Advertising Management – Evolution, Objectives, Functions, Socio-Economic Effects

The word Advertising originated from a Latin word ‘Advertire’. Advertire in Latin mean ‘to turn to’ i.e. when anything is brought to the notice of consumers in a public manner.

The term Advertising sounds familiar to anyone it is uttered to because of the reach it has among the mass. Advertisements reach the nook and corner of the world easily acting as the ambassador of brands and products. It is one of the key aspect of the marketing efforts taken by firms who wish to publicize their brand and products.

According to American Marketing Association, “Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor”

Advertisements are designed target a group of customers rather than individuals. It helps a business to promote their brands and products to the targeted audience with the aim to increase sales, enhance brand value, inform customers about new products, educate customers about product features etc.

“Advertising refers to controlled, identifiable information and persuasion by means of mass–communication media”  – John S. Wright

It is a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action, now or in the future. In a typical business arena, Advertising falls under Marketing Communications. Advertising is used by firms to promote their business ideas. It is an end to end coordination to utilize the efforts of various Departments. Other marketing communication activities carried on by organizations apart from Advertising are selling promotion, publicity and personal selling.

Evolution of Advertising

• Advertising covers a period of 5000 years

• Before the invention of printing there were 3 forms of advertising :

  1. Trademarks – Made by craftsmen

  2. Signs – Phoenicians on rocks

  3. Town criers – They were famous in Greece during the golden age

• William Caxton of London printed the 1st It was a hard bill of the rules for a clergy at Easter and was put on church doors

• The first advertisement printed appeared in German news in 1525. It praised the virtues of a mysterious drug.

• First printed newspaper in English came out in 1622, the Weekly News of London and the first advertisement in 1625.

• In 17th century a weekly newspaper called “mercuries” started in England.

• The first advertisement to appear were coffee 1652, chocolate 1657 and tea 1658.

• Modern advertising began from mid 19th Volney B. Palmen was the 1st advertisement agent who established an office in Philadelphia.

• Walter Thompson is known as the inventor of modern advertising and Albert Lasker as father of modern advertising. They developed approaches like “Reason why” to advertise copy and included “Record of Results”

• Claude C. Hopkins and John E. Kennedy were two star agents of Lord and Thomus agency who believed that advertising is “salesmanship in print”

• After 1920 it was the era of modern advertising – Starting from radio’s to internet in recent times.

Advertising may happen through different media depending upon the product and its target audience. Advertising typically starts with a sponsor who specializes in specific areas of media and disseminates information about a brand or its product to the targeted audience. Advertisers are required to follow certain rules and regulations set by the legal authorities and is also subjected to many kinds of regulations passed by Government from time to time. The main purpose of advertising is to gain publicity among the target audience. Both the terms publicity and advertising are most of the times interchanged for the purpose of appropriate communication.

Objectives of Advertising

The key objectives for which an advertisement is released by Ad Agencies or firms are:

  1. To build brand image and good will

  2. To stimulate buying impulse

  3. To introduce new products in the market

  4. To support personal selling

  5. To reach inaccessible customers

  6. To enter a new market or attract a new group of customers

  7. To support the effort of dealers and agents to sell products and services

  8. To expand market for the existing range of products and services

  9. To complement the efforts of Sales and Marketing people in the organization

  10. To counter competition in an effective manner

  11. To motivate the channel partners to stock in more of the organization’s products

  12. To tap the memory of existing customers

  13. To rope in new customers

  14. To complement other activities pertaining to marketing and sales of Products

  15. To reassure the existing customers about the service levels

  16. To provide end to end guidance to the existing and prospective customers

  17. To provide information about products and services

  18. To change social attitude and persuade the customers to take an action

Characteristics of Advertising

  1. It is basically a commercial activity

  2. It is different from Publicity

  3. It is a sponsored communication

  4. It influences the purchase behaviour and attitude of consumers

  5. It lack personal elements and is purely non-personal

  6. It is mostly carried out through sponsors

  7. It is carried out to target and attract a large group of consumers

  8. It encompasses research, plan, co-ordination and execution of activities

  9. It is a key component of promotion element of marketing mix

  10. It is highly persuasive

  11. It is effective when the time, place and direction of advertisements is controlled

  12. It can be identified by the set of customers for whom it is targeted

  13. Different methods are used to advertise different products and the same strategy cannot be adapted to all product categories and brands

Functions of Advertising

  1. Preparing ground for new products

  2. Creation of demand

  3. Facing the competition

  4. Creating and enhancing good will

  5. Informing the changes to customers

  6. Barring new entrants

  7. Persuading the customers and maintaining customer loyalty

  8. Build brand image

  9. To lower prices

  10. Act as a competitive weapon

  11. Strengthen other promotion mix elements

Jagdish N Seth has suggested four primary sequential functions of advertising –

  1. Precipitation – Stimulate needs and wants of the customer

  2. Persuasion – Persuade the customer for purchase

  3. Reinforcement – Reassuring the customer

  4. Reminder – Keeping the brand fresh in the mind of the consumer

Social and Economic effects of Advertising

(1) Economic effects

(i) Effect on the value of products and services

  1. Advertising may imply quality and add value to the product

  2. Add value by educating about the product

  3. Gives opportunity to satisfy symbolic needs

  4. It encourages competition

(ii) Effect on Prices

  1. Adds cost i.e. increase in per unit cost

  2. Mass production brings down the per unit cost

  3. Tends to support higher prices

(iii) Effect on consumer demand and consumer choice

  1. Helps stimulate demand of new products by communicating relevant information and facts

  2. Product differentiation

  3. Gives customers a right to choose

(iv) Effect on competition

  1.  Acts as a barrier to entry for small firms

  2. It provides competitive advantage – economies of scale in advertising

  3. It may discourage competition

(2) Social effects 

(i) Social and cultural issues

  1. It is criticized for its impact on society, value and life styles

  2. It encourages materialism – Materialism is a tendency to accord undue importance to material interests

  3. It is blamed for manipulating consumers

(ii) Stereotyping in Advertising

  1. It ignores differences among individuals and presents a group in an unvarying pattern. e.g. stereotypical image of Indian woman 

(iii) Sex appeals or nudity used to gain consumer’s attention

  1. Deception in advertising

  2. Subliminal advertising

  3. Effect on value system

  4. Offensiveness

Advertising and Decision Making

Advertising reaches products and services of brands to the customers. During the process many crucial decisions need to be taken by the Branding and Marketing Communications teams. Some pertinent decision that needs to be taken with respect to promoting products and brands through Advertisements are listed below.

  1. Objectives behind releasing the Advertisement

  2. Media through which the Advertisement effort is to be carried out

  3. Ad copy and related aspects of the advertisement

  4. Advertising budget taking into consideration the various costs involved

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