Value of ObjectivesValue of Objectives

Focus and CoordinationFocus and Coordination They help to orient everyone involved They help to orient everyone involved

toward one, common goal.toward one, common goal.

Plans and DecisionsPlans and Decisions They serve as criteria for developing They serve as criteria for developing

plans and making decisions.plans and making decisions.

Measurement and ControlMeasurement and Control They provide the standards and They provide the standards and

benchmarks for evaluating results.benchmarks for evaluating results.

Measuring Advertising Measuring Advertising EffectivenessEffectiveness

Measuring Advertising Measuring Advertising EffectivenessEffectiveness

AdvertisingAdvertisingAdvertisingAdvertising SALESSALESSALESSALES

TechnologyTechnologyTechnologyTechnologyCompetitionCompetitionCompetitionCompetition

The EconomyThe EconomyThe EconomyThe Economy

ProductProductQualityQualityProductProductQualityQuality

PricePricePricePriceDistributionDistributionDistributionDistribution

Problems With Sales ObjectivesProblems With Sales ObjectivesProblems With Sales ObjectivesProblems With Sales Objectives

Many other variables may influence sales.Many other variables may influence sales.

Advertising has a lagged effect.Advertising has a lagged effect.

Sales objectives offer little guidance to creative Sales objectives offer little guidance to creative and media people.and media people.

Many other variables may influence sales.Many other variables may influence sales.

Advertising has a lagged effect.Advertising has a lagged effect.

Sales objectives offer little guidance to creative Sales objectives offer little guidance to creative and media people.and media people.

Where Sales Objectives Where Sales Objectives MayMay Work WorkWhere Sales Objectives Where Sales Objectives MayMay Work Work

In order of appropriateness:In order of appropriateness: Direct responseDirect response

In order of appropriateness:In order of appropriateness: Direct responseDirect response

Where Sales Objectives Where Sales Objectives MayMay Work WorkWhere Sales Objectives Where Sales Objectives MayMay Work Work

In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event

promotionspromotions

In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event

promotionspromotions

Where Sales Objectives Where Sales Objectives MayMay Work WorkWhere Sales Objectives Where Sales Objectives MayMay Work Work

In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event

promotionspromotions Mature & very stable Mature & very stable

marketsmarkets

In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event

promotionspromotions Mature & very stable Mature & very stable

marketsmarkets

Communications ObjectivesCommunications ObjectivesCommunications ObjectivesCommunications Objectives

90% Awareness90% Awareness

70% Comprehension70% Comprehension

40% Liking40% Liking

25% Preference25% Preference

20% Trial20% Trial

5% Regular Use

5% Regular Use

Hierarchy of Effects PyramidHierarchy of Effects Pyramid

Conative

Affective

Cognitive

Communications ObjectivesCommunications ObjectivesCommunications ObjectivesCommunications Objectives

Objective 1Objective 1: Create brand awareness among 90% of : Create brand awareness among 90% of the target audience.the target audience.

Objective 2Objective 2: Create understanding of key brand : Create understanding of key brand benefits among 70% of the target audience.benefits among 70% of the target audience.

Objective 3Objective 3: Create positive feelings about the brand : Create positive feelings about the brand among 40% and preference among 25% of the target among 40% and preference among 25% of the target audience.audience.

Objective 4Objective 4: Obtain trial among 20% of the target : Obtain trial among 20% of the target audience.audience.

Objective 5Objective 5: Develop and maintain regular use : Develop and maintain regular use among 5% of the target audience.among 5% of the target audience.

Objective 1Objective 1: Create brand awareness among 90% of : Create brand awareness among 90% of the target audience.the target audience.

Objective 2Objective 2: Create understanding of key brand : Create understanding of key brand benefits among 70% of the target audience.benefits among 70% of the target audience.

Objective 3Objective 3: Create positive feelings about the brand : Create positive feelings about the brand among 40% and preference among 25% of the target among 40% and preference among 25% of the target audience.audience.

Objective 4Objective 4: Obtain trial among 20% of the target : Obtain trial among 20% of the target audience.audience.

Objective 5Objective 5: Develop and maintain regular use : Develop and maintain regular use among 5% of the target audience.among 5% of the target audience.

The DAGMAR ApproachThe DAGMAR Approach

DDefineefine

AAdvertisindvertisingg

GGoals foroals for

MMeasuringeasuring

AAdvertisindvertisingg

RResultsesults

Characteristics of ObjectivesCharacteristics of Objectives

Specific Communications ObjectivesSpecific Communications Objectives

Concrete Measurable TasksConcrete Measurable Tasks

Well-Defined Target AudienceWell-Defined Target Audience

Existing Benchmark MeasureExisting Benchmark Measure

Degree of Change SoughtDegree of Change Sought

Specific Time PeriodSpecific Time Period

Critique of Objectives

DAGMAR DifficultiesDAGMAR Difficulties

Legitimate ProblemsLegitimate Problems

Response Hierarchy Response Hierarchy ProblemsProblems

Doesn't always define the Doesn't always define the process people use to reach process people use to reach purchase/use.purchase/use.

Attitude - Behavior Attitude - Behavior RelationshipRelationship

Attitude change doesn't Attitude change doesn't always lead to change in always lead to change in actions or behavior.actions or behavior.

Questionable ObjectionsQuestionable Objections

Sales Objectives Are Sales Objectives Are NeededNeeded

Sales are all that really Sales are all that really counts, not counts, not communications objectives.communications objectives.

Costly and ImpracticalCostly and Impractical The research and efforts The research and efforts

cost more then the results cost more then the results are worth.are worth.

Inhibition of CreativityInhibition of Creativity Too many rules and too Too many rules and too

much structure curb much structure curb genius.genius.

Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting

Concave-Downward Response CurveConcave-Downward Response CurveConcave-Downward Response CurveConcave-Downward Response Curve

Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting

S-Shaped Response CurveS-Shaped Response CurveS-Shaped Response CurveS-Shaped Response Curve

Theoretical Issues in Budgeting Theoretical Issues in Budgeting Marginal AnalysisMarginal Analysis

Advertising / Promotion in $

Sa

les

in $

Point A

Profit

Sales Gross Margin

Ad. Expenditure

Problems with Marginal Problems with Marginal AnalysisAnalysis

Assumption:Assumption: Sales are the principal objective of Sales are the principal objective of

advertising and/or promotion.advertising and/or promotion.

Assumption:Assumption: Sales are the result of advertising and Sales are the result of advertising and

promotion and nothing else.promotion and nothing else.

Budgeting - Top DownBudgeting - Top Down

Historical MethodHistorical Method

Affordable MethodAffordable Method

Percentage-of-Sales Percentage-of-Sales

•May be based on last year’s with a percentage increase.

•May be based on last year’s with a percentage increase.

•Allocates whatever is left over to advertising.

•Allocates whatever is left over to advertising.

•Compares total sales with the total promotion budget during a previous or projected time period.

•Compares total sales with the total promotion budget during a previous or projected time period.

Budgeting-Top DownBudgeting-Top Down

Arbitrary AllocationArbitrary Allocation

Competitive ParityCompetitive Parity

•Budgeting by fiat.•Budgeting by fiat.

•Matching the competition’s percentage-of-sales expenditures.

•Matching the competition’s percentage-of-sales expenditures.

Examples of ad-to-sales ratiosExamples of ad-to-sales ratios

AirlinesAirlines 1.2 % of sales 1.2 % of sales

Soft drinksSoft drinks 5.3 5.3

Cable TVCable TV 1.3 1.3

DollsDolls 15.215.2

Food & kindred productsFood & kindred products 10.210.2

Steel works and blast furnacesSteel works and blast furnaces 1.9 1.9

Watches, clocks and partsWatches, clocks and parts 13.713.7

Wine and brandyWine and brandy 11.311.3

Records, audiotape, diskRecords, audiotape, disk 13.413.4

Plastic, resinsPlastic, resins 0.5 0.5

Budgeting-Bottom UpBudgeting-Bottom Up

Objective & Task MethodObjective & Task Method •Looks at objectives set for each activity, and determines the cost of accomplishing each objective.

•Looks at objectives set for each activity, and determines the cost of accomplishing each objective.

1. Isolate Objectives1. Isolate Objectives

2. Determine Tasks Required2. Determine Tasks Required

3. Estimate Required Capital Expenditures3. Estimate Required Capital Expenditures

4. Monitor4. Monitor

5. Reevaluate Objectives5. Reevaluate Objectives

1. Isolate Objectives1. Isolate Objectives

2. Determine Tasks Required2. Determine Tasks Required

3. Estimate Required Capital Expenditures3. Estimate Required Capital Expenditures

4. Monitor4. Monitor

5. Reevaluate Objectives5. Reevaluate Objectives