The Effects of Advertising a Business
Advertising has a number of effects on businesses. Companies use advertising to achieve various goals and objectives. These are usually achieved by varying the messages and content in the advertisements. Hence, the effects that advertising has on businesses are usually deliberate. However, companies can only achieve certain effects by planning their advertising budgets wisely. Companies often spend what they can afford or match competitors' advertising when going after desired effects.
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Building Sales, Profits and Customer Traffic
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Many companies' sales and profits are directly related to the extent of their advertising. A company often measures their return on investment (ROI) when advertising. For example, a company may spend $1,000 on advertising that generates $4,000 in sales, earning a 400 percent ROI. Unprofitable ads are subsequently dropped and replaced with other ads. Companies also use advertising to increase customer traffic in their stores, wholesale establishments or institutions. Companies need customers to increase sales or build repeat business. Therefore, advertising can greatly effect a company's bottom line or profit.
Developing Brand Awareness
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The effects of advertising also can include building brand awareness. Customers need to find out about a company and their products before patronizing their business establishment. Brand awareness is usually developed through repeated exposures of advertisements. The more people times people see a company's advertisement, the more likely they will remember the name and products the company sells. There are generally two types of brand awareness: unaided and aided. Unaided brand awareness is when people think of a company and its products without being prompted. For example, a family gets hungry, thinks about a restaurant then drives there for dinner. Aided brand awareness is when people recall a business only after someone mentions it. Advertising effects both types of brand awareness.
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Targeting Specific Consumers
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A company also can target specific consumers through advertising--those most likely to use their products or services. Companies usually will target consumers by demographics like age and income, usage or desired benefits. Thus, businesses can clearly develop commercials or ads that strongly appeal to various buying groups. For example, a magazine headline stressing weight loss would likely target people who are overweight.
Building an Image
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Advertising also can effect a company's image. Most companies have specific core competencies or characteristics that set them apart from other businesses. For example, a computer software firm stress its strong customer service department in its advertisements. A car company may use advertising to apprise consumers of its high quality and superior engineering. Whatever the case, companies can use advertising to appeal to what buyer's want most in products.
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