Through the various changes that have taken place in our recent studies and measurement of advertising techniques, it has been found that advertising definitely works better than not advertising. It is certainly more beneficial than promotions and it works on almost any type of media, like print, radio, internet or television. It pays to advertise not only for consumer oriented products but also for industrial ones. (Kopalle 2000) Advertising helps to launch new products and also to boost the sales of established ones. In fact, advertising is also beneficial in recessions as it enhances the state of the companies. This works on the principles of “mass involvement through buying and this could be termed as the best example of the theory of Social Communication in Advertising”. (Schudson, 1984, 27) Studies have indicated that those organizations or brands which have a higher advertising-to-sales ratio then their competitors have a greater profitability that can be calculated by their return-on-interest (ROI) and better market share through share-of-market (SOM). (Nair 2004)
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The fundamentals of advertisement work on different principles and theories based on capitalistic society. Several variables are taken into account like “political trends, social trends, culture, mass communications and all these elements help to formulate the basic critical theory of advertising”. (Schudson, 1984, 112)
Does advertising work?
Studies have also proved that organizations or brands with higher advertising-to-promotion ratios tend to dominate the markets with sales volume almost double of their competitors. It has also been proved that heavy-up advertising not only enhances the sales of an organization or brand immediately but continues to work for years even after the advertisement has stopped running. (Kopalle 2000) This mainly happens with television advertisements. Even newspapers and magazines are effective in enhancing the sales of a company. Advertising through printed media and radio helps to increase brand familiarity among the common people. More exposure guarantees development of more purchasing interest among the customers. Nowadays even “the internet plays a big hand in advertising since it is easier, cheaper and gets a brand more exposure”. (Kopalle 2000)
We have also seen that advertising works during times of recessions too. This is because through advertising it is possible to gain long term brand building and exposure which most businesses tend to sacrifice due to the pressures on the bottom line which shows the profit or loss. During recessions consumers spend less and when the organizations reduce advertising, it has a negative affect on the consumers as this further reduces their spending motivation deepening the recession. (Hansen 2009) Good business policies, on the other hand, suggest that when the competitors are reducing their advertisements, an organization that increases or at least maintains its advertising enjoys an increase in its sales volume. Recessionary advertising impacts the consumers even after the recession period. But for advertising to work it must be good and effective since it is not necessary that all types of advertising must work equally well. (Hansen 2009)
Advertising only works when we follow the general pattern of a continuous cycle. The first step is to test the marketing media. Apart from the traditional sources of media, nowadays there are many other sources, like cold calling and cost-per-click campaigns. These mediums need to be tested to determine which one works best. (Nair 2004) Then we should properly evaluate the results to see which strategy returns a high ROI and rank the marketing methods accordingly. After we have evaluated the advertising medium which works best for us, we should invest into it and eliminate the other advertising mediums. We need to repeat this cycle constantly so that the present campaign is better then the previous ones so as to find an optimized method. (Nair 2004)
Advertising that creates a positive attitude and persuades the consumers by creating liking and arousing desires and feelings in them for a particular product or brand is more effective and impacts the sales volumes more than others do. But most of the time advertising requires patience, time and above all repetition. The products must be worthwhile and consistent for good advertising to work and deliver what it promises to the customers. A good marketing strategy, brand perception, knowledge of its benefits and enhancement of its values are the key elements to successful advertising.
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Thus, it is evident that the more the consumer sees a brand or product in a newspaper or website or TV, the more they will tend to like it. (Meenaghan 2003) Effective advertising can change markets by improving profit margins. Advertising has both long term and short term powers. Through the former it conveys new information, builds awareness and enhances credibility and through the latter it can convey brand image and develop a positive reputation of a brand or organization. The great power advertising possesses can seldom be recognized and achieved in reality and those organizations that can consistently develop effective advertising campaigns will have a prosperous future since good advertising is like an invisible cloak. (Meenaghan 2003)
Advertising effectiveness can be described as a certain degree to which the intended goals of an advertising campaign or an advertisement itself can be achieved and it is normally estimated by measuring its impact on brand preference, awareness and level of sales volume. Studies have proved that only about 50% of all advertisements actually work, (Meenaghan 2003) i.e. they leave a positive effect on the brand choices and purchasing activities of the consumers. Sometimes advertisements have a negative effect on the sales volume if they are not tested among consumers before being aired or printed. The clients or the agencies without any feedback are unable to determine whether the advertisement is good or bad. Also, after the advertisement is aired or printed feedback through sales response are not completely able to indicate the advertising effectiveness since there is a lot of randomness and unwanted data in the sales data, like economic trends, pricing variation, out-of-stocks, etc. various researches have proved that an advertisement that is heard a number of times on the same media, like a TV commercial, had less effect on the consumers than if they experience the same message at a time from each of a number of different medias, like an online banner, a printed ad and a TV commercial. (Meenaghan 2003)
Advertisement is also effective if the logo of the brand or the product name is displayed during the total length of the advertisement. However there are exceptions, like that of Nike, who only flashes its logo at the end. Advertisements flashed at a particular time of the day have also been found to be extremely effective with the consumers having a profound response to the ad, like a McDonald ad aired during lunchtime will be more effective than being aired in the evening. (Meenaghan 2003)
In today’s world of high speed internet facilities an online ad is also very effective. It is notoriously difficult to properly measure advertising effectiveness due to unreliable data, irrelevant internal accounting, unpredictable budgets, etc. But if a high level of advertising effectiveness can be achieved then the advertisement will have the power to influence and persuade the consumers shaping their destinies. (Meenaghan 2003)
Measurement of advertising effectiveness
Advertising aims to either increase the sales volume or create a brand name and thus, if we do not properly measure advertising effectiveness it is a simple wastage of time and money. The various forms of advertising are dramatically different and thus, measuring their effectiveness is not an easy task. While measuring marketing effectiveness we actually have to determine the effect each advertising campaign has on the consumers. (Petrison 2006) We also have to take into account the factors influencing advertising, like medium, the exact words or ad copy, the audience the ad aims at, goals of the advertisement, evaluation costs, value placed by the organization on its evaluation measures, reliability and precision generated, budget and its format.
Since most of the above result in the success or failure of the ad, advertising effectiveness needs to be measured in these contexts. Also to properly measure effectiveness of advertising we need to determine the type of advertising we are using. Both Proactive and Reactive advertising can be effectively measured. (Petrison 2006) Proactive advertising is effective in determining whether to increase the activity of the product while Reactive advertising helps to lay out future budget plans. Awareness and Infrastructure advertising are very difficult to measure since they may not generate a proper response.
But they significantly increase the responses we get from Reactive and Proactive advertising. Measurement of effective advertisement is sometimes also affected by type and amount of prior advertising that has taken place, level of awareness of a consumer brand, whether cost efficient evaluation methods are available or not, placing the advertisement properly and product specifications, like price and ability to target audiences. In order to measure the effectiveness of online advertisements we take into account the total number of actual page views which can be collected by various search engine and counter page rankings. (Hansen 2009)
A number of models are used by people to measure advertising effectiveness.
- It can be measured by taking into account the Five Headings of Attention, Communication, Profits, Persuasion and Sales as suggested by E. Pometance. Here a cube diagram is used for illustrating the ways to evaluate advertising through the impact of repeated exposure.
- It can be measured by the model of “Predictive Measurement of Advertising Effectiveness” suggested by Steiner and Lavidge. This model distinguishes between the various levels of purchasing behaviours and also suggests a suitable measure for each of them.
- The model suggested by Armstrong and Kotler for measuring advertising effectiveness viewed the above stages as Awareness, Conviction, Knowledge, Liking, Purchase and Preference. They also suggested that there are 2 major areas in an advertising campaign which need to be evaluated. They are known as the “Sales Effect” and the “Communication Effect”. (Hansen 2009) For evaluating Sales Effect, information about the sales and expenditures of an organization are required and for evaluating Communication Effect research tests are conducted.
We must realize that sales volume alone cannot measure advertising effectiveness since brand value and consumer perceptions play an important role. (Hoek 2008)
Example of Pfizer pharmaceuticals
Let us take the example of Pfizer pharmaceuticals which manufactures pharmaceuticals for a number of medical conditions. Among its well known products are Celebrex, a pain relieving drug, Norvasc, a vasodilator taken to control high blood pressure and Lipitor, which lowers cholesterol. Pfizer’s public policy stresses on the fact that the patients can benefit from medical treatments only when they understand the therapies and symptoms involved and discuss them with their caregivers. One of the ways by which treatment and disease related information is made available to the customers is by advertising. (Hansen 2009)
They utilize Direct-to-Customer or DTC advertising which enables them to keep their patients up-to-date. DTC not only helps the patients to identify their diseases but also eliminates the necessity for expensive medical interventions for acute care, which occur when the patients remain untreated. The impact of DTC advertising is far-reaching since by advertising their prescription drugs in newspapers, magazines, radio, TV or internet, Pfizer help the patients more rather than harming them. The only way patients can take better decisions regarding their health is when they have proper access to useful health information. (Kim 1992)
Pfizer has also recently announced that they are going to make improvements in their DTC advertisements so that their educational benefits become stronger. Among various other changes, these improvements will include information regarding the access programs of their prescription drugs and the benefits of taking their medications along with the associated risks. (Hansen 2009) Pfizer had even run their lavish advertisements in the famous Journal of the American Medical Association. The present policies and rules of the DTC advertisements foster messages for enabling and motivating their patients so that they engage themselves in constructive and thoughtful dialogues with their doctors regarding their treatment options and health conditions. Their DTC advertising is purely governed by the FDA and even contains language describing risks associated by the product as approved by FDA. Thus, it can be stated that advertising is an effective medium of marketing. (Hansen 2009)
In conclusion it should be stated that Human behavior is altered by stimuli outside the mind, but absorbed by that same mind. It is this absorption that must be considered when understanding the human psyche. Advertisement has a tendency to increase the need and create needs. The biggest problem with this now would be the fact that now teenagers and children have become a target audience, resulting in addiction toward images and brands in the public sphere. In the process, advertisement is believed to generate profit maximization for a company.
Hansen, J 2009, ‘Exploring memory for product names advertised with humour’, Journal of Consumer Behaviour, vol. 8, no. 2-3, pp. 135-148.
Hoek, J 2008, ‘Ethical and practical implications of pharmaceutical direct-to-consumer advertising’, International Journal of Nonprofit and Voluntary Sector Marketing, vol. 13, no. 1, pp. 73-87.
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Kim, P 1992, ‘Does Advertising work? A Review of Evidence’, The Journal of Consumer Marketing, Vol. 9, no. 4, pp- 5-21.
Kopalle, PK 2000, ‘When (not) to indulge: the role of consumer expectations and brand goodwill in determining advertised and actual product quality’, Managerial and Decision Economics, vol. 21, no. 6, pp. 223-241.
Meenaghan, T 2003, ‘Sponsorship and advertising: A comparison of consumer perceptions’, Psychology and Marketing, vol. 18, no. 2, pp. 191-215.
Nair, B 2004, Marketing Communication, Intl Specialized Book Service Inc, Sydney.
Petrison, LA 2006, ‘Database marketing: Past, present, and future’, Journal of Direct Marketing, vol. 11, no. 4, pp. 109-125.
Schudson, M 1984, Advertising, The Uneasy Persuasion: Its Dubious Impact On American Society, Basic Books, New York.