Page 370 - Introduction to Business

344 PART 3 Marketing

closing time The time prior to reaching general markets. Closing time, the time prior to publication by which
publication by which an advertisement advertising copy must be submitted, seldom exceeds three days for newspapers.
must be submitted
Thus, a firm can submit, withdraw, or modify copy up to three days before the
advertising is scheduled to be printed. Newspapers are also an excellent means of
cooperative advertising Shared providing retailer support, such as cooperative advertising agreements, in which
advertising costs by a company and a the firm and its retailer share advertising costs.
retailer carrying its products
However, the life of a newspaper advertisement is very short. There is little
opportunity for the reader to get repeated exposure to a single advertisement.
Although improvements have been made, newspapers are largely unable to offer
the fine reproductions of photos and graphics found in magazines, especially for
color ads.
Broadcast TV (16.7 percent of advertising expenditures) got about one-sixth of
total advertising expenditures in 2001. This medium can be very effective because
viewers of advertisements use two senses—sight and hearing—while exposed to
the ads. However, television ads are expensive and they offer little audience selec-
tivity. The latter disadvantage has been effectively exploited by cable television (6.9
percent of media expenditures), which offers programs designated for specific
audiences. Examples include the History Channel, Travel Channel, ESPN, Food
Channel, and Cartoon Network. Cable television has been successful in pulling
viewers from broadcast TV.
Radio (7.7 percent of advertising expenditures) has short closing times; adver-
tising copy can be submitted or changed minutes before it is scheduled for broad-
cast. Radio provides a high degree of selectivity in terms of geographical coverage
and market segment appeal at a low cost, primarily because individual stations are
able to focus on specific groups through their programming; for example, all-news
stations or country-and-western music stations. The availability of portable radios
and car radios allows the advertiser to reach an audience anywhere, especially
those on the move.
Telephone directories, like the yellow pages (6.0 percent of advertising expendi-
tures), are a medium that is very effective for local businesses. Telephone directo-
ries are a convenient source for people who need specific products or services, such
as car repair, dry cleaners, tax preparation, apartments, attorneys, jewelry, insur-
ance, and dentists and physicians.
Magazines (4.7 percent of advertising expenditures) provide high-quality color,
print, and photo reproduction. They allow the advertiser to be highly selective in
reaching specific markets. Magazines can be chosen to reach different geographic
areas or demographic segments of the market. Southern Living is one illustration
of a regionally focused magazine. Cycling, Jogging, and Skiing are examples of
magazines directed toward specific sports segments. Magazines have a longer
life than newspapers and provide the opportunity for repeated exposure to an
advertisement in a single issue. Since magazines are often passed along to family
and friends, a single advertisement may reach a very large readership. Unfortu-
nately, magazines are less flexible than newspapers in terms of publication dead-
lines; magazine copy must ordinarily be submitted eight weeks or more prior
to publication.
Internet advertising represented only 2.6 percent of advertising expenditures
in 2001. However, it is expected on a global basis to reach $28 billion in 2007,
almost triple the expenditures in 2001 ($10.3 billion). This projected increase is
based on the explosion in purchases of personal computers for home use and an
increase in consumers using credit cards over the Internet. Internet advertising
has a major advantage—its extremely low cost. Major online advertising expen-
ditures are for conventional (84 percent), rich media (12 percent), and streaming
(5 percent). 1

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