COM 107 - Midterm Exam 2

Oligopoly

(economics) a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors

Monopoly

(economics) a market in which there are many buyers but only one seller

Advertising as Culture

-Advertising tries to change how we think about the world -Coca-Cola - change when we want a product (and how we see Santa) -Links Barry Goldwater to Nuclear War without actually saying it -"The Hathaway Man" - how to sell a "parity product" = sell the man, not the shirt (parity)

In-class examples of major media conglomerates: Time Warner, Disney, News Corp/21st Century Fox

-Comcast (NBC/Universal): 64.7 Billion -Disney (ABC): 45 Billion -Time Warner (HBO): 29.8 Billion(now split) -21st Century Fox (FOX): 27.7 Billion -News Corp (WSJ): 8.9 Billion

Issues In Advertising: Children

-Concerns about negative influences on children -Consumerism/materialism -Junk Food/Fast Food ads -Rise in obesity in the United States 34% of U.S. adults and 17% of children 2-19 years

Problems with Nielsen Ratings

-DVR -Mobile -Internet Streaming Netflix & Hulu - No Numbers -HBO Go -Piracy

How Google Makes Money

-Gets ads in front of people when they want something -Internet- based advertising: generate ads based on what content people view online

Magazines Respond to TV

-Only one of magazines' responses worked successfully -Slashed subscription prices to attract larger audiences. Didn't work - caused them to lose too much money -Specialized to meet demands of audience with more leisure time (and money)

Ownership and Regulator Roles

-Purpose of ownership restrictions: to ensure a diversity of voices in the market place of ideas; localism; competition -Communications Act of 1934: airwaves as "scarce, public resource" -A few large corporations produce the bulk of the media we consume -Smaller companies owned by the large conglomerates

Strengths of Distributed Network

-Reduced costs of telecommunications and processing, since less information is transmitted and the systems rely on low cost field processing resources. -Reduced vulnerability to a single point of failure such as a control center outage. -Ability to be centrally managed under emergency or other relevant conditions. - Reduced dedicated staffing, as system operation becomes one of a number of responsibilities of the operations staff at each agency's location.

Synergy

-Vertical & Horizontal Integration -> Synergy -Synergy: Cooperation between a company's business holdings to produce a combined effect that is greater than the sum of the efforts of the individual parts -Media companies take full advantage of vertical and horizontal integration to sell, advertise or promote content

Edward Bernays

-Was the first person to apply the findings of psychology and sociology to public relations, he called himself a "public relations counselor" rather than a "publicity agent" (coined the term "public relations counselor with his wife, Doris Fleischman and they opened a firm together) -Worked for the Committee on Public Information (CPI) during WWI developing propaganda that supported America's entry into the war -Bernays wrote the first PR textbook, Crystallizing the Public Opinion, and taught the first PR course ever at NYU -One of his biggest clients was the American Tobacco Company...Bernays was hired to develop a campaign that made smoking for publicly acceptable for women. Bernays labeled cigarettes as "torches of freedom" and encouraged women to smoke as a symbol of their independence. He also staged an event where he placed women smokers in NY's 1929 Easter parade

HTML & Tim Berners Lee

1989 -Tim Berners- Lee was the primary author of html. HTML stands for HyperText Markup Language, it is the authoring language used to create documents on the World Wide Web. HTML is used to define the structure and layout of a Web page, how a page looks and any special functions. HTML does this by using what are called tags that have attributes.

Daisy Ad

A famous ad, produced by Democratic presidential candidate Lyndon Johnson' s campaign against Republican Barry Goldwater in 1964, that appealed to voters' fear of a nuclear attack.

Branded Entertainment

A form of advertising in which marketers integrate products into entertainment venues.

ROI

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Wanamaker quote about "half my ad dollar is wasted..."

A popular saying illustrating how difficult it was to qualify the response to advertising is attributed to John Wannamaker. "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Bundling

A tactic of political action committees whereby they collect contributions from like-minded individuals (each limited to $2,000) and present them to a candidate or political party as a "bundle," thus increasing their influence.

Digital Divide

A term used to describe the discrepancy between people who have access to and the resources to use new information and communication tools, such as the internet, and people who do not have the resources and access to the technology.

ARPAnet

AARPAnet was funded by the United States military after the cold war with the aim of having a military command and control center that could withstand nuclear attack. The point was to distribute information between geographically dispersed computers. ARPAnet created the TCP/IP communications standard, which defines data transfer on the Internet today. Computer network developed by the Advanced Research Project Agency (now the Defense Advance Research Projects Agency) in the 1960s and 1970s as a means of communication between research laboratories and universities. ARPANET was the predecessor to the Internet.

Lobbying

According to Lester Milbrath, a "communication, by someone other than a citizen acting on his own behalf, directed to a governmental decisionmaker with the hope of influencing his decision."

Issues In Advertising: Health

Ads influence beauty ideas, often in promoting unhealthy "idealized" body image eating disorders increase in cosmetic surgery ex. Dove Campaign for Real Beauty rise in obesity in the U.S.: 34% of U.S. adults and 17% of children 2-19 years Coca-Cola Anti-Obesity Campaign Tobacco advertisements—FCC ban on TV and radio beginning 1/2/71 Alcohol ad: portraying alcohol as cool

Product Placement

Advertisers pay to put their products into TV shows and movies where the audience will see them.

PR Vs. Advertising

Advertising has total control over message because you pay; PR spreads info via other avenues (lobbying, news media).

Coke Ads & Santa, "Mean Joe Greene"

Advertising tries to change how we think about the world uses and plays with cultural concepts Coca-Cola—change when we want a product (and how we see Santa) Opened road to social change—Mean Joe Greene

Federal Communications Commission (FCC)

An independent regulatory comission charged with licensing stations, Government agency that regulates the communications industry.

Distributed Network Design

An interrelated arrangement of people, storage facilities and transportation systems that moves goods and services from producers to consumers. A distribution network is the system a company uses to get products from the manufacturer to the retailer. A fast and reliable distribution network is essential to a successful business because customers must be able to get products and services when they want them.

Trade Groups

An organization created by related endeavors, sometimes competitors, to pursue mutual goals.

Publics

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives.

Benjamin Day and the factors that led to the Penny Press

Benjamin Day - New York Sun, 1833 Factors: -Industrial Revolution -Rise of the Middle Class -The steam powered press A method of adding a tone to a printed image by imposing a transparent sheet of dots or other patterns on the image at some stage of a photographic reproduction process.

Horizontal Integration

Company has ownership of multiple companies at each level of -Production -Distribution -Exhibition Reduces Competition Increases Market Share Threat to Independent Studio

Types of Magazines

Consumer (pleasure), trade (specific business fields), corporate/PR (make company look good), professional and education (academic), little (literary), fanzine (published by fans).

DMAs

Designated market areas - these DMAs house affiliate stations for each major networks.

Federal Trade Commission (FTC)

Established to preserve competition by preventing unfair business practices and investigates complaints against companies.

News and Social Media

Ex. news on Facebook: 34% of Facebook users like a news organization or individual journalist -Helps reach those individuals who do not consistently follow the news

Aspirin Examples

Example of successful branding; wanted to show that product stands out and is not interchangeable; Aspirin shows formula that goes into the making of it and how it is different from Bayer.

Conventional Persuasive Techniques

Famous-person testimonial creating a bandwagon effect

Telecommunications Act of 1996

Federal legislation that deregulated radio ownership rules and the communications media; it opened the U.S. telecommunications industry to competition.

Hard Sell Vs. Soft Sell Ad

Hard sell: present brand attributes (information about product) -Rosser Reeves: "Prince of Hard Sell"—find one key attribute of product and repeat it—"Unique Selling Proposition": convince to switch brands Soft Sell: attempt to link moods, images, and feelings with brand—very little inform about actual product

Press Releases

In public relations, announcements-written in the style of news reports-that give new information about an individual, a company, or an organization and pitch a story idea to the news media.

Sweeps

It's a sales promotion device in which the participant competes for prizes by simply entering his or her name.

Press Vs. Public Relations

Journalists are bombarded with press releases -- the Los Angeles Times receives hundreds a week. Reporters are most likely to pay attention to those from a trusted source. For a PR person to win that trust, he issues press releases targeted to the journalist's "beat," or expertise. Press releases should read like actual stories, not just bullet points extolling the client's virtues. There has to be something truly newsworthy about the release or it will be ignored.

Anti-trust Laws

Made to prevent monopolies in business

Subscription vs. Single Copy Sales Magazines and the Digital Age

Magazines have a shelf life -Need to keep you coming back eReaders & tablets = better fit for magazines Portability Size = readability Interactive ads - moment of relevance Can start with pay-for content expectation; while too late for the web, not so for the iPad

Marketing & Journalism

Marketing focuses on product; PR focuses on the organization's image. ---- Journalists are supposed to be objective; PR practitioners advocate for their client. This relationship is tense, but also symbiotic and mutually beneficial. PR needs journalists to get their message out and to add credibility and legitimacy. Journalists need PR's access to organizations and story ideas.

Vertical Integration

Means of Production -Walt Disney Pictures -Walt Disney Animation Studios Distribution -Walt Disney Studios Motion Pictures Exhibition -Disney Channel -ABC Television Network

What PR People Do

Media Relations -Press releases (proactive) -Answer queries (reactive) Community Relations -Corporate contributions -Event planning Employee Communications - a key public Investor and Financial Relations Annual Reports Public Affairs/Gov't Relations -Lobby Gov't officials -Trade Groups Crisis Communications - where PR practitioners face their toughest challenge

How media businesses make profit

Media are businesses - they seek profit first How do they make their money Directly: Selling content to consumers Movie tickets, iTunes songs, etc. Indirectly: Selling consumer's attention to advertisers Ads on NBC, Facebook, Product Placement Advertising - major revenue source for the whole system 2012: 518 Billion worldwide (165 Billion in USA)

Media buyers and account executives proposition

Media buying, a sub function of advertising management, is the procurement of media real estate at an optimal placement and price. The main task of media buying lies within the negotiation of price and placement to ensure the best possible value can be secured for an advertisement. Salesperson who is assigned to a large customer or a group of customers.

Partisan Press

Newspapers and other communication media that openly support a political party and whose news in significant part follows the party line.

"Old" and New Business Models

Old: Bundling -Content attracts the mass audience -Quantity vs. Quality -Lowest Common Denominator Media companies sell mass audience to advertisers Audiences buy bundle -------- Today, the type of business models might depend on how technology is used. For example, entrepreneurs on the internet have also created entirely new models that depend entirely on existing or emergent technology. Using technology, businesses can reach a large number of customers with minimal costs.

Native Digital Media

Online ad that takes the form of the medium in which it appears - New York Times, The Atlantic. For example, an article written by an advertiser to promote their product, but using the same form as an article written by the editorial staff.

Google Adwords & Adsense

Over 90% of Google's revenue comes from advertising. They have two advertising programs called Google AdWords and Google AdSense. When you search something on Google it shows ads related to your search query (sponsored by Google AdWords advertisers). So, when you click on it Google makes money.

Direct Vs. Indirect Elasticity

Product elasticity is the degree to which consumers see products as interchangeable

Subliminal Advertising

Promotional messages that the consumer is not consciously aware of.

Define Public Relations

Public relations is a management function that serves to establish and maintain lines of communication between an organization and its publics. PR is using the media/media relations to influence media frames and media agenda. Using media to reach people directly.

Ratings & Shares

Ratings (%): # of Households watching a show # of Households with TV 1 rating point = approximately 1.1 million homes Ratings = 100,000 watching The Nanny 400,000 households have TV 25 rating (.25 = 25%)

How Nielsen ratings are gathered: diaries, people meter

Ratings data - helps position channels and shows Position: which demographic groups that media content appeals to Diaries: Viewer "diaries", in which a target audience self-records its viewing or listening habits. People Meter: Which are small devices connected to televisions in selected homes. These devices gather the viewing habits of the home and transmit the information nightly to Nielsen through a "Home Unit" connected to a phone line.

Examples of crisis communication: Tylenol, Penn State/BP

The Bad: Penn State (2011-12) Crisis: Former employee arrested on charges of child molestation, possible cover-up Response: when first got info about Sandusky... Tried to hide Didn't contact authorities Obfuscated info from Trustees (key stakeholders) Short-term image took precedence over long-term reputation Response: when story was revealed... No PR plan in place Voiced support for employees without having the facts Not one singular "voice" to deliver message Result: Sanctions, severely tarnished, damaged reputation

Advertising Subsidy

The consumer costs less than the product costs to make, therefore the success of the magazine is dependent on advertising and circulation and makes the consumers the product being sold to advertisers.

PT Barnum

The famous and unscrupulous showman, opened the American Museum in New York in 1842, not a showcase for art or nature, but a great freak show populated by midgets, Siamese twins, magicians, and ventriloquists, eventually launching his famous circus.

Fragmented Audiences

The large number of stations that try to attract the same audience in a market has created tremendous fragmentation.

Specialized Magazines

The new types of magazines that target a specific audience, the top three kinds are consumer, trade, and company magazines.

Cross Ownership

The practice of one company owning tv and radio stations in the same broadcast market.

Apple MacIntosh Ad

Thomas and Hayden wrote up the story of the ad: we see a world of mind-controlled, shuffling men all in gray, staring at a video screen showing the face of Big Brother droning on about "information purification directives." -When the ad aired, controversy erupted -- viewers either loved or hated the ad, and it spurred a wave of media coverage that involved news shows replaying the ad as part of covering it, leading to estimates of an additional $5 million in "free" airtime for the ad.

Adolph Ochs and New York Times

Took charge of the bankrupt New York Times and carried it to influence and prosperity.But his greatest monument is invisible--the principle of clean, temperate and impartial presentation of news and of higher standards in advertising. These are now such commonplaces of decent newspaper practice that many newspaper men of today may think they have obtained from time immemorial.

Pay Walls

Wall off or block access to certain content unless you pay for them. Newspapers use this for their online content.

Brand Differentiation

comparing brands- which to buy, and which will last longer? (For example, cars are a long-term investment)

Brand Familiarity

how well customers recognize and accept a company's brand

3 Purposes of Ownership Restrictions

to ensure a diversity of voices in the market place of ideas; localism; competition

Percentages of People On Internet

• 273 million internet users in North America (78.6%) • 245 million in USA (78.3%) - 157.4 million Facebook users • 2.27 billion users worldwide - 513 million in China (38.4%), 121 million in India (10.2%) source: www.internetworldstats.com - Total web pages: over 1 trillion • Top sites: Alexa.com

Web 1.0, 2.0 and 3.0

• As the Internet changes, we're heading towards Web 3.0 • Web 1.0 - static • Web 2.0 - broadband leads to faster connections, more interactivity - convergence • Web 3.0 - semantic - info gathered automatically based on meaning (Pandora) and associations

Trends in Print Vs. Digital Advertising Revenue

• Digital Ad Revenue is up... • But as we noted, still cannot compensate for loss of print ad revenue • "How do you shrink expenses on the print side enough so that you have more money to devote to digital growth? - Marc Frons, The New York Times

Convergence

• Media Convergence - technological merging of content in different mass media • Propelled by emergence of mobile technology: laptop, smartphone, tablet • Any content, anyplace, anytime

Economic issues - Advertising Revenue, Online Revenue

• Newspaper Advertising Revenues Falling • 85% of Newspaper ad revenue from print • Print ad revenues decline for 8 straight years • Ad revenue driven by big print advertisers • Car dealers, retail/dept., classifieds • Craig's List - devastating effect on classifieds • Digital ad revenues unable to make up for lost print revenue • While growing, only 15%