Discuss how companies use market share as a key indicator and tool to increase market competitiveness
Increasing market share is one of the most important objectives of business. Market share is a key indicator of market competitiveness—that is, how well a firm is doing against its competitors. This metric, supplemented by changes in sales revenue, helps managers evaluate both primary and selective demand in their market.
Selective demand refers to demand for a specific brand while primary demand refers to demand for a product category. It enables a company to judge not only total market growth or decline, but also trends in customers’ selections among competitors. Generally, sales growth resulting from primary demand (total market growth) is less costly and more profitable than that achieved by capturing share from competitors. Conversely, losses in market share can signal serious long-term problems that require strategic adjustments. Firms with market shares below a certain level may not be viable. Similarly, within a firm’s product line, market share trends for individual products are considered early indicators of future opportunities or problems.
Research has also shown that market share is a desired asset among competing firms. Management of all firms, large and small, are concerned with an adequate share of the market so that their sales volume will enable the firm to survive and prosper. Pricing strategy is one of the tools that is significant in creating and sustaining market share. Prices must be set to attract the appropriate market segment in significant numbers. Price is important to marketers because it represents the marketers’ assessment of both the value customers see in the product or service, and how much they are willing to pay for a product or service. Competitors often try to gain market share by reducing their prices. The price reduction is intended to increase demand from customers who are judged to be sensitive to changes in price. Price reduction is often seen in newer brands that have to compete with already existing brands. New brands not only require lower prices to penetrate the target market, but they typically require more investment as well. Advertising improved quality on products is another way market share can be affected. Also, making products and services easier to access can increase a firm’s market share. For example, offering products online with easy payment options can increase sales.
Define the concept of heuristics, and recognize the relevance of influences on decision-making
Advertising is largely a process about influencing the decision-making process of a given target market. This influencing of the consumer is a behavior-oriented pursuit, where the business would like the consumer to perform a certain behavior. This behavior will create a relationship between the business and the consumer. Influence is a big part of marketing and advertising, and consumer influences and decision-making processes are central to smart advertising.
Behavioral economics is the study of the psychological, social, emotional, and cognitive inputs that influence a consumer. Consumer influence from the behavioral economics point of view would divide the consumer influence into three categories: heuristics, framing, and market inefficiencies. Of course, there are plenty more perspectives on what influences consumer behavior, but these three concepts are a great starting point for considering consumer influence.
As a field of study, heuristics are one of the more interesting and useful areas to consider when looking at decision making. Heuristics are simple, efficient rules and processes that humans use to form judgments and select between various options. For example, people often use constructs like logic, probability, and rational choice theory to determine the best among many options.
If you think about it, most decisions have an almost infinite number of opportunity costs (i.e. alternative options for the utilization of time and/or capital). As a result, almost every decision will have a high number of potential choices. For example, a health conscious consumer will use logic and rationality to purchase a soft drink that isn’t packed full of sugar. As a soft drink manufacturer with an understanding of the heuristics of this target market, creating an option that is low cost, low sugar would appeal to that particular type of of consumer.
As an organization, particularly as an advertiser, the objective is to identify what is important to a consumer in terms of how they will make a purchasing decision. Filling their decision making needs, and aligning with their process of heuristics, is a task that requires knowledge of key consumers, an understanding of what’s important to them, and the ability to be the best option among many.
Framing is another interesting consumer influence. Framing is basically just how people and societies organize, communicate, and perceive reality. Think of it as the consumer’s frame of reference, which is influenced by mass media, friends, family, religion, education, and just about everything else in the social structure.
As an ethical advertiser at an organization, framing is the opportunity to ensure that the stereotypes, perceptions, and assumptions about the organization’s brand are accurate and aligned with what the company strives for and believes in. Red Bull does a lot of work with extreme sports, because they believe that their product and that lifestyle fit together well. They want to be framed within the context of social icons in daring exploits (at least, this is how the person writing this frames Red Bull).
Finally, there are also market inefficiencies in consumer influence. All this means is that not all decisions are necessarily rational or built on a predictable assumption. Sometimes people make irrational purchasing decisions, and that has to be considered when determining what might (or might not) influence consumer behavior. Other market inefficiencies include intervention from governments, unfair competition (monopolies), and a variety of other unique factors which may render a consumer decision unpredictable.
In order for an organization to have a positive impact on a target market, they must understand what influences the decision-making process of the individuals within that segment. By understanding heuristics, market inefficiencies, and framing, an organization can interact with consumers in an authentic, organic, and relevant way to better inform prospective consumers on the benefits they could receive for purchasing a given product or service.
13.3: The Advertising Campaign
13.3.1: Identifying Product Benefits
Identifying product benefits involves finding out what the customer really wants and needs, not just listing a variety of product features.
Demonstrate the application and use of product benefits in advertising campaigns
- Product features include such factors as form, color, size, weight, odor, material, and tactile qualities.
- A benefit answers the question, “So What? “.
- The Voice of the Customer is a market research technique that produces a detailed set of customer wants and needs, organized into a hierarchical structure, and then prioritized in terms of relative importance and satisfaction with current alternatives.
A subset of a population selected for measurement, observation, or questioning, to provide statistical information about the population.
- Voice of the customer
Voice of the customer (VOC) is a term used in business and Information Technology (through ITIL, for example) to describe the in-depth process of capturing a customer’s expectations, preferences, and aversions.
- The success of the iPod and iPhone wasn’t related to the innovation of a product that had never previously existed. It was because Apple was able to tap into what consumers saw as benefits as opposed to focusing on product features.
It’s one o’clock in the afternoon and you’re starving. You pass by a deli and see various types of ready-made sandwiches in the window. What will make you buy one of them? The whole grain bread? The organic ingredients? While your hunger drives the initial buying behavior (the benefit), there are other, more subtle, components to selecting one sandwich from many (product features). This concept of user needs is layered and complex, and marketers must first identify consumer needs, and then ensure benefits will fulfill those needs and features will drive advantage.
Features and Benefits
You’ve just seen the difference between features and benefits. Features tell you what the product is — a chicken sandwich made with organic ingredients and whole grain bread. The benefit — I’m starving and I need something to satisfy my hunger — is what sells it.
Product features include such factors as form, color, size, weight, odor, material, and tactile qualities. A new car can offer thousands of alternatives when one considers the exterior and interior options. Features are important as they may help back up the benefit. But consumers will not buy the car unless it provides them with a benefit.
A benefit answers the question, “So What? ” While the development of ultra-high-speed photographic film was a research breakthrough, whether consumers perceive this as a benefit can only be answered by them. Profitable products must align the need of the consumer with the benefit of the product.
Second Generation iPods
The iPod wasn’t the first mp3 player, but it was the first one that gave consumers the benefits they were searching for.
In a functional sense, the key question is: “Does the product do what the consumer wants it to do? ” Does it get clothes clean? Does it quench your thirst? Does it save you money? Some of these questions can be answered only through product research, but consumer research provides more answers.
Voice of the Customer
Voice of the customer (VOC) is a term used in business and Information Technology (through ITIL, for example) to describe the in-depth process of capturing a customer’s expectations, preferences, and aversions.This is the type of research that marketers need to perform to find out what their customers really perceive as benefits.
Specifically, the VOC is a market research technique that produces a detailed set of customer wants and needs, organized into a hierarchical structure, and then prioritized in terms of relative importance and satisfaction with current alternatives.
VOC studies typically consist of both qualitative and quantitative research steps. They are generally conducted at the start of any new product, process, or service design initiative to better understand the customer’s wants and needs, and as the key input for new product definition, Quality Function Deployment (QFD), and the setting of detailed design specifications.
Much has been written about this process, and there are many possible ways to gather the information – focus groups, individual interviews, contextual inquiry, ethnographic techniques, and so on. But all involve a series of structured in-depth interviews, which focus on the customers’ experiences with current products or alternatives within the category under consideration. Needs statements are then extracted, organized into a more usable hierarchy, and then prioritized by the customers.
It is critical that the product development core team are highly involved in this process. They must be the ones who take the lead in defining the topic, designing the sample (i.e. the types of customers to include), generating the questions for the discussion guide, either conducting or observing and analyzing the interviews, and extracting and processing the needs statements.
Qualities of Desirable Voice of Customer Metrics
Talking to customers to determine what they see as benefits is just the first step. The next step is making sure that the data you obtain is useful. The metrics you can use to make this determination are:
- Credibility: How widely accepted is the measure? Does it have a good track record of results? Is it based on a scientifically and academically rigorous methodology? Will management trust it? Is there proof that it is tied to financial results?
- Reliability: Is it a consistent standard that can be applied across the customer lifecycle and multiple channels?
- Precision: Is it specific enough to provide insight? Does it use multiple related questions to deliver greater accuracy and insight?
- Accuracy: Is the measurement right? Is it representative of the entire customer base or just an outspoken minority? Do the questions capture self-reported importance or can they derive importance based on what customers say? Does it have an acceptable margin of error and realistic sample sizes?
- Actionability: Does it provide any insight into what can be done to encourage customers to be loyal and to purchase? Does it prioritize improvements according to biggest impacts?
- Ability to predict: Can it project the future behaviors of the customer based on their satisfaction?
13.3.2: Identifying the Target Market
Recognizing the core target market(s) for a given product or service is integral to maximizing advertising spend.
Explore the process of identifying the target market and how it impacts advertising strategies
- In marketing, a target market should provide an organization the best possible return on its investments from an advertising perspective. As a result, identifying the target market is an important aspect of the process.
- The process begins with segmentation. From the entire potential market, the organization must identify its core customers who are most likely to purchase their products.
- Segmentation should be done on various parameters, such as demographic, geographic, pyschographic, and behavioral ones.
- Once segments are identified, the organization should rank each segment based on their objectives, vision, mission and core competency. This should enable a small number of target markets to be selected.
- Once these target markets are selected, the organization should position the firm competitively to capture that target market.
The process of identifying various groupings within the broader market.
When developing an advertising campaign, be it organization-wide or product-specific, a critical input is identifying the target market. Creating generic advertising campaigns for the entire population is usually not strategic, both in terms of focus and capital. Advertisers should instead narrow down the population to an ideal segment, based upon various factors. This is called segmentation.
The segmentation process can be summarized in seven simple steps. These steps can fit within three primary categories: segmentation, targeting, and positioning. Combined, these seven steps will demonstrate how to identify a target market through segmentation, and how to capture it through positioning.
- The first step is identifying the broader market in which the organization operates. For example, a company that sells beer operates in a market of alcohol drinkers over a certain age located within specific regions of production and distribution.
- Next, the organization must identify, select, and apply parameters that will be used to create the segments. Common examples include demographic data, psychographic data, behavioral metrics, and geographic information. However, there are essentially infinite ways to segment a market, depending on what is best for the organization.
- Finally, the organization should refine and commit to certain segmentation profiles. These profiles will act as potential strategic options in the targeting and positioning in the next segments.
- Now that each segment has been identified, the organization should evaluate the attractiveness of each profile. Ranking these in some way for potential profitability is a critical component.
- Once a proper system of prioritization amongst segments is established, it’s fairly easy to let the best segment(s) float to the top. These segments represent the optimal strategic opportunity in regards to target markets. At this point, the target market has been identified.
- However, the marketing work doesn’t stop at identifying the optimal market. The organization must identify the relative competitive role compared to the segment and the competition. What does the organization stand for? How does that differentiate them?
- Finally, once the ideal markets and positioning are established, the organization is ready to prepare customized marketing material for each specified segment.
Identifying Target Segements (STP Approach)
This image illustrates the process of identifying a target market through a flow chat. It is a useful overview of the general concept behind determining a target market.
This image illustrates the process of identifying a target market through a flow chat. It is a useful overview of the general concept behind determining a target market.
Once an organization understands the broader market, and their relative role within it, targeted advertising should come fairly naturally as marketers experiment and gather data. Firms must pay close attention to their relative position within key markets, and maintain a strong, differentiated presence to achieve competitive advantage.
13.3.3: Defining Campaign Objectives
The hierarchy-of-effects model clarifies the objectives of an advertising campaign and each individual advertisement.
Examine how campaign objectives are identified for an advertising campaign
- The model suggests that there are six steps a consumer or a business buyer moves through when making a purchase.
- It is easier to accomplish ad objectives located at the base of the pyramid than the ones toward the top.
- Many marketers know the hierarchy-of-effects model, but usually by a different name. Some call it AIDA, others the demand chain, still more the purchase funnel.
- Maslow’s Hierarchy of Needs
a theory in psychology describing the pattern that human motivations generally move through
- hierarchy-of-effects model
It clarifies the objectives of an advertising campaign and for each individual advertisement.
- You may market a certain brand of bottled water. Your target audience may like the water and buy it when other brands are not available, but still prefer others. In this case, the objective of the advertising campaign would be to build consumer preference by promoting the quality of the water.
When determining your campaign objectives, you need to consider the state your audience is in and where you want them to be. Among advertising theories, the hierarchy-of-effects model is predominant. It clarifies the objectives of an advertising campaign and for each individual advertisement.
The objectives of a company will depend on the stage the audience is in and where they want to take them.
Even though it is just one of several theoretical frameworks that is useful in developing an advertisement for an advertising campaign, it shows clear steps of how advertising works.
The Hierarchy-of-effects Model
The hierarchy-of-effects model can be explained with the help of a pyramid. The lower level objectives such as awareness, knowledge or comprehension are accomplished first.
Subsequent objectives may focus on moving prospects to higher levels in the pyramid to elicit desired behavioural responses such as associating feelings with the brand, trial, or regularuse.
It is easier to accomplish ad objectives located at the base of the pyramid than the ones toward the top. The percentage of prospective customers will decline as they move up the pyramid toward more action-oriented objectives, such as regular brand use.
Many marketers know the hierarchy-of-effects model, but usually by a different name. Some call it AIDA, others the demand chain, still more the purchase funnel. Whatever the name, it invariably begins with the total potential market for your brand. This pool of potential customers then progress through a series of stages that can include awareness, preference, purchase and, hopefully, loyalty.
The Six Steps
If most of the target audience is unaware of the object, the communicator’s task is to build awareness with simple messages repeating the product name. Consumers must become aware of the brand. This isn’t as straightforward as it seems. Capturing someone’s attention doesn’t mean they will notice the brand name. Thus, the brand name needs to be made focal to get consumers to become aware.
The target audience might have product awareness but not know much more, so this stage involves creating brand knowledge. This is where comprehension of the brand name and what it stands for becomes important. What are the brand’s specific appeals, its benefits? In what way is it different than competitor’s brands? Who is the target market? These are the types of questions that must be answered if consumers are to achieve the step of brand knowledge.
If target members know the product, how do they feel about it? If the audience looks unfavorably toward the product, the communicator has to find out why. If the unfavorable view is based on real problems, a communication campaign alone cannot solve it. It would be necessary to first fix the problem and only afterward communicate its renewed quality.
The target audience might like the product but not prefer it to others. In this case, the communicator must try to build consumer preference by promoting quality, value, performance, and other features. The communicator can check the success of the campaign by measuring audience preference before and after it.
A target audience might prefer a particular product but not develop a conviction about buying it. The communicator’s job is to build conviction among the target audience.
Finally, some members of the target audience might have conviction but not quite get around to making the purchase. They may wait for more information or plan to act later. The communicator must get these consumers to take the final step, perhaps by offering the product at a low price, offering a premium, or letting consumers try it out. This is where consumers make a move to actually search out information or purchase.
Advertising is thus thought to work and follow a certain sequence whereby the prospect is moved through a series of stages in succession from unawareness of the brand to purchase of its product.
13.3.4: Informative, Persuasive, and Reminder Advertising
Advertising should always be in line with promotional and marketing objectives, and the business strategy or mission of the organization.
Explain different types of advertising; informative, persuasive and reminder oriented
- Reminder advertising reinforces previous promotional activity by keeping the name of good, service, person, or cause before the public.
- Marketers use persuasive advertising to increase the demand for an existing good, service, or organization.
- Informative advertising is often used when launching a new product or for an updated or relaunched product.
To show, or be the distinction between two things.
The desire to purchase goods and services.
- advertising objective
the goal of the marketing strategy
- Coca-Cola is a well-established brand that uses reminder advertising to maintain its position in the market. It brings back past packaging as well as advertisements that go back to the beginning of the brand.
Advertising objectives should always be in line with promotional and marketing objectives, as well as the business strategy or mission of the organization. Group advertising objectives fall into three categories:
- To Inform
- To Persuade
- To Remind
Informative advertising is often used when launching a new product, or for an updated or relaunched product. The objective is to develop initial demand for a good, service, organization, or cause. It is used when a new product is put on the market on when an old product has been re-launched or updated.
Informative advertising will tell the consumer and marketplace about the product, explain how it works, provide pricing and product information, and should build awareness for the product as well as the company. The image of the product and the company should be compatible and complementary. There should be enough information to motivate the consumer to take some sort of action.
Marketers use persuasive advertising to increase the demand for an existing good, service, or organization. The idea is persuade a target audience to change brands, buy their product, and develop customer loyalty. After the purchase, the quality of the product will dictate whether or not the customer will remain loyal or return to the previous brand.
Persuasive advertising is highly competitive when there are similar products in the marketplace, and products are competing for their share of the market. In this situation, the winning product will differentiate itself from the competition and possess benefits that are superior to, or compete strongly with, the competition. Comparative approaches are common place, either directly or indirectly.
Reminder advertising reinforces previous promotional information. The name of the product, testimonials of past customers, public response, and sales techniques are repeated in the hopes of reminding past customers and garnering new ones. It is used to keep the public interested in, and aware of, a well-established product that is most likely at the end of the product life cycle.
Coca-Cola is an established brand which uses reminder advertising.
13.3.5: Focus of an Advertisement
The focus of an advertisement must say to each reader or viewer: Buy this product, and you will get this specific benefit.
Outline the mindset and rationale of advertisement focus within an advertising campaign
- The Unique Selling Point or Proposition (USP) is a marketing concept that was first proposed as a theory to understand a pattern among successful advertising campaigns of the early 1940s. It refers to any aspect that differentiates one object from similar objects.
- Positioning is an attempt to place a product into a certain category in consumers’ minds.
- A Brand Character Statement sets the tone for an entire campaign by defining the target audience and how the product or service will benefit that audience.
- Nine-Wheel Logic
the use of specious information in an advertisement when real information is too awkward to use.
A unique selling proposition or unique selling point.
when two or more benefits are demonstrated in an advertisement.
- A example brand character statement: Advertising will convince artistic types age 18-35 that Apple computers are hip and cool. Support will be two men discussing Macs and PCs. Tone will be humorous.
Advertisements make propositions to consumers. They are not just words, product puffery, or window dressing. Each advertisement must say: “Buy this product, and you will get this specific benefit. “
The proposition must be one that the competition cannot or does not offer. It must be unique, relative to the brand, or make a claim not otherwise made in that particular field of advertising. It must differentiate. The proposition must be strong enough to move the masses, pulling new customers to the product. This is known as the “unique selling point or proposition. “
The Unique Selling Point or Proposition
The Unique Selling Point or Proposition (USP) is a marketing concept that was first proposed as a theory to understand a pattern among successful advertising campaigns of the early 1940s. The term was invented by Rosser Reeves of Ted Bates & Company and states that certain campaigns make unique propositions to customers to convinced them to switch brands. Today the term is used in other fields to refer to any aspect that differentiates one object from similar objects.
The term USP has also been largely replaced by the concept known as a Positioning Statement. Positioning determines what place a brand (tangible good or service) should occupy in the consumer’s mind in comparison to its competition. A position is often described as the meaningful difference between the brand and its competitors.
Focus on the USP
When preparing an advertisement, the product’s USP must be defined. To find a USP, ask “How is this product different? ” By making a list of the product’s pros and cons the message that the ad should communicate will become clear.
Positioning is an attempt to place a product into a certain category in consumers’ minds. Types of positioning are Best, Against (Hertz vs. Avis, 7-Up vs. Coke), Niche (a sub-division of a category), New, and Traditional.
A brand character statement sets the tone for an entire campaign. A simple way to start preparing an advertisement is with this statement: “Advertising will (A) (B) that (C) is (D). Support will be (E). Tone will be (F). ” In this case, A is a verb, B is a target demographic, C is the product, D is an adjective or phrase, E is the core of the ad, F is the “attitude. ” For example, “Advertising will convince artistic types age 18-35 that Apple computers are hip and cool. Support will be two men discussing Macs and PCs. Tone will be humorous. “
The next part of this strategy statement is the target audience. Advertisers use many methods to gain information about this group, including demographics, psychographics (how the target thinks), and focus groups.
Next is the product itself. Important questions to ask are “Why would anybody buy this? ” “What is the product’s advantage? ” and “What is the client’s image? ” The last one is important to consider in order to make sure the ad coincides with the public perception the company has created for itself. For example, hip or edgy ads probably won’t go over well with a company that has a public image of being “conservative” and/or “family friendly. “
Support is anything that demonstrates or otherwise backs upthe premise presented in the first sentence. Some examples are facts, images, or a scenario, such as the following:
- Reason Why: How a product delivers a benefit.
- Combination: Two or more benefits are demonstrated.
- Permission to Believe: A clever story or characters make claims that are believable.
- Nine-Wheel Logic: Specious support used when real support would be too awkward.
- Image: An attitude or lifestyle that advertiser attempts to link to product.
Advertising Focus Models
Several models help define the focus of advertisement. The FCB Grid, created by Richard Vaughn, categorizes messages as “thinking” and “feeling”, “low” and “high. “
The FCB Grid
With this model, messages are categorized by “thinking” and “feeling”, “low” and “high”.
- A Low Feel commercial demonstrates the pleasure obtained by using the product. This approach is popular for foods.
- A High Feel commercial emphasizes how the product makes the consumer hip or cool. This approach is popular for advertising products like clothing, shoes, or sports cars.
Tom Harris created the Harris Grid for measuring a product’s level of interest in consumers versus the level of interest in mass media. The Ladder type of advertising messages are arranged in a hierarchical ladder, based on what perspective they use to discuss the product.
Types of advertising messages can be arranged in a hierarchical ladder, based on what perspective they use to discuss the product.
The Harris Grid
The Harris Grid measures a product’s level of interest in consumers versus the level of interest in mass media.
13.3.6: Determining a Budget
Determining a marketing budget requires an understanding of the cost of producing campaigns and the expected (or actual) return from the advertising campaign.
Differentiate between fixed and variable budgeting strategies in advertising, and recognize the way advertising investments have changed
- Advertising is one aspect of the broader marketing strategy, and is funded (and constrained) by the resources available for promotional endeavors.
- Traditionally, advertising budgets were often fixed and set by upper management based on forecasts and available capital. This type of budgeting specifies how much can be spent on different types of line items.
- In more modern contexts, advertising budgets are set over shorter term intervals and focused on justifying an ROI before investing more capital.
- Advertising budgets should take into account the average cost of acquiring a single paying customer. Once this is understood with statistical certainty, the organization can confidently increase the advertising budget if it’s profitable.
An online advertising performance metric representing an instance where an ad is shown once.
Advertising is one aspect of the broader marketing strategy, and is funded (and constrained) by the resources available for promotional endeavors. Advertising budgets can be considered from a wide variety of perspectives, but are more often than not looked at as individual campaigns. Each advertising campaign has a budget constraint placed upon it, including the cost of developing assets (filming a commercial, for example), the cost of distributing this asset, and the overall expected return on investment from this asset.
At its simplest, an advertising budget can be determined based on the expected return from the advertising campaign. If the campaign is expected to return more than it costs, than the budget is appropriate for strategic implementation. However, it’s useful to look at traditional advertising, modern advertising, and some key concepts in how advertising campaigns can be proven effective or ineffective.
Traditionally, advertising campaigns were funded up front by large organizations. Advertising campaigns were placed on billboards, newspapers, radio shows, and TV. This usually required fairly large budgets just to test advertising campaign ideas, which would be carefully vetted in strategic meetings. As advertising has evolved, the distribution format and up front fixed costs have changed significantly.
In this situation, determining a budget for an advertising campaign is placing a fixed amount of capital into the advertising budget (annually, or on a per campaign basis) with the expectation that it will add value. Under this form of budgeting, the amount in the budget will be established based on the cost of creating the desired assets, not specifically on the return on investment that is being obtained. This is a fixed budgeting approach.
With the advent of consistent and easily applied ad tracking, particularly with online media, the justification of advertising budgets has grown increasingly precise and stringent. For the production and placement of an online video commercial, for example, an organization can easily figure out how many people have watched the video, how many viewers have converted to customers, and the average cost per conversion.
Forecasts and Scaling
Considering the above mentioned factors of modern advertising, advertising campaign budgets are most often created based on an expected return. This is done through creating forecasts. A forecast is simply a prediction of how something will perform, in this situation the advertising campaign. To create a forecast for a campaign, the organization can run small, iterative tests within the target segment on different platforms to see how it performs. Let’s consider a quick example to understand this concept a bit more clearly:
You have a small company. You want to advertise on Facebook to promote it. You sell coffee mugs with goofy pictures and great quotes on them. Each mug costs about $5 to produce. You sell them for $10 each (shipping is paid by the consumer). With taxes and your time and effort, you are likely to make $3 off of each mug sold. That leaves you with $2 per user to spend on getting a sale. Your advertising budget, from a variable point of view, is $2 or less per sale.
On Facebook, you can get your ad seen by 1,000 for $20. That’s, on average, $0.02 per impression (or customer who sees your advertising campaign). Not bad, right? However, seeing an ad isn’t the same as making a purchase. In fact, only about 10% of the people who see your ad end up going to your website. And only 10% of the people who visit your website after the ad make a purchase! That means of the 1,000 people who see your ad, 100 go to your website and 10 make a purchase. As it will cost $20 for those 1,000 views, and you only get 10 purchases, you are paying $2 per purchase. This meets your target (but only barely!). Your average cost may go down if the market is big, and your targeting improves. The average cost could also go up, however, as you saturate your target segment.
As a result, the advertising budget for this campaign can be increased until you begin paying more per average purchase. In this case, an advertising budget is variable and changing over time to take into account learnings in real time.
Determinants of Advertising Budgets
This image demonstrates the evolution of metrics, which directly relates to how advertising budgets are derived. In short, understanding how many people see, engage with, or act upon an ad will directly impact the budget that advertising campaign will receive.
This image demonstrates the evolution of metrics, which directly relate to how advertising budgets are derived. In short, understanding how many people see, engage with or act upon an ad will directly impact the budget that advertising campaign will receive.
13.3.7: Creating a Media Plan
The standard media plan covers four stages: stating media objectives, evaluating media, selecting and implementing choices, and determining the budget.
Assemble the components and methodology of creating a media plan
- Media objectives are normally stated in terms of three dimensions.
- There are definite inherent strengths and weaknesses associated with each medium so many advertisers rely heavily on the research findings provided by the medium, by their own experience, and by subjective appraisal when deciding which media to use.
- The media planner must make media mix decisions and timing directions, both of which are restricted by the available budget.
- factory outlet
a brick and mortar or online retail store in which manufacturers sell their stock directly to the public
- A C Nielsen
A.C. Nielsen is a global marketing research firm, with worldwide headquarters in New York City, United States of America.
The mass media are all those media technologies that are intended to reach a large audience by mass communication.
- When choosing the media, you not only need to know which media outlets exist, but also which ones suit your product. You probably will not want to contact local business publications if you want to advertise the authors and schedule of the new reading program you are creating. However, if you want to focus on the support of the business community in pulling this off, then this is exactly who you would want to contact.
Developing the Media Plan
Advertising media selection is the process of choosing the most cost-effective media for advertising to achieve the required coverage and number of exposures in a target audience.
Although the media plan is placed later in this process, it is in fact developed simultaneously with the creative strategy. This area of advertising has gone through tremendous changes; a critical media revolution has taken place.
The standard media plan covers four stages: (a) stating media objectives; (b) evaluating media; (c) selecting and implementing media choices; and (d) determining the media budget.
Stating Media Objectives
Media objectives are normally stated in terms of three dimensions:
- Reach: The number of different persons or households exposed to a particular media vehicle or media schedule at least once during a specified time period.
- Frequency: The number of times within a given time period that a consumer is exposed to a message.
- Continuity: The timing of media assertions (e.g., 10% in September, 20% in October, 20% in November, 40% in December and 10% the rest of the year).
There are definite inherent strengths and weaknesses associated with each medium. In addition, it would require extensive primary research, either by the sponsoring firm or their advertising agency in order to assess how a particular message and the target audience would relate to a given medium. As a result, many advertisers rely heavily on the research findings provided by the medium, by their own experience, and by subjective appraisal.
Selection and Implementation
The media planner must make media mix decisions and timing directions, both of which are restricted by the available budget. The media mix decision involves putting media together in the most effective manner. This is a difficult task and necessitates quantitatively and qualitatively evaluating each medium and combination thereof.
Unfortunately, there are very few valid rules of thumb to guide this process, and the supporting research is spotty at best. For example, in attempting to compare audiences of various media, we find that A C Nielsen measures audiences based on TV viewer reports of the programs watched, while outdoor audience exposure estimates are based on counts of the number of automobile vehicles that pass particular outdoor poster locations.
The timing of media refers to the actual placement of advertisements during the time periods that are most appropriate, given the selected media objectives. It includes not only the scheduling of advertisements but also the size and position of the advertisement.
Setting the Media Budget
The media budget is a subset of the advertising budget, and the same methods used to create advertising budget will be used to create the media budget.
In general, remember that:
- Media outlets which deliver messages involving multiple senses (sight, sound, touch, and smell) will be more expensive than those involving just one sense (sound).
- The quality expectations of the media outlet will influence the cost. For example, the quality of ads for national television stations tend to be higher than those for local outlets. Creating a text ad on the Internet, however, can be free or cost next to nothing.
13.3.8: Media Types and Scheduling
Marketers must choose the type of media that best suits their budget and message and then choose the best way to schedule their message.
Compare the types of media and types of scheduling used in advertising campaigns
- In terms of overall advertising expenditures, media advertising is still dominated by press and television.
- Scheduling refers to the pattern of advertising timing, represented as plots on a yearly flowchart.
- The classic scheduling models are continuity, flighting, and pulsing.
The mass media are all those media technologies that are intended to reach a large audience by mass communication.
- Product categories that are sold year round but experience a surge in sales at intermittent periods are good candidates for pulsing. For instance, under-arm deodorants, sell all year, but more during the summer months.
In terms of overall advertising expenditures, media advertising is dominated by press and TV. Posters and radio and then cinema follow behind.
Spending is dominated by the national & regional newspapers, the latter taking almost all of classified advertising revenue. The magazines and trade/technical journals are equal in size, but less than half of newspapers.
Normally the most expensive medium and used predominately by major advertisers. Regional contractors offer more affordable packages to their local advertisers. It offers the widest coverage, particularly at peak hours and mostly to family audiences.
TV has the greatest impact, especially for those products or services where a “demonstration” is essential. It combines the virtues of both the “storyteller” and the “demonstrator. ” To be effective, these messages must be simple and able to overcome household distractions.
Radio advertising has increased greatly in recent years, with the granting of many more licenses. It reaches specific audiences at different times of the day—adults at breakfast, housewives during the day, and commuters during rush hours. Additionally, people listen to the radio when they are stuck in traffic, whereas other listeners may only listen in the evenings. The 24-hour availability makes reach to a variety of customer sub-segments possible. In addition, It is well-established and able to reach rural areas. It is cost-effective since production costs are lower than TV, however, the lack of visual elements may limit the message.
Though national audience numbers are down, this may be the most effective medium for reaching younger age groups, since the core audience is age 15 to 35.
This rapidly growing marketing force is similar to press advertising, but its interactivity is the most powerful element.
Personal mobile phones are attractive advertising media to network operators and are gaining in power and reach.
Mobile phones are a form of media for advertising.
Advertising-free media refers to outlets whose output is not funded or subsidized by the sale of advertising space. It includes entities such as websites, television and radio networks, and magazines.
Out of Home Advertising
Other areas in which a company’s product message intersects with potential buyers occur outside of the home, meaning not via a device owned or operated by the potential buyer such as mobile phones, televisions, radio, computers, etc. Billboards, signage on public transportation, skywriting, blimps and other outdoor advertisements are examples of product messages that reach potential buyers while they are outside of their home, on the go and in public places, waiting in offices, in transit. This medium is in contrast with broadcast, print and internet advertising. There are four types; billboards, street furniture, transit and alternative.
Advertising Media Scheduling
Scheduling refers to the pattern of advertising timing, represented as plots on a yearly flowchart. These plots indicate the pattern of scheduled times that coincide with favorable selling periods. The classic scheduling models are continuity, flighting, and pulsing.
This model is primarily for non-seasonal products and some seasonal products. Advertising runs steadily with little variation over a campaign period. There may be short gaps at regular intervals and also long gaps—for instance, one ad every week for 52 weeks, and then a pause. This pattern of advertising is prevalent in service and packaged goods that require continuous reinforcement on the audience for top of mind recollection at point of purchase.
- Works as a reminder.
- Covers the entire purchase cycle.
- Cost efficiencies in the form of large media discounts.
- Positioning advantages within media.
- Program or plan that identifies the media channels used in an advertising campaign, and specifies insertion or broadcast dates, positions, and duration of the messages.
In media scheduling for seasonal product categories, flighting involves intermittent and irregular periods of advertising, alternating with shorter periods of no advertising at all. For instance, all of 2000 Target Rating Pioneered in a single month, “going dark” for the rest of the year. Halloween costumes are rarely purchased all year except during the months of September and October.
- Advertisers buy heavier weight than competitors for a relatively shorter period of time.
- Little waste, since advertising concentrates on the best purchasing cycle period.
- Series of commercials appear as a unified campaign on different media vehicles.
Pulsing combines flighting and continuous scheduling by using a low advertising level all year round and heavy advertising during peak selling periods. Product categories that are sold year round but experience a surge in sales at intermittent periods are good candidates for pulsing. For instance, under-arm deodorants, sell all year, but more during the summer months.
- Covers different market situations.
- Advantages of both continuity and flighting possible.
13.3.9: Creating Advertisements
The advertising creative effort can be divided into two elements: the creative strategy and creative tactics.
Outline the process of how to create advertisements
- The creative strategy concerns what you are going to say to the audience.
- Creative tactics outline the means for carrying out the creative strategy.
- The place to begin the creative strategy is to ascertain the proper appeal to employ in the ad.
The achievement of objectives through strategy.
- Offering a product at a reduced price or under some special deal arrangement (e.g. buy-one-get-one-free) may be the only viable appeal in a particular ad.
Developing the Creative Strategy
Once all the relevant facts are gathered and evaluated, the process of actually creating the advertisement is appropriate. This process is very complex and a complete description of it is well beyond the scope of this unit. However, it is possible to highlight the primary parts of this process.
The Creative Process
Once all of the relevant facts have been obtained, one can start creating the ad.
More than likely, the development and approval of advertising creation is the responsibility of the senior advertising manager within the company. If an advertising agency is used, the responsibility belongs to the senior account person, in conjunction with the senior creative person assigned to the account.
The advertising effort can be divided into two elements: the creative strategy and creative tactics.
The creative strategy concerns what you are going to say to the audience. It flows from the advertising objectives and should outline what impressions the campaign should convey to the target audience.
Creative tactics outline the means for carrying out the creative strategy. This includes all the various alternatives available, which will help reach the advertising objective.
The place to begin the creative strategy is to ascertain the proper appeal to employ in the ad. Identifying the appropriate appeal is just the first part of the advertising design process.
The second part is to transform this idea into an actual advertisement. To say that there are a large variety of ways to do this would be a gross understatement. The number of techniques available to the creative strategist are not only vast, but the ability of more than one technique to successfully operationalize the same appeal makes this process even more nebulous.
Primary Advertising Appeals
Service Features of a Product
Many products have such strong technology or performance capabilities that these features can serve as a primary advertising appeal.
Competitive Advantage of a Product
When an advertiser can determine that his product is superior, either in terms of features, performance, supporting services, or image, emphasizing a competitive advantage has proved to make a successful appeal.
Price Advantage of a Product
Offering a product at a reduced price or under some special deal arrangement (e.g. buy-one-get-one-free) may be the only viable appeal in a particular ad.
Popularity of a Product
Although the manner varies, the notion of claiming that a product is “number one” or the most popular is an appeal that has been around for a long time.
In such advertising, a product or service category is promoted for its own sake, but individual makes or brands of product are not singled out.
News about a Product
When a truly new product is developed, or when an existing product is changed or improved in a substantial manner, highlighting this single element can be the core appeal.
A popular appeal is to illustrate how the product may be used to best serve the needs of the consumer.
Savings Through Product Use
An opportunity to save time, money, or energy is always very appealing to consumers.
Helping us feel better about ourselves (e.g. personal care, clothing, automobiles) is an appeal that many people cannot resist.
Embarrassment or Anxiety
Situations that represent a threatening situation, either physically or socially, can provide the basis for an effective appeal.
When this appeal is used, the advertiser offers a free sample, a price reduction, or some other purchase incentive to encourage consumer use or trial.
This type of appeal presents a company or corporation in a favorable light in order to create a favorable impression or image.
13.3.10: Measuring Impact with Metrics
Measuring performance based on previously established objectives is useful in determining the quality of advertising efforts.
Derive useful data metrics from advertising campaigns, and recognize the importance of establishing advertising objectives
- Performance-based advertising has grown in popularity as advertising campaigns have shifted towards online media. These types of advertising campaigns are easily measured by a variety of merics.
- Thinking strategically and planning objectives for each campaign, as well as selecting key metrics to measure along the way, enables performance-based advertising approaches.
- Some metrics will focus on the overall reach, and cost of reach for an advertising campaign. These are referred to as CPI or CPM.
- Other metrics will measure overall clicks, and the costs per clicks, relative to other campaigns. These are measured as CTR, CPC, and CPO.
- GRP will look at overall exposure relative to the market size, which is useful in understanding penetration of key segments.
- When taken in combination, these metrics can paint a clear image of which campaigns are doing well, and which campaigns make financial sense to continue (or discontinue).
- performance-based advertising
A type of marketing that focuses on paying advertising costs based upon the success of campaigns.
When utilizing advertising tools and releasing new campaigns, it is critical that marketers measure the impact to understand what works and what doesn’t. There are many ways to measure an advertising campaigns efficacy, and determining what the objectives are before releasing the campaign is an important step in the process.
Thinking strategically, tactfully, and proactively offers the best opportunity for accurate and meaningful metrics. This is often referred to as performance-based advertising.
With the massive growth in online activity and potential channels of promotion, the measurement of marketing and advertising efforts consists of more tools and possibilities than ever before. Understanding the opportunities for measurement within the field of performance-based marketing is the first step to accurately planning campaigns which can be measured effectively.
This list of potential metrics is a great starting point for peformance-based marketeers to consider, particularly online marketers:
Cost Per Click (CPC) – Simply put, the organization can look at an online campaign’s overall costs and overall clicks. By dividing the overall cost by the overall quantity of clicks, the advertising team can determine how much each click is worth. Keep in mind, a click is not necessarily a sale! So other metrics may be required to make financial sense of a CPC data point.
Cost Per Impression (CPI) – Also referred to as CPM, the cost per impression is usually measured in the cost per thousand impressions (due to the massive volume of online distribution). If a campaign costs $10,000 and reaches 1,000,000 people, the cost per thousand impressions (CPI) is $10.
Reach – A simple metric, reach determines the overall volume of potential consumers an ad will engage. This is a useful input variable for a variety of other metrics, as well as a viable metric in and of itself.
Gross Rating Point (GRP) – With an understanding of CPI in place, this metric expands on that data point by comparing it to the overall penetration of the target market. That is to say, a GRP is going to measure the total number of impressions relative to the overall size of the target population, or GRPs (%) = 100 * Impressions (#) ÷ Defined population (#).
Click-through Rate (CTR) – The click-through rate (CTR) is related to the CPC and CPI, but measures a relative percentage of impressions to clicks. This is a bit different than the other calculations, as it implies relevance and quality from the eyes of the consumer between advertisements. So if advertising campaign A has a CTR of 2% and advertising campaign B has a CTR of 4%, it would appear that B is twice as relevant when it comes to engaging the target audience. However, this does NOT mean it is more effective financially (although it likely will be).
Cost Per Order (CPO) or Cost Per Purchase (CPP) – Finally, we get to the financial certainties. At a certain point, the organization will need to financially justify advertising campaigns. This is not always easy, as attributing a campaign to a purchase is not always completely clear. however, a CPO or CPP will track and measure users throughout the channel to see which advertising campaigns ultimately result in a purchase. This CPP must be lower than the margin per customer purchase, otherwise the campaign is losing money (at least in the short run).
This is a good example of a measurable advertising campaign, which would reflect most of the performance-based metrics in this discussion.
This is a good example of a measurable advertising campaign, which would reflect most of the performance-based metrics in this discussion.
13.4: Public Relations
13.4.1: Public Relations Tools
PR is the practice of managing the flow of information between organizations and the public.
Give examples of communications tools used to develop effective public relations programs
- A fundamental technique of public relations is identifying the target audience and tailoring messages to appeal to them.
- Messaging is the process of creating a consistent story around a product, person, company, or service. The goal is to avoid having consumers receive contradictory or confusing information that will make them doubt their purchase or make other decisions that negatively impact the company.
- Social media technology allows companies and organizations to disseminate information without relying solely on mainstream publications. Messages can be communicated directly to the public, customers, and prospects through social networks such as Facebook and Twitter.
- Other common PR activities include speaking at conferences, pursuing industry awards, working with the press, and communicating with employees.
- Public relations
the practice of managing the flow of information between an individual or an organization and the public
- Pennsylvania State University hired one of the largest PR firms in the world, Edelman, to deal with the negative fallout of the Sandusky sex abuse scandal.
Public Relations Tools
Public relations (PR) is the practice of managing the flow of information between an individual or an organization and the public. The aim is to persuade the public, investors, partners, employees, and other stakeholders to maintain a certain point of view about the company and its leadership, products, or political decisions. Common PR activities include speaking at conferences, seeking industry awards, working with the press, communicating with employees, and sending out press releases.
Public relations may include an organization or individual gaining exposure to an audience through topics of public interest and news items.
The Media in Action
The media is often utilized in PR campaigns.
Building and managing relationships with those who influence an organization’s or individual’s audiences is critical in public relations. When a public relations practitioner is working in the field, they build a list of relationships that become assets, especially in media relations. The ultimate objective of PR is to retain goodwill as well as create it; the procedure to follow to achieve this is to first do good and then take credit for it. The PR program must describe its target audience—in most instances, PR programs are aimed at multiple audiences that have varying points of view and needs.
There are several PR tools firms can utilize to ensure the efficacy of PR programs: messaging, audience targeting, and media marketing.
Messaging is the process of creating a consistent story around a product, person, company, or service. Messaging aims to avoid having readers receive contradictory or confusing information that will instill doubt in their purchasing choice or spur them to make other decisions that will have a negative impact on the company. A brand should aim to have the same problem statement, industry viewpoint, or brand perception shared across multiple sources and media.
A fundamental technique of public relations is identifying the target audience and tailoring messages to appeal to them. Sometimes the interests of different audiences and stakeholders vary, meaning several distinct but complementary messages must be created.
Stakeholder theory identifies people who have a stake in a given institution or issue. All audiences are stakeholders (or presumptive stakeholders), but not all stakeholders are audiences. For example, if a charity commissions a public relations agency to create an advertising campaign that raises money toward finding the cure for a disease, the charity and the people with the disease are stakeholders, but the audience is anyone who might be willing to donate money.
Digital marketing is the use of Internet tools and technologies, such as search engines, Web 2.0 social bookmarking, new media relations, blogs, and social media marketing. Interactive PR allows companies and organizations to disseminate information without relying solely on mainstream publications and to communicate directly with the public, customers, and prospects. Online social media platforms such as Facebook and Twitter ensure that firms can get their messages heard directly and quickly. Other forms of media include newspapers, television programs, radio stations, and magazines. Public relations people can use these various platforms and channels to publish press releases. It is important to ensure that the information across all channels is accurate and as complementary as possible.
The amount of money spent on traditional media channels has declined as more and more readers have turned to favor online and social media news sources. As the readership of traditional media shift to online media, so has the focus of many in public relations. The advent and increase of social media releases, search engine optimization, and online content publishing and the introduction of podcasts and video are related trends.
Sponsorship is often used as part of a public relations campaign. A company will pay money to compensate a public figure, spokesperson, or “influencer” to use its logo or products. An example of sponsorship is a concert tour presented by a bank or drink company.
Product placement is basically passive advertising in which a company pays to have its products used prominently in a photograph, film, or video message or during a live appearance. The most common use of product placement is in films where characters use branded products.
Both product placement and sponsorship decisions are based on a shared target market. No matter the public relations vehicle, there must be a common buyer that all parties want to reach.
13.4.2: Handling Unfavorable Publicity
Handling unfavorable publicity means being honest with consumers and putting public interest first.
List the steps firms can take to implement an effective crisis communication plan
- Being prepared for harmful situations is imperative. It is important to map out potential negative scenarios and have a PR plan for each one. It is important to have a crisis management team who can handle these situations.
- Protecting the integrity and reputation of an organization is important, but putting public interest ahead of the organization’s interest is key to gaining consumer trust and loyalty.
- A media reaction plan should include a company media representative as part of the crisis management team. Firms need to show that they are working toward positive resolutions to deflect the negative publicity.
- Crisis Management Team
A team in an organization that prepares contingency plans in advance, as part of a crisis management plan.
- In 1982, Johnson & Johnson’s Tylenol medication commanded 35% of the US over-the-counter analgesic market and represented 15% of the company’s profits. Unfortunately, one individual succeeded in lacing the drug with cyanide. Seven people died as a result, so a panic ensued about how widespread the contamination might be. By the end of the episode, everyone knew that Tylenol was associated with the scare. The company’s market value fell by $1 billion as a result. When the same situation happened again in 1986, the company had learned its lesson. It quickly ordered that Tylenol be recalled from every outlet, not just those in the state where it had been tampered with. The company also decided that the product would not be re-established on the shelves until something had been done to provide better product protection. As a result, Johnson & Johnson developed the tamperproof packaging that would make it much more difficult for a similar incident to occur in the future.
Crisis communication planning can help a firm deal effectively with unexpected disasters, emergencies, or other unusual events that may lead to unfavorable publicity. Effectively responding to any crisis means both controlling the public narrative and ameliorating any harm done, whether tangibly or to a company’s reputation.
The following principles represent best practices in crisis management: be prepared, do the right thing, communicate quickly and accurately, and follow up.
Although emergencies are by their very nature unpredictable, it is possible to list and prepare for negative scenarios that might occur. It is also possible to set up a communication system that can be activated in almost any emergency situation.
Do the Right Thing
In any emergency situation, it is imperative that a company put the public interest ahead of the organization’s interest. The company’s first responsibility is to the safety and well-being of the people involved. Once safety has been restored, the company needs to face the public and face the facts. The company should never try to minimize a serious problem or “smooth it over” in the hope that no one will notice. Conversely, don’t blow minor incidents out of proportion or allow others to do so. Social media has accelerated the speed at which information about a crisis can spread; the viral affect of social networks such as Twitter means that stakeholders can break news faster than traditional media, which makes managing a crisis harder. However, a company should not speculate; if they don’t know the facts, they should say so and promise to get back to the media as soon as possible.
Communicate Quickly and Accurately
Positive, assertive communication focuses attention on the most important aspects of the problem and moves the process forward to resolution, even in the face of antagonistic news media. Media representatives have an obligation to provide reliable information to their audiences, and they will get that information whether or not company spokespeople cooperate; if a company will not comment on the situation, someone else will. Serving as one of the major sources of media information in a crisis is a means of maintaining control. If necessary, activate the crisis management team. Act quickly and spare no expense in distributing the information you determine the media and others should have.
It is important to make amends to those affected and then do whatever is necessary to restore the organization’s reputation in the community. It is helpful to perform an act of goodwill during or immediately after a crisis when possible. Internal policies should be changed to minimize a repeat of the crisis situation. The crisis communication plan should be revised based on any new learnings.
Johnson & Johnson’s Tylenol medication was once laced with cyanide. In time, Johnson & Johnson learned to deal with the negative public relations.
13.4.3: Measuring Effectiveness of Public Relations Efforts
Measuring and evaluating the effectiveness of a public relations campaign is necessary to ensure that established objectives are met.
Explain how organizations can measure and evaluate the effectiveness of the campaign
- The most basic level of measuring effectiveness comes from compilations of message distribution and media placement. One elementary form of evaluation is simply to count how many news releases, feature stories, photos, letters, etc. are produced in a given period of time.
- Measuring the effectiveness of public relations involves the measurement of changes in attitudes, opinions, and behavior, which can often be subjective and up to interpretation.
- Social media measurement refers to tracking social content such as blogs, wikis, news sites, and social networking sites such as Twitter and Facebook, as a way to determine the volume and sentiment of online conversation about a brand or topic.
- social media
Interactive forms of media that allow users to interact with and publish to each other, generally by means of the Internet.
a systematic determination of a subject’s merit, worth and significance, using criteria governed by a set of standards. It can assist an organization to assess any aim, realizable concept or proposal, or any alternative, to help in decision-making; or to ascertain the degree of achievement or value in regard to the aim and objectives and results of any such action that has been completed.
- Quick Response (QR) codes have become increasingly popular. Users can access the information via QR codes using their mobile devices. However, placing a large QR code on a highway billboard (such as the one seen here on the side of a highway is not a good idea. Encouraging people to use their cell phones to read the QR code while driving at high speeds is an ineffective PR campaign.
Evaluation of a public relations campaigns is the measurement of results against established objectives, which are set during the planning process. The desire to improve results the next time is a major reason for evaluating public relations efforts. Before any public relations program can be properly evaluated, it is important to clearly establish a set of measurable objectives. Public relations personnel and management should agree upfront on the criteria that will be used to evaluate success in attaining objectives, rather than waiting until the end of the program to determine how it will be evaluated.
When establishing objectives and measurement criteria, consider the following questions:
- Was the activity or program adequately planned?
- Did the recipients of the message understand it?
- How could the program strategy have been more effective?
- Were all primary and secondary audiences reached?
- Was the desired organizational objective achieved?
- What unforeseen circumstances affected the success of the program or activity?
- Did the program or activity fall within its budget?
- What steps can be taken to improve the success of similar activities in the future?
Sophisticated techniques, including computerized news clip analysis, survey sampling, quasi-experimental designs, and attempts to correlate efforts directly with sales, can be used for measurement. A minimum of three levels of measurement and evaluation include:
- On the most basic level are compilations of message distribution and media placement. One elementary form of evaluation is simply to count how many news releases, feature stories, photos, letters, etc. are produced in a given period of time. This kind of evaluation provides management with the staff’s productivity and output.
- The second level, which requires more sophisticated techniques, measures audience awareness, comprehension, and retention of the message. For example, editors of newsletters should evaluate readership annually to help ascertain reader perceptions, the credibility of the source, and the extent to which the newsletter meets organizational objectives.
- The third level is the most advanced level. It is the measurement of changes in attitudes, opinions, and behavior.
Social media measurementrefers to tracking various social content such as blogs, wikis, news sites, micro-blogs such as Twitter, social networking sites, video/photo sharing websites, forums, message boards, blogs, and other user-generated content to determine the volume and sentiment of online conversation about a brand or topic, and to gain insight on consumer choices. This information indicates what marketing strategies appear to be working and which ones are not.
QR Codes Gone Wrong
Placing large QR codes on billboards on busy streets or highways may not be an effective approach to public relations.