Principles of Advertising

This article will focus on the basic principles of advertising. Advertising is crucial to every business. A successful marketing strategy includes an advertising plan that will grow the business. Advertising is a huge investment for an organization. Organizations spend billions of dollars on advertising in order to support the creation and production of its products as well as to generate income to pay its employees. The benefits of internet advertising versus traditional advertising will be explored as well as examples of companies who have launched successful advertising campaigns for their online businesses.

Advertising is crucial to every business, and a successful marketing strategy includes an advertising plan that will grow the business. Advertising is a type of promotion for a business, and the ad campaign is placed in some form of media venue. In most cases, the advertising representative may have to pay for the message to be placed. However, according to Boaze (2004), there are two types of advertising -- the ones that you pay for and the ones that are free. Both types have their place for every organization. Each company must determine when and how to use each type.

Advertising has been viewed as an effective marketing technique because one ad campaign has the potential to reach many people at once. To be effective, the advertising representative must ensure that the message is reaching the appropriate markets. Otherwise, the organization may not be using its advertising budget in the most efficient manner. The use of new advertising technologies and media outlets can assist in preventing the misuse of the budget by providing options for targeted advertising.

Two other characteristics of advertising are also changing because of new technology. In the past, advertising has been viewed two ways: as a one-way form of marketing, in which consumers cannot immediately request additional information about the ad, and as a method that does not elicit immediate demand for the product advertised. Both of these characteristics are changing, as technology has provided target consumers the opportunity to click on a web page, for example, to receive additional information about a product and be interactive with ads as they are being displayed (http://www.knowthis.com) (Dent, 2012). Consumers can now buy products at the same time they view an ad.

Importance of Advertising

Advertising is a huge investment for businesses, which spend billions of dollars on advertising to support product creation and to generate income to pay its employees. The size of a company may determine how advertising campaigns are implemented. For example, a large business may split its advertising budget by applying half of the budget toward media advertisements and the other half toward efforts conducted by an internal sales team. A small business may elect to place small ads in specific media or to promote their product through sources that offer free advertisements. Regardless of the technique, all companies must develop an advertising plan that will support the business's marketing objectives and minimize the risks of costly advertising mistakes.

Six Types of Advertising

An organization can avoid costly mistakes by developing a strategy that focuses on what the message is and what the desired result should be. To accomplish this goal, advertising representatives should determine what type of advertising is best for their organization. Egelhoff (n.d.) identified six types of advertising that an organization could use in its planning phase. The six types of advertising address the following:

1. Company image: Depending on the type of company, it may be beneficial to create an ad campaign that focuses on promoting the company versus its product line. This is especially helpful for new businesses. Name recognition could be valuable in the long term.
2. Name brands: Many large organizations have developed advertisement strategies that highlight specific brand names. By highlighting brand names, the company is attempting to create an image in the mind of the consumer. The goal is to help the target market identify with the product. For example, Levi-Strauss is recognized for its jeans. Procter & Gamble is known for hygiene products, especially toothpaste (for, example, Crest).
3. Advertising a service instead of a product: This type of advertising may be difficult for some organizations to achieve. Services are not tangible products, so it may be hard for the consumer to grasp the intent of the message. The advertising campaign usually has to explain and demonstrate the benefits of the service. In addition, service advertising tends to appeal to the emotions of the consumer. For example, AFLAC created a successful campaign using a duck. Many consumers now associate AFLAC with the image and sound of a duck. Once consumers relate to the slogan and visual, they then associate AFLAC's message with the importance of having secondary insurance benefits.
4. Business-to-business advertising: Organizations attempting to market to another business should use direct mail and advertisements in trade journals. For example, pharmaceutical representatives tend to market directly to physicians. These ad campaigns tend to focus on explaining the benefits of specific drugs to doctors so that they would recommend and encourage their patients to use them.
5. Co-op advertising: This type of advertising involves manufacturers absorbing part of the cost and supplying the artwork for the ads. Although this type of advertising could be good for certain companies, such as small businesses, there could be disadvantages. For example, the organization has to follow the guidelines of the manufacturer or run the risk of having to cover all of the campaign costs.
6. Public service advertising (PSA): Many companies will set aside a portion of their advertising budget to run campaigns in conjunction with the service of a nonprofit organization or public service event. For example, a business may secure ad time on a local television network for community programs.

Organizations do not have to use all of the different types of advertising. Each advertising department must first determine what they want to say (the ad campaign) and who they want to say it to (the target market). Once these questions have been defined, the advertising team can decide which types of advertising it will use to have a successful campaign. Each campaign is unique. Therefore, organizations may change types based on the campaign.

Pros & Cons of Advertising

There are advantages and disadvantages in the field of advertising. Two advantages of advertising are that it is considered one of the best ways to send a message about a new or existing product or service, and that it can lower the cost of the product by increasing sales. The savings from reduced production costs may be passed on to the consumer.

Two disadvantages of advertising are that it creates a temporary need for products and services, and that the ad campaign can negatively influence the consumer. Ad campaigns that are directed toward children are examples of the first disadvantage. Advertisers create campaigns directed toward children and run them on Saturday mornings and during the holiday season in December. The ad campaigns are created to entice children to desire products and have their parents purchase them. However, children's interests can wander with each new commercial, and the desire for an item can be for a season, a day, or a minute. An example of the second disadvantage can be seen in the results of studies investigating TiVo users. "Participants in the studies stated that they skipped commercials with their TiVo recorder because once they've seen an ad, they don't want to see it again. They only want to see the ad once or twice" (Smith, 2005). This finding shows that ad campaigns are not enjoyable or desired by the consumer and can lead to negative feelings toward a product.

Application

Principles of Advertising

Advertising is not a function that operates independently. It works in conjunction with the marketing operation within an organization. To have an effective plan, the marketing and advertising departments will have to work together to obtain their objectives. DePaola (1977) cited principles that these two departments need to recognize when coordinating advertising objectives and budgets with the marketing objectives. The principles are

1. Marketing and advertising are partners, not adversaries. Both areas should work together to accomplish the organization's objectives and goals. Most managers in the areas know both functions and appreciate the contributions that each can make to the bottom line.

2. Market identification is the first planning stage. It is important that the first step in the planning stage is to identify the target market by size, type, and location. The advertising team will need to determine where the business is going to come from and the amount of business expected from the campaign. The next step would be to rank the list of sources by the volume and profit that each market is expected to generate. The markets with the greatest potential should be listed at the top.

3. A rational, consistent ranking of markets by potential should precede any thought of allocating advertising dollars. One should not automatically assume there exists a well-developed marketing plan before advertising decisions are made. Some advertising decisions are made before marketing plans are implemented. Therefore, advertising professionals may have to rely on the results from the planning stage to make budget decisions. The decision makers can determine how many of the potential markets can be served by the established budget. This type of evaluation process will be viewed as an objective method of allocating funds in lieu of having a marketing plan.

4. Successful advertising programs require sound marketing input. If the marketing side makes an error in judgment regarding the consumer, it could cause the advertising campaign to fail. Testing may be an important step for marketing professionals to perform before launching an advertising and marketing campaign. Information from the testing phase could yield information about the consumers that could prevent an unsuccessful advertising campaign.

5. Advertisements should target specific audiences. A popular strategy for an organization would be to spend the advertising budget on one market where the organization is strong and has the potential, distribution, and ability to do business. The next step would be to formulate an offensive strategy that includes outspending the competitor. Once the organization has made a successful impact on this market, the advertising department could reduce the funding in the market and move some of the budget to the next potential market.

6. The advertising approach should be sensible and factual. Advertising professionals should be honest with themselves regarding the potential sales a product or service can generate. Being realistic about the product's or service's ability to entice the consumer would be a sensible approach when determining how to allocate budget money.

7. Information is more important than persuasion in advertising copy. The average consumer is intelligent and informed about different products and services. Therefore, advertising professionals should not underestimate the level of knowledge that potential consumers have about a product or service. Providing the consumers with information about a service or product is more important than focusing on persuading a consumer to try a product or service. Consumers value making the final decision based on facts versus emotion.

8. Beware of lists of "ten rules" to instant marketing and advertising success. These lists tend to leave out more information than they include. In addition, the information can mislead a consumer about a particular service or product.

9. Results of advertising efforts must be measured. To determine the return on investment, an organization will have to effectively measure the activities surrounding each campaign. By analyzing consumer feedback about specific campaigns, an advertising professional can evaluate whether or not the amount of money invested in the project was warranted.

Viewpoint

Internet Advertising

Internet advertising has many benefits over traditional advertising (http://www.impliedbydesign.com). Advantages include the following:

• Internet advertising is huge. People spend a lot of time on the Internet because there is a wealth of information to be found. Also, the Internet is a social place, leaving companies with a vast resource for placing ads. As a result, a new market for Internet advertising, including social media advertising, has blossomed. Given the access to potential consumers, most large companies and many smaller businesses have created an Internet presence for their business. Some of these ads work, others do not (Seymour, 2013).
• Internet advertising is targeted. As companies target specific markets, Internet advertising can provide target methods that make sure its ads are seen by consumers who will buy their products.
• Internet advertising enables good conversion-tracking. Many companies have not been able to track the effectiveness of their traditional advertising campaigns. However, they can track Internet advertising based on how many people see the ad and how many people visit the website based on a particular ad.
• Internet advertising has lower entry-level fees. Traditional advertising can be very expensive, especially if the company (such as a small business) has a tight budget. However, certain Internet advertisements allow a company to only pay when a visitor clicks on the ad.
• Internet advertising can be much cheaper. Given the target methods, it is easier to track the effectiveness of Internet advertising.
• Internet advertising has greater range. Traditional advertisement tends to focus on a specific geographic location, whereas, an Internet audience is global.

Best Practices

Since advertising can be expensive and most advertisement departments have to be accountable for the return on investment, research companies have developed testing approaches to evaluate the effectiveness of various strategies used in an ad campaign. The testing models review how the advertising works and look at data collection methods, response measurements, and analytic approaches. Olson (2001) believes fessionals should select a testing approach based on the type of advertisement (television spot, print ad), the type of stimulus to be tested (storyboard, commercial), and the measure of effectiveness sought.

Organization Year of Airing Award Business Country AOL.de 1999/2000 German Effie 2000 ISP Germany Confetti.co.uk 1999 IPA Award Wedding Site UK Drugstore.com 1999 US Effie Award Online Drugstore USA Easy Jet 1999 IPA Award Budget Airlines UK FT.com 1999/2000 IPA Award Financial News UK Hotbot.com 1998/1999 US Effie Award Search Engine USA Letsbuyit.com 1999/2000 Euro Effie Award Buying Club Europe Monster.com 1999 US Effie Award Job Search Site USA MoneyExtra.com 1999/2000 IPA Award Financial Information UK Scoot.com 1999/2000 IPA Award Information Directory UK

Organization Significant Contributions and Highlights of Advertising Campaign AOL.de • The campaign objective was to increase brand awareness, attract new users and establish AOL's position, especially in Germany. • The target market was consumers who were fascinated by the internet, but afraid to use it because they felt they lacked the skills to successfully navigate the system. • The commercial campaign increased brand awareness from 28% to 43%. New customers increased by 66% in the first six months and reached 1.5 million by January, 2001. Confetti.co.uk • Had the task of building a brand within six months. • Established a target market as the 1% of the UK population that wanted to get married, with a focus on women in the 20-45 year old age range. • Radio and print advertising was used to refer the target markets to the website. • The campaigns boosted the brand awareness by 46% in the target market, and the number of new wedding profiles on the site increased by 500% during the advertising period. Drugstore.com • The objective of the campaign was to establish drugstore.com as the online category leader by building brand awareness and preference. • Campaign targeted 25-54 year olds who were comfortable with online shopping and were open to the drugstore category. • Market research showed that many consumers were unsatisfied with their brick-and-mortar drugstore experience, but did not know there was an alternative. • The company launched a nine week campaign with three TV commercials. The last two commercials highlighted a tag line emphasizing "the trip to the drugstore, without the trip to the drugstore." • The campaign doubled brand awareness and new customer orders increased by 356%. Easy Jet • A budget airline operating in a low-margin business. • Main concern is to keep costs down. • Low-cost booking was an alternative to an expensive call center facility. • The organization used three key messages in its advertising: displayed prices for specific destinations, offered web surfers a discount for using online booking, and promoted their brand as the web's favorite airline. As a result of these initiatives, online sales doubled during the first two months of the campaign. FT.com • The objectives of the campaign were to explain what FT.com was and create a brand image that distinguished it from its parent -- the Financial Times paper. • This campaign was the most complex and expensive of all the companies listed. The launch was a three phase program. The first phase's mission was to create awareness and understanding of the product. The second phase's purpose was to communicate the features of the site, and the third phase highlighted the brand's benefits to the target audience. • The target audience was anyone involved in business and risk takers driven by success and effectiveness in business life. • The nine month campaign led to a 342% increase in users, and advertising revenues tripled in the first six months of the campaign. Hotbot.com • The advertising objectives were to increase traffic as well as brand awareness and brand recognition. • Target market was defined as males in the 20-30 year old age range who were savvy with the internet. • Market research showed that this target market consisted of frustrated consumers who were not satisfied with the quality of services provided by search engines. • Launched two commercials that highlighted how other search engines were a waste of time due to old links and outdated information. • As a result of the campaign, brand awareness doubled, daily web site hits increased by 48% and the number of new visitors increased by 91%.

Letsbuyit.com • The objectives of the campaign were to build awareness and understanding of the concept and to drive visitor's to the site. • The target market was 18-50 year old upscale adults, not just internet users. • A multimedia campaign was launched and it consisted of advertisement via TV, press, radio, the outdoors, transportation and online. • The results of the campaign indicated that brand awareness and understanding was achieved, and the campaign attracted approximately one million new subscribers. Monster.com • The advertising objectives of the campaign were to establish itself as the category leader in the online recruiting market as well as increase total number of resumes and job searches. • The target market was individuals dissatisfied with their jobs that were not actively seeking new employment, but were open to new opportunities. • The company launched an advertising campaign during the Super Bowl, which is highly selective and very expensive. • The results of the campaign were measured on the Monday after the Super Bowl. The number of job searches per 24 hours increased to 2.2 million versus 83,000 for the Monday prior to the Super Bowl. Resumes posted per 24 hours increased by 570% and overall traffic increased by 177%. MoneyExtra.com • The first campaign was ineffective and did not yield the desired results. Therefore, the advertising department learned from its mistakes and created a second campaign focused on increasing the number of visitor to the site by explaining what MoneyExtra did. • The campaign was directed toward consumers who felt their finances were out of control and consumers who had negative feelings toward the financial industry. • A four month multimedia campaign was launched and it included radio, posters, online advertising and a promotion at railway stations. • As a result of the campaign, there was an increase of visitors to the site and a 300% increase in advertising revenue. Scoot.com • The first campaign was ineffective, and there was a re-launch. The second campaign focused on increasing brand awareness and understanding as well as creating a positive image. • TV, radio, print and direct mailing were used in the campaign. • As a result of the campaign, the brand awareness and understanding almost doubled, and usage increased.

Conclusion

Advertising campaigns can be expensive. "With the cost of producing a commercial at $500,000 or more -- and media budgets of $50 million -- there is a natural desire, on the part of advertisers, to make sure that the advertising they are running is effective" (Olson, 2001). Walker (2005) suggested four principles to use when evaluating advertising strategies to ensure that advertising campaigns are in line with the marketing objectives. The principles are the following:

• Precision: Advertising should be sent to a specific, concise target market.
• Relevance: Advertising should be sent to a market that is interested in the product.
• Power: Advertising should give more control to the target market.
• Reciprocity: Advertising should acknowledge that con sumers want quality products and services in exchange for their time commitment to evaluate the products and services.

Advertising professionals should evaluate the attitudes, motivations, and demographics of consumers. Simply looking at the demographics is no longer enough. It would be beneficial to review potential consumers' life stage and behaviors as well as why they buy products and services.

Terms & Concepts

Advertising: Persuasive and informative message that is intended to influence consumer purchasing decisions; sent out through various forms of media.

Advertising Budget: The amount of money allocated by an organization to be spent on advertising; necessary to weigh the pros and cons of different budget allocations.

Advertising Campaign: A coordinated advertising plan that consists of advertisements, commercials, and related promotional materials that are intended to meet certain objectives during a specified period of time.

Brand Image: The consumer's perception of a product or brand.

Internet Advertising: The use of websites, email, social media, software, and cell phones to deliver ads to consumers.

Marketing: The process of maintaining strategic organizational relationships through product, service, event, or organizational promotion.

Media Advertisement: The marketing of products, services, organizations, or ideas through various forms of mass media, including newspaper and television ads.

Tag Line: Usually the theme to a campaign. A slogan or phrase that imparts a product attribute or benefit to the consumer.

Target Market: A specific group of consumers at which a company aims its products and services.

Traditional Advertising: Advertising such as signage, phonebook listings, and newspaper advertising.

Bibliography

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Boaze, S. (2004, November 22). Two kinds of advertising for a marketing strategy. EzineArticles. Retrieved May 3, 2007, from http://ezinearticles.com/?Two-kinds-of-Advertisingfor-a-Marketing-Strategy&id=5536.

Dent, G. (2012). Brand building. BRW, 34(7), 18-21. Retrieved November 19, 2013, from EBSCO Online Database Academic Search Complete. http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=78556941&site=ehost-live

DePaola, F. (1977). Ten principles for coordinating advertising budgets and marketing objectives. Management Review, 66(1), 35. Retrieved May 3, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=6072339&site=ehost-live

Egelhoff, T. (n.d.). Six types of advertising and how to use them. Small Town Marketing.com. Retrieved on May 3, 2007, from http://www.smalltownmarketing.com/sixads.html

Expert: 4 principles at heart of effective advertising. (2005).

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Implied By Design, LLC. The advantages of internet advertising vs. traditional advertising. Retrieved May 3, 2007, from http://www.impliedbydesign.com/articles/the-advantages-of-internet-advertising-vs-traditional-advertising.html

Olson, D. (2001). Principles of measuring advertising effectiveness. Retrieved May 3, 2007, from http://www.marketingpower.com/content1025.php

Principles of marketing, Part 13: Advertising. Retrieved May 3, 2007, from http://www.knowthis.com/tutorials/principles-of-marketing/advertising.htm

Rossiter, J. R. (2012). Advertising management principles are derived mostly from logic and very little from empirical generalizations. Marketing Theory, 12(2), 103-116.

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Seymour, C. (2013). Brand advertising on the web. Econtent, 36(6), 12-16. Retrieved November 19, 2013, from EBSCO Online Database Academic Search Complete. http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=89881560&site=ehost-live

Suggested Reading

Eagle, L. (2005). Principles of advertising & IMC, 2nd ed. Journal of Marketing Communications, 11(4), 309-310.

Retrieved May 3, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19019729&site=ehost-live

Roche, B. (1978). Advertising, principles, problems, and cases. Journal of Advertising, 7(3), 52. Retrieved May 3, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=18560393&site=ehost-live

Snoddy, R. (2002). Core principles omit to mention that advertising can be a waste. Marketing (00253650), 14. Retrieved May 3, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=6047246&site=ehost-live