How Advertising Works

How Advertising Works The debate on how advertising works is actually eight decade old. It started post world war-I when the packaged goods companies, which came into being to supply packaged goods to the fighting armies had to find a market to sell their produce. They took the route of advertising and mass distribution to ensure that their produce is consumed. By 1930s, during the years of great depression, the economists and social activists’ started attacking the means of such activities like advertising and mass marketing methods. Their plea was that advertising forces people to buy things which they don’t need and can’t afford, and thereby create frustration and artificial demand. With such circumstances, the onus to defend the advertising as an institution came on the advertising and marketing professionals. As the debate heated up, researchers, academicians and practitioners, all strives to find a scientific explanation to ‘how advertising works’.

The role of advertising in this process is vital.

• It seeks to reach the prospective buyer, bringing to his attention a product or service that will meet his needs.

• It tells the prospective buyers about the particular features or special advantages of the advertised brand over other competing brands-why it meets his needs better than others.

• A favorable attitude towards the brand can be established by the ads in a campaign.

The buying decision will be complete only when the consumer weighs the price against his need and the ability of the product to meet this need. If his need is more or if the advertising has convinced him of its quality he will pay more for it.

1.      There is no direct correspondence between dollars invested and results gained. No mathematical formula can be devised to answer the advertiser’s question… “If I spend this much on advertising, what can I expect to happen?”
The amount of money you spend… and what you get for it, have virtually nothing to do with each other. Two businesses can spend an identical amount of money to reach the identical group of people; one advertiser gets rich, while the other advertiser fails miserably. So what was the difference?

2.      The variable, which prohibits a mathematical formula, is the power of the message. Two advertisers can reach precisely the same audience with exactly the same repetition… one advertiser is successful, while the other fails miserably. The difference? The Message.
One advertiser spoke to the customer in the language of the customer about what mattered to the customer, and the customer said YES, YES, YES, YES. The other advertiser spoke about himself, answered questions the customer wasn’t asking, and the customer said, “Hey, here’s 35-cents ... Call your mum ... I don’t care!”

3.      When a message has been uncovered which generates a positive response, a mathematical pattern does emerge. The benefit experienced in Year Two will be twice the benefit experienced in Year One, provided everything else remains equal and the core message does not change. The benefit in Year Three will be three times the benefit of Year One.

ROAD MAP FOR SMART SPENDING
More Platforms = Higher ROI	→	Add a Platform
Catch the “Kicker” = +60% ROI	→	Add Back Television to Digital/Mobile – Even for Millennials!
A Unified Creative Strategy = Higher ROI	→	Tailor to Each Platform
Too Much Frequency = Negative ROI	→	Optimize Frequency