QUIZ 7: CHAPTER 12

How do you calculate a CPM and what is its purpose?

-The effectiveness of a given placement is judged by its cost per thousand (CPM), the cost of reaching 1,000 audience members -For example, an ad that costs $20,000 to place in a major newspaper and is read by 1 million people has a CPM of $20

In the agency who is involved in the account management, the creative department and the media department?

1. Account management is typically handled by an account executive who serves as liaison between agency and client, keeping communication flowing between the two and heading the team of specialists assigned by the agency to the client 2. The creative department is where the advertising is developed from idea to ad It involves copywriting, graphic design, and often the actual production of the piece- for example, radio, television, and Web spots 3. The media department makes the decisions about where and when to place ads and then buys the appropriate time or space

What is the difference between demographics and psychographics? What is VALS?

1. Demographic segmentation: The practice of appealing to audiences defined by varying personal and social characteristics such as race/ethnicity, gender, and economic level, which has long been part of advertisers' strategy 2. Psychographic segmentation: Appealing to consumer groups with similar lifestyles, attitudes, values, and behavior patterns 3. VALS: A psychographic segmentation strategy that classifies consumers according to values and lifestyles, is indicative of this lifestyle segmentation. VALS II divides consumers into eight VALS segments. Each segment is characterized by specific values and lifestyle, demographics, and, of greatest importance to advertisers, buying patterns.

How are clients billed and compensated?

1. Production is billed at an agreed-upon price called a retainer. 2. Placement of advertising in media is compensated through commissions; typically 15% of the cost of the time or space. Commissions account for as much as 75% of the income of larger agencies.

What is search marketing, banners, rich media and sponsorships?

1. Search marketing: advertising sold next to or in search results produced by users' keyword searches 2. Banners: static online billboards placed conspicuously on a Web page 3. Rich media: sophisticated, interactive Web advertising, usually employing sound and video 4. Sponsorships: Web pages "brought to you by," typically include a number of ad placements, advertorials, and other co-branded sections

What is an Unique Selling Proposition and a parity product?

1. Unique Selling Proposition: Highlighting the aspect of a product that sets it apart from other brands in the same product category. Once an advertiser discovered a product's USP, it could drive it home in repeated demonstration commercials. 2. Parity products: Most brands in a given product category are essentially the same and advertisers were often forced to create a product's USP

What is an advertising agency?

Advertising agency: A business for creating, planning, and handling advertising and sometimes other forms of promotion and marketing for its clients.

What are five criticisms of advertising? Know four arguments for advertising?

Advertising suffers from a number of criticisms: 1. it is intrusive 2. it is deceptive 3. it exploits children 4. it demeans and corrupts culture. Advertising is also considered beneficial: 1. it supports our economic system 2. it provides information to assist buying decisions 3. it supports our media system 4. it improves our standard of living.