Deck 3: The Business of Advertising

Question 1

A good copy should contain all the information intended to be communicated in a few pertinent,succinct points.

Answer 1

True
Explanation: Most ads rely heavily on copy,the words that make up the headline and message.The people who create these words,copywriters,must condense all that can be said about a product into a few pertinent,succinct points.

Question 2

Local advertising is sometimes called cooperative advertising.

Answer 2

False
Explanation: Local advertising is sometimes called retail advertising because so much is placed by retail stores.

Question 3

The majority of countries do not have strong national newspapers for conducting national advertising campaigns.

Answer 3

False
Explanation: Unlike the United States,most countries have strong national newspapers that are a good medium for national campaigns.

Question 4

Dissatisfaction with agency conduct is the most commonly cited reason for agency switches.

Question 5

A speculative presentation is typically a waste of an agency's resources.

Question 6

One of the primary purposes of co-op advertising is to build the manufacturer's brand image.

Question 7

One of the primary differences between national and local advertisers is that national advertisers plan strategically and local advertisers think tactically.

Question 8

The traffic department coordinates all phases of production and makes sure everything is completed before their deadlines.

Question 9

One of the ways to organize a centralized advertising department is by the sub-function of advertising.

Question 10

Creative boutiques work for advertisers and occasionally subcontract to ad agencies.

Question 11

The account planner defends the consumer's point of view and the creative strategy in the debate between the agency's creative team and the client.

Question 12

In a decentralized advertising system,the company sets up separate ad departments for different divisions,subsidiaries,regions,brands or other categories that suit the company's needs.

Question 13

The most common types of local ads are sales,clearance,product and classified.

Question 14

Some of the non-advertising services performed by full-service agencies are performing research,selecting media,designing packages and producing sales promotions.

Question 15

Advertising agencies work for the media.

Question 16

One of the distinct groups in the advertising business is the suppliers who act as the communications vehicles paid to present an advertisement to their target audience.

Question 17

The retainer method of pricing the services of an ad agency is also called the negotiated commission method.

Question 18

Local newspapers typically charge all advertisers the same commission-no matter what the size of the company.

Question 19

Multinational companies that use a customized approach to marketing and advertising in all countries are considered global marketers.

Question 20

The basic principles of advertising are the same for both local and national advertising.

Question 21

What is the departmental system in an agency structure?

Question 22

Define account planning.

Question 23

What is integrated marketing communications?

Question 24

What are the various pricing methods the agencies and the clients use in a fee system?

Question 25

What are the various ways that the advertising agencies adopt to get new clients?

Question 26

List with examples the four types of local advertisers targeting customers in their geographic area.

Question 27

What do you understand by cooperative advertising?

Question 28

Examine the validity of the following sentence: "Local advertising is synonymous with retail advertising".

Question 29

Explain how the account planner acts as a "surrogate for the consumer."

Question 30

On what bases are advertising agencies normally classified?

Question 31

How would you classify most full-service ad agencies?

Question 32

What are the two most common client based classification of the full service agency? Discuss in brief,the characteristics of such agencies.

Question 33

What is the difference between international media and foreign media?

Question 34

How can a large multidivisional company benefit from the use of a decentralized advertising department?

Question 35

List the three basic ways that national advertising differs from local.(Do not include the area coverage of the advertising).

Question 36

Why are many influential advertisers demanding that agencies replace commissions with a payment-for-performance approach?

Question 37

What are the disadvantages inherent in establishing an in-house ad agency?

Question 38

Distinguish between the suppliers and the media.

Question 39

The advertising business has evolved into four distinct groups.List them.

Question 40

What is the function of creative boutiques?

Question 41

Which of the following is an example of product advertising?

A)An ad for Circuit City explaining how to help the environment by recycling printer cartridges.
B)An ad for American Express explaining how important small businesses are to national economic health.
C)An ad describing why you should buy Glen Muir organic coups.
D)An ad announcing Westinghouse provides appliances for homes built by Habitat for Humanity.
E)An ad for Avon cosmetics announcing that it will donate $100,000 to breast cancer research.

Question 42

Which of the following statements about local advertising is true?

A)Retail advertising is always local.
B)Local advertising refers to advertising done by stores like Pets Mart,J C Penney and Dollar General.
C)Because most consumer sales are made or lost locally,local advertising is critically important.
D)There are only two categories of local advertisers.
E)Ninety percent of the money advertisers spend each year is spent on local advertising.

Question 43

Many experts believe the biggest difference between local advertisers and national advertisers is their:

A)focus on sales.
B)use of cooperative advertising.
C)ability to act proactively.
D)emphasis on feedback.
E)relationships with customers.

Question 44

Toys 'R' U.S.has divided its advertising department into two sections: Toys 'R' U.S.United States and Toys 'R' U.S.International.Toys 'R' U.S.International is further divided into individual overseas locations including Italy,Germany,France,Hong Kong,Singapore and Canada.Given these facts,it would appear that the Toys 'R' U.S.ad department is organized by:

A)product or brand.
B)sub-function of advertising.
C)end user.
D)media.
E)geography.

Question 45

Advertisers use _____ advertising in the newspaper to locate and recruit new employees,to offer services or to sell or lease new and used merchandise.

A)classified
B)product
C)generic
D)relationship
E)media

Question 46

Cooperative advertising serves two key purposes.One of those purposes is to help a manufacturer's distributors,dealers or retailers make more sales.The second purpose is to:

A)reduce the probability that distributors,dealers or retailers will do no advertising at all.
B)decrease the probability that distributors,dealers or retailers will present poor advertising to a manufacturer's customers.
C)build the manufacturer's brand image.
D)save the manufacturer money by reducing its variable costs.
E)reduce dependence on institutional advertising.

Question 47

Advertising is organized around four distinct groups.The _____ group includes the photographers,the illustrators,video production houses and digital service bureaus.

A)encoders
B)support staff
C)account personnel
D)suppliers
E)creators

Question 48

When the Ace Hardware Store located in Franklin mails an advertising flyer to all the residents in the community,it is an example of _____ advertising.

A)local
B)institutional
C)interactive
D)interregional
E)dealer

Question 49

Pathmark Stores operate 142 supermarkets in the New York-New Jersey and Philadelphia metropolitan areas.Pathmark Stores only advertises in those states where it has stores.The form of advertising that best describes Pathmark's approach to advertising is:

A)institutional.
B)adjacency.
C)regional.
D)national.
E)local.

Question 50

According to the text,local advertisers and national advertisers differ in terms of:

A)credibility,autonomy and sources.
B)ad penetration,focus and resources.
C)focus,time orientation and resources.
D)focus,promotional themes and advertising vehicles.
E)credibility,resources and focus.

Question 51

Hudson Pool and Spa,owned by Jill and Joel Hudson,sells and installs above-ground swimming pools and Beachcomber brand hot tubs.The manufacturer of the Beachcomber hot tub has sent the Hudsons a letter in which it offers to pay 50 percent of the advertising cost if the Hudsons will run a newspaper ad featuring the Beachcomber hot tubs.What type of advertising is the Beachcomber manufacturer suggesting they use?

A)Cooperative advertising
B)Horizontal advertising
C)Vertical advertising
D)A franchise promotion
E)A strategic promotion

Question 52

_____ advertising promotes a specific good or service and stimulates short-term action while building awareness of the business.

A)Interactive
B)For-profit
C)Product
D)Institutional
E)Agency

Question 53

Advertising is organized around four distinct groups.One of these groups is the advertisers.This group is often referred to as the:

A)senders.
B)encoders.
C)clients.
D)customers.
E)suppliers.

Question 54

Retailers like The Home Depot use television,catalogs,the Internet and magazines to transmit its advertising message to consumers.In terms of the four distinct groups around which advertising is organized,The Home Depot uses:

A)message channels.
B)media.
C)message handlers.
D)transmission channels.
E)communication channels.

Question 55

Walgreen pharmacy ran an ad to announce it was selling all of its Easter candy and decorations at half their original prices.How should you classify this ad?

A)As a regular price-line ad
B)As an institutional ad
C)As an ad of enticement
D)As a clearance ad
E)As a sale ad

Question 56

Which of the following is an example of institutional advertising?

A)A magazine ad containing recipes using Swanson's chicken broth.
B)An ad announcing a sale at Macy's department store.
C)An ad sponsored by Avon promoting breast cancer prevention.
D)A radio ad for Linda's Restaurant.
E)A coupon to save $1 on the price of a box of Pampers disposable diapers.

Question 57

Recently,BP,the petroleum company,ran a series of commercials in which they asked consumers how they would improve and preserve the natural environment.After each individual's responses,an announcer explained how BP was doing more than its share to protect our environment.These commercials were examples of _____ advertising.

A)organizational
B)generic
C)product
D)institutional
E)agency

Question 58

Helen Jackson operates a retail store that specializes in children's clothing in a local strip mall.She faces many promotional and advertising decisions on a daily basis.For example,what kind of a sale should she conduct after the Christmas holidays? For how many days should the sale be held? What kind of items should be placed on sale? Jackson's advertising focus is on _____ because of its short-term nature.

A)strategy
B)tactics
C)narrowcasting
D)broadcasting
E)relationships

Question 59

_____ advertising attempts to create a favorable long-term perception of the business as a whole,not just of a particular good or service.

A)Institutional
B)Interactive
C)Organizational
D)Product
E)Relationship

Question 60

The three primary types of ads placed in local media are product,classified,and:

A)service.
B)retail.
C)governmental.
D)corrective.
E)institutional.

Question 61

Flexco manufactures rivets used on heavily loaded conveyor belts which carry ore in underground and surface mining operations.Flexco would most likely hire a(n)_____ agency to create the company's advertising.

A)general consumer
B)intermediary
C)institutional
D)non-commissioned
E)business-to-business

Question 62

A(n)_____ is an organization of creative specialists who works for advertisers and occasionally subcontracts to advertising agencies.Its mission is to develop exciting creative concepts and to produce fresh,distinctive advertising messages.

A)promotional facilitator
B)interactive agency
C)entrepreneurial agency
D)creative boutique
E)IMC agency

Question 63

Ericsson is an international telecommunications supplier based in Sweden.It has six product lines: public switches,private branch exchanges,radio communications,defense system,components and cable and network television systems.If a media representative wanted to sell ad space to the company,he or she must meet with representatives from each of the product lines.Its ad department is organized by:

A)product or brand.
B)sub-function of advertising.
C)end user.
D)media.
E)geography.

Question 64

As defined by the American Association of Advertising Agencies,the _____ is an independent organization of creative people and business people that specialize in developing and preparing advertising plans,advertising and other promotional tools.

A)creative boutique
B)promotional facilitator
C)facilitating intermediary
D)advertising agency
E)advertising supplier

Question 65

When compared to an in-house agency an independent advertising agency offers the advantage of a:

A)better defined strategic plans.
B)stronger organizational mission statement.
C)more complete control over all channels of distribution.
D)more objective viewpoint to the advertiser's business.
E)lower variable expenses.

Question 66

General consumer agencies:

A)provide advertising for products that are used in the manufacture of consumer products.
B)concentrate on institutional advertising accounts.
C)represent the widest variety of accounts.
D)are not paid on a commission basis.
E)do not operate internationally.

Question 67

Which of the following statements is true about account planning?

A)It is a method used to benchmark competitors.
B)It is a hybrid discipline that bridges the gap between the traditional agency research,account management and creative departments.
C)It does not include any consumer research.
D)It is the reorganization of an advertiser for the purpose of improving its image.
E)It is a service provided by creative boutiques,which allow the advertiser to choose generic ads that can be customized.

Question 68

A full-service advertising agency:

A)supplies both advertising and non-advertising services in all areas of communications and promotion.
B)should not be expected to produce annual reports,trade show exhibits or sales-training material.
C)is normally classified as one of three basic types-generic,specialist,or entrepreneurial.
D)works on a contractual basis and does not accept commissions.
E)supplies advertising and non-advertising services in certain,not all,areas of communications and promotion.

Question 69

One of the advantages that a company has when it uses a decentralized advertising department is:

A)exceptionally good organizational communications flow.
B)lack of measurable responses.
C)rigid and compact structure.
D)increased divisional flexibility.
E)a narrow span of management.

Question 70

A manufacturer of _____ would be most likely to use a business-to-business agency.

A)greeting cards
B)hydrocracker machinery used in an oil refinery
C)personal laptops
D)designer apparel
E)monogrammed towels

Question 71

A company that uses a(n)____,sets up separate ad departments for different divisions,subsidiaries,regions,brands or other categories that suit the company's needs.

A)centralized system
B)pyramid system
C)organizational development scheme
D)decentralized system
E)managerial hierarchy

Question 72

Interactive agencies:

A)use customer relationship marketing to work with customers.
B)create ads for nontraditional media like car bodies,supermarket carts and the back of airplane tickets.
C)design Web pages and ads for the Internet.
D)acts as a broker of advertising services to small companies that have limited advertising budgets.
E)include among their services a fulfillment center for refunds and rebate offers.

Question 73

At one time Parker Pens were advertised in 30 different countries with 30 different ad themes in 30 different languages.At that time,Parker Pens would have been a user of:

A)multitask advertising.
B)foreign media.
C)global advertising.
D)standardized advertising.
E)international media.

Question 74

An advertiser who uses international media:

A)typically uses a highly decentralized advertising department.
B)has a flat organizational structure.
C)serves several countries,usually without any change in the advertising.
D)develops a different ad for the local media of each country.
E)typically produces its ads in the language of each country in which it advertises.

Question 75

DDB Needham,one of the world's largest ad agencies,formed a company with director Spike Lee called Spike DDB.The purpose of the new company is to develop ways to tap into urban trends and to increase minorities' use of its client's brands.The company is relying on the creative abilities of director Spike Lee to produce fresh,distinctive advertising messages.Spike DDB would be categorized as a(n):

A)promotional facilitator.
B)interactive agency.
C)entrepreneurial agency.
D)creative boutique.
E)IMC agency.

Question 76

_____ must have the skill to condense all that can be said about a product into a few salient and pertinent points.

A)Account directors
B)Advertising supervisors
C)Copywriters
D)Communication specialists
E)Advertising planners

Question 77

Account executives are:

A)brokers of advertising services to small companies that have limited advertising budgets.
B)the liaisons between the agency and the client.
C)typically employed by non-profit organizations as fund raisers.
D)agents that handle multiple small non-competing advertising accounts.
E)the sole media buyers at most large agencies.

Question 78

Western International Media buys unsold television and radio media and resells the time and space to advertisers and agencies.Western International Media is an example of a(n):

A)entrepreneurial agency.
B)promotional facilitator.
C)creative boutique.
D)media-buying service.
E)promotional broker.

Question 79

Organizations that use a standardized approach to marketing and advertising in all countries in which they do business are called:

A)foreign marketers.
B)multinational corporations.
C)global marketers.
D)international exporters.
E)transnational corporations.

Question 80

The modern _____ advertising agency supplies both advertising and non-advertising services in all areas of communications and promotion for its clients.

A)entrepreneurial
B)institutional
C)organizational
D)full-service
E)multi-tasking