Advertising is one of the most visible forms of communication. Because of its wide use and its limitations as one-way method of communication, advertising in international markets is subject to a number of difficulties. Advertising is often the most important part of the communication mix for the consumer goods, where there is a large number of small volume customers who can be reached through mass media.
International advertising entails dissemination of a commercial message to target audiences in more than one country. Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli, respond to humor or emotional appeals, as well as in levels of literacy and languages spoken.
International advertising can, therefore, be viewed as a communication process that takes place in multiple cultures that differ in terms of values, communication styles and consumption patterns. International advertising is also a business activity involving advertisers and the advertising agencies that create ads and buy media in different countries. The total sum of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values and propagates certain values worldwide.
Advertising, as one of the most visible forms of communication and as an element of the promotion mix, is a critical tool for an internationally oriented company. Viability and effectiveness of international advertising depend on the climate for advertising in the foreign target markets as well as the differences in the availability and usefulness of advertising media.
International Advertising as a Communication Process
In international markets, the process of communicating to a target audience is more complex because communication takes place across multiple contexts, which differ in terms of language, literacy and other cultural factors. In addition, media differ in their effectiveness in carrying different appeals. A message may, therefore, not get through to the audience because of people’s inability to understand it (due to literacy problems), because they misinterpret the message by attaching different meanings to the words or symbols used, or because they do not respond to the message due to a lack of income to purchase the advertised product. Media limitations also play a role in the failure of a communication to reach its intended audience.
An advertising message can have a variety of effects upon the receiver. It can:
- Create awareness
- Communicate information about attributes and benefits
- Develop or change an image or personality
- Associate a brand with feelings and emotions
- Create group norms
- Precipitate behavior
The process of communication in international markets involves the seven identifiable steps which can ultimately affect the accuracy of the process. The communication process consists on the following steps:
- An information source. An international marketing executive with a product message to communicate.
- Encoding. The message from the source converted into effective symbols for transmission to a receiver.
- A message channel. The sales force and/or advertising media that convey the encoded message to the intended receiver.
- Decoding. The interpretation by the receiver of the symbolism transmitted from the information source.
- Receiver. Consumer action by those who receive the message and are the target for the thought transmitted.
- Feedback. Information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process.
- Noise. Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process and affect any or all of the other six steps.
In encoding a verbal message, care needs to be taken in translation. Numerous examples exist of translation problems with colloquial phrases. For example, when the American Dairy Association entered Mexico with its “Got Milk?” campaign, the Spanish translation read “Are you Lactating?” Low levels of literacy may result in the need to use visual symbols. Here again, pitfalls can arise due to the differences in color association or perception. In many tropical countries, green is associated with danger and has negative connotations. Red, on the other hand, is associated with weddings and happiness in China. Appeal to humor also needs to be treated with considerable care as its expression and effectiveness varies from one culture to another. The dry British sense of humor does not always translate effectively even to other English-speaking countries.
In addition to encoding the message so that it attracts the attention of the target audience and is interpreted correctly, advertisers need to select media channels that reach the intended target audience. For example, use of TV advertising may only reach a relatively select audience in certain countries. Equally, print media will not be effective where there are low levels of literacy. Certain media may also be more effective in certain cultures. For example, radio advertising has substantial appeal in South America where popular music is a key aspect of the local culture.
Decoding problems are generally created by improper encoding, which caused such errors as Pepsi’s “Come Alive” slogan being decoded as “Come out of the grave”. Chevrolet’s brand name for the Nova model (which means new star) was decoded into Spanish as No Va!, meaning “it doesn’t go”. In another misstep, a translation that was supposed to be decoded as “hydraulic ram” was instead decoded as “wet sheep”. In a Nigerian ad, a platinum blonde sitting next to the driver of a Renault was intended to enhance the image of the automobile. However, the model was perceived as not respectable and so created feeling of shame.
Finally, the feedback step of the communications process is important as a check on the effectiveness of the other steps. Companies that do not measure their communications efforts are apt to allow errors of source, media selection, decoding, or receiver to continue longer than necessary. In fact, a prosper feedback system (ad testing) allows a company to correct errors before substantial damage occurs.
In addition to the problems inherent in the steps outlined, the effectiveness of the international communications process can be impaired by noise. Noise comprises all other external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end, that can detract from the ultimate effectiveness of the communication. Noise is a disruptive force interfering with the process at any step and is frequently beyond the control of the sender or the receiver.
The cultural context also impacts the effectiveness of communication. In “high context” cultures, such as the collectivist Asian cultures of Japan and China, the context in which information is embedded is as important as what is said. In low context cultures, which include most Western societies, the information is contained in the verbal messages. In these cultures, it is important to provide adequate information relating to the product or service in order to satisfy their need for content. Conversely, people in high context cultures are often more effectively reached by image or mood appeals and rely on personal networks for information and content. Awareness of these differences in communication styles is essential to ensure effective communication.
The problems associated with communicating to people in diverse cultures present one of the great challenge in advertising. One advertising executive puts it bluntly: “International adverting is almost uniformly dreadful mostly because people don’t understand language and culture”. Communication is more difficult because cultural factors largely determine the way various phenomena are perceived. If the perceptual framework is different, perception of the message itself differs.
Language is one of the major barriers to effective communication through advertising. The problem involves different languages of different countries, different languages or dialects within one country, and the subtler problems of linguistic nuance and vernacular. For many countries language is a matter of cultural pride and preservation — France is the best example, of course.
Language raises innumerable barriers that impede effective, idiomatic translation and thereby hamper communication. This is especially apparent in advertising materials and on the Internet. Abstraction, terse writing, and word economy, the most effective tools of the advertiser, pose problems for translators. Communication is impeded by the great diversity of cultural heritage and education that exists within countries and which causes varying interpretations of even single sentences and simple concepts. Some companies tried to solve the translation problem by hiring foreign translators who live in their domestic country. This often is not satisfactory because both the language and the translator change, so the expatriate is out of touch after a few years. Everyday words have different meanings in different cultures. Even pronunciation causes problems: Wrigley had trouble selling it s Spearmint gum in Germany until it changed the spelling to Speermint.
In addition to translation challenges, low literacy in many countries seriously impedes communications and calls for greater creativity and use of verbal media. Multiple languages within a country or advertising area pose another problem for the advertiser. Even a tiny country as Switzerland has four separate languages. The melting-pot character of the Israeli population accounts for some 50 languages. A Jerusalem commentator says that even though Hebrew “has become a negotiable instrument of daily speech, this has yet to be converted into advertising idiom”. Advertising communications must be perfect and linguistic differences at all levels cause problems. In-country testing with the target consumer group is the only way to avoid such problems.
International Advertising as a Business Practice
International advertising can also be viewed as a business activity through which a firm attempts to inform target audiences in multiple countries about itself and its product or services offerings. In some cases the advertising message relates to the firm and its activities, i.e. its corporate image. In other cases, the message relates to a specific product or service marketed by the firm. In either case, the firm will use the services of an advertising agency to determine the appropriate message, advertising copy and make the media placement.
Advertising has gone through five major stages of development: domestic, export, international, multi-national, and global. For global advertisers, there are four, potentially competing, business objectives that must be balanced when developing worldwide advertising: building a brand while speaking with one voice, developing economies of scale in the creative process, maximizing local effectiveness of ads, and increasing the company’s speed of implementation. Born from the evolutionary stages of global marketing are the three primary and fundamentally different approaches to the development of global advertising executions: exporting executions, producing local executions, and importing ideas that travel.
An important issue in determining international advertising strategy is whether or not to develop a global or regional advertising campaign, or rather tailor communication to differences in local markets. If the purpose of advertising is to develop a strong corporate or global image, a uniform global campaign is more likely to be used. When, on the other hand, the objective is to launch a new product or brand, or to more clearly differentiate the product or brand from other competing brands or products, local campaigns tailored to local markets are more typical.
A global campaign offers a number of advantages. In the fist place, it can be an important means of building a strong and coherent global image for the firm and / or its products worldwide. Use of the same image in different countries build familiarity and generates synergies across world markets. It allows utilization of good ideas and creative talent (both of which are scarce commodities) on a worldwide basis. In addition, use of a single campaign provides substantial cost savings in copy development and productions costs. Conversely, development of multiple local campaigns can lead to duplication of effort, result in inconsistent brand images across countries and confusion in consumers’ minds with regard to the benefits offered by the brand and corporate image.
While use of uniform advertising appeals offers a number of advantages, differences in customer perceptions and response patterns across countries and cultures, as well as media availability and government regulation are major barriers to use of a standardized campaign. Even though technological developments allow adaptation of advertising appeals to different languages (for example, TV can have audio channels in two languages, Internet messages can be automatically translated), development of visual and verbal copy that works effectively in multiple countries poses major creative challenges.
The organizational structure of the firm often plays a key role in the choice of global vs locally adapted campaigns. If international operations are organized on a country-by-country geographic basis and operate as local profit centers with local advertising budgets, pressures exist for use of local advertising campaigns. If, on the other hand, the company is organized by product divisions, with centralized advertising budgets at corporate or regional headquarters, use of the regional or global advertising campaigns is more likely.
International Advertising as an Industry
The world advertising industry is characterized by a large number of small and medium sized advertising agencies that operate primarily in one country and by a small number of very large advertising agencies with operations in many countries. These agencies have developed extensive networks of offices throughout the world in order to coordinate the advertising process in all the countries where their clients do business. These networks often include both wholly-owned subsidiaries and formal relationships with local advertising agencies to establish a presence in new markets, particularly in emerging markets.
In an effort to establish greater control over their advertising, many major advertisers are consolidating all their advertising with one agency. For some major advertisers such as IBM and Citibank, this represents annual advertising expenditures in excess of $500 million worldwide. As a consequence, advertising agencies that do not have a global network are at a serious disadvantage when competing for new advertising accounts or attempting to retain existing ones that are expanding globally.
An advertising agency handles part or all marketing communications activities on behalf of a client organization. The agencies themselves tend to vary in size from small, perhaps a handful of people, to vast — where many thousands of employees make up the company. A commission is generally taken by the agency which tends to be taken from the media purchases of the client organization.
This is done rather like a theatrical agent would take a percentage of the income of an actor for whom employment had been found. The agency may also take payment from the media owners (i.e. sometimes take a discount and do not pass it on to the client). More transparent means of payment are becoming more popular, with some agencies being paid-by-results.
There are many types of agency, but it is generally accepted that the main ones are include full-service agency, a la carte agency, or specialist agency. A full-service agency will take on the whole project or campaign. An a la carte agency will offer some aspects of a campaign such as media buying, rather like buying items from a menu. A specialist agency tends to be small and more focused on a specific aspect of marketing communications and/or a specific market such as Internet Marketing
The majority of these large advertising agencies are headquartered in the US. Of the ten largest advertising agency groups, seven are headquartered in the US and one each in UK, France and Japan, although WPP, the British agency holding company, is made up of two large US-based agencies. With the exception of Dentsu, the Japanese agency, most other agency networks generate the majority of their revenues outside their home country. The largest agency group, Omnicom places over $ 37 billion of advertising for its clients around the world and derives half its revenue from outside the US. Omnicom has 891 offices in over 85 countries and employs 35,600 persons worldwide (57 % work outside the US). US-based advertising agencies and their subsidiaries are responsible for most of the advertising throughout the world. For example, of the approximately $60 billion in advertising placed by the top 25 agency networks in Europe during 1955, 89 % of the total was placed by subsidiaries of US-based agencies. This general pattern holds in most parts of the world that do not have restrictions on foreign ownership. The major exception is Asia where the three major Japanese agencies account for 62% of the advertising placed by the top 25 agency networks.
Worldwide over $400 billion is spent on advertising. Approximately half of that amount is spent in the US and the other half outside the US. Information on advertising spending can be obtained from Advertising Age’s web site and from Mc Cann — Erickson’s web site. The bulk of expenditure outside the UK takes place in Europe and Japan, although Brazil, Canada, Mexico and Australia are also important advertising markets. Outside of these markets, China is the next largest advertising market and is also growing rapidly.