Category: Advertising

We have already discussed how advertising evolved in the previous century. Organisations built their business taking advantage of advertising. In a growing economy, there is more marketing and advertising spend and the consumers are favourably inclined to consume more. There is an overall growth in the sales revenue and media revenue. Advertising expenditure grew in India by leaps and bounds.

When the recession sets in, the first axe falls on the advertising expenditure. There are studies to show that if advertising is maintained in recession, the firm stands to gain from the competitor’s market share who is sluggish in advertising.

In a down turn, the media advertising agencies suffer as the ad expenditure is ourtailed or diverted elsewhere. Both the print media and electronic media are affected adversely. Agencies experience lower  billings and reduced profits.

The relationship between advertising and economy has two dimensions. Advertising is a major source of information for the consumers enabling them to exercise their choice from a wide array of products. Advertising is the only guide to the consumers to learn about the new products. The other dimension is the pull effect of advertising on the consumers who ask for the advertised product from the retailer. That is similar to exercising control over distribution and pricing. The consumer has to pay the price desired by the advertiser.

Thus there are views and counter-views regarding the role of advertising in the economy. Advertising does influence several economic elements including pricing, consumer demand and competition.

Pricing

The question is whether advertising increases the prices people pay for the products or reduces them. There are cogent arguments on both the sides. As advertisement is expenditure that is passed on to the consumer, naturally they pay a higher price. In addition, advertising takes away the market share of the competitive products, and so the competition increases its ad spend, and thus cycle of higher prices sets in. There is an entry barrier to the new comers, as they cannot match the financial muscle of the established players. Since competition is restricted, the higher prices do not come down.

There are counter-arguments. Advertising lowers the price by stimulating sales and raising productivity. The per unit cost of the advertises product is lower. Advertising keeps the buyers well informed about products and pricing. Buyers are in a position to take the comparative view and choose the brands which suit their purpose at the most affordable prices. In other words, advertising empowers the buyers to choose the suitably priced products. In some countries, even professional advertising of doctors, lawyers and accountants is legally permitted so as to augment competitive pricing.

Consumer Demand

The effect advertising on consumer demand is a complex issue. There are  a number of variables that can affect the demand — advertising being one of them. The other variables could be demographic changes, income and life style. However, one thing is crystal clear. Advertising stimulates the demand for a new product. Had it not been for advertising, it would have been difficult for the companies to market newer versions of smart phones and tablets.

In recent years, there is a growth in product categories, e.g. on-the-counter medicines. Advertising helps the companies to snatch a bigger portion of that growth.

Advertising is, however, helpless in reviving obsolete products, e.g. out-of-fashion garments, or manual typewriters.

Apart from stimulating demand, advertising can be used to subdue the demand for products in short supply, e.g. conserve energy, save water.

Advertising enables an organisation to defend its market share when the market is static.

Competition

Massive advertising of the leading firms cannot be matched by a new entrant, and hence it is said that advertising dampens competition. However, advertising can be used as a tool for entry into the new market by differentiating the product or by inviting attention to it. This calls for creativity and effective advertising. Just advertising is not enough to make a product competitive. There should be an improved product too, and advertising must get some reasoning to promote it. You have a good product, and you advertise it well. That is the formula for success. The combination beats the competition. Advertising slowly builds a brand by emphasizing its salient features and by establishing a connect between the product and the users.

Internet users in the US are using ad blocking software — almost half of them. They block online ads. To begin with, this was done by those who are technically savvy, but now it has become mainstream. Subscription based services are not affected. It is a big trouble for display ads. Advertising within mobile apps is safe at least currently. Because of this blocking, you must get larger page views to get  the same effect. Could it affect online journalism? Journalism could fund itself from other sources — subscriptions, conferences and native advertising ( e.g. Hulu refuses to play unless you watch the ad ). There are mobile ads. Companies may have to figure out how to get around the ad bloking software. Its a wake up call for online advertisers.

In the context of advertising, fusion is a blend of the product/brand and the message. A fruit juice centre can show a healthy kid consuming their products. Still, there is no fusion, as the kid and the product are different. However, if you turn the juice centre into an apple, the fusion is complete. The greater the fusion, the more the creativity.

Content creators such as Star, Yash Raj films, Facebook and Google are being roped in by Lever to create content where their brands could tell a story that consumers can relate to. As media is changing, this skill will have to be evolved. There is no question of replacing the advertisement. They would like to ride on the content that is designed to entertain, engage and connect. It is a differentiated communication platform. The consumer here does not remain passive, but is an active participant in the brand’s story telling journey. HUL’s move will break the clutter.

Myntra promoted Anouk, a sub-brand of ethnic wear for modern day women by a digital video of a girl in relationship with another girl. They had worn Anouk. Previously, Myntra had two more ads for Anouk — one with a woman alone at the bar and another showing a single mother, and both these were dressed  comfortably in their Anouk. The couple ad has gone viral, where the couple in love does care for family endorsement.

Myntra is not the first to touch the same sex theme. There was Fast-track ad showing two women emerging out of closet with crumpled clothes and contented grins. Many ads have emphasized women empowerment. Airtel ad showing a woman boss ordering her spouse who was her subordinate at office to finish the task, and then asking him to come home where a favourite meal of her husband cooked by her awaits him. The conversation takes place on Airtel. As digital ads could be customized and finely segmented, such ads can be flashed to the right target audience. They engage the young people in digital space.The campaign has to create a buzz. Ads mirror the world around us, and social shifts.  The old stereotyping of roles is just fading. It is about the choices and freedom. The ads flow with the current of female autonomy.

Hermann Zapf expires at the age of 96. He created beautiful type faces.He created around 200 typefaces in different scripts. His work spanned from the metal typesetting to phototypesetting to digital typesetting. Palatino, Optima, Melior, Zapfino, Zapf Dingbats are all fonts attributed to him. According to Jerry Kelly, a leading US typographer, what  Michelangelo was to sculpture and Beethoven to music, Zapf was to type design. The type designer works letter by letter but at the same time takes a holistic view. He has to pay attention to to the shapes of the letters, modulation in the thickness of a letter’s lines and the relationship of the letters to one another. You have to combine beauty with clarity. A type designer’s creativity is bound by practicality. It is constrained by the alphabet. As the type is to be read, the design cannot change the nature of the alphabet beyond a limit. He created typefaces for the Hallmark greeting cards.

As a young man, he worked as an apprentice. He was a photo retoucher.Koch’s work inspired him. he taught himself calligraphy through books. His first design was print type Gilgengart. He drew Palatino in 1948. he taught at various institutions.

There is tremendous growth in digital ad spends — in 2014 it grew at 45 per cent. It touched a revenue of Rs 43.5 billion in 2014, as against a revenue of Rs 30.1 billion in 2013. In total digital advertising, the share of mobile advertising also grew from 10 per cent to 14 percent in 2014. It touched Rs 5.2 billion. Thus most of the money is still spent on search engines, display ads on sites and social media. In total mobile advertising, the in-app advertising has a share of 40 per cent. Next comes the share of mobile web ads at 25 per cent and movie, video, TV, SMS, MMS ads at 35 per cent.

Just now the need is to make the content available on all kinds of devices. However, an individual content player has to focus on a niche. Bennet Coleman offers a range of contents through apps such as the TOI, ET, Newspoint, Navbharat Times, Maharashtra Times, Navgujarat Samay and so on. It runs online publications such as HuffingtonPost and AdAge India. They are into foreign tie ups. The content strategy of online players is different,e.g. Buzzfeed, Scoopwhoop, The Quint, The News Minute.Apart from technology, we shuold have differntiated content.TV apps have mostly ‘catch up’ content, rather than original content.

All types of ads are being tried on mobiles — from display ads to fully rich experience of a video. It is yet to be seen which format of the ad and which model best suits the mobile space.Media plans are made on the basis of the content and traffic.

Online publishers do not get lucrative ad rates as compared to the traditional media., despite their huge reach. Mobile is still a part of the web, and not an independent medium. The cost of the banner ads on popular mobile sites are Rs 200 to Rs 400 per impression or CPM. It comes down to Rs 70 to Rs 150 in case of new sites or second rung apps/sites.The cost of running a video ranges from Rs2-3 per view for popular sites. The payment is made only if the full video is watched without skipping. One can buy a fixed presence on monthly basis with sites having high traffic,e.g. NDTV. It costs rs 3 lac to Rs 4 lac a month. A roadblock for a day may cost Rs2-3 lac.

Ads should not be placed conspicuously to avoid alianation of the viewer. Vdopia runs its ads when the content is being played — in the heart of the content.E-commerce companies put contextual advertising.

Cell phone advertising reached an estimated Rs 144 crore by March, 2013.Cell phone ads include :

Browser Ads : These ads are seen when we visit any site on the cell phone. They are currently 75 per cent of cell phone advertising market.

In-app Ads : The ads we see on free applications. These account for 20 per cent of cell phone ads.

SMS Ads : There is a clampdown on unwanted SMS ads. SMS advertising enjoys only 5 per cent of cell phone advertising.

The new trends in cell phone ads are :

Near Field Communication (NFC) : Here push notifications are sent to cell phones when they are near a certain billboard or shop.

Bar Code Scanning : It allows the customers to scan bar codes placed in newspapers, billboard etc which open the relevant information on the cell phone.

The three-and-a-half -minute commercial was the longest to be aired on Indian TV.It was called Prison Break. A group of foreign convicts attempt an escape bid taking advantage of the cricket match between India and Pakistan.They assumed the jailor and other guards would be busy watching the match.They kept running but were caught. The jailor had an eye on them as he had already opted to record the match on TataSky set-top-box. It was created by O&M. It was aired full for a week. Then 60 or 75 second edits were shown.They had struck a deal with the channels to get the discounted rates. The other long-format commercials are Nissan Micra, Air Deccan, Blackberry Boys II and Idea3G.

When the product becomes a part of the film’s story, we call it in-film placement. It is good promotional technique. MakeMyTrip placed itself in Yeh Jawani Hai Deewani (YJHD). In past, they have tied up with films such as Dostana and My Name Is Khan. Nokia too was placed with YJHD. Several other branded products have been placed, e. g. KitKat, BSA bicycles, L’Oreal Paris in films such as Break Ke Baad, Student of the Year and Aisha. Shah Rukh’s Ra.One had collaborated with 25 brands including Sony Playstation, YouTube, Nokia, McDonald’s, Nerolac, Videocon, Western Union Money Transfer and ESPN Star Sports. Barfi had nine brands collaborating with films. Sometimes the brand is incorporated in the title of the film — Mere Dad Ki Maruti. The studio has to approach the marketing department of the company whose product is to be place in the film. The brand can then advertise along with the film, once the film is released. Munni Badnaam Hui had Zandu balm in its lyrics and that boosted the sale of the brand.