. This is the core of any ad or advertising campaign. At the design and development phase, the message should be directed at the specific target audience with the intention of meeting specific goals as laid out in the strategic planning stage. The message should include the communication of the product's or service's unique features and why this product or service is better than those offered by the competition (although this latter is often implied rather than stated). The message should also take into consideration how potential customers are likely to evaluate the product or service and what might make them more likely to purchase.

Once the message has been crafted, the actual advertising copy needs to be written and the artwork and layout for the ad created. Often, an outside advertising agency is used to write the copy and do the layout and artwork. Given the fact that people are inundated with messages on screen, in print, and over the air, it is important that advertising catch and hold the potential customer's attention. This is done in different ways depending on the medium being used to carry the message. However, in general, direct, simple language and clean presentation work best. Although modern technology allows the creation of eye-catching animations and artwork and memorable storylines for advertisements, in the end it should always be the message, not the story, the audience should remember.

Issues

Advertising Management for the Global Company

It can be a complicated task to determine the best way to market a product to differing subgroups of potential customers with one culture. This task becomes even more complex, however, when marketing the same product in the global marketplace among differing cultures. What is an appropriate advertisement for a product in the United States, for example, may utterly fail in Sweden or Japan for any of a wide variety of factors. Reflecting these complexities, there has been a long-standing debate in the literature regarding whether advertising management should be centralized or decentralized. One of the aspects of advertising management in the international arena that needs to be taken into account is the perspective of the local manager.

Global management of the advertising function makes sense at one level. Such an approach can help ensure a consistency of message and branding in all markets. However, when some of those markets are in different cultures, regional expectations need to be taken into account. In addition, advertising copy cannot merely be translated from one language to another. To be effective, advertising management of global campaigns needs to be managed for consistency and also take into account individual differences.

Jeong, Tharp, and Choi (2002) explored the importance of local managers in multinational advertising agencies with branches in the United States and in Korea. The researchers found that when local managers in global firms were dissatisfied with standardized advertising approaches, difficulties tended to arise. To help attenuate such problems, the researchers suggested that managers be rotated through various locations so that they can better understand the thinking and issues associated with advertising in the other locales. Frequently, local managers are not made to feel part of the advertising team and do not perceive their input as being valued by managers at headquarters. Implementation of training programs and better use of the organization's intranet to include local managers can go a long way to alleviating this problem. The researchers also found that when local managers were brought into the process rather than just seeing copy that could be adapted for local use, the end result was more effective advertising efforts that better reflected the local culture.

Conclusion

Advertising management is the application of the principles, concepts, and research of management science, marketing, and communications to the design and evaluation of advertising. The goal of advertising is to communicate with potential customers and to persuade them to purchase the product or service offered by the organization. The advertising management function is responsible for overseeing and coordinating all the activities of the advertising process in order to produce an effective ad or advertising campaign. Although there are many individual activities within the advertising department that need to be managed, in general, these can be classified into three general categories:

• Strategic planning is necessary to provide the baseline information for a successful ad or advertising campaign that not only wins customers, but that also advances the organization's goals and objectives. This should be coupled with research in order to determine the best target market and the best way to reach that market.
• Advertising messages and copy should be developed in support of these goals and should be designed not only to show the advantages of the organization's offerings over those of their competitors, but also to do so in a way that is easily understood and memorable and that communicates the message.
• Research and evaluation are useful tools throughout the development and implementation processes in order to provide feedback to help develop better advertising both in the short term and long term.

Terms & Concepts

Advertising Management: The application of the principles, concepts, and research of management science, marketing, and communications to the design and evaluation of advertising. Advertising management uses research to determine the needs and characteristics of the target market, strategy development to determine advertising goals and objectives and how to reach them, advertising design and development, and evaluation of advertising and campaign effectiveness.

Advertising: Nonpersonal communication used by a business to persuade prospective customers to buy their goods or services. Advertising may be done through any number of media, including television or radio broadcasts, newspapers, magazines, or other publications, direct mail, billboards, or catalogs.

Brand: A trademark or distinctive name that is identified with a particular a product, service, or organization that makes it publicly and easily distinguishable from other products, services, or concepts. A brand may include a name, logo, slogan, or design scheme associated with the product, service, or organization.

Demographic Data: Statistical information about a given subset of the human population, such as persons living in a particular area, shopping at an area mall, or subscribing to a local newspaper. Demographic data might include such information as age, gender, or income distribution, or growth trends.

Integrated Marketing Communications: An approach to marketing communications that combines and integrates multiple sources of marketing information (e.g., advertising, direct response, sales promotions, public relations) to maximize the effectiveness of a marketing campaign.

Management: The process of efficiently and effectively accomplishing work through the coordination and supervision of others.

Marketing: According to the American Marketing Association, marketing is "an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders."

Persuasion: The process of convincing someone to take a particular course of action or hold a particular point of view by argument, reasoning, or entreaty.

Public Relations: The process of creating and managing a public image or reputation with outside agencies and groups. In business, the public relations function is responsible for developing positive messages about the organization and reducing the impact of negative events and information on the organization's reputation.

Return on Investment (ROI): A measure of the organization's profitability or how effectively it uses its capital to produce profit. In general terms, return on investment is the income that is produced by a financial investment within a given time period (usually a year). There are a number of formulas that can be used in calculating ROI. The higher the ROI, the more profitable the organization.

Strategic Planning: The process of determining the long-term goals of an organization and developing a plan to use the company's resources -- including materials and personnel -- in reaching these goals.

Strategy: In business, a strategy is a plan of action to help the organization reach its goals and objectives. A good business strategy is based on the rigorous analysis of empirical data, including market needs and trends, competitor capabilities and offerings, and the organization's resources and abilities.

Target Market: The people or businesses to whom the organization wishes to sell goods or services.

Bibliography

Egelhoff, T. (2004). How to advertise: Planning your ad budget strategy. Retrieved October 6, 2009 from Eagle Marketing Website http://www.smalltownmarketing.com/adbudget.html

Jankovic, M. (2012). Integrated marketing communications and brand identity development. Management (1820-0222), (63), 91-100. Retrieved November 20, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=83926216

Jeong, J., Tharp, M., & Choi, H. (2002). Exploring the mission point of view in international advertising management: Local managers in global advertising agencies. International Journal of Advertising, 21(3), 293-321. Retrieved September 22, 2009 from EBSCO Online Database Business Source Premier http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=7256031&site=ehost-live

Laurie, S., & Mortimer, K. (2011). 'IMC is dead. Long live IMC': Academics' versus practitioners' views. Journal of Marketing Management, 27(13/14), 1464-1478. Retrieved November 20, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=67698755

Mazharul Haque, S. M. (2011). Introduction: Global advertising and values. In E. C. Alozie (Ed.), Advertising in developing and emerging countries: The economic, political and social context (pp. 1-17). Farnham, England: Gower. Retrieved November 20, 2013 from EBSCO online database eBook Academic Collection (EBSCOhost). http://search.ebscohost.com/login.aspx?direct=true&db=e000xna&AN=398278&site=ehost-live

Percy, L. (1997). Strategies for implementing integrated marketing communications. Lincoln, IL: NTC Business Books.

Schultz, D. E., Tannenbaum, S. I., & Lauterborn, R. F. (1993). Integrated marketing communications. Lincoln, IL: NTC Business Books.

Sirgy, M. J. (1998). Integrated marketing communications: A systems approach. Upper Saddle River, NJ: Prentice Hall.

Wind, Y., Sharp, B., & Nelson-Field, K. (2013). Empirical generalizations: New laws for digital marketing -- How advertising research must change. Journal of Advertising Research, 53(2), 175-180. Retrieved November 20, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=88284642

Suggested Reading

Balnkenburg, W. B. (1970). Successful advertising management by Henry Obermeyer [Book Review]. Public Relations Quarterly, 14(4), 42. Retrieved September 22, 2009 from EBSCO Online Database Business Source Premier http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=6570982&site=ehost-live

Biehal, G. J., & Sheinin, D. A. (1998). Managing the brand in a corporate advertising environment: A decision-making framework for brand managers. Journal of Advertising, 27(2), 99-110. Retrieved September 22, 2009 from EBSCO Online Database Business Source Premier http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=1287062&site=ehost-live

Cohen, S. I. (1966). The rise of management science in advertising. Management Science, 13(2), B10-B28. Retrieved September 22, 2009 from EBSCO Online Database Business Source Premier http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=7351772&site=ehost-live

Hall, B. F. (2004). On measuring the power of communications. Journal of Advertising Research, 44(2), 181-187. Retrieved September 22, 2009 from EBSCO Online Database Business Source Premier http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=13039259&site=ehost-live

Helgesen, T. (1992). The rationality of advertising decisions: Conceptual issues and some empirical findings from a Norwegian study. Journal of Advertising Research, 32(6), 22-30. Retrieved September 22, 2009 from EBSCO Online Database Business Source Premier http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=9301270947&site=ehost-live

Massey, C. S. (2011). Advertising management: Media challenges and lesson learnt. Advances in Management, 4(12), 38-45. Retrieved November 20, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=69973547

Pollack, I. (2002). The 8 golden rules of winning advertising campaigns. Fort Worth Business Press, 15(43), 7. Retrieved September 22, 2009 from EBSCO Online Database Regional Business News http://search.ebscohost.com/login.aspx?direct=true&db=bwh&AN=7723516&site=ehost-live

Sheehan, B. (2011). Marketing management. Lausanne, Switzerland: AVA Pub. Retrieved November 20, 2013 from EBSCO online database eBook Academic Collection (EBSCOhost). http://search.ebscohost.com/login.aspx?direct=true&db=e000xna&AN=390499&site=ehost-live