Advertising messages may promote the adoption of goods, services, persons, or ideas. Because the sales message is disseminated through the mass media – as opposed to personal selling – it is viewed as a much cheaper way of reaching consumers. However, its non-personal nature means it lacks the ability to tailor the sales message to the message recipient and, more importantly, actually get the sale. Therefore, advertising effects are best measured in terms of increasing awareness and changing attitudes and opinions, not creating sales.
Advertising’s contribution to sales is difficult to isolate because many factors influence sales. The contribution advertising makes to sales are best viewed over the long run. The exception to this thinking is within the internet arena. While banner ads, pop-ups and interstitials should still be viewed as brand promoting and not necessarily sales drivers, technology provides the ability to track how many of a website’s visitors click the banner, investigate a product, request more information, and ultimately make a purchase.
Through the use of symbols and images advertising can help differentiate products and services that are otherwise similar. Advertising also helps create and maintain brand equity. Brand equity is an intangible asset that results from a favorable image, impressions of differentiation, or consumer attachment to the company, brand, or trademark. This equity translates into greater sales volume, and/or higher margins, thus greater competitive advantage. Brand equity is established and maintained through advertising that focuses on image, product attributes, service, or other features of the company and its products or services.
Cost is the greatest disadvantage of advertising. The average cost for a 30-second spot on network television increased fivefold between 1980 and 2005. Plus, the average cost of producing a 30-second ad for network television is quite expensive. It is not uncommon for a national advertiser to spend in the millions of dollars for one 30-second commercial to be produced. Add more millions on top of that if celebrity talent is utilized.
Credibility and clutter are other disadvantages. Consumers have become increasingly skeptical about advertising messages and tend to resent advertisers’ attempt to persuade. Advertising is everywhere, from network television, to daily newspapers, to roadside billboards, to golf course signs, to stickers on fruit in grocery stores. Clutter encourages consumers to ignore many advertising messages. New media are emerging, such as digital video recorders which allow consumers to record programs and then skip commercials, and satellite radio which provides a majority of its channels advertising free.