Custom essays on Advertising and its Economic and Cost Effectiveness

At the same time, it is important to remember about the power of mass media to shape preferences of customers. In actuality, many specialists (Chomsky, 1997) argue that mass media has a very substantial impact on the consciousness of people to the extent that mass media can shape an individual’s identity. This means that mass media have a significant impact on human consciousness and, therefore, they can influence customers’ decisions, including decisions concerning the choice of some products and services advertised in mass media. The development of mass media makes advertising very effective because mass media accompany people practically everywhere and modern telecommunication technologies makes mass media not only more available to people but new technologies put people into such a situation, when they cannot simply avoid the impact of mass media. Obviously, today, it is practically impossible to find a person living in a well-developed country, such as the USA, who do not use either television, or Internet, or newspapers, or magazines, or mobile phones and other means of telecommunications via which mass media reach their audience.
In addition, the advertisements grow more and more sophisticated that also increase the effectiveness of advertisement. Modern promotional campaign can involve a variety of strategies which encourage people to buy products and services of certain company or which promote brands of large companies. Advertising campaign can involve celebrities, support of significant events highlighted by media, and other strategies which contribute to the formation of a positive brand image of companies and promotes their products and services. It is also worth mentioning the fact that modern advertising campaigns involve specialists working in different fields, such as psychology, sociology, and others, which help advertisers to increase the effectiveness of advertising consistently.
Hypothesis
Hence it is obvious that the advertisement has remained popular over time despite changes in economic conditions, technology and advertising spend. On the other hand, it is important to understand that the effectiveness of advertisement, to a significant extent depends on the media because, in the course of time, the impact of media has changed. What is meant here is the fact that, in the past, print media used to be mainstream media and, therefore, the use of these media allowed maximizing the effectiveness of the advertisement, while, today, visual and electronic media play increasingly more important role and become mainstream media. Therefore, the advertisement has always been effective, but its effectiveness is highly dependent on the advertising strategy to be used, including the media used for advertising.
Methodology
Sampling
The research involves the analysis of statistical data concerning the use of advertising in different mass media and its effectiveness. At the same time, the use of statistical data helps to define the cost effectiveness of advertising. The latter allows identifying the most effective mass media which are currently used for advertising. In addition, the research is backed up with interviews of managers and specialists working in the field of advertising along with analysis of other researches related to the problem of advertising effectiveness and cost effectiveness of advertising. Finally, some examples of the use of advertising and its effectiveness are discussed to obtain factual evidence of advertising effectiveness.
Variables
Basically, it is possible to distinguish the following variables: cost invested into advertising; changes in sale rates/profits of companies after advertising; the effects of media and their impact on advertising; the audience of the media, including age, gender, cultural background; cultural traditions, legal and ethic norms regulating advertising.
Discussion
Today, the overall effectiveness of advertising is, to a significant extent, defined by its cost effectiveness. According to Japanese famous advertising company Dentsu report (Peters, 2007), newspaper was used $9,986 in 2006. This decreases by 3.6% compared with the previous year, 2005. In magazine, it was used $3,887 in 2006 and it also decreases 1.5% from 2005. However, many companies use a newspaper or magazine advertisement to present their products and services in the most appealing ways. Macy’s, a department store, uses newspapers, and it was ranked the first of those brands that spent the most money on newspaper advertising in 2003. They spent more than $303 million on newspaper advertisements and the catalogs (Peters, 2007). As part of the Thanksgiving campaign, Macy’s sent 54-page catalogs to 3.8 million customers costing more than $100 million. Louis Vuitton manufactures of luxury leather goods, fashion accessories, and jewelry are rarely advertised on television, but the company spends about $250 million annually on printed advertisement, such as a building poster, a direct mail, a catalog, and the most media that is used is a magazine (Pine, and Gilmore, 2007).
Since the number of people who watch television, compared to the past, has been declining, the cost for their television advertisements is also decreasing (Bagdikian, 2007). According to Dentsu report (Peters, 2007), the television was used $ 20,161 for advertisement in 2006, however, it is 1.2% decreasing compared to 2005. In contrast, Internet was used $3,630 in 2006, it increase 29.3% compared to 2005. Budweiser is the company which uses money for TV advertising most. Their total advertising budget in 2006 was $509 million, of which more than a half, at $386 and spent more $30 million for their other electronic advertisements (Bagdikian, 2007). In addition, the company started own TV program, “Bud. TV”, on the Internet. Toyota spent more than $ 1,000 million for an annual advertisement for TV, magazine, newspaper, and radio, and it was assigned $ 123 million on the Internet. (Peters, 2007) According to recent researches (Pine, J. and Gilmore, 2007), the model of cars best sold by Toyota Inc. in North America was advertised only on the internet and was not advertised on TV. The Toyota cars advertised only on the internet were as follows: Sion, bB and Ist that are marketed only in North America. Toyota understood the effectiveness and advantages of the advertising tactics of spreading the information about these three models through the Internet and then let it spread by itself from customers to customers. Toyota is cutting down advertising on the TV and they are raising the Internet advertisement budget by 20-50% Thus, the Internet is gaining power as the advertising medium.
First of all, according to specialists (Bagdikian, 2007), there are reliability and details in the newspaper advertisement. The newspaper can hardly be positioned as entertainment medium, and it is basically a news medium compared to other media. The advertisement recorded in media mainly composed of journalism might naturally have the aspect of journalism. Therefore, the newspaper advertisement can give the reader more reliability of the product. Specialists (Pine, J. and Gilmore, 2007) argue that “a magazine usually contains written pieces such as stories, essays, editorials, news, reports advice columns, poems or reviews; and visual features such as photos, cartoons, or illustrations; and advertisements.” The magazine can know details like the newspaper, and also has the entertainment; as a result it gives the customer more positive emotions and impressions concerning products.
The TV advertisement appeals to the sense of the audience by audio-visual means and it gives people the feeling of being present at a live performance (Bagdikian, 2007). If it is an image and a sound with a motion, goods can be made to understand within an instant. For example, Intel has a jingle, and this jingle is played at the end of all TV commercials and commercials of all radio. This “D♭ D♭ G♭ D♭ A♭” (Pine and Gilmore, 2007) jingle has become very famous. The jingle is not long and sounds like an image of intelligent or high quality, so it helps people to recognize Intel and to give it a good image. Moreover, a brand name can be impressed within a short period of time by advertising repeatedly. Since television is seen together by several persons in many cases, audience shares a message while talking with other people; it can also expect a word-of-mouth effect. (Bagdikian, 2007) In Internet advertising, in addition, it is possible to narrow down a target and to carry out advertising distribution. By distributing the advertisement according to the audience interest, the degree of impression of an advertisement becomes strong. Furthermore, the point that the Internet differs from other media most has the property of interaction. That is, it is the point that media can get reactions from audience, not only send message one way to people like other media (Hart, 2004). By having an interaction, people can acquire more detailed information and get interested. In addition, it is important to remember that the growth of the audience and the growing impact of mass media on the audience increase the cost effectiveness of advertising because costs spend on advertising lead to higher revenues as the mass audience is reached by the advertisement.
Conclusion
Thus, taking into account all above mentioned, it is possible to conclude that advertising has always being important and companies used advertising to reach the target customer group and convince customers to buy their products and services. In fact, advertising strategies and technologies changed, new media emerged, but companies used and keep using advertising as a powerful tool which helps them accelerate their sales, expand their markets or enter new markets. In such a way, advertising is an essential part of a marketing strategy of companies, though mass media used for advertising can vary, depending on the target customer group of a company. Nevertheless, a modern company can hardly succeed without advertising.
 

References:
Bagdikian, B. H. (2007). The Media Monopoly, Sixth Edition, Beacon Press.
Bovee, C.L. and Thill, J.V. (2005).Excellence in Business Communication. New York: Prentice Hall.
Blanchard, K. & Bowles, S. (1993). Raving fans: A revolutionary approach to customer service. New York: Morrow.
Chomsky, N. (June, 1997). “What makes mainstream media mainstream”, Z Magazine, 33(4), 91-97.
Hart, J.L. (2004). “Organizational Communication in an Age of Globalization: Issues, Reflections. Practices”. Business Communication Quarterly, 67(14), 34-41.
Moy, P. et al. (1999). “Media use and public confidence in democratic institutions.” Journal of Broadcasting and Electronic Media, 43(2), 137-142.
Pine, J. and Gilmore, J. (2007). The Experience Economy, Boston: Harvard Business School Press.
Peters, T. J. (2007). In search of excellence: Lessons from America’s best-run companies. New York: Harper & Row.
Schenker, H. (2000). The Art of Performance. New York: Random House.
Wilkins, A. L. (1999). Developing Corporate Character: How to successfully change an organization without destroying it. San Francisco: Jossey-Bass.