Advertising

-Rutika Saini
 DAGMAR Approach: Definition,
Advantages, Examples
• DAGMAR is a marketing expression that stands for
“Defining Advertising Goals for Measured Advertising Results”. It
is a marketing tool to compute the results of an advertising
campaign.
• DAGMAR attempts to guide customers through ACCA model.
According to this approach, every purchase encounters four steps;
Awareness, Comprehension, Conviction, and Action. DAGMAR
method is an established technique of creating effective advertising.
 HISTORY

• DAGMAR is an advertising model proposed by Russell Colley in

1961. Russell Colley advocated that effective advertising seeks to
communicate rather than to sell. Advertisers discover whether their
message conveyed enough information and understanding of a
product to their consumers and also its respective benefits from
clear objectives.
ACCA
 AWARENESS
• Awareness of the existence of a product or a service is needful before the
purchase behaviour is expected. The fundamental task of advertising activity is
to improve the consumer awareness of the product.
• Once the consumer awareness has been provided to the target audience, it
should not be forsaken. The target audience tends to get distracted by other
competing messages if they are ignored.
• Awareness has to be created, developed, refined and maintained according to
the characteristics of the market and the scenario of the organization at any
given point of time.
• The objective is to create awareness about the product amongst the target
audience.
 COMPREHENSION
• Awareness on its own is not sufficient to stimulate a purchase. Information and
understanding about the product and the organisation are essential. This can be
achieved by providing information about the brand features.
• Example: In an attempt to persuade people to budge for a new toothpaste
brand, it may be necessary to compare the product with other toothpaste
brands, and provide an additional usage benefit, such as more effective than
other toothpaste because it contains salt or that this particular toothpaste is a
vegetarian toothpaste, which will, in turn, attract more customers.
• The objective is to provide all the information about the product.
 CONVICTION
• Conviction is the next step where the customer evaluates different products and
plans to buy the product. At this stage, a sense of conviction is established, and
by creating interests and preferences, customers are convinced that a certain
product should be tried at the next purchase.
• At this step, the job of the advertising activity is to mould the audience’s beliefs
and persuade them to buy it. This is often achieved through messages that
convey the superiority of the products over the others by flaunting the rewards
or incentives for using the product.
• Example: Thumbs up featured the incentive of social acceptance as “grown up”.
It implied that those who preferred other soft drinks were kids.
• The objective is to create a positive mental disposition to buy a product.
 ACTION
• This is the final step which involves the final purchase of the
product. The objective is to motivate the customer to buy the
product.
Advantages of DAGMAR Approach
 TARGET AUDIENCE
• DAGMAR claims the target audience is well defined. A group of potential
customers, who have the highest likelihood of purchasing the product, is the
target market. Identifying the target market includes the process of
demographic, geographic, and psychological segmentation. Target markets can
be segmented into Primary and secondary groups.
• Primary markets are the main target audience, on whom the marketing efforts
are mainly focused.
• Secondary markets are the target audience on whom the marketing efforts
will focus after the primary market goals are achieved. After identifying the
target audience, the organization devises objectives for advertising and later the
objectives for communication.
CONCRETE AND MEASURABLE
• The objective of communication should be a precise and clear
statement of whatever message the advertiser wants to
communicate to the target audience.
• The specification must include all the details and descriptions of the
measurement procedure.
 SPECIFIED TIMEFRAME AND
BENCHMARKS
• A good objective has a specified time frame, during which the
objective is to be achieved. Understanding the specifications
enables advertisers to define goals that will yield the best result.
• Setting a specific timeframe assures effective evaluation of results.
The timeframe should be realistic to prohibit skewed results from
static marketing.
• Creating the benchmark is essential for an appropriate
measurement of the effectiveness of the advertisement.
 WRITTEN GOAL
• The goal should be committed on a paper. When the goals are
clearly written, basic shortfalls and flaws are exposed, it becomes
eventually easy to determine whether the goal contains the crucial
aspects of the DAGMAR approach.
 OBJECTIVES OF DAGMAR
APPROACH
• Persuade a prospect to visit the showroom.
• Growth in market share.
• Improve sales turnover.
• Perform complete selling function.
• Advertise a special reason to buy.
• Stimulate impulse sales.
• Remind people to buy.
• Create awareness about the product and brand existence.
• Create favourable emotional disposition towards the product.
• Impart information regarding benefits and distinctive features of the product.
• Combat and offset competitive claims.
• Correct false impressions, wrong information and other hindrances to sales.
• Aid sales force with sales promotion and selling activities and boost their morale.
• Establish brand recognition and acceptance.
 EXAMPLE OF DAGMAR APPROACH

• Let’s suppose that an ABC company wants to evaluate the effectiveness of marketing campaign
for its latest product launched. The company starts evaluating the commercial that is designed to
persuade potential consumers through the four stages of the buying process:
1. In the AWARENESS stage, company ABC spreads awareness among the consumers about its
new product launched in the market.
2. In the COMPREHENSION stage, company ABC portrays to its consumers the features and
distinctiveness of the new product and reminds the consumers of the company ABC’s logo and
brand name.
3. In the CONVICTION stage, company ABC attaches the consumer emotionally to the new product
so that the consumer establishes an emotional preference for the company ABC’s brand.
4. In the ACTION stage, company ABC makes sales.
Selection of the Audience
 Types of target audience

• There is a lot of attributes that can be used in finding the right

audience. As we mention - age, income, education, gender are just
a few examples. On the basis of IAB taxonomy, we can sort all the
attributes in three large categories, which are listed below:
 Demography

• Socio-economic data that describe a user. This group includes

attributes, such as age, income, education, gender or geographic
location. Using demographic data you can target your campaign
for example at young people (eg. age 18-24), both female and
male from towns with a population larger than 20,000.
 Interests

• This is data about users’ hobbies, passions, things that they are
looking for and read about. It can be, e.g. books, movies, music,
cars, marketing, parenting or dance. By knowing your customers’
passions you gain powerful knowledge because you know how to
engage your clients, what product will be interesting for them. For
example, you can offer a new book for book lovers or new album
of their favorite music group.
 Purchase intentions

• Data that can be crucial especially for e-commerce. Audiences are

divided into groups of users who recently looked for a specific
product, e.g. laptop, refrigerator or car and did not look for it
previously. It means that they want to buy a new thing, but first
need to gain more knowledge about the demanded product.
Examples of audience types in this groups are Women’s clothing,
Skiing, Televisions, Tablets or Vehicles.
 Advertising Budget
• An advertising budget is an estimate of a company's promotional
expenditures over a certain time period. More importantly, it is the
money a company is willing to set aside to accomplish its marketing
objectives.
 Key Takeaways
• An advertising budget is the amount of money set aside for purposes of
marketing and advertisements.
• The cost of advertising dollars must be weighed against the potential
recognized revenues that those dollars will generate.
• Demographic research and customer segmentation can create profiles
to help optimize the returns to advertising spending.
 Importance of Budgeting in Marketing
and Advertising
• Helps in Achieving Goals and Targets – As a marketing manager, budgeting will help you set specific monetary targets for
your team. It will provide you with a tracking mechanism to keep an eye on your goals!
• Financial Efficiency – Marketing requires a lot of funds to run various campaigns and activities; managing these funds is a
very tedious job for marketing and advertising managers. Budgeting will help you make sure every penny you spend is
worth it. Even in your B-school event, it will help you to spend every rupee most efficiently.
• Decision-Making – After preparing budgets, you will also need to match it with the actual expenditures; this is called
controlling. If there are any deviations in the actual and prepared budget, controlling will help you find the source of the
deviations. Finding the culprit will help you to make better decisions for the future.
• Over-Spending – Marketing is notorious for over-spending; one reason for this could be that there is less accuracy in
calculating its returns. In this scenario, budgeting helps you keep track of all the expenses incurred in different campaigns
and activities.
• Preparing for Contingencies – If you have organised any of your B-school events, then I am sure you must have known that
emergencies can arise at any time due to any reason. In that scenario, as the head of the marketing department, you need
to be prepared with sufficient funds. Budgeting will help you in making efficient use of your resources and save for these
contingent situations.
 Setting Advertising Budget

• Top-Down Budgeting
• Bottom Up Budgeting
 Percentage of Sales Method:

• It is a commonly used method to set advertising budget. In this

method, the amount for advertising is decided on the basis of sales.
Advertising budget is specific per cent of sales. The sales may be
current, or anticipated. Sometimes, the past sales are also used as
the base for deciding on ad budget. For example, the last year sales
were Rs. 3 crore and the company spent Rs. 300000 for
advertising. It is clear that the company has spent 1% of sales in the
last year.
 Objectives and Task Method:

• This is the most appropriate ad budget method for any company. It is a

scientific method to set advertising budget. The method considers company’s
own environment and requirement. Objectives and task method guides the
manager to develop his promotional budget by (1) defining specific objectives,
(2) determining the task that must be performed to achieve them, and (3)
estimating the costs of performing the task. The sum of these costs is the
proposed amount for advertising budget.
• The method is based on the relationship between the objectives and the task to
achieve these objectives. The costs of various advertising activities to be
performed to achieve marketing objectives constitute advertising budget.
 Competitive Parity Method

• Competition is one of the powerful factors affecting marketing performance. This

method considers the competitors’ advertising activities and costs for setting
advertising budget. The advertising budget is fixed on the basis of advertising strategy
adopted by the competitors.
• Thus, competitive factor is given more importance in deciding advertising budget. For
example, if the close competitors spend 3% of net sales, the company will spend, more
or less, the same per cent for advertising. Here it is assumed that “competitors or
leaders are always right.” If not followed carefully, this method may result into
misleading.
• It is obvious that a company differs significantly from the competitors in terms of
product characteristics, objectives, sales, financial conditions, management philosophy,
other promotional means and expenses, image and reputation, price, etc.
 Affordable or Fund Available
Method

• This is, in real sense, not a method to set advertising budget. The
method is based on the company’s capacity to spend. It is based on
the notion that a company should spend on advertising as per its
capacity. Company with a sound financial position spends more on
advertising and vice versa.
 Market Share Method

• This method is based on the market share of a company. For a

company which has higher market share, less amount is set aside
for its advertising budget. It is based on a notion that already
established and renowned companies need not have to spend huge
bucks on promoting their brand. Companies with lower market
share have to spend more on their marketing and advertising
budget if they follow this budgeting method.