Advertising is often used to make consumers aware of a product’s special low price or its benefits. But an even more important function of advertising is to create an image that consumers associate with a product, known as the brand image. The brand image goes far beyond the functional characteristics of the product. For example, a soft drink may have a particular taste that is one of its benefits. But when consumers think of it, they not only think of its taste, but they may also associate it with high energy, extreme action, unconventional behavior, and youth. All of those meanings have been added to the product by advertising. Consumers frequently buy the product not only for its functional characteristics but also because they want to be identified with the image associated with the brand.
By adding meaning to a product, advertising also adds value. For example, when Philip Morris Companies Inc. purchased Kraft Foods, Inc. in 1988 for nearly $13 billion, Philip Morris paid 600 percent more than Kraft’s factories and inventory were worth. Over 80 percent of the purchase price was for the current and future value of the Kraft brand, a value that was created in large part by advertising. Advertising plays such an important role in promoting products and adding value to brands that most companies spend considerable sums on their advertising and hire specialized firms, known as advertising agencies, to develop their advertising campaigns.
Advertising is most frequently done on television, radio, and billboards; in newspapers, magazines, and catalogs; and through direct mail to the consumers. In recent years, numerous advertising agencies have joined forces to become giant agencies, making it possible for them to offer their clients a comprehensive range of worldwide promotion services.
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.
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.
By adding meaning to a product, advertising also adds value. For example, when Philip Morris Companies Inc. purchased Kraft Foods, Inc. in 1988 for nearly $13 billion, Philip Morris paid 600 percent more than Kraft’s factories and inventory were worth. Over 80 percent of the purchase price was for the current and future value of the Kraft brand, a value that was created in large part by advertising. Advertising plays such an important role in promoting products and adding value to brands that most companies spend considerable sums on their advertising and hire specialized firms, known as advertising agencies, to develop their advertising campaigns.
Advertising is most frequently done on television, radio, and billboards; in newspapers, magazines, and catalogs; and through direct mail to the consumers. In recent years, numerous advertising agencies have joined forces to become giant agencies, making it possible for them to offer their clients a comprehensive range of worldwide promotion services.
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.
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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