Advertising, the collective term for public announcements designed to promote the sale of specific commodities or services. Advertising is a form of mass selling, employed when the use of direct, person-to-person selling is impractical, impossible, or simply inefficient. It is to be distinguished from other activities intended to persuade the public, such as propaganda, publicity, and public relations. Advertising techniques range in complexity from the publishing of simple, straightforward notices in the classified advertisement columns of newspapers to the concerted use of newspapers, magazines, television, radio, the Internet, direct mail, and other communications media in the course of a single advertising campaign. From its unsophisticated beginnings in ancient times, advertising has burgeoned into a worldwide industry.
America is by far the largest user of advertising in terms of annual expenditure. In the United States alone in the late 1980s, approximately US$120 billion was spent in a single year on advertising to influence the purchase of commodities and services. By 2003 this figure had grown to a total of over US$132 billion and accounted for 41 per cent of the global spend on advertising. The United States was followed by Japan and the United Kingdom who spent over US$31 billion and over US$19 billion/£10 billion respectively on advertising that same year. As of 2006, total advertising expenditure worldwide was predicted soon to exceed US$400 billion.
Modern advertising is an integral segment of urban industrial civilization, mirroring contemporary life in its best and worst aspects. Having proven its force in the movement of economic goods and services, advertising since the early 1960s has been directed increasingly towards matters of social concern. Health awareness and anti-drink-driving campaigns are two examples of the use of the advertising industry as a means to promote public welfare.
Advertising falls into two main categories: consumer advertising, directed at the ultimate purchaser, and trade advertising, in which the appeal is made to dealers through trade journals and other media.
Both consumer and trade advertising employ many specialized types of commercial persuasion. A relatively minor, but important, form of advertising is institutional (or corporate) advertising, which is designed solely to build prestige and public respect for particular business concerns. Each year vast sums are spent on institutional advertising, which usually mentions products or services for sale only incidentally.
Another minor, but increasingly popular, form of advertising is cooperative advertising, in which the manufacturer shares the expense of local radio or newspaper advertising with the retailer who signs the advertisement. National advertisers occasionally share the same space in magazine advertising.
Advertising may be local, national, or international in scope. The rates charged for the three different levels of advertising vary sharply, particularly in newspapers; varying rates are set for differing classifications of advertising. At one end of the scale display advertisements for expensive consumer items such as cars. At the other is classified advertising, which ranges from appointments and property advertising at the top to relatively inexpensive charitable and religious advertisements at the bottom.
The origins of advertising lie thousands of years in the past. One of the first known methods of advertising was the outdoor display, usually, an eye-catching sign painted on the wall of a building. Archaeologists have uncovered many such signs, notably in the ruins of ancient Rome and Pompeii. An outdoor advertisement excavated in Rome offers the property for rent, and one found painted on a wall in Pompeii calls the attention of travellers to a tavern situated in another town.
In medieval times word-of-mouth praise of products gave rise to a simple but effective form of advertising, the use of so-called town criers. The criers were citizens who read public notices aloud and were also employed by merchants to shout the praises of their wares. Although graphic forms of advertising appeared early in history, printed advertising made little headway until the invention of the printing press. The trademark, a two- or three-dimensional design symbolizing a company or industry, dates from about the 16th century when tradespeople and guild members posted characteristic symbols outside their shops. Among the best-known trademarks surviving from early modern times are the striped pole of the barber and the three-ball sign of the pawnbroker.
In terms of both volume and technique, advertising made its greatest early advances in the United States. In the early stages of American advertising, a nationwide promotion was impractical because the nation itself was underdeveloped and lacked transcontinental transport, distribution, and communications systems. Eventually, however, certain types of manufacturers conceived the idea of bypassing wholesalers and retailers and reaching the consumer through direct advertising, mainly by means of catalogues. The pioneers in this field were seed companies and book and pamphlet publishers. Mail-order houses appeared on the scene as early as the 1870s. To the present day, they have continued to expand their businesses through direct-mail catalogue and flyer advertising, although some of the biggest houses also sell through retail outlets. Nowadays, advances in advertising are international.
Patent-medicine companies loomed large in British newspaper and magazine advertising from the mid-19th century. They found a ready market because doctors and reliable chemists were scarce outside populated areas. The patent-medicine bottlers made a gross profit of between 80 and 90 percent and could therefore well afford to spend money publicizing their remedies. Railways and steamship lines were also among the early users of advertising in the United States, not only to praise the luxury and comfort of their modes of travel but also to publish their schedules and rates.
Late in the 19th century, many firms began to market packaged goods under brand names. This development initiated a new era in the history of advertising. Previously, such everyday household products as sugar, soap, rice, molasses, butter, milk, lard, beans, confectionery, candles, and pickles had been sold in local shops from bulk packages. As a result, consumers had seldom been aware of or influenced by, brand names.
In Britain and the United States, soap-makers were early advertisers of packaged and branded products. The first “household name” soap brands, which date from about 1880, include Ivory, Pears’, and Colgate. Soon afterward such brands as Royal Baking Powder, Quaker Oats, and Waterman’s Pens were nationally advertised. Shortly after the turn of the 20th century, Americans began to be aware of such brand names as Wrigley and Coca-Cola.
After World War I, advertising developed into a business so big that it became almost a trademark of the United States itself in the eyes of the world. This expansion was stimulated by many technical improvements, and the expanding American industry inspired innovations and improved techniques that benefited other facets of business in the nation.
The invention of electricity led to the illuminated outdoor poster; photoengraving and other modern printing inventions helped both the editorial and advertising departments of printed journals. Advertising was used increasingly by public-relations specialists as an important means of communication. In the United States, the advent of radio in the 1920s stimulated a whole new technique of selling by voice, but commercial radio was not to begin in Britain until the 1970s.
Commercial television advertising began in Britain in 1955. The combination of sound, movement, and colour that modern television offers can provide greater scope than most other media. It is generally regarded as the most powerful and persuasive of all media and has the capacity to build brand awareness rapidly among a high proportion of the population. However, it is also very expensive, both in terms of airtime and production. Today, the increasing number of channels now available through the development of satellite, cable, and digital television present new challenges and opportunities for media planners who have to schedule airtime in a manner that will provide the greatest number of viewers from within the target audience (coverage), as well as the greatest number of opportunities to see the commercial (frequency).
The proliferation of the Internet and digital television since the 1990s has opened up many new avenues for advertising, for a discussion of which see below III Media.
Advertising messages are disseminated through numerous and varied channels or media. The major media in developed countries are newspapers and consumer magazines, television, direct mail, radio, the Internet, business publications, and outdoor and transport advertising. In addition, a significant amount of advertising is invested in miscellaneous media, such as window displays, free local newspapers and shopping news publications, calendars, and even sandwich-boards.
A wide range of advertising media has been developed from sources whose potential importance was formerly ignored. Delivery trucks, once plainly painted, now often carry institutional or product messages, as do many shipping cartons. Some packages, for example, takeaway food cartons, carry advertising for products other than those contained in them, as do telephone credit cards. Wrapping paper and shopping bags bearing advertisements are used widely by retail stores to advertise their own products and services.
In recent years, the use of ambient media has become more widespread. The term “ambient media” refers to advertising media that exploits the use of common objects or materials that the audience will encounter within their everyday environment. To a varying degree, these objects or materials become part of the advertisement themselves. Some of the very earliest examples of ambient media were found in petrol stations where advertisements were placed on the nozzles of petrol pumps. More elaborate examples have involved the use, manipulation, or utilization of buildings, architectural fixtures, furniture, animals, and even people in order to convey the advertising message. Ambient media can be particularly effective as it tends to take the audience by surprise.
The proliferation of electronic and various digital media has also had a profound impact on the channels of communication being used by organizations to promote their brands or services. Digital television and the Internet have permitted a greater level of interaction with audiences, and as more households embrace the new technology, both of these media are beginning to converge. WebTV is perhaps the ultimate manifestation of this as it combines the key functions of both the Internet and television, enabling viewers to access Web sites and order products online through their television sets. Online advertising tools include company Web sites, Web communities (Websites that provide a channel for people with similar interests to exchange information), online stores, banner ads, pop-up ads, e-mail newsletters, and unsolicited e-mails (sometimes referred to as spamming). Not all online advertising is welcomed by its recipients, and pop-up ads together with e-mail “spam” have the capacity to be intrusive and annoying. While the full potential of digital television and the Internet has yet to be reached, they are both certain to expand the scope of interactive advertising in the future.
IV DIRECT ADVERTISING
Direct advertising includes all forms of sales appeals posted, delivered, or exhibited directly to the prospective buyer of an advertised product or service, without the use of any indirect medium, such as newspapers or television. Direct advertising may be divided logically into three broad classifications, namely, direct-mail advertising, mail-order advertising, and unmailed direct advertising.
All forms of sales appeals (except mail-order appeals) that are sent through the post are considered direct-mail advertising. The chief functions of direct-mail advertising are to familiarize prospective buyers with a product, its name, its maker, and its merits, and with the product’s local distributors. The direct-mail appeal is designed also to support the sales activities of retailers by encouraging the continued patronage of both old and new customers.
When no personal selling is involved, other methods are needed to induce people to send in orders by post. In addition to newspapers, magazines, television, and radio, special devices such as single-product folders or multi-product catalogues are used in mail-order advertising. Mail-order promotions are designed to accomplish a complete selling job without salespeople. The success of direct mail rests on the quality of the database from which advertisers and their respective agencies draw up their mailing lists. Up-to-date, accurate databases enable advertisers to target the recipients of the advertising in a precise manner.
Used for the same broad purposes as direct-mail advertising, unmailed direct advertising includes all forms of indoor advertising displays and all printed sales appeals distributed from door to door, handed to customers in retail shops, included in packages and bundles of merchandise, or conveyed in some other manner directly to the recipient.
With each medium competing keenly for its share of business, advertising agencies continue to develop new techniques for displaying and selling wares and services. Among these techniques have been vastly improved printing and reproduction methods in the graphic field, adapted to magazine advertisements and to direct-mail enclosures; the use of colour in newspaper advertisements and in television; and more attractively designed and efficiently lit outdoor signboards, which are sometimes even three-dimensional. Many subtly effective improvements are suggested by advertising research.
During the 19th century, it was only possible to approximate the effectiveness of various advertising techniques. Prospective advertisers were guided almost solely by estimates of magazine and newspaper readership. In the early days of broadcasting and outdoor advertising, the industry lacked a reliable measure of the audience of these media. However, in the United States in 1914 the Audit Bureau of Circulations, an independent organization subscribed to principally by newspaper and magazine publishers, was established to meet the need for authentic circulation statistics and for a coordinated, standardized way of presenting them. Similar independent bodies have since been established in all developed countries.
Eventually, greater scientific efforts to determine relevant facts about audience and readership developed as a result of competition among the media and the demand among advertisers for an accurate means of judging the relative effectiveness of the media. The media soon found ways of ascertaining not only how many people see or hear advertising messages, but what kinds of people they are and where they are located. Newspapers and magazines, either through their own research staff or through specialized organizations employed for a fee, go to great lengths to analyse circulation to show where their readers live, their income, education, recreational habits, age, and number of children, and to provide other guides to determine their readers’ susceptibility to certain classes of products.
Radio and television broadcasters and networks similarly analyse their audiences for the guidance of advertisers. In this field, too, broadcast companies, advertising agencies, and advertisers subscribe to one or more audience-research organizations to determine how many viewers or listeners tune into regional and national programmes at any given time. Special surveys of local broadcast programmes are also arranged. In a similar but less comprehensive manner, outdoor and transport advertising companies have set up organizations to tally the numbers of people exposed to their posters.
By nature, advertising is dependent on psychological and other variables that are difficult to ascertain precisely, with the consequence that the whole field of audience research is complex and controversial. Researchers have found it necessary to refine their techniques consistently to make them increasingly reliable.
One major type of research project is the survey of test markets. Advertisers and agencies frequently conduct extensive and expensive surveys to determine the potential acceptance of products or services before they are advertised nationally at costs that may be enormous. In one common procedure, the advertising-marketing division of a company despatches surveyors to carry out door-to-door canvassing in various residential areas with different average income levels. Householders are shown various versions of the product intended for the market. If the survey convinces the manufacturer that one of the versions exhibited will attract enough purchasers, a crew then pre-tests various sales appeals by showing provisional advertisements to consumers and asking them to indicate their preference. After the one or two best-liked advertisements or basic appeals are determined, the advertiser produces a limited quantity of the new product and introduces it in a test market. On the basis of this market test, the advertiser-manufacturer can make a decision as to whether a national campaign should be launched.
The question of what motivates a consumer to buy challenges the imagination and ingenuity of the seller and presses research specialists forward into new fields of investigation. Motivational research, for example, attempts to probe the unconscious impulses that motivate buying decisions; advertising agencies then utilize these findings to influence the consumer and to attempt to break down sales resistance. Critical observers outside the advertising industry have assailed the motivational approach as unreliable and as unfair to the consumer, who should not, they feel, be subjected to such indirect sales attacks. Many researchers, however, regard motivational enquiry as merely a means of delving deeper than before into the psychological springs of behaviour. Through careful questioning and investigation, it is often possible for an advertiser to trace a sale and learn what motivated the consumer to buy a product. Workers in motivational research try to explore these influences.
VI TECHNIQUES OF PERSUASION
While experts argue about new methods of persuasion, they still rely mainly on basic appeals that have proved successful over the years. These appeals offer the hope of more money and better jobs, security against old age and illness, popularity and personal prestige, praise from others, more comfort, increased enjoyment, social advancement, improved appearance, and better health. The modern advertiser stresses not the product but the benefits that may be enjoyed by purchasers. Thus, the advertiser surveys not cosmetics but the expectation of new beauty, allure, and hope. To attract the prospective buyer of cars, the manufacturer may stress not only the mechanical attributes of the car but also the excitement, comfort, and prestige it may bring the buyer.
The most effective advertising tends to be very single-minded in the manner by which it selects the key benefit or message, and communicates this to the audience. This message is called the “advertising proposition”. It is the single, most important thing that the advertiser wants the audience to remember after seeing the advertisement.
The many techniques of persuasion are circumscribed only by the ingenuity of the creative mind, by the limits of the various channels of communications, by certain legal restrictions, and by standards self-imposed by the advertising industry. One fundamental technique, apparent in the earliest applications of advertising and still basic in the most modern procedures, is repetition. A typical national advertiser captures the attention of prospective customers by repeated appeals to buy. It is not unusual for a person to encounter advertisements for the same product in national and local newspapers, on radio, television, and online, to receive additional reminders in various consumer magazines, and to be confronted with a poster, counter card, or display on entering a shop. Repetition also helps to build a reputation. A strong brand identity can be developed through repetition of the proposition and consistency of communication.
Another basic persuader is the product name. Manufacturers have spent millions to establish their products as symbols of reliability and value. Once consumers gain confidence in it, the owner can use the product name and logo as a persuader, that is, as a device to reassure customers that all products bearing this symbol are reliable. The product name and logo are especially useful when the manufacturer introduces a new item to an existing line of goods.
Price appeal probably motivates more decisions to buy than any other appeal, and the magic words “sale” and “bargain” are directed at consumers with great frequency. Closely allied to these plain and simple discount offers are the “something for nothing” lures, such as “buy two and get a third free”, “send for free sample”, and “trial offer at half price”. Substantial cash prizes are frequent inducements, as are “buy now, pay later” offers. Special offers such as these are often referred to as “sales promotion” and can also involve the provision of free gifts as another means of encouraging individuals to purchase specific goods.
Modern advertising employs an astonishing variety of persuaders. Among these are softer-selling, often humorous and entertaining television and radio commercials (in which Britain has led the advertising world), appeals to the sense of smell by the use of perfumed ink on paper, endorsements of products by celebrities, appeals to parents to give their children a better life and future, appeals to children to ask parents to buy certain breakfast cereals, and the controversial use of “scare copy”. Playing on the principal human frailty of fear, this last-mentioned motivation is applied to the advertising of thousands of commodities, sometimes boldly, sometimes subtly. Fear of poverty, sickness, loss of social standing, and the spectre of possible disasters, great and small, sometimes moves previously unexcitable consumers to buy anything from insurance and fire extinguishers to cosmetics and vitamin tablets.
VII STRUCTURE OF THE INDUSTRY
Big-budget advertising is a relatively new industry. The developed commercial economy that supports advertising on a large scale was only established in most Western countries in the 19th century. The advertisers of that period had little need for agents. The publishers of magazines and newspapers, however, often found it difficult to sell space on their pages to advertisers and therefore began to commission brokers to go out and sell advertising space. These so-called space brokers were the first advertising agents. Present-day advertising agencies continue to act as space brokers in that they purchase space and time on behalf of the advertiser. Their commissions, however, come from the media owners. In fact, the commission represents a major portion of the income of the modern advertising agency. The feed method of agency compensation has become increasingly important and is now generally used for such non-commissionable services as research, market analysis, and public relations.
Time and space buying is only one of the principal services rendered by the modern advertising agency, although this one department has become highly specialized. The agency spends most of its time planning, creating, and producing the advertising for its clients. A typical major agency maintains advertising and marketing specialists, designers, writers, artists, economists, psychologists, researchers, media analysts, product-testers, librarians, and bookkeepers. An important group of people follows and expedites the work from start to finish until the completed advertisement is delivered to the media. The growth of television and radio broadcasting as advertising media necessitated the creation of new departments devoted to the purchase of national and local broadcast time.
In the simplest terms, the relationship between advertiser and agency may be described as follows. The advertiser tells the agent what product or service is to be sold and at what price. The agency, in consultation with the advertiser, then creates and produces the advertising and recommends the budget, the media to be used, and the scheduling of the various parts of the campaign.
The magnitude of such operations is indicated by the volume of advertising placed by market leaders. In Britain, in 2003 the top holding companies by advertising expenditure were: Unilever (through its subsidiaries), on soaps and detergents, groceries, and cosmetic products, over £206 million; Proctor & Gamble, over £195 million; and Ford Motor Company, over £154 million. These sums were all spent through media outlets such as newspapers, consumer and other magazines, network radio and television, and outdoor advertising.
Since the late 20th century, one of the most profound changes in the manner in which advertising agencies operate has been the shift towards the integration of communication media. Many agencies have now established themselves at the head of larger communication groups and networks offering a full and broader range of creative marketing and communication services. This has since manifested itself in efforts by agencies to develop strategies for using promotional tools in a more synergistic and unified way, a process termed “Integrated Marketing Communications” (IMC).
VIII ECONOMIC AND SOCIAL EFFECTS
With so many businesses using one or more forms of advertising, almost everybody hears or sees advertising every day. The high per capita cost of advertising has led many critics to attack it as a wasteful, unnecessary, unreliable, and annoying institution. Such critics usually argue that the industry adds unnecessarily to the cost of goods and services promoted by it. The proponents of advertising recognize some validity in these criticisms, but in rebuttal argue that by interesting consumers in purchasing commodities, advertising enables manufacturers and others to sell their products in larger quantities than they would otherwise; the increased volume of sales, in turn, enables companies to sell individual units at a lower cost than if they were produced in small quantities.
In the opinion of most top business executives and of many economists, modern advertising plays an integral role in the development of markets for the low-cost goods made possible by an efficient industry. At least one worldwide study of national investment in advertising, which showed a direct correlation with living standards, supported this thesis.
Advertising also supplies most of the operating funds of the principal communications media. The commercial television and radio industry depends on advertising for most of its revenue. Newspapers and magazines also derive very considerable income from advertising.
Early in the 20th century, in Britain, before the advertising industry became well organized, the sharp and unethical practices of some advertisers prompted the rise of self-regulation to avoid state controls. Self-imposed codes of ethics and procedures aim principally to curtail not only bad taste but also misrepresentation and deception in copy and illustrations, as well as derogatory and unfair representations of competitors’ products.
Advertising trade associations are concerned with maintaining high standards. The associations feel it is good public relations to do so, inasmuch as advertising that weakens public confidence damages the impact and influence of all advertising.
Individual media and media groups often establish their own codes of ethics. Some newspapers and magazines are selective about which products they will publish advertising for, refusing to promote alcoholic beverages, for example; most of them, in varying degrees, investigate the reliability of advertisers before accepting their copy. Some publishers have strict rules about the presentation of advertising to prevent the publication of false or exaggerated claims and to preserve the aesthetic tone of their publications.
Television and radio likewise cooperate closely to avoid permitting advertising that might cause unfavourable reactions.
The Tobacco Advertising and Promotions Act (2003) outlawed tobacco advertisements in newspapers, magazines, and on billboards in Britain.
Since 1961, the ASA (Advertising Standards Authority) together with the CAP (Committee of Advertising Practice) have been responsible for administering the self-regulation of non-broadcast advertising in the United Kingdom. In 2004 both of these organizations entered a co-regulatory partnership with Ofcom and are now also responsible for the regulation of TV and radio commercials.
History of Advertising Trust
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