Chapter 19- Advertising, Public Relations and Sales Promotions

How do advertising agencies get paid for the services they provide national advertisers? For the services they provide non-national or local advertisers? - How do advertising agencies get paid? o It depends on who their customer is • For a national company - they get paid on the commissions they get on the media they buy (the discount the get for being national- They use the extra money saved to put together the ad) • For a non-national advertiser (local)- Income comes from billing them for the media they buy and the services they provide o Most of this money goes How do you determine the CPM for advertising media? - Cost per thousand (CPM- cost per milli)= the cost of reaching 1,000 members of the target market a. Cost per contact x 1,000= 0.002 x 1,000= $2.00 How does each medium get its market segmentation? - o Television- channel; program o Radio- station format; geographical location o Magazines- topic; type o Newspapers- section; geographical location o Outdoor- physical location o Internet- website Is Publicity "Free Advertising?" - Not free advertising- Publicity is getting your commercial message published in the media in the form of news- you have to pay the public relations firm or the PR people in the company What are the 2 forms of institutional advertising and their characteristics? - Institutional advertising a. Corporate image- directly trying to promote positioning/image i. Ex: Northwest airlines used corporate image advertising by letting kids create pictures that were then painted o