Test Bank For Advertising and Integrated Brand Promotion, International Edition 5th Edition Thomas O’Guinn

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Test Bank For Advertising and Integrated Brand Promotion, International Edition 5th Edition Thomas O’Guinn

Chapter 2 – The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support Organizations

TRUE/FALSE

1.While many facets of advertising have undergone a great deal of change since the early days of advertising, the essence of the creative process has remained constant.

ANS: T DIF: Easy REF: p. 44 OBJ: 2-1

TYP: Knowledge

2.In the 1990s, full-service agencies acquired and merged with other full-service agencies and interactive shops. One such merger sequence began when Leo Burnett (the long-standing Chicago-based full-service agency) merged with the MacManus group to create a $1.7 billion-a-year agency known as Omnicom.

ANS: F DIF: Moderate REF: p. 45 OBJ: 2-1

TYP:Comprehension

3.The increased number of cable television stations, new direct marketing technology, Web options, and alternative new media has caused a consolidation of media options.

ANS: F DIF: Moderate REF: p. 46 OBJ: 2-1

TYP:Comprehension

4.Advertisers are looking to the full complement of promotional opportunities in sales promotions, event sponsorships, new media options, and public relations instead of the primary advertising efforts of brands.

ANS: F DIF: Moderate REF: p. 47 OBJ: 2-1

TYP:Comprehension

5.Media clutter, once a major problem of the mass media, has intensified as a barrier to quality advertising messages because of the introduction of new technologies and their contribution to an increased number of messages.

ANS: T DIF: Difficult REF: p. 46-47 OBJ: 2-1

TYP:Comprehension

6.Given the backlash against advertising that clutter can cause, advertisers and their agencies are spending more money for longer messages as the best way to communicate with consumers.

ANS: F DIF: Easy REF: p. 47 OBJ: 2-1

TYP:Comprehension

7.While the amount spent on advertising across the world has increased, it has actually decreased in the United States. This has caused agencies in the United States to look overseas for growth possibilities.

ANS: F DIF: Difficult REF: p. 50 OBJ: 2-2

TYP: Application

8.Spending on all forms of advertising and promotion has not yet reached 250 billion dollars.

ANS: F DIF: Difficult REF: p. 50-51 OBJ: 2-2

TYP:Comprehension

9.Different types of advertisers each use advertising somewhat differently, depending on how big their budgets are.

ANS: F DIF: Moderate REF: p. 52 OBJ: 2-3

TYP:Comprehension

10.Manufacturers, service firms, governments, social organizations and agencies all participate in the advertising process in one way or another.

ANS: T DIF: Moderate REF: p. 53-55 OBJ: 2-3

TYP:Comprehension

11.Howard Davis, retired CEO of the full-service advertising agency Tracy-Locke, refers to the creative process in the industry as the “art of the brand”.

ANS: F DIF: Difficult REF: p. 63 OBJ: 2-3

TYP: Application

12.Most large agencies, such as Omnicom, Chiat/Day, and Fallon McElligott, set up their own interactive media groups years ago in response to client demands that the Internet media option be included in nearly every IBP plan.

ANS: T DIF: Difficult REF: p. 64 OBJ: 2-3

TYP: Application

13.Advertising by social organizations at the national level is common but not at state and local levels.

ANS: F DIF: Moderate REF: p. 54 OBJ: 2-3

TYP:Comprehension

14.The reason GAP, Calvin Klein, and Revlon rely on advertising agencies is that agencies house a collection of professionals with very specialized talent, experience, and expertise that simply cannot be matched by their in-house talent.

ANS: F DIF: Moderate REF: p. 58 OBJ: 2-3

TYP: Application

15.Unilever decided to turn over its $575 million media-buying and planning tasks to MindShare Worldwide, an ad agency which now creates its ads.

ANS: F DIF: Moderate REF: p. 59 OBJ: 2-3

TYP: Application

16.Gap, Calvin Klein, and Revlon have developed their own in-house agencies because of economic reasons, and the fact that their in house agencies have brand specific control over and knowledge of their own marketing activities.

ANS: T DIF: Difficult REF: p. 58 OBJ: 2-3

TYP: Application

17.A creative boutique like E-volution Media or Fusion Idea Lab specializes in the creation of inventive advertising concepts.

ANS: T DIF: Difficult REF: p. 57 OBJ: 2-3

TYP: Application

18.Cramer-Kasselt advertising is a mid-sized advertising agency that has a select list of relatively smaller budget clients including Air-Tran and Bombardier ATVs. The company is nevertheless considered a “full service” agency because it provides a wide array of promotional services.

ANS: T DIF: Difficult REF: p. 57 OBJ: 2-3

TYP: Application

19.Interactive agencies help advertisers prepare communications for new media on the world wide web.

ANS: T DIF: Easy REF: p. 57 OBJ: 2-3

TYP: Knowledge

20.DeeAnne Watson ensures that research is part of each creative development decision; she is a media planner.

ANS: F DIF: Moderate REF: p. 63 OBJ: 2-4

TYP: Application

21.Over the past two decades, and particularly in the past three years with the change in consumer media use, most agencies like J Walter Thompson now operate under a variety of compensation contracts from the traditional 15% commission to fee-based services and pay for results.

ANS: T DIF: Difficult REF: p. 64-65 OBJ: 2-3

TYP: Application

22.There are four typical agency compensation systems used in modern advertising including commission, markup, fee, and pay-for-results.

ANS: T DIF: Difficult REF: p. 64-65 OBJ: 2-3

TYP:Comprehension

23.A fee system is much like that used by consultants or attorneys, whereby the advertiser and the agency agree on a fixed percentage of the media spending amount.

ANS: F DIF: Easy REF: p. 64-65 OBJ: 2-3

TYP: Knowledge

24.Direct marketing agencies and database agencies (sometimes also called direct response agencies) provide a variety of direct marketing services and maintain and manage large websites as one of their services.

ANS: F DIF: Moderate REF: p. 60 OBJ: 2-4

TYP: Knowledge

25.While playing golf, Tom sees a billboard on the adjoining highway for McDonald’s. This is an example of interactive advertising because Tom responds by having lunch at the Golden Arches.

ANS: F DIF: Easy REF: p. 70 OBJ: 2-4

TYP: Application