Advertising

Generally speaking, advertising is the promotion of goods, services, companies and ideas, usually by an identified sponsor. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling and sales promotion.

History

In ancient times the most common form of advertising was "word of mouth". However, commercial messages and election campaign displays were found in the ruins of Pompeii. Egyptians used papyrus to create sales messages and wall posters. Lost-and-found advertising on papyrus was common in Greece and Rome. As printing developed in the 15th and 16th century, advertising expanded to include handbills. In the 17th century advertisements started to appear in weekly newspapers in England.

These early print ads were used mainly to promote books (which were increasingly affordable) and medicines (which were increasingly sought after as disease ravaged Europe). Quack ads became a problem, which ushered in regulation of advertising content.

As the economy was expanding during the 19th century, the need for advertising grew at the same pace. In America, the classified ads became popular, filling pages of newspapers with small print messages promoting all kinds of goods. The success of this advertising format led to the growth of mail-order advertising. In 1843 the first advertising agency was established by Volney Palmer in Philadelphia. At first the agencies were just brokers for ad space in newspapers, but by the 20th century, advertising agencies started to take over responsibility for the content as well.

The 1960s saw advertising transform into a modern, more scientific approach in which creativity was allowed to shine, producing unexpected messages that made advertisements interesting to read. The Volkswagen ad campaign featuring such headlines as "Think Small" and "Lemon" ushered in the era of modern advertising by promoting a "position" or "unique selling proposition" designed to associate each brand with a specific idea in the reader or viewer's mind.

Today, advertising is evolving even further, with "guerrilla" promotions that involve unusual approaches such as staged encounters in public places, giveaways of products such as cars that are covered with brand messages, and interactive advertising where the viewer can respond to become part of the advertising message.

Media
 
Commercial advertising media can include billboards (outdoor advertising), street furniture components, printed flyers, radio, cinema and television ads, web banners, web popups, skywriting, bus stop benches, magazines, newspapers, town criers, sides of buses, taxicab doors and roof mounts, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on apples in supermarkets, the opening section of streaming audio and video, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising.

Covert advertising embedded in other entertainment media is known as product placement. A more recent version of this is advertising in film, by having a main character use an item or other of a definate brand - an example is in the movie Minority Report, where Tom Cruise's character owns a computer with the Nokia logo clearly written in the top corner, or his watch engraved with the Bulgari logo.

The TV commercial is generally considered the most effective mass-market advertising format and this is reflected by the high prices TV networks charge for commercial airtime during popular TV events. The annual Super Bowl football game in the United States is known as much for its commercial advertisements as for the game itself, and the average cost of a single thirty-second TV spot during this game has reached $2.3 million (as of 2004).

Increasingly, other mediums such as those discussed below are overtaking television due to a shift towards consumer's usage of the Internet as well as devices such as TiVo.

Advertising on the World Wide Web is a recent phenomenon. Prices of Web-based advertising space are dependent on the "relevance" of the surrounding web content and the traffic that the website receives.

E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail advertising is known as "spam".

Some companies have proposed to place messages or corporate logos on the side of booster rockets and the International Space Station. Controversy exists on the effectiveness of subliminal advertising, and the pervasiveness of mass messages.

Unpaid advertising (also called word of mouth advertising), can provide good exposure at minimal cost. Personal recommendations ("bring a friend", "sell it by zealot"), spreading buzz, or achieving the feat of equating a brand with a common noun ("Xerox" = "photocopier", "Kleenex" = "tissue" , "Scotch Tape" = "Clear Tape", "iPod" = "MP3 Player" ) -- these must provide the stuff of fantasy to the holder of an advertising budget.

The most common method for measuring the impact of mass media advertising is the use of the rating point (rp) or the more accurate target rating point (trp). These two measures refer to the percentage of the universe of the existing base of audience members that can be reached by the use of each media outlet in a particular moment in time. The difference between the two is that the rating point refers to the percentage to the entire universe while the target rating point refers to the percentage to a particular segment or target. This becomes very useful when focusing advertising efforts on a particular group of people. For example, think of an advertising campaign targeting a female audience aged 25 to 45. While the overall rating of a TV show might be well over 10 rating points it might very well happen that the same show in the same moment of time is generating only 2.5 trps (being the target: women 25-45). This would mean that while the show has a large universe of viewers it is not necessarily reaching a large universe of women in the ages of 25 to 45 making it a less desirable location to place an ad for an advertiser looking for this particular demographic.

Objectives

Whereas marketing aims to identify markets that will purchase a Product or support an idea and then facilitate that purchase, advertising is the paid communication by which information about the product or idea is transmitted to potential consumers.

In general, advertising is used to convey availability of a "product" (which can be a physical product, a service, or an idea) and to provide information regarding the product. This can stimulate demand for the product, one of the main objectives of advertising. More specifically, there are three generic objectives of advertisements : communicate information about a particular product, service, or brand (including announcing the existence of the product, where to purchase it, and how to use it), persuade people to buy the product, and keep the organization in the public eye (called institutional advertising). Most advertising blends elements of all three objectives. Typically new products are supported with informative and persuasive ads, while mature products use institutional and persuasive ads (sometimes called reminder ads). Advertising frequently uses persuasive appeals, both logical and emotional (that is, it is a form of propaganda), sometimes even to the exclusion of any product information. More specific objectives include increases in short or long term sales, market share, awareness, product trial, mind share, brand name recall, product use information, positioning or repositioning, and organizational image improvement.

Examples of the ideas, informative or otherwise, that advertising tries to communicate are product details, benefits and brand information. Advertising usually seeks to find a unique selling proposition (USP) of any product and communicate that to the user. This may take the form of a unique product feature or a perceived benefit. In the face of increased competition within the market due to growing numbers of substitutes there is more branding occurring in advertising. This branding attributes a certain personality or reputation to a brand, termed brand equity, which is distinctive from its competition. Generally, brand equity is a measure of the volume and homogeneity of, as well as positive and negative characteristics of, individual and cultural ideas associated with the product.

Co-op advertising is money offered by manufacturers or distributors to assist retailers in advertising certain merchandise lines.

Effective advertising will stimulate demand for a product and build brand equity and brand franchise. When enough brand equity is created that the brand has the ability to draw buyers (even without further advertising), it is said to have brand franchise. The ultimate brand franchise is when the brand is so prevalent in people's mind (called mind share), that it is used to describe the whole category of products. This phenomena is sometimes known as "hyperbranding." Kleenex, for example, can distinguish itself as a type of tissue or a label for a category of products. That is, it is frequently used as a generic term. One of the most successful firms to have achieved a dominant brand franchise is Hoover, whose name was for a very long time synonymous with vacuum cleaner (and Dyson has subsequently managed to achieve similar status, having moved into the Hoover market with a more sophisticated model of vacuum cleaner). The strength of a brand franchise can be established to a greater or lesser degrees in various markets. In Texas, for example, it is common to hear people refer to any soft drink as a Coke, regardless of whether it is actually produced by Coca-Cola or not (more accurate terms would be 'cola' or 'soda').

Impact

The impact of advertising has been a matter of considerable debate and many different claims have been made in different contexts. During debates about the banning of cigarette adervertising, a common claim from cigarette manufacturers was that cigarette advertising does not encourage people to smoke who would not otherwise. The (eventually successful) opponents of advertising, on the other hand, claim that advertising does in fact increase consumption.

According to many sources, the past experience and state of mind of the person subjected to advertising may determine the impact that advertising has. Children under the age of four may be unable to distinguish advertising from other television programs, whilst the ability to determine the truthfullness of the message may not be developed until the age of eight .