Skip to main content
Business LibreTexts

8.5: Understanding Advertising

  • Page ID
    • John Burnett
    • Global Text Project

    \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

    \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)

    \( \newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\)

    ( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\)

    \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\)

    \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\)

    \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\)

    \( \newcommand{\Span}{\mathrm{span}}\)

    \( \newcommand{\id}{\mathrm{id}}\)

    \( \newcommand{\Span}{\mathrm{span}}\)

    \( \newcommand{\kernel}{\mathrm{null}\,}\)

    \( \newcommand{\range}{\mathrm{range}\,}\)

    \( \newcommand{\RealPart}{\mathrm{Re}}\)

    \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\)

    \( \newcommand{\Argument}{\mathrm{Arg}}\)

    \( \newcommand{\norm}[1]{\| #1 \|}\)

    \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\)

    \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\AA}{\unicode[.8,0]{x212B}}\)

    \( \newcommand{\vectorA}[1]{\vec{#1}}      % arrow\)

    \( \newcommand{\vectorAt}[1]{\vec{\text{#1}}}      % arrow\)

    \( \newcommand{\vectorB}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

    \( \newcommand{\vectorC}[1]{\textbf{#1}} \)

    \( \newcommand{\vectorD}[1]{\overrightarrow{#1}} \)

    \( \newcommand{\vectorDt}[1]{\overrightarrow{\text{#1}}} \)

    \( \newcommand{\vectE}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash{\mathbf {#1}}}} \)

    \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

    \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)

    \(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)

    Undoubtedly, advertising is the promotional element that most consumers feel they know the best and hold strong opinions about. This is a result of the visibility and intrusiveness of advertising. In fact, most people have little understanding of advertising.

    The organization of advertising

    There are within the advertising industry a wide variety of means by which advertising is created and placed in media. At one extreme, an individual might write and place his own classified ad in a newspaper in the hope of selling his daughter's canopy bed. At the other extreme, the advertiser employs a full-service advertising agency to create and place the advertisement, retaining only the function of final approval of plans developed by that agency. Significant specialization is developed within the full-service advertising agency to discourage clients from hiring any outside vendors or other parties to perform any of the various functions involved in planning and executing advertising programs for the various advertisers that the agency serves. Another organizational possibility is a full-scale, in-house advertising department. This department may have total responsibility for all aspects of the advertisement, or some of the tasks might be optioned out to ad agencies or other types of specialty organizations, e.g. production, talent, media placement. It is not unusual for a large corporation to employ all of these possibilities or to use different agencies for different products or for different parts of the country.

    Whether or not the advertiser uses an advertising agency, does his advertising in-house, or uses some combination of the two depends upon a host of factors unique to each organization: available funds, level of expertise, expediency, and so forth. Regardless of the influencing factors, a number of basic functions must be performed by someone if creative and effective advertisements are to be placed:

    • what products, institutions, or ideas are to be advertised;
    • who is to prepare advertising programs;
    • who the organization engages and gives policy and other direction to the advertising agency, if any agency is used;
    • who in the organization has the authority to develop advertising work and/or approves the advertising programs presented by the advertising agency;
    • who pays the advertising bill;
    • who determines the extent to which advertisements help reach the stated objectives.3

    The advertising department

    A company advertising department can range from a one-person department to one employing 500 or more people. Regardless of the size, advertising departments share similar responsibilities:

    • formulating the advertising program
    • implementing the program
    • controlling the program
    • presenting the budget
    • maintaining relationships with suppliers
    • establishing internal communications
    • setting professional standards
    • selecting an advertising agency

    The advertising agency

    The relations between an advertising agency and a client can go on for years, although some clients do move from agency to agency. Firms such as DuPont, Procter & Gamble, Kraft, Kellogg, and General Mills rarely change agencies.

    Clients employ advertising agencies because they believe that the agency can: (a) produce better-quality, more persuasive messages for their products; and (b) place these messages in the right media so that the message reaches the greater number of prospects. Clients who believe they can do better themselves set up their own in-house agencies. However, relatively few of them exist and these are in specialized fields such as retailing.

    Developing the creative strategy

    Once all the relevant facts are gathered and evaluated, the process of actually creating the advertisement is appropriate. This process is very complex, and a complete description of it is well beyond the scope of this book. However, it is possible to highlight the primary parts of this process.

    To begin with, the person or persons actually responsible for the complete advertisement depends upon the advertiser's organization of the advertising function and whether an advertising agency is used. More than likely, the development and approval of advertising creation is the responsibility of the senior advertising manager within the advertiser company and, when an advertising agency is used, of the agency management. In most agencies, the responsibility is that of the senior account person, in conjunction with the senior creative person assigned to the account. The advertising effort can be divided into two elements: the creative strategy and creative tactics. The creative strategy concerns what you are going to say to the audience. It flows from the advertising objectives and should outline what impressions the campaign should convey to the target audience. Creative tactics outline the means for carrying out the creative strategy. This includes all the various alternatives available, which will help reach the advertising objective

    The place to begin the creative strategy is to ascertain the proper appeal to employ in the ad. (See Table 9) Identifying the appropriate appeal is just the first part of the advertising design process. The second part is to transform this idea into an actual advertisement. To say that there are a large variety of ways to do this would be a gross understatement. The number of techniques available to the creative strategist are not only vast, but the ability of more than one technique to successfully operationalize the same appeal makes this process even more nebulous.

    Table 9: Primary advertising appeals

    Product/service features

    Many products have such strong technology or performance capabilities that these features can serve as a primary advertising appeal.

    Product/competitive advantage

    When an advertiser can determine that his product is superior, either in terms of features, performance, supporting services, or image, emphasizing a competitive advantage has proved to be a successful appeal.

    Product/service price advantage

    Offering a product at a reduced price or under some special deal arrangement (e.g. buy-one-get-one-free) may be the only viable appeal in a particular ad.

    News about product/service

    There are times when a truly new product is developed, or when an existing product is changed or improved in a substantial manner, that highlighting this single element is the core appeal.

    Product/service popularity

    Although the manner varies, the notion of claiming that a product is "number one" or the most popular is an appeal that has been around for a long time.

    Generic approach

    In such advertising, a product or service category is promoted for its own sake, but individual makes or brands of product are not singled out.

    Consumer service

    A popular appeal is to illustrate through the advertisement how the product may be used to best serve the needs of the consumer.

    Savings through use

    An opportunity to save time, money or energy is always very appealing to consumers.


    Helping us feel better about ourselves (e.g. personal care, clothing, automobiles) is an appeal that many people cannot resist.

    Embarrassment or anxiety

    Situations that represent a threatening situation, either physically or socially, can provide the basis for an effective appeal.

    Product trial

    When this appeal is used, the advertiser offers a free sample, a price reduction, or some other purchase incentive to encourage consumer use or trial.


    This type of appeal presents a company or corporation in a favorable light in order to create a favorable impression or image.

    Developing the media plan

    Although the media plan is placed later in this process, it is in fact developed simultaneously with the creative strategy. This area of advertising has gone through tremendous changes; a critical media revolution has taken place.

    The standard media plan consists of four stages: (a) stating media objectives; (b) evaluating media; (c) selecting and implementing media choices; and (d) determining the media budget.

    Stating media objectives

    Media objectives are normally started in terms of three dimensions:

    • Reach: number of different persons or households exposed to a particular media vehicle or media schedule at least once during a specified time period.
    • Frequency: the number of times within a given time period that a consumer is exposed to a message.
    • Continuity: the timing of media assertions (e.g. 10 per cent in September, 20 per cent in October, 20 per cent in November, 40 per cent in December and 10 per cent the rest of the year).

    Evaluating media

    As noted in Table 10, there are definite inherent strengths and weaknesses associated with each medium. In addition, it would require extensive primary research either by the sponsoring firm or their advertising agency in order to assess how a particular message and the target audience would relate to a given medium. As a result, many advertisers rely heavily on the research findings provided by the medium, by their own experience, and by subjective appraisal.

    Selection and implementation

    The media planner must make media mix decisions and timing directions, both of which are restricted by the available budget. The media mix decision involves putting media together in the most effective manner. This is a difficult task, and necessitates quantitatively and qualitatively evaluating each medium and combination thereof.

    Unfortunately, there are very few valid rules of thumb to guide this process, and the supporting research is spotty at best. For example, in attempting to compare audiences of various media, we find that A C Nielsen measures audiences based on TV viewer reports of the programs watched, while outdoor audience exposure estimates are based on counts of the number of automobile vehicles that pass particular outdoor poster locations. The timing of media refers to the actual placement of advertisements during the time periods that are most appropriate, given the selected media objectives. It includes not only the scheduling of advertisements, but also the size and position of the advertisement.4

    Determining the media budget

    This budget is a part of the advertising budget, and the same techniques and factors that apply to the advertising budget apply to the media budget as well.

    Banner advertisements

    Before leaving the topic of advertising, both creative and media, it is important to introduce a new form of advertising—banner advertising. Banner ads are the dominant form of online advertising. Banner ads are graphic images in Web pages that are often animated and can include small pieces of software code to allow further interaction. Most importantly, they are "clickable", and take a viewer to another Web location when chosen.

    Banner ads typically run at the top and bottom of the page, but they can be incorporated anywhere. The CASIE organization has developed a small number of standard sizes and formats. Like the Web itself, banner ads are a mixture of approaches, with elements of traditional print advertising and more targeted direct advertising. Banner ads include direct marketing capabilities. Each banner carries with it a unique identifier. This allows the website to track the effectiveness of the ad in generating traffic. Measurability permits ad banner pricing based on results and behavior. Click-through pricing ignores impressions and charges the advertiser based on the number of viewers that select the ad and follow it to the linking website.

    Admittedly, the performance of banner ads to date has been less than stellar. One company, San Francisco-based Organic, has approached the problem of ineffective online advertising with a product called "expand-o". This new ad vehicle allows an advertiser to include some of its website's content in an expandable banner ad. At the click of a mouse, the advertisement expands to as much as five or six times its original size.

    Table 10: An appraisal of mass media





    • strong emotional impact

    • mass coverage/small cost per impression

    • repeat message

    • creative flexibility

    • entertaining/prestigious

    • high costs

    • high clutter (too many ads)

    • short-lived impression

    • programming quality

    • schedule inflexibility


    • provides immediacy

    • low cost per impression

    • highly flexible

    • limited national coverage

    • high clutter

    • less easily perceived during drive time

    • fleeting message


    • flexibility

    • community prestige

    • market coverage

    • offer merchandising services

    • reader involvement

    • short life

    • technical quality

    • clutter

    • timing flexibility

    • two-tiered rate structure


    • highly segmented audiences

    • high-profile audiences

    • reproduction qualities

    • prestigious

    • long life

    • extra services

    • inflexible

    • narrow audiences

    • waste circulation

    • high cost


    • inexpensive

    • flexible

    • reminder

    • repetition

    • immediacy

    • short/concise messages

    • negative reputation

    • uncontrollable

    • inflexible

    Direct mail

    • flexibility

    • develop complete/precise message

    • supplement

    • negative image

    • high cost per impression

    • high production costs

    • dependent upon mailing list

    Specialty advertising

    (Directories, matchbooks, calendars, etc.)

    • positive reinforcement

    • segmented markets

    • flexible

    • wasteful

    • expensive


    • flexible

    • repetition

    • involvement

    • hard to measure

    • limited market coverage

    • uncontrollable

    For instance, an expand-o for Fort Washington, PA-based CDNow provides consumers with a sample of dynamically updated content housed on the music retailer's site. When the consumer clicks an arrow on the ad, it expands to show the top 10 songs in CDNow's top 100 Billboard Chart.5

    This page titled 8.5: Understanding Advertising is shared under a CC BY license and was authored, remixed, and/or curated by John Burnett (Global Text Project) .

    • Was this article helpful?