Whitepaper on the Advertising industry

What is advertising?

The ultimate aim of an advertisement is to inform the public and thereby influence them to buy services or products with the help of oral or visual messages. Advertising creates awareness about a particular service or product among the consumers. The most common forms of advertising media include radio, T.V, magazines, newspapers, internet and billboards.

Advertising has indeed become a part and parcel of our daily life. Be it, global brands or organizations or famous persons or religious firms, all of them make use of some type of advertisements or the other. Advertising facilitates effective communication with the target audience. It has grown leaps and bounds in the recent past, primarily because of evolving social trends and economic liberalization.

The exact definition of advertising:

 The word ‘Advertising’ is derived from the Latin term ‘ad-verter’ that means to turn the attention. This is true based on the fact that all advertisements try to turn the listener/viewer/onlooker/reader’s attention on a service/product/idea. Hence it is understood that everything that turns the attention towards a service/article/idea could be termed as Advertising.

While there are several definitions for advertising, the largely accepted one is provided by the American Marketing Association. It says that, “Advertising is done by an identified sponsor in the form of non-personal presentation and promotion of services, ideas and goods”.

The following points are highlighted by this definition:

i.                    Advertising could be any paid communication form.

ii.                  It could assume any form such as audio, visual, oral and written forms.

iii.                It must contain a non-personal presentation.

iv.                Advertisements tend to present and promote goods, ideas or services.

v.                  There must be an identified sponsor for each advertisement.

But this particular definition offered by the American Marketing Association possesses a few limitations. To start with, several people argue that the definition does not deal with the persuasion aspect of Advertising, which is very crucial for the success of any advertisement. Focussing on this persuasion aspect, another Advertising definition was proposed below:

“Advertising is paid, non-personal communication of information from a known sponsor by means of employing mass media for the purpose of persuading or influencing the audience for gaining optimum profits.”

Even though this definition speaks about the persuasion side of advertising, the main emphasis lies on the commercial aspect of advertising. Still all ads can’t be simply tagged as commercial. For example, various government ads on quitting smoking, driving safely, saving water and protecting girl child are not based on commercial gains. Hence the above definition can’t also be accepted as a comprehensive one for sure.

Advertising Types:

The process of advertising can be categorized based upon:

1. Target audience (Trade/Consumer/Industry)
2. Geographical Spread (Local/National/Global)
3. The advertised service/product/idea/place/organization
4. The intended objective (Stimulation of Primary or Secondary demand, Direct or indirect action, public service or cooperative advertising)
5. Others

Based on Geographical Spread:

1. Global Advertising:

Multinational companies consider the whole world as their marketplace. Top organizations such as Sony, IBM, Pepsi, Coke utilize this marketing strategy through the support of various media outlets located all over the world.

A classic example will be the ‘Open happiness’ campaign launched by Coke by the end of January 2009 in the USA. Later, it decided to introduce this campaign in India too as a strategic move being the first of its kind ever. So the brand’s long-time Indian ambassador Aamir Khan started campaigning for it in the very same year. Just as a bottle of coke brought unity and joy among the people, Aamir Khan was considered as the messenger of optimism in these advertisements.

2. National Advertising:

It means that the company has a nation vide target market, but the ads won’t reach the entire nation’s people. For it, the advertising company forms partnership with nationally recognized media houses. Various large established brands such as Sunsilk Shampoo, Lux soap, Colgate Toothpaste and TajMahal Tea are advertised using this particular technique.

3. Local Advertising:

Some firms will desire to limit their ads up to a particular region or state. Certain other companies begin this process during their initial stages and start spreading out once their brand got well-established in the local market. A good example for this case will be the Nirma washing powder, which was initially sold only in the Gujarat market and now a renowned brand across the whole nation.

Many retail shops also carry out this tactic by employing marketing efforts covering only their town or city with the aid of a note-worthy local media. You can consider Big Bazaar in this regard, that advertises in Gurgaon newspapers while simultaneously circulating its copies in Delhi and NCR region. In a few exceptional cases, several big MNCs too opt for this idea while they are in the course of pre-testing a product in selected areas. Based on its performance and success, the campaign will later be thrown open to the entire country’s citizens.

Depending upon the target audience:

I.                   Consumer Advertising:

This form of advertising is commonly targeted towards the end users or consumers. Advertisements for detergents, soaps, coffee, tea, soft drinks, televisions, washing machines, cosmetics and refrigerators come under this category. You can typically see these product based advertisements in various mass media channels like radio, magazines, television and newspapers.

II.                Trade Advertising:

These ads come under consumer-product advertising type, where the retailers or wholesalers will purchase and resell the products to their customers. The best example will be the Coke’s advertisement in a trade magazine about ‘Franchising’, for promoting it among the food store owners. Their sole aim is to expand the distribution of the product that is advertised.

Retail advertising is a type of trade advertising in which the sellers advertise their products directly to the potential buyers. It is primarily performed by establishments that sell their services to the common men such as the banks, petrol bunks and beauty stores. The primary objective is to engage more traffic by giving attractive discounts on the best-sellers or by promoting the image of the specific store. This could be achieved by highlighting the top brands, wide selection and friendly knowledgeable staff.

Here are a few other reasons for doing Retail advertising:

1. Create awareness among the public about the store’s brand.
2. Develop consumer’s knowledge about the services and items for easing the selling process.
3. To effortlessly deliver messages about the recent ongoing sales promotions.
4. For building and shouting out the shop’s personality or image.
5. Instigate the consumer’s desire for shopping at your store.

III.             Industrial Advertising:

This advertising method is predominantly aimed towards firms and businesses that buy and utilize industrial equipments like machinery, raw materials, equipments and tools. For instance an electric motor based ad campaign could be intended for washing machine manufactures, while another tool based ad might be focussed on tractor manufacturers. But it is a known fact that the industrial buyers are fewer in number in comparison with the regular consumers. Technical journals and trade are the main media for serving the industrial advertising purpose.