Question

Topic: Advertising/PR

Which Are The Qualitative Benefits Of Advertising?

Posted by Anonymous on 11/3/2004 at 5:21 AM ET 250 Points
Why do companies advertise? Do they advertise only because of the financial returns - gains?
Are there qualitative aspects & benefits that derive from advertising and affect companies decisions?
Is it correct to measure advertising effectiveness based only on short or mid-term effects on sales or market share?
Do companies base their decisions of choosing an advertising strategy - mix based on RoI in terms of expected short - midterm financial benefits - profits or based on the expected mix of non-financial gains (which can actually translate in profit but in the mid - long-term) with short term financial returns - profits.
In case that we do believe that there are qualitative aspects - benefits, is it possible to determine which they are and measure them by relating them to measurable observations (i.e. from market research)?
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RESPONSES

  • Posted on 11/3/2004 at 10:54 PM Accepted
    There are several possible objectives for advertising, and different companies have different reasons for advertising the way they do.

    When you have an awareness problem, advertising is a way to increase awareness. When you have an alternate use that people may not know about, advertising is a way to tell them about it. When you have a product improvement, advertising is a way to get trier-rejectors to think again about their decision.

    And, of course, advertising is a classic way to create, explain, and reinforce a brand's positioning.

    The objectives are all different, and the metrics you'll use need to recognize your particular objectives. Some companies see advertising as a long-term investment. They expect advertising to sustain a brand over a long period of time. They'll want to track consumer attitudes, brand image, and (perhaps) unaided awareness.

    Other companies want to create quick awareness of a new brand or a product change. They'll want to track advertising awareness and brand awareness (aided and unaided).

    Still other companies haven't even thought about their objectives. They just like to see their name all over the place. They don't need to spend any money measuring effectiveness. They're advertising to the board room anyway, not the consuming public.

    Net, like so many other things, it depends. There's no one-answer fits all.
  • Posted on 11/4/2004 at 7:32 PM Member
    For the record, I would not categorize awareness as a qualtiative factor. It's clearly measurable and trackable, and it's an objective that is often the controlling one.

    The progression is awareness, understanding (of the positioning benefit), preference, intent to purchase, purchase and repurchase. Each of those steps can be directly measured, and each is a legitimate objective of advertising. (Purchase and repurchase, of course, have a number of prerequisite factors, not just advertising.)

    I'm not sure where you're going with the line of thinking. Different companies have different objectives for advertising. Usually it's to generate incremental sales, but not always. And sometime it's longer-term and sometime it's short-term. When you ask why companies advertise, it sounds like you're looking for a single, specific answer.

    What sparked the question? If we understand that, perhaps we can be more helpful.
  • Posted by Chris Blackman on 11/19/2004 at 9:52 PM Accepted
    Companies advertise to get new customers, keep existing ones, and to confirm to recent customers they did the right thing.

    They advertise to tell shareholders they are doing something active to keep the company growing.

    They advertise to tell government they are there.

    And sometimes they advertise to win awards.

    But most of all, they advertise because they've grown to expect they need to.

    Hope this helps.

    Chrisb
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