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32
The agency's media planners have to decide what percentage of the target
market they want to reach (how many people will be exposed to the ads) and the
number of times they are likely to see them. Advertising people talk about
frequency or 'OTS' (opportunities to see) and the threshold effect - the point at
which advertising becomes effective.
4
How much to spend on advertising is always problematic. Some companies
use the comparative-parity method - they simply match their competitors'
spending, thereby avoiding advertising wars. Others set their ad budget at a
certain percentage of current sales revenue. But both these methods disregard
the fact that increased ad spending or counter-cyclical advertising can increase
current sales.
5
(English for business Studies)
A The most talented advertising people generally prefer to work for agencies
rather than individual companies as this gives them the chance to work on a
variety of advertising accounts (contracts to advertise products or services). It is
also easier for a dissatisfied company to give its account to another agency than it
would be to fire its own advertising staff.
B On the other hand, excessive advertising is counter-productive because after
too many exposures people tend to stop noticing ads, or begin to find them
irritating. And once the most promising prospective customers have been
reached, there are diminishing returns, i.e. an ever-smaller increase in sales in
relation to increased advertising spending.
C The choice of advertising media is generally strongly influenced by the
comparative cost of reaching 1,000 members of the target audience, the cost per
thousand (often abbreviated to CPM, using the Roman numeral for 1,000). The
timing of advertising campaigns depends on factors such as purchasing frequency
and buyer turnover (new buyers entering the market).
D Advertising is an important element of the marketing function. It is used to
increase sales by making the product or service known to a wider audience, and
by emphasizing its superior qualities.
E Agencies often produce alternative ads or commercials that are pre-tested in
newspapers, television stations, etc. in different parts of a country before a final
choice is made prior to a national campaign.
F Yet virtually no providers of goods or services rely on this alone, but use paid
advertising instead. Indeed, many organizations also use institutional or prestige
advertising, which is designed to build up their reputation rather than to sell
particular products.
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