Advertising

Advertising is the process of making potential consumers aware of a product, including goods and services, and describing the manifestation of the message. It may include print and broadcasting media, as well as social media and non-traditional messages, such as novelty items and T-shirts. Advertising also includes such acts as product placement—when a product appears in a film, for example—and contests to promote products, infomercials, and sponsorships, such as when a company sponsors a concert tour. Although much of advertising is related to commerce, social services, governments, and other groups also advertise to make people aware of events, services, and benefits they may wish to explore.

Advertising has existed for thousands of years, and has changed considerably. While early messages were often posted in public places, with little attention to targeting one's message to the most likely consumers, modern advertising is often based on individuals' habits, such as internet browsing history, subscriptions, and e-newsletters from businesses or groups with which one is associated. In this way, the advertiser is able to target messages to likely customers. In 2023, advertising was a nearly $1 trillion industry with annual growth of over 7 percent.

Background

Early advertising was limited to verbal messages. Merchants literally shouted about what they had to sell, hoping to draw in passersby. This type of selling is still seen in some venues, such as sports arenas, where hot dog and soft drink vendors shout out to spectators. Merchants hung signs and flags on their stalls, often with symbols indicating what was for sale, to alert customers. These methods were effective because in ancient times, many people were illiterate.

The first public notices were created in ancient Egypt in about 2000 BCE. These were carved in steel and placed in public places. Much later, printers learned to create handbills, or small advertisements on paper or parchment that were hand distributed in public. Handbills became important to merchants in China during the Song dynasty (960–1276 CE). Chinese merchants used handbills with trademarks to differentiate their products from those sold by other merchants.

The invention of the movable-type printing press in 1440 created new opportunities. Inventor Johannes Gutenberg first used the press to mass-produce books, but as other printers acquired presses, they found new ways to use them. Some printers began producing handbills for merchants. The first handbill advertisement in England was produced in 1472 to sell prayer books.

Printed material was widely available by the eighteenth century. In addition to handbills, posters, pamphlets, and other materials were distributed. The printing press also brought about the newspaper industry. In North America, the first newspaper advertisement appeared in the Boston News-Letter in 1704. One of the most famous newspaper publishers in history, Benjamin Franklin launched the Pennsylvania Gazette, complete with numerous advertisements, in Philadelphia in 1729 and followed up thirteen years later with a new magazine. About three decades later, Franklin was at the center of the American Revolution (1765–83), which was spurred at least in part by advertisements, including calls for men to enlist and fight the British.

New printing processes led to the development of illustrated posters in the 1790s. To protect advertisements such as these from the weather, billposters began erecting boards on which to hang their bills in high-traffic areas. Large-scale posters originated in 1835 in New York. These ads of more than fifty square feet were printed by Jared Bell to promote circuses.

Advertising became a field in its own right during the late eighteenth and early nineteenth centuries. Most early advertising agencies did little more than sell advertising space with printers. During the mid-nineteenth century, however, agencies took on more creative roles. Copywriters began focusing on conveying a message to consumers. Many of these worked to promote businesses such as Wanamaker's department store and products such as Ivory soap. The rise in magazines, especially women's publications such as Ladies' Home Journal, increased the reach of advertising.

Sears, which made its name as a mail-order catalog business, created the first direct marketing campaign in 1892. Sears mailed eight thousand handwritten postcards to consumers. The effort was a success, generating two thousand orders.

Rapid developments in technology during the twentieth century led to broadcasting. Radio launched in 1920 and helped spread mass culture through music and programming. Many radio shows were sponsored by advertisers, a practice that continued with the development of television and, much later, podcasting.

Society experienced a shift during the 1920s. The decade saw social upheaval, as women gained the vote and rejected many of the ideas of previous generations, and many people were looking for ways to enjoy themselves. Women became important consumers during the 1920s. Many went to work in white-collar office jobs, performing clerical and secretarial work. They had the means and interest in buying goods, in particular radios, home appliances, and ready-to-wear clothes.

During the Roaring Twenties, more people lived in urban settings than in rural communities for the first time in US history. Despite the poverty in many areas, a sizable population—mostly young urban dwellers—spent freely. Advertising capitalized on this culture. Companies increasingly promoted nonessential goods. National advertising campaigns and the growth of retail chains meant that consumers were aware of and able to buy the same products from coast to coast.

The heady days of advertising took a hit in 1929, however. The stock market crash left companies reeling. Advertising spending went from $3.5 billion to $1.5 billion in 1933. After World War II (1939–45), however, the purchasing power of Americans increased and advertising helped usher in the rise of American consumerism.

Advertising became increasingly common in many public spaces. Ads were placed on train cars, and in 1962, a French company created the first bus shelter, which provided a place for commuters to sit but also generated revenue through advertising. The development of digital billboards allowed advertisers to change their messages almost instantly.

Late in the century and into the early twenty-first century, the internet and social media platforms, including applications (apps), became valuable advertising tools. Over time, such technology shifted the advertising landscape, creating a global industry dominated by digital marketing.

Overview

Changes in society have shaped advertising tools and approaches. For example, many nineteenth-century ads were painted on the sides of barns and other buildings near roadways. These ads were for nearby businesses and touted their products.

As the automobile grew to dominate transportation, outdoor advertising became increasingly important. An advertisement painted on the side of a building was semipermanent, but a printed large-scale advertisement could be changed as needed. The first billboard was leased in 1867 to take advantage of increased traffic. Although early billboards were of various shapes and sizes, in 1900 the Outdoor Advertising Association of America (OAAA) helped standardize billboards. This permitted companies to develop national billboard campaigns and produce ads that could be placed on billboards across the country. Coca-Cola, Kellogg's, and Palmolive began mass-producing billboards to market their products nationally.

Many businesses and advertising agencies develop advertising strategies, or blueprints for how to present products to potential customers. In developing a plan, the strategist must first understand the product, and evaluate its purpose, strengths, and how it may meet consumers' needs better than other products on the market. Next, a market analysis identifies potential customers, studying demographics such as age, gender, and social status, and which forms of media these customers are most likely to consume. Do they watch certain television shows, read specific magazines, or use certain websites? Is the market saturated with similar products? If this is a luxury good, how many sales are likely to be generated in the current economic climate? Once the strategist understands the product, the consumers, and the market, the team or individual establishes goals for advertising, such as sales increases overall or to specific demographics and a timeframe in which to meet the goals, which will help the business evaluate the success of the campaign. The company then decides where to advertise (selecting media, geography, television shows, etc.), develops ideas for how the ads should focus on the product's strengths, and establishes where the advertising budget will be spent.

Advertising Flops

Some national advertising campaigns have failed very publicly. The Ford Motor Company began promoting its new automobile in early 1957. The campaign kept an air of mystery about the car, generating keen consumer interest with the statement "The Edsel is coming" without showing the vehicle. The campaign progressed to show quick glimpses of the car, from the silhouette to the hood ornament. The Edsel was finally revealed to the public on September 4, 1957, in showrooms. Crowds swept in to see the mysterious car, but few bought it. Ford had built up such high expectations with its advertising campaign that the car could never meet. Although nothing was wrong with the Edsel, the public was disappointed by the reveal.

Coca-Cola tried to supplant Pepsi as the world's best-selling soft drink in 1985 with a new advertising campaign and a new cola. The company had conducted a number of taste trials while developing Diet Coke and discovered that people preferred a sweeter version of Coke. The new formula was announced with a splash of publicity in April 1985, including a press conference, when the company announced it had replaced the old formula. The press concluded that New Coke tasted more like Pepsi. Consumers were divided—many liked the new formula, while others remained loudly loyal to traditional Coke. The company logged thousands of calls from angry customers. Although blind taste tests had proven that consumers preferred the new formula, the company had failed to consider the public's emotional connection to a century-old product. By July, the company announced it was bringing the old formula out of retirement and repackaging it as Coca-Cola Classic. The press conference drew national attention, with television news interrupting regular programming to report on the decision. The classic formula surged in popularity, and within months, Coke Classic was the top-selling sugar cola on the market. Although the advertising campaign had failed in its efforts to sell the new formula, in the end, Coca-Cola succeeded in claiming the major share of the soft drink market. New Coke was rebranded as Coke II in 1990 but faded away entirely in 2002.

Modern Marketing

In the early 1990s, as people began using the internet, advertisers developed new approaches to advertising for the digital age. By 1999, internet advertising had reached $2 billion worldwide. Television remained the largest advertising venue through the early 2000s, but its share of the market began to decrease as digital advertising rapidly took hold of the market. In the US, digital advertising accounted for about half of total advertising spending by 2015. As technology developed, advertisers increasingly used social media. Users of social media platforms like Facebook, Instagram, and TikTok are highly engaged with the content, which helps companies target consumers with feed-based ads. Although the digital trend was driven in large part by the increasing availability of smartphones, tablets, and other technology, it also owed its growth to ad measurement techniques. Advertisers began collecting more information about consumers through users' shopping habits and online search results. This information allowed companies to target consumers with specific products and learn how to better place advertisements where they could generate the most revenue. Such personalization was further enhanced through the use of artificial intelligence (AI). AI technology allowed companies to more effectively collect user data and determine relevant shopping experiences for online consumers. Technological advances like AI continued to improve digital advertising throughout the 2020s.

By the 2020s, the majority of global ad revenues came from the internet, with digital advertising gaining over two-thirds of the market share in 2024. Technology giants like Facebook's parent company, Meta, and Google earned the majority of global advertising revenue. In 2023, Meta earned over $40 billion in advertising revenue alone.

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