chapter 2 - Current dilemma in the industry Power struggle...

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Current dilemma in the industry: Power struggle: big time agencies are no longer in control of the big money 2 groups exerting their power and control : consumers / advertisers Consumers: insisting on the convenience and appeal (control) of their PC, iPod, TiVo o Make product branding make important as consumer’s choose what they want to be exposed to persuasive messages o Control new environment of advertising Advertisers: struggling how to insert themselves and their client brand in this new environment controlled by consumers Coke 1. Consumers no longer passive TV, Magazine Ads 2. Brand is going to have to be apart of their daily lives o Ex. 20 million dollars for judges to drink coke on American Idol 4 trends affecting advertising 1. globalization: in 1999-2002, large firms merged with other large firms to create global advertising firms a. this caused lots of problems, debts, conflicts of interest, not higher profit b. clients felt missing out small shops creativity and specialization services 2. Media Proliferation and Consolidation a. Federal Communications Commission (FCC): relaxed old-rules that restricted media ownership b. Also lifted “cross ownership”—ending ban on joint ownership c. Media will consume more and more “properties” if they are allowed to 3. Media clutter and fragmentation a. More ways to try to reach consumer, TV (100 channels), billboards, Internet all equal to clutter advertisers new ways to communicate b. Expressing desire for commerce experience ecommerce c. Advertisers looking promotional, event sponsorships, etc. for brands 4. Consumer control: from Blogs to TiVo a. Blogs: “ephemeral scribble”: people express foots, opinions, promote brand, product to other prospective buyers, owners, etc. b. TiVo: people have power to skip advertising commercials IBP Box: Problems for luxury brands = knockoffs VP marketing Louis Vuitton stresses that PR is important in helping luxury brands establish themselves---placing brands with right programs and right people adds validity to the brand Top 3 companies spent over 3 billion dollars on advertising 1. General Motors 2. Procter and Gamble 3. Time Warner
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Structure of Industry Advertisers (manufacturers and service firms, trade resellers, retailers,
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