Deck 3: The Business of Advertising

Question 1

International media that serve several countries are limited to newspapers and magazines.

Answer 1

False

Question 2

Institutional advertising is primarily used to locate and recruit new employees.

Answer 2

False

Question 3

Global marketers are multinational companies that create a standardized approach to marketing their brand in many countries.

Answer 3

True

Question 4

A centralized advertising strategy relies on creating separate ad departments based on divisions,subsidiaries,regions,brands,or other categories.

Question 5

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

Question 6

Advertising agencies work for the media.

Question 7

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

Question 8

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

Question 9

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

Question 10

Advertisers and advertising agencies rely on suppliers to provide creative content for ads.

Question 11

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 12

Local advertising is sometimes called cooperative advertising.

Question 13

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

Question 14

The incentive system is also called the retainer method.

Question 15

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

Question 16

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 17

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

Question 18

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

Question 19

Most agencies prefer giving a speculative presentation to potential clients than highlighting past accomplishments because speculative presentations are quick and inexpensive.

Question 20

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

Question 21

Which of the following statements about local advertising is most likely true?

A) Retail advertising is always local.
B) There are only two categories of local advertisers.
C) Local advertising refers to advertising done by stores like PetSmart and Target.
D) Local advertising is critical because most consumer sales are made or lost locally.
E) Ninety percent of the money advertisers spend each year is spent on local advertising.

Question 22

Which of the following is a function of cooperative advertising?

A) utilizing social media marketing
B) ensuring that franchisees advertise
C) building the manufacturer's brand image
D) lowering the manufacturer's variable costs
E) reducing dependence on institutional advertising

Question 23

Which of the following is an example of product advertising?

A) an ad on Facebook advertising a two-for-one sale on fish tacos at Ralph Rubio's Mexican restaurant
B) a video on Youtube explaining British Petroleum's efforts to help habitat in the Gulf of Mexico
C) an ad sponsored by Avon promoting breast cancer prevention
D) a classified ad to recruit new employees
E) a television ad about the Ronald McDonald House's efforts to help the families of sick children

Question 24

Evie Poitevent operates a boutique store that specializes in footwear.She faces many promotional and advertising decisions on a daily basis,such as what kind of a sale she should conduct after Christmas,for how many days the sale should be held,and what kind of items should be placed on sale.Poitevent's advertising focus is on _____ because of its short-term nature.

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

Question 25

Toys 'R' Us has divided its advertising department into two sections: Toys 'R' Us United States and Toys 'R' Us International.Toys 'R' Us 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' Us ad department is organized by

A) product.
B) brand.
C) end user.
D) media.
E) geography.

Question 26

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 27

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 28

An advertising agency that earns more money if an ad campaign attains specific,agreed-upon goals is most likely being compensated through an incentive system.

Question 29

A(n)_____ performs all the administrative,planning,budgeting,and coordinating functions at a small,local business.

A) account executive
B) copywriter
C) traffic manager
D) advertising manager
E) creative director

Question 30

National companies focus on building their _____,while local advertisers focus on attracting customers to a location.

A) autonomy
B) ad penetration
C) brands
D) volume
E) tactics

Question 31

Many small and lesser-known agencies solicit new business by making cold calls,writing letters,and participating in advertising competitions.

Question 32

Advertising professionals argue that local advertisers have an advantage in social media over national advertisers because they can use local events like weather changes and festivals to inform customers of their products.

Question 33

Southern California Honda Dealers is a franchise group that coordinates more than 50 Honda Dealers in Southern California.It advertises only in those areas where it has stores.The form of advertising that best describes Southern California Honda Dealers' approach to advertising is

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

Question 34

Which of the following is an example of integrated marketing communications?

A) a coupon in a local newspaper offering two-for-one printer cartridges at Office Depot
B) an ad for American Express offering bonus air miles for purchases at restaurants, hotels, and car rental agencies
C) a television ad for Toyota describing the company's work to improve safety standards after a recent recall for brake failures
D) an ad announcing GE appliances on sale for the holidays with free lifetime warranties available only at Best Buy for a limited time
E) a series of ads on Facebook, in mailings, and on television from Ralph Rubio's Mexican Restaurant describing the excellent service

Question 35

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

A) encoders
B) clients
C) agencies
D) suppliers
E) creators

Question 36

_____ 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 37

When Evie Poitevant,owner of a boutique shoe store,tweets about her stylish rain boots during a rainstorm at a neighborhood jazz festival,it is an example of _____ advertising.

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

Question 38

In advertising,what are television,radio,newspapers,magazines,billboards,direct mail,coffee mugs,and digital entertainment,commonly described as?

A) clients
B) media
C) suppliers
D) creative boutiques
E) communication networks

Question 39

Ford,GE,and McDonald's are global advertisers that use a standardized approach to marketing and advertising in all countries.

Question 40

In-house advertising agencies typically attract the best creative people,who prefer the stability of such settings and the lack of internal politics and managerial criticism.

Question 41

Which of the following statements is most likely true about account planning?

A) It is a method used to benchmark competitors' promotions.
B) It bridges the gap between management and creatives.
C) It rarely involves conducting consumer research.
D) It restructures an advertiser to improve its image.
E) It is a service provided by B2B creative boutiques.

Question 42

Western International Inc.purchases unsold television and radio media and resells the time and space to advertisers and agencies.Western International is most likely a(n)

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

Question 43

Interactive agencies

A) use customer relationship marketing to work with customers.
B) create ads for nontraditional media like shopping carts.
C) design Web pages and ads for the Internet.
D) purchase media time and space in bulk.
E) facilitate refunds and rebate offers.

Question 44

A(n)_____ is an organization of talented artists who work for advertisers and occasionally subcontract 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 45

Procter & Gamble's brands are advertised in more than 180 countries,with different ad themes in scores of different languages.Overseas divisions are set up like separate companies,with their own advertising departments to coordinate advertising across brands in that division.Procter & Gamble would be a user of

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

Question 46

Non-advertising services include

A) planning ads.
B) creating trade-show exhibits.
C) performing research.
D) selecting media.
E) creating ads.

Question 47

A decentralized advertising system is first broken up by

A) product or brand.
B) subfunction of advertising.
C) separate departments.
D) end user.
E) medium.

Question 48

Account executives are

A) brokers of advertising services to small firms.
B) the liaisons between the agency and the client.
C) typically employed by nonprofit organizations.
D) agents that handle multiple, noncompeting accounts.
E) the sole media buyers at most in-house advertising agencies.

Question 49

_____ 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 50

General consumer agencies

A) provide advertising primarily for trade publications.
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 51

An advertiser who uses international media most likely

A) uses the same ad in several countries.
B) relies on an in-house advertising group.
C) has a highly decentralized advertising department.
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 52

In a decentralized system,the _____ of each division or brand is responsible for that group's advertising.

A) brand manager
B) creative manager
C) organizer
D) general manager
E) marketing manager

Question 53

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

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

Question 54

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 55

What is the most likely advantage of using an independent advertising agency instead of an in-house agency?

A) reduced overhead
B) organizational vision
C) distribution control
D) greater experience
E) lower commissions

Question 56

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

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

Question 57

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

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

Question 58

Creative boutiques usually provide

A) original concepts.
B) research.
C) marketing.
D) sales expertise.
E) deep customer service.

Question 59

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

A) greeting cards
B) X-ray machines
C) personal laptops
D) designer apparel
E) monogrammed towels

Question 60

Ericsson,an international telecommunications supplier,manufactures radio communication systems,defense systems,components,and cable and network television systems.If a media representative wants to sell ad space to the company,he or she must meet with representatives from each of the product lines.Ericsson's ad department is organized by

A) product.
B) service.
C) end user.
D) media.
E) geography.

Question 61

As few agencies have the capability to produce television ads in-house,most rely on independent

A) production houses.
B) ad intermediaries.
C) art agencies.
D) Internet boutiques.
E) art studios.

Question 62

Which is not a way ad agencies typically get new clients?

A) referrals and word of mouth
B) advertising, writing letters, and making cold calls
C) presentations
D) publicity from recent campaigns
E) research

Question 63

A large advertising agency that is divided into a number of "little" agencies is most likely structured according to

A) industry.
B) the group system.
C) media availability.
D) the departmental system.
E) geographical location.

Question 64

An ad for Benetton shows a full-size photograph of a young woman wearing business casual clothing and looking despondent.The caption says,"Unemployee of the Year." Who is in charge of the photograph portion of the ad,its framing,and the location and appearance of the language in the ad?

A) ad illustrator
B) advertising planner
C) media specialist
D) art director
E) communication specialist

Question 65

JWT Co.,an ad agency,has designed a quarter-page magazine ad for Promise vegetable-oil spray.The job required the services of a photographer to produce photographs of various foods that will "taste better with Promise." The invoice for the artwork from the photographer was for 00.If JWT uses the traditional markup,how much did the advertising agency bill Promise vegetable-oil spray company?

A) $170
B) $200
C) $230
D) $235
E) $250

Question 66

_____ supply agencies with artwork and illustrations for advertisements.

A) Ad intermediaries
B) Art studios
C) Art warehouses
D) Production houses
E) Art directors

Question 67

What is probably the greatest disadvantage associated with in-house ad agencies?

A) loss of revenues
B) adherence to the organizational mission
C) reluctant acknowledgement by the mass media
D) loss of objectivity
E) staff-line relationships

Question 68

In advertising,a retainer is

A) the same as a straight fee.
B) a commission that is paid on a monthly rate.
C) a form of markup paid by nonprofit organizations.
D) the cost for reserving TV and radio time.
E) a commission paid to media-buying services.

Question 69

Research is closely allied to advertising and an important tool for marketing professionals.Most firms do not maintain a fully staffed research department.Instead,they use independent

A) Web data agencies.
B) research production houses.
C) research suppliers.
D) research intermediaries.
E) data boutiques.

Question 70

Which of the following creates online ads?

A) production houses
B) art houses
C) Internet boutiques
D) art agencies
E) Web design houses

Question 71

Which of the following are not considered to be suppliers?

A) ad distributors
B) art studios
C) Web design houses
D) printers
E) film and video production houses

Question 72

What is the most critical factor in the agency-client relationship?

A) the competitive relationship between the in-house and the outside agencies
B) the level and type of communication between the client and the agency
C) the ethical conduct and history of the advertising agency
D) the dynamic nature of the environment in which the client operates
E) the personal chemistry between the client's employees and the agency's staff

Question 73

If Tomlinson Inc.,an ad agency,were to buy an ad in Western Horseman magazine for the manufacturer of Reins saddles,the ad would cost $3 ,000.How much money would the advertising agency bill the saddle manufacturer?

A) $2,250
B) $2,850
C) $3,000
D) $3,150
E) $3,750

Question 74

An agency that earns a _____ charges a basic monthly fee for all of its services to the client and retains any media commissions earned.

A) retainer
B) salary-plus-commission
C) media markup
D) fee-commission combination
E) negotiated fee

Question 75

When the advertising agency of Lopez and White purchased several hours of television time for its customers' commercials from KLOX-TV,the agency received 15 percent of the gross amount charged by the station.The 15 percent is known as a

A) spiff.
B) retainer.
C) markup.
D) slotting allowance.
E) media commission.

Question 76

When an advertiser asks for speculative presentation,the ad agency is expected to

A) give a presentation of what the agency intends to do for the advertiser.
B) infer what the market is for a particular product based on experience with other clients.
C) show a portfolio of previous campaigns.
D) improvise a storyboard based on brainstorming during a meeting.
E) present three-dimensional advertising plan.

Question 77

The primary reason that some advertisers set up a wholly owned in-house ad agency is to

A) attract the best photographers and graphic artists.
B) save money and tighten control over their advertising.
C) stimulate external creative efforts on the part of the marketing staff.
D) meet the challenges of mass media with respect to creative incentives.
E) utilize inexpensive social media tools in their online advertising efforts.

Question 78

Which of the following is a current trend in advertising?

A) an increased use of commissions by large advertisers
B) the growth of media options
C) a decline in the use of integrated marketing communications
D) an increase in the importance of traditional media
E) the decrease of audience empowerment

Question 79

An ad agency's traffic department

A) makes sure there is no unplanned replication of the advertising effort.
B) maintains the agency's position as a facilitating intermediary.
C) develops the client's channel of distribution.
D) coordinates all phases of ad production.
E) negotiates long-term media deals.

Question 80

The most commonly cited reason for changing agencies is

A) internal environmental changes.
B) poor communication.
C) the loss of subjectivity.
D) dissatisfaction with agency conduct.
E) a static competitive environment in the agency.