Advertising, a form of commercial
mass communication designed to promote the sale of a product or service, or a message
on behalf of an institution, organization, or candidate for political office.
Evidence of advertising can be found in cultures that existed thousands of
years ago, but advertising only became a major industry in the 20th century.
Today the industry employs hundreds of thousands of people and influences the
behavior and buying habits of billions of people. Advertising spending
worldwide now exceeds $350 billion per year. In the United States alone about
6,000 advertising agencies help create and place advertisements in a variety of
media, including newspapers, television, direct mail, radio, magazines, the
Internet, and outdoor signs. Advertising is so commonplace in the United States
that an average person may encounter from 500 to 1,000 advertisements in a
single day, according to some estimates.
Most advertising is designed
to promote the sale of a particular product or service. Some advertisements,
however, are intended to promote an idea or influence behavior, such as
encouraging people not to use illegal drugs or smoke cigarettes. These ads are
often called public service ads (PSAs). Some ads promote an institution, such
as the Red Cross or the United States Army, and are known as institutional
advertising. Their purpose is to encourage people to volunteer or donate money
or services or simply to improve the image of the institution doing the
advertising. Advertising is also used to promote political parties and
candidates for political office. Political advertising has become a key
component of electoral campaigns in many countries.
Billboard
Advertising is used throughout the world to promote the sale
of products and services. This Chinese billboard advertises a brand of
telephone card.
Many experts believe that
advertising has important economic and social benefits. However, advertising
also has its critics who say that some advertising is deceptive or encourages
an excessively materialistic culture or reinforces harmful stereotypes. The
United States and many other countries regulate advertising to prevent
deceptive ads or to limit the visibility of certain kinds of ads.
Advertising has become increasingly
international. More than ever before, corporations are looking beyond their own
country's borders for new customers. Faster modes of shipping, the growth of
multinational corporations, rising personal income levels worldwide, and
falling trade barriers have all encouraged commerce between countries. Because
corporations are opening new markets and selling their products in many regions
of the globe, they are also advertising their products in those regions.
In 2000 the United States
was the leading advertising market in the world with total advertising spending
of $147.1 billion. Japan ranked second with $39.7 billion, followed by Germany
with $20.7 billion, the United Kingdom with $16.5 billion, and France with
$10.7 billion. This article deals primarily with advertising practices in
Canada and the United States.
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TYPES OF
ADVERTISING
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Advertising
on the Internet
The Internet enables advertisers to promote products and
services to millions of potential customers through the World Wide Web. This
Web site provides information about a product designed to keep vegetables
fresh.
Advertising can be divided
into two broad categories—consumer advertising and trade advertising.
Consumer advertising is directed at the public. Trade advertising is directed
at wholesalers or distributors who resell to the public. This article focuses
on consumer advertising, the form of advertising that is familiar to most
people.
Consumer advertising can be
further divided into national advertising and local advertising.
National advertising is aimed at consumers throughout the entire country.
National advertising usually attempts to create awareness among the public of a
product or service, or it tries to build loyalty to a product or service. Local
advertising is aimed at informing people in a particular area where they can
purchase a product or service. Advertising to the public may also take the form
of institutional advertising, image advertising, informational
advertising, or cooperative advertising.
Institutional advertising seeks to
create a favorable impression of a business or institution without trying to
sell a specific product. This type of advertising is designed solely to build
prestige and public respect. For nonprofit institutions, such advertising helps
support the institution’s activities—for example, by encouraging blood
donations or cash contributions for the work of an organization like the Red
Cross. A for-profit business has other reasons for improving its reputation
rather than trying to sell a particular product. In some cases a large company
may sell a diversity of products. As a result, there is more value and greater
efficiency in building a brand image for the company itself. If consumers learn
to have a high regard for the company, then they are more likely to have a
favorable opinion of all of the company’s diverse products.
Many advertisers prefer a
strategy known as image advertising. These advertisers seek to give a product a
personality that is unique, appealing, and appropriate so that the consumer
will want to choose it over similar products that might fulfill the same need.
The personality is created partly by the product's design and packaging but,
more importantly, by the words and pictures the advertisements associate with
the product. This personality is known as a brand image. Advertisers believe
brand image often leads consumers to select one brand over another or instead
of a less expensive generic product. Brand image is especially important for
commodities such as detergents, jeans, hamburgers, and soft drinks, because
within these product categories there are few, if any, major differences.
Informational advertising seeks to
promote an idea or influence behavior. Sometimes known as public service
advertising, it may try to discourage young people from using illicit drugs or
tobacco, or it may encourage people to adopt safer, healthier lifestyles.
Cooperative advertising is an
arrangement between manufacturers and retailers in which manufacturers offer
credits to their retail customers for advertising. The credits, or advertising
allowances, are based on the amount of product the retailer purchases. For
example, if the retailer purchases $100,000 worth of a product from a
manufacturer, the manufacturer’s cooperative advertising program may allot a 1
percent credit, or $1,000, toward the cost of purchasing an ad that will
feature the product. In addition, some manufacturers will match the amount that
the retailer spends, sharing the cost of the ad. In the United States antitrust
laws enforced by the Federal Trade Commission (FTC) ensure that these ad
allowances are offered on equal and proportionate terms so that large retailers
are not unduly favored over small retailers. Cooperative advertising is a form
of local advertising because it directs consumers to local retail outlets.
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THE ROLE OF THE
ADVERTISING AGENCY OR DEPARTMENT
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Early
Sears, Roebuck and Co. Catalog
Catalogs allow advertisers to appeal directly to consumers.
This early catalog from Sears, Roebuck and Co. promised the cheapest prices for
a wide variety of goods.
Advertising agencies create
most advertisements and are the core of the advertising industry. Some
companies, however, have their own advertising departments which function much
like an agency. The development, production, and placement of a single ad can
be a time-consuming process involving a large number of people with a variety
of business and creative skills. Advertising agencies not only create the
advertisements but also pay for the cost of placing the ad in a newspaper or
magazine or on television or radio. A large advertising agency or department
may employ hundreds or thousands of people, including advertising and marketing
specialists, designers, writers known as copywriters, artists, economists,
psychologists, researchers, media analysts, product testers, librarians,
accountants and bookkeepers, and mathematicians.
A typical advertising agency
is divided into a number of departments, such as account service, research,
media planning and buying, the creative department, and production. A
multinational advertising agency with clients that spend hundreds of millions
of dollars on advertising may employ as many as 8,000 people worldwide and up
to 900 people in a major office. A local agency with clients that spend about
$15 million a year on advertising may employ only about 25 people.
Advertising agencies make
money in a variety of ways. When the agency uses the client’s advertising
budget to buy time for an ad on the radio or on television or when it buys
space for an ad in a newspaper or magazine, the media outlet allows the agency
to keep 15 percent of the cost of the space or the time as a commission. The 15
percent commission has become an advertising industry standard and usually
accounts for the largest portion of the agency’s income. Agencies also charge
clients for the cost of producing the ads. Increasingly, agencies are charging
clients a straight monthly or hourly fee for all of their services or are
combining a fee with some kind of commission. Agencies have turned to this
approach because clients are asking them to address a range of marketing issues
rather than just producing ads. The fee arrangement pays for the time devoted
to these larger marketing issues.
Once a company selects
an agency, the agency assigns an account executive to act as liaison
between it and the client. The account executive manages all of the services
conducted on behalf of the client and coordinates the team assigned to the
client's business. The account executive directs the preparation of the
advertising strategy, which includes deciding how and to whom the product or
service will be presented. The account executive also assigns priorities,
oversees the budget, reviews and approves all recommendations before they are
taken to the client, and makes sure that the agency meets all deadlines.
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The Functions of
Advertising Departments
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Each advertising department
has a specific function or assignment. Once one department has completed its
work, it hands off the completed assignment to the next department in the
advertising process until the ad campaign is completed. The first department that
becomes involved in an advertising campaign is the research department.
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Research
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Advertising agencies employ
research for both strategic and evaluative purposes. Strategic
research enables the agency to better understand how consumers use a product or
service and how they regard the product or service. Strategic research also
determines the types of people most likely to buy the product. That group of
people is called the target market. Advertisers have limited budgets so knowing
who is most likely to buy a particular product helps them spend their
advertising budget more efficiently. Evaluative research is used after the
advertising has run and seeks to determine how well consumers remember the
advertising message and how persuasive it was. Evaluative research is
expensive, and as a result, many advertisers do not employ it. Instead, they
try to measure the advertising's effectiveness by analyzing sales results.
Agencies use both qualitative
and quantitative research methods. Agencies employ qualitative research
to gain an initial understanding of the marketing situation (see Marketing).
This research method uses open-ended questions that allow consumers to explain
their values, beliefs, and behaviors at length. One of the most common qualitative
research techniques is the focus group in which a moderator leads a
small group of consumers in a candid discussion of a particular product
category, service, or marketing situation.
Agencies use quantitative
research to determine a final course of action. This type of research uses
close-ended questions in which answers are selected from a set list. This
enables the researcher to determine the exact percentage of people who answered
yes or no to a question or the exact percentage choosing answer a, b, or c. One
of the most common quantitative research techniques is the survey in which
researchers use a questionnaire to gain information from a large group of
people, called a sample. Statistical studies show that if the sample is large
enough, about 1,000 people, and is representative of a particular group (for
example, working mothers who buy disposable diapers), then the findings from
the sample are considered true, or statistically valid, and can be extended to
the entire group of consumers in that category. The findings provided by
quantitative research are therefore conclusive in a way that qualitative
research cannot be.
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Media Buying
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Once the target audience
has been identified, an agency's media department determines the most effective
way of delivering the message to that target. The media planner is the
person who decides which media will be used. The media planner must consider
three factors: (1) the number of people to be exposed to the message, known as
the reach, (2) the number of times each person needs to be exposed to the
message in order to remember it, known as the frequency, and (3) the costs.
The media planner wants
to reach the largest possible percentage of the target audience. To accomplish
that goal, the media planner must employ the media that have audiences closely
resembling the target audience. If the target is very broad, such as the
national market for medium-priced automobiles, the media planner will probably
select network television, which has a broad reach. If the target is more
narrow and specialized, then the media that reach a more specialized audience,
such as magazines, would be selected. Moreover, since not all members of the
narrow target audience read the same magazines, the media planner might employ
a range of magazines to reach a larger percentage of the intended consumer.
The media planner must
also determine how frequently the advertising should run in each medium.
Frequency is important because repetition helps the consumer remember both the
product and the advertising message.
Finally, because no advertiser
has an unlimited amount of money to spend, cost is also a factor. The media
planner must choose those media that will enable the advertiser to reach the
largest percentage of the target with enough frequency for the message to be
remembered without exceeding the advertiser’s budget. Once this media plan has
been put together, the agency's media buyer contacts the media on behalf
of the client in order to purchase advertising space or time at the best
possible rate.
Often an advertising campaign
will employ many types of media. For example, to help advertise a medium-priced
automobile, the ad campaign may consist initially of national television
advertising to raise brand awareness, followed by local newspaper and radio
advertising to reinforce the message and to direct consumers to a special sale
at a local dealer.
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Creative Work
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Once the types of media
have been determined, the agency's creative department develops the
presentation of the ads. The principal figures in the creative department are
the copywriter and the art director. The copywriter is the person
who writes the advertising message. The art director is the person who oversees
the design of the ad. The copywriter and the art director work together to find
creative ways to deliver the message that research found would have the
greatest appeal to the target audience.
The creative team begins
by familiarizing itself with the product and the research. Often the creative
team will 'kick around ideas' or “brainstorm,” a process in which one idea is
allowed to stimulate another without reaching a decision about whether any of
the ideas are valid. Such free association often leads to unexpected approaches
that might never have resulted from more logical thinking.
Once the brainstorming has
produced a wide range of ideas, the team then evaluates the various proposals
and selects the best to present to the client. For example, if the team selects
an idea for a television commercial, they present the idea to the client as a storyboard.
The storyboard consists of a sequence of drawings indicating how the TV
commercial's story or action will unfold. Or the team may design print ads for
the client as layouts in which the various elements—the headline, photograph or
illustration, and body copy—will appear as intended for publication in a
magazine or newspaper.
Print ads and television
commercials use a variety of techniques to deliver their messages. Testimonials
and endorsements can lend both prestige and credibility to a product. Seeing an
athletic superstar, for example, endorse a particular brand of athletic shoe
makes the brand seem more prestigious and suggests that it must be good because
a professional uses it. Superiority is also often demonstrated through product
comparisons–for example, by showing that one brand of paper towels absorbs more
spilled liquid than another or that in consumer taste tests one beverage is
preferred over another. But because more and more competing products are
virtually identical to one another, advertisers frequently use image
advertising to distinguish their products. Image advertising surrounds the
product with a 'halo of positive associations' by using the same character or
theme year after year.
Most advertising appeals to
people’s emotions, particularly the emotional needs for love and belonging,
prestige and self-esteem. Manufacturers of luxury and fashion products, for
example, frequently appeal to the desire for esteem and prestige. Advertising
for a line of clothing, such as Ralph Lauren’s Polo clothes, may associate the
product with the lifestyle of wealthy landowners. Those who buy the clothing
purchase it, in part, because they want to be identified with that prestigious
lifestyle. Makers of personal care products, on the other hand, often suggest
that buying their products will enable consumers to experience love and
acceptance. Advertising for perfume or cologne conveys the message that the
product makes users more sexually attractive. Personal care products such as
breath mints and dandruff shampoos, on the other hand, usually play upon
consumers’ fears and dramatize the rejection that results from failing to use
the product. The implication is that product usage brings love and acceptance.
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Production
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Art directors and copywriters
create the concepts behind the ads, but they do not literally make the
advertising. Making the ads is the job of the production department. In print
advertising, the art director works with the print production manager to hire a
photographer or illustrator and then supervises the work. Once the photograph
has been taken or the illustration completed, the image is scanned into a
computer and placed in the proper position. The art director also selects
typefaces for the headline and body copy and then, using the computer,
correctly positions the headline and body copy. Once all the elements are in place,
the computer file is sent to the newspaper or magazine in which the ad will
run. The publication then prints the ad directly from the computer file.
After a client approves
a television storyboard, the creative team works with the broadcast producer to
hire a director for the commercial. In consultation with the agency and the
client, the director selects the actors who will appear in the commercial. The
director also hires the crew, including the camera and sound people who will
film and record the commercial. After the commercial has been filmed, the
creative team works with an editor to put the commercial's various scenes
together. When that task is completed, the copywriter and art director
supervise the addition of music and sound effects. Once the ad is completed,
numerous videotape copies called dubs are made. A dub is then sent to each
television station that will air the commercial.
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METHODS OF
ADVERTISING
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Internet
Banner Ad
Banner ads, such as this ad for eBay on the Microsoft Network
(MSN) home page, are a favorite method of advertising on the Internet. Although
Internet advertising has grown rapidly, it still accounts for only a tiny
percentage of total national advertising spending in the United States.
To reach the consumer,
advertisers employ a wide variety of media. In the United States, the most
popular media, as measured by the amount of ad spending, are television,
newspapers, direct mail, radio, Yellow Pages, magazines, the Internet, outdoor
advertising, and a variety of other media, including transit ads, novelties,
and point-of-purchase displays. (These rankings are measured each year by Advertising
Age, an advertising trade magazine, and seldom vary, although Internet advertising
continues to grow significantly. In the first half of 2005, ad spending on the
Internet increased 26 percent, far greater than the 4.5 percent growth for the
entire advertising market.)
In Canada, newspapers are the
most popular advertising medium, followed by television, magazines, radio, and
outdoor advertising. Canada is the ninth largest advertising market in the
world.
Television attracts about 23
percent of the advertising dollars spent in the United States. Television is
available to advertisers in two forms: broadcast and cable. Broadcast
TV—television signals that are sent over the air rather than through cable
wires—generates all of its revenue from advertising. Advertising accounts for
about 60 percent of cable television revenues with the rest coming from
subscriber fees.
To run commercials on
television, advertisers buy units of time known as spots. The standard units of
time are 15, 30, or 60 seconds in length. These spots are purchased either
locally or from a national network. Because of the high cost of national
network spots, ranging from hundreds of thousands of dollars to millions of
dollars, only large national advertisers can afford to run network television
spots. Advertisers wishing to reach a local audience can buy time from an
individual station. But even these spots cost so much to produce and run that
small and even many mid-sized companies cannot afford them.
Celebrity
Testimonial
High-fashion model and television personality Cindy Crawford
lends her allure to Omega watches. Celebrities are often used in advertising to
attach their glamour or athletic prowess to the product being sold.
Because television commercials
combine sight, sound, and motion, they are more dramatic than any other form of
advertising and lend excitement and appeal to ordinary products. Advertisers
consider television an excellent medium to build a product's brand image or to
create excitement around a particular event such as a year-end auto sale. But
TV spots are too brief to provide much product information. As a result,
television works best for products such as automobiles, fashion, food,
beverages, and credit cards that viewers are familiar with and easily
understand.
In the United States,
newspapers are the second most popular advertising medium after television, receiving
about 22 percent of all advertising dollars. Newspapers enable advertisers to
reach readers of all age groups, ethnic backgrounds, and income levels. Two
types of advertising appear in newspapers: classified advertising, such as the
want ads, and display advertising. Display ads range in size from as large as a
full page to as small as one column in width and less than one centimeter (less
than one inch) in length. Display ads often contain illustrations or
photographs and usually provide information about where the product or service
being advertised can be purchased. Typically, advertising makes up about 65
percent of a newspaper's content and generates about 65 percent of a
newspaper's revenue. About 88 percent of this revenue comes from local businesses.
Most advertisers believe that
newspaper ads fail to convey the kind of emotional images that build brand
image. As a result, most newspaper advertising is done by retailers who use
newspaper ads to provide timely information that can lead to immediate sales.
Newspapers are particularly well suited to this role because most are published
daily. Readers can clip coupons from the newspaper and cash them in quickly at
local stores. People also turn to newspapers for immediately useful information
about product discounts, bank interest rates, restaurant specials, and
entertainment.
Poster
for La Diaphane Face Powder
Improvements in color printing paved the way for
cost-effective production of illustrated advertising posters during the 19th
century. French illustrator Jules Chéret revolutionized the look of poster
advertisements. Earlier posters were text-oriented and only illustrated to
highlight the message of the words; Chéret’s posters featured prominent
illustrations and a minimum of text. His idealized figures emphasized beauty
and vitality: The image, not the words, conveyed the message.
Direct mail is the third
largest advertising medium, attracting about 20 percent of all U.S. advertising
dollars. Direct mail advertising, as the name implies, is advertising that is
sent directly to people by mail, usually through the postal system.
Increasingly, however, electronic mail (e-mail) is being used as a direct mail
device. Direct mail can be as simple as a single letter or as involved as a
catalog or an elaborate e-mail known as HTML mail that offers graphics and
links to more information.
From the advertiser's point
of view, the key to a successful direct mail program is the mailing list. The
mailing list contains the names and addresses of people who share certain
common characteristics that suggest they will be likely to buy a particular
product or service. Because advertisers are speaking directly to those who are
most likely to buy their product or service, many advertisers consider direct
mail the most effective of all advertising media for generating immediate
results. Direct mail through the U.S. postal system, however, is the most
expensive form of advertising, costing about 14 times as much per exposure as
most magazine and newspaper ads. But because of the results it produces, many
advertisers believe the expense is justified.
Radio attracts about 8
percent of all U.S. advertising dollars, making it the fourth largest
advertising medium. Although national advertisers can buy national network
radio time, 90 percent of all radio advertising is local. Unlike television
which reaches a broad audience, the specialized programming of radio stations
enables advertisers to reach a narrow, highly specific audience such as people
who like sports or urban teenagers who listen to the latest styles of popular
music. Because many people listen to radio while in their cars, radio also
enables advertisers to reach prospects just before they go shopping. But
because people listen to the radio while doing something else such as driving
or working, radio commercials can be easily misunderstood. As a result, radio
ads work best when the messages are relatively simple ones for familiar, easily
understood products.
Poster
for the Opera Adriana Lecouvreur
The best-known opera of Italian composer Francesco Cilea,
Adriana Lecouvreur (1902) tells the story of the heroine’s rivalry with the
Princess Bouillion to win the love of the Count of Saxony. The dramatic color
poster serves as an example of entertainment advertising in the early 20th
century.
Yellow Pages, the thick
directories of telephone listings and display advertisements, represent the
fifth most popular advertising medium, attracting about 6 percent of total
advertising spending. Almost all advertising in the Yellow Pages is local
advertising.
Magazines rank sixth in
total U.S. ad spending, representing about 5 percent. Although newspapers reach
all different kinds of readers, a magazine’s specialized editorial content
generally reaches readers who have similar interests. The relatively
specialized, narrow audience of a magazine enables an advertiser to speak to
those most likely to buy a particular product. For example, a manufacturer of
mascara who advertises to teenage girls could use a magazine with editorial
content aimed especially at teenage girls to reach that audience exclusively.
A magazine's editorial
environment can also lend a product credibility and prestige, and the
magazine’s ability to reproduce beautiful color photographs can enhance a
product's appearance. As a result, magazine advertising is an effective way to
build a product's brand image. Because such advertising is expensive and
because most magazines are distributed regionally or nationally, they generally
feature national advertising rather than local advertising. Magazines generate
63 percent of their revenue from advertising.
Carter’s
Little Liver Pills
The difficulty of reaching doctors in rural areas of the
United States in the late 19th century made patent medicine companies quite
successful. These companies placed advertisements in newspapers and magazines
for their products, which they claimed were “guaranteed to cure your ills.”
Another means of advertising was trade cards (now called advertising cards),
which were printed up by the hundreds and handed out in various public places.
The trade card shown here advertises Carter’s Little Liver Pills, which
supposedly cured “sick headache,” biliousness, constipation, and bad
complexions.
In 2004 the Internet accounted
for $9.6 billion in advertising spending in the United States, or 3.7 percent
of total ad spending, an increase from 3 percent in 2003, according to data
gathered by the accounting firm of PricewaterhouseCoopers LLP for the
Interactive Advertising Bureau. About 96 percent of ad spending on the Internet
goes to 50 Web companies, mostly to four sites maintained by Yahoo, Google,
America Online, and the Microsoft Network.
Advertisements on the
Internet often take the form of banners, buttons, pop-ups, and sponsorships.
But the most important aspect of Internet marketing is that the World Wide Web
allows advertisers to personalize their messages for individual customers. For
example, when a customer visits a commercial Web site that person is often
welcomed by name and is offered information about new products based on the
type of products the person has purchased in the past. Moreover, the customer
can then order the product immediately without venturing out to a store. By
allowing advertisers to customize their advertising, the Internet enables them
to build customer loyalty and generate stronger sales results. Google pioneered
the technique of providing customized ads when someone enters a search term.
Advertisers take part in an auction to have their ads placed next to relevant
search results and pay only when someone clicks on the ad.
Outdoor advertising amounts
to less than 1 percent of total ad spending in the United States. Outdoor
advertising is an effective way to reach a highly mobile audience that spends a
lot of time on the road—for example, in commuting to and from work or as part
of their job. It offers the lowest cost per exposure of any major advertising
medium, and it produces a major impact, because it is big, colorful, and hard
to ignore. The messages on outdoor boards have to be very brief. So outdoor
advertising primarily serves as a reminder medium and one that can trigger an
impulse buy.
A wide variety of other
advertising media make up the remainder of total ad spending. Transit
advertising is mainly an urban advertising form that uses buses and taxi tops
as well as posters placed in bus shelters, airports, and subway stations. Like
outdoor boards, transit is a form of reminder advertising that helps
advertisers place their name before a local audience. Finally,
point-of-purchase advertising places attention-getting displays, streamers,
banners, and price cards in the store near where the product is sold to explain
product benefits and promote impulse buys.
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THE IMPACT OF
ADVERTISING
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Advertising has an important
effect on a country’s economy, society, culture, and political system. This is
especially true in the United States where the advertising industry plays such
a prominent role.
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Economic Impact
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Early
Heinz Advertisement
One of the world's largest processed food companies, H. J.
Heinz Company grew out of a small horseradish business founded in 1869. The
company’s founder, Henry Heinz, believed strongly in the power of advertising
and coined the slogan “57 Varieties”. This advertisement appeared in The
Saturday Evening Post, on November 23, 1935.
Most economists believe that
advertising has a positive impact on the economy because it stimulates demand
for products and services, strengthening the economy by promoting the sale of
goods and services. Manufacturers know that advertising can help sell a new
product quickly, enabling them to recoup the costs of developing new products.
By stimulating the development of new products, advertising helps increase
competition. Many economists believe that increased competition leads to lower
prices, thereby benefiting consumers and the economy as a whole. These
economists also argue that by interesting consumers in purchasing goods,
advertising enables manufacturers and others to sell their products in larger
quantities. The increased volume of sales enables companies to produce
individual units at lower costs and therefore, sell them at a lower price.
Advertising thus benefits consumers by helping lower prices.
Other economists, however,
believe that advertising is wasteful. They argue that the cost of advertising
adds to the cost of goods and that most advertising simply encourages consumers
to buy one brand rather than another. According to this view, advertising
simply moves sales from one company to another, rather than increasing sales
overall and thereby benefiting the economy as a whole.
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Social Impact
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Early
Quaker Oats Advertisement
An 1896 advertisement for Quaker Oats hot breakfast cereal
uses the “Quaker Man” to emphasize the cereal’s purity. The founder of The
Quaker Oats Company, Henry Seymour, chose the Quaker image after deciding that
Quakers symbolized wholesome and virtuous living.
Advertising can have wide-ranging
repercussions on a society. Some critics suggest that advertising promotes a
materialistic way of life by leading people to believe that happiness is
achieved by purchasing products. They argue that advertising creates a consumer
culture in which buying exciting new products becomes the foundation of the
society's values, pleasures, and goals.
Other critics express concern
over the way advertising has affected women and racial minority groups. Ads in
the 1950s depicted women primarily as decoration or sex objects. Although
millions of women worked outside the home in the 1960s, ads continued to focus
on their role as homemakers. Whether owing to the feminist movement or to
women's increasing economic power, after the 1960s it became more common to see
women depicted in professional roles. However, many ads today still emphasize a
woman’s sexuality.
The way advertising has
depicted racial minorities has also been harmful. Prior to 1960, African
Americans were usually shown in a subordinate position. Due to the influence of
the civil rights movement, however, advertisers by the 1980s had begun to
depict African Americans as students, professionals, or business people.
However, many African American organizations and community activists continue
to object to the way that alcohol and tobacco companies have seemingly targeted
low-income minority communities with a heavy preponderance of outdoor advertising
for their products.
As ads have begun to more
fully reflect the lives of women and African Americans in the United States,
increasing attention has been paid to the way in which advertising shows other
ethnic groups, including Hispanics, Asians, Native Americans, and Eastern
Europeans. There is still considerable debate over how advertising influences
public perception of gender and of particular ethnic groups.
Advertising has a major
social impact by helping sustain mass communications media and making them
relatively inexpensive, if not free, to the public. Newspapers, magazines,
radio, and broadcast television all receive their primary income from
advertising. Without advertising, many of these forms of mass communication
might not exist to the extent that they do today, or they might be considerably
more expensive, offer less variety, or even be subject to government control
through subsidies. In-depth news programs, a diversity of magazines, and free
entertainment might no longer be widely available.
At the same time, however,
some critics warn that because advertising plays such a major economic role, it
may exercise undue influence on the news media and thereby curtail the free
flow of information in a free society. Reporters and editors, for example, may
be hesitant to develop a news story that criticizes a major advertiser. As a
result, society might not be alerted to harmful or potentially harmful conduct
by the advertiser. Most members of the news media deny that pressure from an
advertiser prevents them from pursuing news stories involving that advertiser,
but some members of the media acknowledge that they might not be inclined to
investigate an issue aggressively if it threatened to offend a major
advertiser.
Advertisers may affect media
programming in other ways, too, critics charge. For example, companies that
sponsor TV programs prefer relatively wholesome, noncontroversial programming
to avoid offending a mass audience. This preference causes TV networks to
emphasize this type of programming. The result is that society may be denied
the benefits of being able to view challenging or highly original entertainment
programs or news programs on controversial issues. Because advertisers are
especially interested in attracting the 18 to 34 year olds who account for most
consumer spending, television shows are often developed with this audience in
mind. If the ratings show that a program is not attracting large audiences,
particularly among 18 to 34 year olds, advertisers often withdraw support, which
causes a program to be canceled. As a result, shows that are more likely to
interest and to be of value to older audiences are not produced.
The impact of television
on young children has received much attention. Research suggests that children
see television advertising as just another form of programming and react
uncritically to its messages, which makes them especially vulnerable to
advertising. There is also concern about the way in which adolescent girls
respond to advertising that features beautiful, thin models. Research indicates
that many adolescent girls are unduly influenced by this standard of beauty,
become dissatisfied with their own bodies, and may develop eating disorders in
pursuit of a thin figure. New research suggests that adolescent boys are also
being influenced by advertising images of bulked-up, buffed bodies. As a
result, many become dissatisfied with their own body image, devote large
amounts of time to weightlifting, and may even take drugs that have harmful
side effects in order to develop more muscle. Those over the age of 60 are
thought to be less influenced by advertising, but some elderly people no longer
process messages as easily as younger people, making them more susceptible to
questionable advertising claims.
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Political Impact
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Advertising is now a major
component of political campaigns and therefore has a big influence on the
democratic process itself. In 1998 more than $467 million was spent on election
campaigns in the United States. That amount of spending placed political
advertising in the ranks of the country’s 30 leading advertisers that year.
Political advertising is a relatively new development in U.S. history.
Advertising professionals did not become involved in electoral campaigns until
the 1950s. But since then, political advertising has grown in sophistication
and complexity.
Political advertising enables
candidates to convey their positions on important issues and to acquaint voters
with their accomplishments and personalities. Television advertising is
especially effective for candidates running for national or statewide office
because it can reach so many people at once. Candidates can also use
advertising to respond effectively to the charges of their opponents.
Various campaign finance
reform proposals, however, have tried to address the impact of television
advertising on political campaigning. Because of the high cost of television
ads, the costs of political campaigns have skyrocketed, making it necessary for
candidates to raise money continually, even after they have been elected to
office. Critics say this factor jeopardizes the democratic process by making
elected officials beholden to wealthy contributors and by making it more likely
that only the wealthy will run for office. Some reform proposals have called
for free airtime, but television and radio networks have resisted this idea.
Critics of political advertising
also charge that the 30-second television spot has become more important to a
political campaign than a thorough discussion of the issues. As a result,
voters are bombarded with image advertising rather than being acquainted with
the candidate’s positions. They contend that this practice is harmful to good
government. Issues are simplified, and candidates are “packaged and sold” much
like a consumer product, thereby distorting the political process.
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Cultural Impact
|
Advertising can affect
cultural values. Some advertising messages, for example, encourage aggressive
individualism, which may clash with the traditional cultural values of a
country where the collective or group is emphasized over the individual or
humility or modesty is preferred to aggressiveness. With the globalization of
the world economy, multinational corporations often use the same advertising to
sell to consumers around the world. Some critics argue that advertising
messages are thus helping to break down distinct cultural differences and
traditional values, causing the world to become increasingly homogeneous.
Many advertising campaigns,
however, have universal appeal, overriding cultural differences, or they
contribute to culture in a positive way. Humor in advertising has made many ad
campaigns widely popular, in some cases achieving the status of folklore or taking
on new life in another arena. For example, a popular ad campaign for a
fast-food chain with the slogan “Where’s the beef?” became part of the 1980
Democratic presidential primary campaign between Gary Hart and Walter Mondale.
The ad ridiculed a competitor by depicting a small hamburger patty dwarfed by a
huge bun. During a primary debate one of the candidates used the ad slogan to
suggest that his opponent’s campaign lacked substance.
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REGULATION
|
Advertising is subject to
both government regulation and industry self-regulation to prevent deceptive
advertising or to limit the visibility of advertising. Advertising is heavily
regulated in the United States, Canada, and a number of European and Asian
countries.
|
|
Joe
Camel Campaign
The Joe Camel character came under fire in the late 1990s as
an example of harmful advertising targeted to the young. In 1998 the tobacco
industry and the attorneys general of 46 states agreed to ban the use of
cartoon characters in tobacco advertising, a practice that many thought had
encouraged young people to start smoking.
Federal, state, and city
governments have all passed legislation restricting advertising in various ways
in the United States. The Supreme Court of the United States has overturned
some restrictions, however, ruling that advertising is protected under the free
speech provisions of the First Amendment to the Constitution, although to a
lesser extent than political speech. In a landmark 1976 ruling, Virginia
State Board of Pharmacy v Virginia Citizens Consumer Council, the
Court declared advertising to be a semiprivileged form of free expression, subject
to some regulation. In the Virginia case the Supreme Court struck down a
ban that prohibited pharmacists from advertising drug prices. The ruling
removed bans that had applied to other professionals, such as physicians and
lawyers, and enabled them to advertise their services.
In the United States the
main government regulatory agency for advertising is the Federal Trade
Commission (FTC). The FTC enforces a variety of consumer protection laws to
eliminate ads that deceive the consumer. The FTC defines deceptive advertising
as any ad containing a misrepresentation or omission harmful to the consumer.
An advertisement does not have to be untrue to be deceptive. For example, ads
for a certain bread product claimed that it had half as many calories per slice
as its leading competitors. The advertiser failed to say, however, that each
slice of its bread was also half as thick as the competitors. The ads were
ruled to be deceptive.
The key to the FTC's regulation
of advertising is its power to require that advertisers substantiate the
accuracy of their claims. So if advertisers say that 'tests prove' or
'physicians recommend,' they must be able to show test results or affidavits
from doctors. Moreover, companies cannot misuse evidence. For example, claims
that a particular brand of dog food provided all the milk protein a dog needs
were ruled to be misleading because dogs do not need milk protein.
Products that can affect
health receive special regulatory attention. The U.S. Congress banned cigarette
advertising from radio and TV in 1971 under the Public Health Cigarette Smoking
Act. In 1998 the tobacco industry and the attorneys general of 46 states agreed
to ban outdoor cigarette advertising and the use of cartoon characters in
advertising, a practice that many thought had encouraged young people to start
smoking.
Advertising directed to
children has received considerable scrutiny. In 1990 Congress passed the
Children's Television Advertising Practice Act. Among other things, it set
limits on the amount of advertising that could be included in children's
television programming and barred hosts of children's shows from selling
products.
State laws and enforcement
bureaus impose additional regulations on certain types of advertising,
particularly those involving contests. These regulations may differ from state
to state. Consequently, advertisers planning a national contest through
newspapers may have to prepare several different versions of an advertisement
to comply with the varying laws. In some states the media are themselves
regulated. For example, it is illegal in a number of states for radio and
television stations to broadcast distilled-liquor advertising; outdoor
billboard advertising is banned in certain other states.
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Industry Regulation
|
The advertising industry has
resorted to self-regulation in a serious effort to stop abuses before they
occur. These 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 products of
competitors.
Several advertising trade
associations are concerned with maintaining high standards. The associations
believe 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
refuse to publish advertising for tobacco and alcoholic beverages; most of
them, in varying degree, 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.
Radio and television stations
generally try to investigate the company and its product before broadcasting
advertising messages that might cause unfavorable reactions. The networks and
the National Association of Broadcasters have established codes regulating the
advertising of medical products and controlling contests, premiums, and other
offers. All the networks maintain so-called acceptance departments, which
screen both commercial and noncommercial scripts, either deleting or
challenging for substantiation any questionable material. Most magazine
publishers have their own strict rules on acceptance of advertising copy.
The American Advertising
Federation, an organization of leading national advertisers, has long
campaigned for “truth in advertising.” Other organizations that promote ethical
standards are the American Association of Advertising Agencies and the
Association of National Advertisers. The Institute of Outdoor Advertising
encourages its members to improve the design of their advertising posters and
signs and, more importantly, to make sure they do not erect advertising
billboards in locations where they will mar the landscape or otherwise offend
the public. The best-known and most active watchdogs in the advertising field
are the Better Business Bureaus, which bring pressure to bear on unethical
advertisers through persuasion, publicity, or, in extreme cases, legal action.
The fact that local and national bureaus are subsidized by both advertisers and
media reflects the conviction of modern business management that “good
advertising is good business.”
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In Canada
|
Canadian advertising regulations
are even stricter than those in the United States. The Competition Act is the
Canadian federal statute that seeks to prevent false and misleading
advertising. The act is administered by the Bureau of Competition Policy which
is part of Consumer and Corporate Affairs. If the bureau finds advertising to
be misleading, it may simply ask the advertiser to stop running the ad or it
may ask a company to take certain steps to correct the impression made by the
false claims. The bureau may also take legal action against the advertiser in
which case it will turn over its evidence to the Attorney General of Canada who
will decide whether the evidence warrants a criminal prosecution.
Canada’s self-regulatory body, the
Canadian Advertising Standards Council, has the right to take a commercial off
the air if it offends taste and public decency. Moreover, in Canada ads that
deal with products regulated by the government (for example, food, drugs,
alcohol, and children's products) have to be approved before they air and can
also be pulled if complaints arise after they run. In the United States, action
can only be taken after the advertisement runs. Finally, beginning in 2001
tobacco advertising in Canada was limited to direct mail and to adults-only
environments such as bars.
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In Other Countries
|
Advertising is often heavily
regulated in other countries as well. But the regulations vary from country to
country. For example, in Mexico advertising for tobacco and alcohol is limited
to late evenings after children have gone to bed. France prohibits any
reference to health in tobacco ads, and Italy allows alcohol advertising to
promote the brand name but not product attributes such as 'cold filtered' or
'smooth tasting.'
Advertising regulations in other
countries are often designed to protect culture and morals. France prohibits
the use of foreign expressions where there are equivalent French terms as a way
of protecting the French language. Advertising regulations in Malaysia bar the
depiction of nudity, disco dancing, seductive clothing, and blue jeans in ads
and require ads to project the Malaysian culture and identity. Varying
regulations present numerous challenges to multinational corporations that
advertise their products in many different countries.
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HISTORY
|
Archaeologists have found
evidence of advertising dating back to the 3000s bc, among the Babylonians. 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 property for rent, and one found painted on a wall in Pompeii calls
the attention of travelers 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.
Later they became familiar figures on the streets of colonial American
settlements. The town criers were forerunners of the modern announcer who
delivers radio and television commercials.
Although graphic forms of
advertising appeared early in history, printed advertising made little headway
until the invention of the movable-type printing press by German printer
Johannes Gutenberg about 1450. This invention made the mass distribution of
posters and circulars possible. The first advertisement in English appeared in
1472 in the form of a handbill announcing a prayer book for sale. Two hundred
years later, the first newspaper ad was published offering a reward for the
return of 12 stolen horses. In the American colonies, the Boston
News-Letter, the first regularly published newspaper in America, began
carrying ads in 1704, and about 25 years later Benjamin Franklin made ads more
readable by using large headlines.
In the United States,
the advertising profession began in Philadelphia, Pennsylvania, in 1841 when
Volney B. Palmer set up shop as an advertising agent, the forerunner of the
advertising agency. Agents contracted with newspapers for large amounts of
advertising space at discount rates and then resold the space to advertisers at
a higher rate. The ads themselves were created by the advertisers. In 1869
Francis Ayer bought out Palmer and founded N. W. Ayer & Son, an agency that
still exists today. Ayer transformed the standard agent practice by billing
advertisers exactly what he paid to publishers plus an agreed upon commission.
Soon Ayer was not only selling space but was also conducting market research
and writing the advertising copy.
Advertising agencies initially
focused on print. But the introduction of radio created a new opportunity and
by the end of the 1920s, advertising had established itself in radio to such an
extent that advertisers were producing many of their own programs. The early
1930s ushered in dozens of radio dramatic series that were known as soap operas
because they were sponsored by soap companies.
Television had been introduced
in 1940, but because of the high cost of TV sets and the lack of programming,
it was not immediately embraced. As the American economy soared in the 1950s,
so did the sale of TV sets and the advertising that paid for the popular new
shows. Soon TV far surpassed radio as an advertising medium.
The tone of the advertising
was also changing. No longer did advertising simply present the product
benefit. Instead it began to create a product image. Bill Bernbach, founder of
Doyle Dane Bernbach in New York City; Leo Burnett, founder of the Leo Burnett
agency in Chicago, Illinois; and David Ogilvy, founder of Ogilvy & Mather
in New York City, all came to prominence in the late 1950s and 1960s and led
what has been called the 'creative revolution.' Bernbach's agency captured the
spirit of the new age. Bernbach believed that advertising had to be creative
and artistic or it would bore people. He also believed that good advertising
began with respect for the public's intelligence. The ads his agency created
were understated, sophisticated, and witty.
For example, when Bernbach's
agency picked up the account for the Henry S. Levy Bakery in Brooklyn, a
borough of New York City, the agency created an ad that entertained New Yorkers
and provided fodder for many conversations. The ad showed a Native American
eating a slice of the bakery's rye bread with the headline, 'You don't have to
be Jewish to love Levy's.' But it was the advertising for Volkswagen that made
the agency's reputation. At a time when American cars were getting bigger and
bigger and the advertising for them trumpeted that bigger was better, Doyle
Dane Bernbach created a magazine ad that showed a small picture of the
Volkswagen Beetle surrounded by a sea of white space with the headline, 'think
small.' An equally unconventional ad carried the headline 'lemon' beneath a
photo of an apparently flawed Volkswagen. The ad's copy explained that 'this
Volkswagen missed the boat. The chrome strip on the glove compartment is
blemished and must be replaced…We pluck the lemons; you get the plums.' In an
era of hype and bombast, the Volkswagen ads stood out because they admitted
failure in a witty way and gave facts in a believable manner that underlined
the car's strengths. This wit together with a conversational and believable
style was a hallmark of the advertising created by Doyle Dane Bernbach and that
style became highly influential.
The creative foundation
established by Bernbach and others has been critical to the success of
contemporary advertising. The introduction of the TV remote control and access
to hundreds of cable channels mean that today advertising must interest and
entertain consumers or else they will simply use the remote to change the
channel. New digital devices even threaten to make it possible to edit out
commercials. The development of interactive television, combining the functions
of a computer with access to high-speed transmission over cable lines or
optical fibers, will likely enable consumers to select from a vast video
library. Consumers will be able to determine not only when they watch
something, but also, to a greater extent than ever before, what they
will watch. Some industry observers believe that as consumers gain greater
control over their viewing activities, they will find it easier to avoid
advertising.
No one can predict what
new forms advertising may take in the future. But the rapidly increasing cost
of acquiring new customers makes one thing certain. Advertisers will seek to
hold onto current customers by forming closer relationships with them and by
tailoring products, services, and advertising messages to meet their individual
needs. So while advertising will continue to encourage people to consume, it
will also help provide them with products and services more likely to satisfy
their needs.
