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Chapter 1 Where marketing communication began: the development of advertising in Australia and New Zealand Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-1 Learning objectives 1. To define advertising—looking at its importance and its function. 2. To trace the history of advertising in Australia and New Zealand. 3. To explore the changing advertising environment. 4. To introduce marketing communication concepts —such as consumer empowerment and engagement, the push–pull marketplace and interactive advertising, digital and social media— that will be fundamental to the rest of the book. Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-2 Importance Structure & function Definition Future of advertising History Advertising News channels Empowered Consumers Changes in ad agencies Social media Interactive advertising Engagement Digital media Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-3 What is advertising? Traditional Traditional definition definition Advertising paid form of non-personal non-personal communication communication communication about about about Advertising is is any any paid paid paidform form formof of ofnon-personal non-personal non-personal non-personal communication communication communication about about about an an organisation, organisation, product, product, service service or or idea idea by by an an identified identified sponsor. sponsor. Paid: Paid: The The space space or or time time for for an an advertising advertising message message must must be be purchased. purchased. Non-personal: Non-personal: Involves Involves mass mass media media (e.g. (e.g. TV, TV, radio, radio, newspapers, newspapers, magazines) magazines) in in oneoneway way communications. communications. Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-4 The best job in the world The best job in the world campaign, but how much advertising did it use? Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-5 A new definition of advertising Traditional Traditional definition definition Advertising Advertising isis any any paid paid form form of of non-personal non-personal communication communication about about an an organisation, organisation, product, product, service service or or idea idea by by an an identified identified sponsor. sponsor. New, New, improved improved definition definition Advertising Advertising isis aa paid, paid, mediated mediated form form of of communication communication from from an an identifiable identifiable source, source, designed designed to to persuade persuade the the receiver receiver to to take take some some action, action, now now or or in in the the future. future. Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-6 Importance of advertising Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-7 Importance of advertising Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-8 Advertising has many functions Communicate Communicate && interact interact The The nature nature and and purpose purpose of of advertising advertising differs differs from from one one industry industry to to another another and and across across situations. situations. Engage Engage && involve involve Brand Brand awareness awareness Brand Brand equity equity Brand Brand image image Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-9 Brand awareness Building brand awareness is especially important for new products. Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-10 Brand image Even established brands need to build and maintain brand image. Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-11 History of advertising Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-12 Function and structure Client Client options options In-house In-house advertising advertising Advertising Advertising agency agency Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-13 Types of agencies Full Full service service Types Types of of agencies agencies Creative Creative boutiques boutiques Media Media buying buying services services Other Other Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-14 Full-service agencies Planning Planning advertising advertising Creating Creating advertising advertising Research Research Full Full range range of of marketing, marketing, communication communication and and promotion promotion services services Producing Producing advertising advertising General General communications communications   Sales Sales promotion promotion   Direct Direct marketing marketing   Interactive Interactive   Package Package design design   Public Public relations relations   Publicity Publicity Selecting Selecting media media Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-15 Ad agencies have skilled specialists Artists Artists Copywriters Copywriters Researchers Researchers Photographers Photographers Media Media analysts analysts Other Other skills skills Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-16 Great Australian ads Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-17 Importance Structure & function Definition Future of advertising History Advertising News channels Empowered consumers Changes in ad agencies Social media Interactive advertising Engagement Digital media Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-18 Advertising timeline (Australia) 1800 First ad (poster) 1821 First magazine 1803 First newspaper ad 1911 Media commissions introduced 1912 First industry association (Melbourne) 1901 First advertising service agency (Sydney) 1946 National industry association (AANA) 1923 Commercial radio Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1956 Commercial TV 13-19 1-19 Advertising timeline (NZ) 1901 Newspaper Publishers Association 1906 First advertising agency 1821 First magazine 1931 1927 11 accredited Advertisers agencies in Association of operation NZ 1923 Broadcasting regulations Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1960 1st television broadcast 1989 Te Mangai Paho (Maori Broadcasting) established 13-20 1-20 History of advertising Early Early newspaper newspaper advertisements advertisements were were confined confined to to printed printed text text only. only. Illustrations Illustrations were were rare rare until until the the 1860s. 1860s. Source: Walter Powell Advertisement for Paragon Kitchens, 1862 State Library of Victoria, Pictures Collection Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-21 Advertising today—Australia Media Media expenditure: expenditure: $12.6 $12.6 billion billion Advertising Advertising agencies: agencies: 1000+ 1000+ Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-22 Advertising today—Australia (cont.) Radio Radio licences licences 374 374 commercial commercial 358 358 community community Television Television (FTA) (FTA) 54 54 commercial commercial 83 83 community community Subscription Subscription TV TV 2588 2588 Metro Metro and and regional regional daily daily newspapers: newspapers: 50+ 50+ Consumer Consumer magazines magazines 140 140 (audited) (audited) Cinema Cinema screens: screens: 1994 1994 Population: 21 million Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-23 Advertising today—NZ Media Media expenditure: expenditure: $2045 $2045 million million Advertising Advertising agencies: agencies: 200+ 200+ Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-24 Advertising today—NZ (cont.) 300 300 radio radio stations stations 150 150 newspapers newspapers 87 87 TV TV channels channels 6000 6000 magazines magazines 455 455 cinema cinema screens screens Population: 4.18 million Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-25 Breakdown of advertising expenditure (Australia) Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-26 Media expenditure in New Zealand: 2007 Media Platform 2008 2009 ($million) ($million) Newspapers 760 623 Television 647 570 Radio 268 236 Magazines 249 217 Outdoor 74 68 Cinema 9 6 Addressed mail 56 58 Unaddressed mail 64 65 Interactive 193 214 Source: New Zealand Advertising Standards Board Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-27 Importance Structure & Function Definition Future of Advertising History Advertising News Channels Empowered Consumers Changes in Ad Agencies Social Media Interactive Advertising Engagement Digital Media Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-28 The changing advertising landscape  Consumer empowerment  Push-pull marketplace  Digital media and interactive advertising  Social media  New rules of engagement Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-29 Consumer empowerment and the push-pull marketplace • Insert figure 1.7 • Push pull marketplace Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-30 Digital media and interactive advertising Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-31 Interactive advertising Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-32 Social media Social media defined: Social media has been defined as ‘a group of internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content. David Schumann, Andy Artis & Rachel Rivera, ‘The future of interactive advertising through an IMC lens’, Journal of Interactive Advertising, vol. 1, no. 2,. 2001 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-33 Social media Traditional view Contemporary view Consumersare are Consumers consumersof ofcontent content consumers Consumersare are Consumers producersof ofcontent content producers Brandsare areowned owned Brands bycompanies companies by Brandsare areaashared shared Brands creation creation Marketersdefine definebrand brand Marketers meaningsand andvalues values meanings Consumersdefine definebrand brand Consumers meaningsand andvalues values meanings Key opportunity: How to engage consumers by inviting them to create content around a product? Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-34 Social media Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-35 New rules of engagement Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-36 Importance Structure & Function Definition Future of Advertising History Advertising News Channels Empowered Consumers Changes in Ad Agencies Social Media Interactive Advertising Engagement Digital Media Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-37 The future of advertising  Harsh economic environment leading to advertising budget cuts  Mass media advertising is dying  Rise of new communications technologies  Fragmentation of media and markets  Search for big ‘consumer insight’  From great executions to strong strategy Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-38 Summary and conclusions  Advertising in Australia and New Zealand has a long heritage with its roots dating back to the 1800s.  Advertising has evolved from a push by marketers to reach audiences to a more complex and interactive approach.  Consumer empowerment has led to an emphasis on shared dialog rather than pushed messages.  Definitions of advertising have changed to accommodate new technologies and interactivity.  The advertising industry has also adapted to current changes.  Advertising continues to be the best way to reach large audiences. Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-39