Friday, April 22, 2011

The real role of advertising?

Measuring the success of advertising is not easy. It really isn't. We sometimes overly focus on the measures we have, even if they are not the best ones. For example, we can measure clicks on banner ads, so we judge success by click-through rates or cost per click. This information is useful, but is only part of the picture.

When I ask students (and colleagues) what is the purpose of advertising, they generally end up with "sales" as an answer. I think it was Hopkins that said the only objective for advertising is to sell. Or was it Ogilvy? Correct of course. But as Paul Feldwick said, that is like saying the objective for a football team is to score goals. It is - but we know the game is not as simple as that. Neither is advertising.

The complexity of measuring advertising is a problem - as it can lead to poor business decisions. If we do not see immediate increase in sales, we may jump to the conclusion that the advertising is not working. Worse, we may decide that 'advertising' itself doesn't work and we may decide to not reinvest in any more advertising.

This is dangerous.

Bryon Sharp has some interesting research showing that the effect of not-investing in advertising can be a slow burn for brands. While not obvious or immediate, over time we can see the negative impact on sales.

Often, advertising is a defensive play, protecting market share by keeping your brand top of mind. Legendary planner Stephen King once wrote that the effect of a lot of advertising is on profits rather than sales - "through making consumers disinclined to try lessor brands for the sake of 2p off."

71 comments:

Gerard O'Neill said...

King is on to something. The purpose of branding (and therefore of advertising to promote brands) is to 'de-commoditize'consumer perceptions and therefore buying behaviours.

Free market capitalism has a tendency through competition to turn most markets into commodities. The task of advertising is to arrest and even reverse that trend.
A big ask, admittedly.

Advertising should therefore enable you to charge a price premium (if you're a brand), otherwise - what's the point...?

Paul Dervan said...

Thanks Gerard. Yep, a big ask alright.

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Advertising is indeed an important aspect in business operations. Without proper strategy, you may not be able to achieve the full potentials of your company.

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Advertising is very important in creating brand awareness and if you stop doing it then your brand will lose face in time.

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I agree with the comments. Advertising your products play an important role in getting it noticed. Thus, it is important to create a very effective advertising strategy.

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Sam Whitlock said...

Here is alternative view on this problem smartyads. There is an effective advertising strategy called "combined campaign" and you should definitely read it.

Fred Castillo said...

The "real" role of advertising depends on so many factors that I can't even sum it up in a few sentences. Your brand, your product, your target audience, the advertising medium... there's just so much to consider that I don't think you can give one universal "real role" to all advertising. It depends on what you're trying to do.

Fred | O'Malley Hansen Communications

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