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y category (agency fee, production, media, promotions, etc.). This budget was set up to reflect the contract between SS+K and msnbc.com that spelled out the categories and the amounts of the client’s money that the agency was entitled to spend. The open collaboration and understanding of financials is key to the success of any business partnership. Both sides are responsible for staying in budget, and the agency is specifically responsible for justifying anything it spends for any purpose to a client. Former Ogilvy and Mather executives Shona Seifert and Thomas Early learned this lesson the hard way. In 2005, both were convicted and sentenced to prison for their roles in overbilling one of the agency’s clients, the Office of National Drug Policy. Seifert also was ordered to write a code of ethics for the entire ad industry as part of her sentence. [1] There are a few key pieces to managing the budget: bids, estimates, invoices, and actuals. A bid is the estimated cost that a vendor will charge for a service. In some cases, the agency will have an exclusive partnership, and only one bid is needed. In other cases, a producer will take bids from multiple potential vendors or partners in order to understand the scope and price of that service. Once the agency collects the bids, it will recommend the partner to the client. The formal acceptance of costs is the estimate. It is generated from the producer or accounting department. The agency outlines the job, a description, and the costs associated with the job. A job number is assigned to every estimate, and this job number and cost are inserted into the budget. The agency invoices the client, and the client then pays the agency on the agreed-upon schedule. Sometimes jobs are billed at 100 percent of an invoice. Another common practice is to bill 50 percent of an invoice up front and 50 percent upon completion. It is important for the account manager to establish a system that works both for the agency and for the client when it comes to billing. Actuals are the final cost of a job upon completion. In the SS+K/msnbc.com budget tracker that Figure 7.3 "msnbc.com Budget Allocation" shows, the bid is indicated in italics, the estimate is indicated with no treatment, and actuals are indicated in bold. This helps the agency and the client understand the money flow and make future spending decisions accordingly. KEY TAKEAWAY The open collaboration and understanding of financials is critical to the success of any business partnership. Both agency and client are responsible for establishing and maintaining the budget. The Saylor URL: http://www.saylor.org/books Saylor.org 223
agency is specifically responsible for justifying anything it spends for any purpose to a client. The key components that an agency must manage are bids, estimates, invoices, and actuals. [1] Matthew Creamer, “Shona Seifert Sentenced to 18 Months in Prison,” Advertising Age, July 14, 2005, http://adage.com/abstract.php?article_id=46288 (accessed February 1, 2009). 7.5 Exercises TIE IT ALL TOGETHER Now that you have read this chapter, you should be able to determine how the various budgeting methods can be applied to marketing and advertising: You can identify the two primary top-down budgeting methods. Saylor URL: http://www.saylor.org/books Saylor.org 224
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This text was adapted by The Saylor
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1.1 Why Launch!? LEARNING OBJECTIVE
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1.2 Meet Our Agency Partner: SS+K L
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This perspective is a consumer-cent
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Follow the e-mail trail. Dr. Duke C
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As you can see, it takes a village
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1.3 The Pitch: Win the Account LEAR
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Initial strategic thinking. Before
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Figure 1.9 The Pitch Process How do
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1.4 Let’s Meet the Potential Clie
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1.5 Exercises TIE IT ALL TOGETHER N
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message to them. What do you percei
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LEARNING OBJECTIVES After studying
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eally are trying to fake you out. F
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MySpace. We weren’t early enough
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Specialty print media include bookl
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Ad-Supported Content Ad agencies ar
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[5] “Traditional Radio’s Digita
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the promotional activities that int
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increasingly thin layer of audience
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Figure 2.8 A sales promotion is a t
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2.3 Advertising Industry Structure
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Figure 2.10 Matrix Organization in
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P&G reacted to this problem when it
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Media buyers and media planners eva
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Within a company, the jobs of the a
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[1] Suzanne Vranica, “Ad Houses W
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drumsticks and simulated drumhead p
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Figure 3.1 Build a Foundation Chapt
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3.1 Economic Effects of Advertising
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Broadcast radio and TV rely exclusi
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3.2 The Good: Advertising Enhances
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washing with soap, that remain kill
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share, so they tend to be more stri
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now one of the primary attributes s
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[8] Mister Snitch!, “Top Ten Reje
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here is subjective—your image of
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“If you let me play sports, I wil
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Categories can be made quite specif
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Luxury products are not a bad or wa
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[9] Jean Grow and Joyce M. Wolburg,
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3.4 Advertising Regulation: Who Loo
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Agencies), the ANA (Association of
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[3] American Association of Adverti
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about one-half the size of existing
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Chapter 4 Consumers and the Communi
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messages they see or hear, and when
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4.2 Is the Medium the Message? Comp
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Figure 4.4 SS+K used actor George C
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SS+K developed a comparative messag
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Audio Clip “Ahem” http://app.wi
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After studying this section, studen
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SS+K Spotlight The memes and trends
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4.4 Decision Making LEARNING OBJECT
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Motivation refers to the processes
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4.5 Internal Influences on Consumer
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isn’t sure. And, regardless of hi
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it’s not subliminal; the stimulus
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Product line extensions. Marketers
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1. Sensory memory permits storage o
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Of course, the nature of the ad its
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c. Create an example involving a lo
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[24] Raymond R. Burke and Thomas K.
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products with others and to solicit
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community hub on Yahoo! it calls Po
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4.7 Culture, Globalization, and Adv
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Advertisers have (for the most part
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Why do they bother? Their goal is t
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1a &ex=1369108800&partner=USERLAND&
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advertising and ad men (and women)
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Chapter 5 Know Your Audience: SS+K
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5.1 Types of Data LEARNING OBJECTIV
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preferable but harder and more expe
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One really encouraging finding from
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Figure 5.4 Brand Tags Dig Deeper Th
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irreverent British tastes. “In th
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KEY TAKEAWAY Primary data refers to
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magazines they prefer, an agency co
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a. Identify and discuss the signifi
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more natural and objective than int
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Results showed that sportier models
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5.5 Using Research to Guide a Succe
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they wanted to see recipes for ligh
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[1] Quoted in Lisa McTigue Pierce,
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a U.S. Army ad, see yourself walkin
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audience profiling to become more t
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“The key turning point of this wh
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Life stage (e.g., empty-nest parent
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feather flock together”). PRIZM (
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fashionable. Bloomie’s research d
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Actualizers, the top VALS2 group, a
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Surveys of consumer behavior (for e
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generic attribute and not a point o
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2. Demographics are measurable aspe
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What Are the Properties of a Good T
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conversation. The customer would ha
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6.3 Position Your Brand: Why Will T
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The average Buick buyer is a man in
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6.4 Exercises TIE IT ALL TOGETHER N
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muscle is being used to bring such
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check any information on ethics pro
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times like now. We see this situati
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than 32 percent in just two years w
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SS+K Spotlight Since msnbc.com’s
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Clients use a variety of methods to
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How Loud Are You? Share of voice (S
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properties, and sci-fi sites over a
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3. List and discuss the keys to usi
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Southern California, and it aims to
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are positive or negative and whethe
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the company spent on TV advertising
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You can list the pros and cons of t
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AD-VICE 1. A company is trying to d
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We are now eight months prior to th
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After studying this section, studen
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Just as people have personalities,
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KEY TAKEAWAY The power of branding
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well. It may also reveal indirect c
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ealistic feel for its market positi
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In contrast, opportunities and thre
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8.3 Define Where You Want to Go: Se
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You’ll learn more about how these
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adio, or read magazines. It may als
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Figure 8.5 Anatomy of a Creative Br
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Figure 8.7 The Communications Brief
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KEY TAKEAWAY This section described
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2. Is there a Chick-fil-A in your n
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Chapter 9 Choose Your Communication
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direct mail people, whoever else yo
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Campaigns that utilize multiple med
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9.2 Elements of the Promotional Mix
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team is more relevant and effective
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virtual trade shows that you attend
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newsworthy, such as announcing a ne
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aloud. Salespeople in fashion retai
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drive potential new Sun customers t
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service Loopt, which allows its sub
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Fox: Ads That Can Change Pitch,”
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The third campaign in the series be
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Pool Resources with Associations an
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9.4 Exercises TIE IT ALL TOGETHER N
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1. Assume that you are a proponent
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Chapter 10Plan and Buy Media: SS+K
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10.1 Traditional Advertising Media
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The print portion of the media plan
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The television plan that The Media
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“advertising abhors a vacuum,”
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Lack of messaging. Although sponsor
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KEY TAKEAWAY Traditional media incl
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10.2 New Media LEARNING OBJECTIVES
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In order to maximize the effectiven
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presented by Craftsman at Sears,”
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As the tip of the iceberg, MTV rece
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are used to getting from real-world
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where they select the flavor of the
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catch up to Google (which provides
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[16] Quoted in Paul Hyman, “Burge
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2. Demonstrate how media planning i
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A common place for these negotiatio
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Cost per thousand (CPM) Calculation
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outdoor advertising, online banner
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c. Define and discuss impressions,
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Assume that your advertising agency
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Assume one of two roles: (a) You ar
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11.1 Execute on Media Platforms LEA
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Figure 11.4 The other campaign opti
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Figure 11.8 The client’s new logo
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Subject matter, composition, color,
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visually.” Sound effects reinforc
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from the opposite direction seeing
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TV: Online ads are like TV commerci
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The total spending on alternative m
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[6] Quoted in Martin Pazzani, “Ma
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is a more accurate measure of likel
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position for Apple as revolutionary
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prompted the viewer to think about
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11.3 Exercises TIE IT ALL TOGETHER
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products? What do you think the fut
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Chapter 12 Make the Message Sell: S
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1. Define relevance and resonance.
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The common denominator among the mo
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[5] Quoted in Geoff Colvin, “Sell
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In 2007, Dial rebranded its Soft &
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It also helps when viewers don’t
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The solution? Advertisers need to s
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[2] David Carr and Tracie Rozhon,
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providing our consumers with even m
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Tupperware Chairman-CEO Rick Goings
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KEY TAKEAWAY An executional framewo
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1. Characterize the members of an a
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Art direction has grown in importan
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You can explain why having an emoti
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3. Go to at least one favorite maga
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accomplished this by designing mult
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As you saw in the media plan we pre
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13.4 TV Another important element o
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Figure 13.7 The banners titled “P
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The “Keywords” banner ads were
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13.7 NewsBreaker Game Another insig
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13.8 NewsBreaker Live The final pus
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13.10 Spectrum Home Page Figure 13.
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14.1 ROI: Show Me the Money LEARNIN
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Marketers echo this pessimism; many
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The ROI for any campaign must relat
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[1] Jeff Lowe, “The Marketing Das
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While an advertiser in the 1960s co
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National cable metrics from the msn
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Figure 14.8 msnbc.com purchased a
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Read Most: The percentage of reader
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Double-page spreads and bound multi
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14.3 ROI for Alternative Media LEAR
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Outdoor advertising is quickly movi
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procure products they needed to dre
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Figure 14.15 Chart tracking number
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Online advertising formats have his
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Figure 14.18 In order to optimize o
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In addition to measuring elements o
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Figure 14.24 SS+K compared the rate
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Table 14.1 Final Takeaway and Lesso
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[2] “The Association of National
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14.4 Exercises TIE IT ALL TOGETHER
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site. Summarize what you have learn
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