Role Value Of Advertising

What What advertising advertising CANNOT doCANNOT do

Why do Why do companies companies advertise?advertise?

What are What are the the

benefits benefits to to

society?society?

What is What is the the

consumer consumer benefit?benefit?

The role and value of advertising

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What does What does advertising advertising

do?do?

www.valueofadvertising.org

What does advertising do?

The The procesproces

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Awareness

Knowledge

Preference

Purchase

“I remember that

brand”“I understand what they are offering me”

“I am going to try it out/buy

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The desired response:

“I choose this over the

competitor” based on

emotional/rational benefits

Why do companies advertise?

The The procesproces

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Awareness

Knowledge

Preference

Purchase

Establish our brand name

Communicate proposition attributes

Establish point of difference versus

competition

Advertiser objectives:

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Everyone Everyone advertisesadvertises

Better Better value value

propositiopropositionn

AccountabiliAccountabilityty

Consumer Consumer choicechoice

What is the consumer benefit?

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Advertising promotes choice

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Cons. Cons. benefibenefit menut menu

Taste Preferences

Price

Quality Convenience

Accountability

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Cons. Cons. benefibenefit menut menu

Ingersoll Rand’s Kryptonite brand replaced 380,000 bike-locks after

impregnable promise was

shattered by a man and his pen.

Source: USA Today, 18 September 2004

Better value proposition

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Cons. Cons. benefibenefit menut menu

When bans on advertising were lifted in some US states, prices of

eyeglasses fell by 30% to 40% thanks to public awareness and competition.

Source: D. Carlton and J. Perloff, Modern Industrial Organization, 1989

Everyone advertises!

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Cons. Cons. benefibenefit menut menu

The top 100 marketers account for only 20% of all media ad expenditure.

Source: AdAge, 21st Annual Global Marketers, 19 November 2007; WARC, World Advertising Trends 2007

Local businesses, not-for-profit organisations, even individuals use advertising…in the classifieds, when distributing fliers for an event, or when selling products on eBay.

CreativitCreativity and y and

creative creative valuesvalues

Sports Sports and and

CultureCulture

Job Job CreationCreation

Media Media pluralismpluralism

InnovatioInnovationn

IntangiblIntangible assetse assets

Economic Economic growthgrowth

What are the benefits to society?

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Societal Societal benefits benefits menumenu

Economic Growth

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Intangible Assets

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On average, the brand constitutes 30% of the stock-market value of listed companies.

Source: Milward Brown Optimor. BrandZ: Top 100 Most Powerful Brands, 2007, pp. 3 & 26

SocietaSocietal l

BenefitBenefits Menus Menu

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Job Creation

US advertising plays a key role in generating 18.2 million of the

126.7 million jobs. Source: Lawrence R. Klein, The Role of Advertising in America, 1999

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benefibenefits ts

menu menu

Innovation

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benefitbenefits menus menu

MP3 technology was invented in Germany, but developed and

brought to market in the US.

Media pluralism

On average, newspapers and magazines rely on advertising revenue for over

50% of their earnings. Source: SEO Economisch Onderzoek-Univ of Amsterdam, Het economische belang van reclame, Centrum voor Merk en Communicatie, 2006,

pp. iii & 52

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benefitbenefits menus menu

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“No advertising at the Olympic Games but no

games without advertising”

Michael Payne (IOC Marketing Director 1983-2004)

Sports and culture

SocietaSocietal l

benefitbenefits menus menu

Creativity and creative values

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benefitbenefits menus menu

Henri de Toulouse-Lautrec was an ad guy.

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Convince citizens against their better judgment Deliver success for an unwanted or poor

quality proposition. “Research shows that 75% of new product

launches fail”: nothing kills a bad product like good advertising. Source: AMR Research Report, 23 June 2005

Ignore societal expectations of responsible advertising reflected in self-regulation codes

What advertising CANNOT do

SustainablSustainable e

developmendevelopmentt

Contributions of the marketing industry

Social Social marketingmarketing

TeachingTeachingA model of A model of responsiblresponsibl

e self e self regulationregulation

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Advertising is the agent of social marketing, which can raise awareness, inspire action and save lives.

Many national governments are among the largest

advertisers.

Procter & Gamble’s Ariel consumers in the UK are twice as likely as the

average consumer to reduce their wash temperature to 30° since the launch of the Ariel Cool Clean UK Campaign.

Sources: ‘P&G Urges Business Leaders to Follow Green Path’, Brand Republic, 26 February 2008; P&G information: www.scienceinthebox.com/en_UK/programs/Cool_savings.html

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A model of effective and responsible industry self-regulation

Recognised as a model system of self-regulation for other

commercial sectors.

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Teaching media literacy: Media Smart

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marketinmarketing menug menu

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Materials are used in 20,000 schools across Europe, reaching 3

million students.