Advertising

Definition:-

Any paid form of nonpersonal presentation and promotion of ideas, goods, or

services by an identified sponsor.

Key decisions in advertising:-

Setting objectives:

➢ Inform
• Introducing new products:- Advertising is one of the most
important things present in or society today, like an old
slogan puts it 'Advertising, your right to choose'.

Advertising helps to keep the consumers informed about

whatever new products or services are available in the
market at their disposal. It helps to spread awareness
about products or services that are of some use to
consumer and potential buyers.

The main aim of advertising, many believe is to sell. These

are the kind of people who vehemently oppose anything
that make advertising seem unethical. Advertising on the
whole helps business as well as the economy to prosper
and makes the consumer aware of the various choices that
are available to him.
➢ Persuade
• Comparative advertising:- Advertising is of great
importance in our world of competition. It is important for
both seller and buyer. Even the government cannot do
without it. First, of all, advertising introduces new products

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 to general public. For example, the public come to know
about useful new medicines for some diseases. We often
learn about new machines for agriculture and industry for
ads
➢ Remind
 Most important for mature products:- Buyers who are using
the brand already. The aim is to serve as a reminder of the
brand's benefits and convince them to continue using it.

Setting the budget:-

A famous comment usually attributed to Lord Leverhulme goes:

“I know that half of my advertising budget is wasted, but I’m not

sure which half”

It is notoriously difficult to measure the effect of advertising on a business’

sales. Advertising is just one of the variables that might affect sales in a
particular period.

These include:

 Stage in the PLC

 Market share

 Level of competition

 Ad clutter

 Degree of brand differentiation

How can a business know whether a specific advertising campaign was

effective?

As a percentage of sales, advertising expenditure varies enormously from

business to business, from market to market. For example, the leading

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pharmaceutical companies spend around 20% of sales on advertising,
whilst business such as Ford and Toyota spend less than 1%. An average
for fast-moving consumer goods markets (“FMCG”) is around 8-10% of
sales.

In practice, the following approaches are used for setting the advertising
budget:

Approaches to setting the advertising budget

Method (1) Fixed percentage of sales

In markets with a stable, predictable sales pattern, some companies set

their advertising spend consistently at a fixed percentage of sales. This
policy has the advantage of avoiding an “advertising war” which could be
bad news for profits.However, there are some disadvantages with this
approach. This approach assumes that sales are directly related to
advertising. Clearly this will not entirely be the case, since other elements
of the promotional mix will also affect sales. If the rule is applied when
sales are declining, the result will be a reduction in advertising just when
greater sales promotion is required!

Method (2) Same level as competitors

This approach has widespread use when products are well-established

with predictable sales patterns. It is based on the assumption that there is
an “industry average” spend that works well for all major players in a
market.

A major problem with this approach (in addition to the disadvantages set
out for the example above) is that it encourages businesses to ignore the
effectiveness of their advertising spend – it makes them “lazy”. It could
also prevent a business with competitive advantages from increasing
market share by spending more than average.

Method (3) Task

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 The task approach involves setting marketing objectives based on the
“tasks” that the advertising has to complete.

These tasks could be financial in nature (e.g. achieve a certain increase in

sales, profits) or related to the marketing activity that is generated by the
campaigns. For example:

• Numbers of enquiries received quoting the source code on the

advertisement
• Increase in customer recognition / awareness of the product or brand
(which can be measured)

• Number of viewers, listeners or readers reached by the campaign

Method (4) Residual

The residual approach, which is perhaps the worst of all, is to base the
advertising budget on what the business can afford – after all other
expenditure. There is no attempt to associate marketing objectives with
levels of advertising. In a good year large amounts of money could be
wasted; in a bad year, the low advertising budget could guarantee a
further low year for sales.

Developing an Advertising strategy:-

An advertisement has three goals mainly. First of all an advertisement is

created to inform the consumers about a company and its products or
services. Once the customers have been informed the next aim is to attract
customers to stimulate sale. A customer comes to know about you, buy your
product or service. Now it is obvious that you want that customer to get back
to you. For achieving this purpose you need to remind them over and again

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about the value they have got with your product or service and this is the
third aim of an ad.

Recognizing the Target Audience:

Before you make an advertisement you should recognize your target

audience. Knowing the age group, gender, job, income and hobby is very
important for you. The next thing to detect is the consumer's behaviors and
their shopping habits (from whom do they buy). Finally you should
concentrate on their needs and desires. If you can determine the consumer
need (develop a desire to buy your product) with your products or services
half of your work is done.

Put Yourself in Your Consumer's Shoe:

Once you identify your target customers put yourself in their shoe to
understand what they expect from you. You should develop your product
concept the way the consumers want to perceive it. Your product is actually
a "bundle of values" as described by Courtland L. Bovee and William F.
Arens. Emphasize on the quality the consumers would like to have in your
product.

Advertising Medium:

There are a number of mediums through which you can transmit your
message to the customers. You should identify the medium your target
audience is exposed to. It can be newspaper ads, popular magazine ads,
radio ads, TV ads, Internet ads, banner ads, direct mail and so on. Instead of
going for a particular medium you can go for multiple mediums since no one
concentrate on a single medium these days.

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Create Unique Advertising Message:

You have crossed all the necessary steps. Now comes the most important
part. It is time to create the advertising message that covers your
marketing objectives as well as your product or service value. You should
focus on the unique features of your products or services. Emphasize the
point that will persuade the customers. Your advertising message is a
combination of content and visual. Use attractive visual and informative
content to win the trust of your customers.

Evaluating advertising campaigns:

1. Step 1

Evaluate website traffic. Study the statistics on the tracking page offered
by your web host. Using these numbers, evaluate the who, where and
when of your prospect and customer base. Determine which parts of the

website and advertising campaign elicit the most results and tailor
future advertising from the findings.

2. Step 2

Position your brand advertising to entice leads. From website and

brochure checklists that offer more information to direct calls for action
on websites and in television commercials, develop advertising methods
that employ diverse methods to attract customers.

3. Step 3

Develop a 1-800 phone number. If your company offers different products

or services, use a different number for each one. You can use an

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 extension number for each product to save on the cost of a separate 1-
800 number for each product. Evaluate the callers' locations, spending
patterns, interests and the call volume at specific times.

4. Step 4

Monitor brand recognition among prospects. Research target groups

before the campaign to evaluate goals. Then keep track of respondents
who request information, contact sales reps or purchase items. The sales
staff needs to bring more prospects into the fold with brand recognition,
regardless of whether they buy.

5. Step 5

Offer coupons for products or services. Determine the time and target
customer group and distribute only to one consumer demographic or use
an all-inclusive approach. Include a request for consumer information to
acquire detailed information about customers.

6. Step 6

Compile a list of direct response goals. If you use direct mail sales pieces,
keep a list of prospects and follow-ups. Evaluate response rates (rate of
return) and calculate the number of leads from each version and
geographic region. Adjust future mailings according to response patterns.

Creative Execution Styles:

Advertising is the promotion of a product or service and is extremely

pervasive in contemporary society. To maximize sales, companies will pay
a premium for wide exposure through the mass media. Advertising space
is common, but not restricted to these realms; billboards, public
transportation, movies (product placement), schools, clothing, even

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bathroom stalls carry ads and the industry is constantly finding new ways
to advertise.

The United States has the largest advertising market, accounting for half
of the world's advertising expenditures (estimated at 500 billion in 2004
by the New Yorker). Japan holds a secure second place over Germany and
the United Kingdom but still at less than one fifth of the U.S. total. In the
United States, the number one target market for most major companies is
the youth market. American youth spend over $70 billion a year as
consumers and also influence their parents’ purchases (The Educators
Reference Desk). Marketing to youth begins in early childhood where
approximately 90% of the ads shown during children’s programs promote
food and drink products. Companies believe that young people are more
inclined to be loyal to their favorite products,

Most companies employ other persuasive tactics to lure the youth dollar,
like enlisting celebrity endorsers. Actors, musicians, and athletes earn a
lot of money to promote everything from cereal to expensive clothes and
lifestyle choices. Companies hope that youth will define their personal
identity loyalty to what they buy, wear and eat.

Although the majority of youth are attracted to logos, brand names, and
popular chains, many others resist brand culture for political reasons. One
example of resistance is the culture jam movement in North America.
Founder and publisher of Adbusters magazine Kalle Lasn and other media
activists are “concerned about the erosion of our physical and cultural
environments by commercial forces.” Culture jamming aims to “change
the way information flows, the way institutions wield power, the way
television stations are run and how food, fashion, automobile, sports,
music and culture industries set their agendas.”

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 Major Media Types:

If money were no object, it would be easy to decide which advertising

medium to go with. All of them! Unfortunately, the reality is that even with a
hefty advertising budget, it is a challenge to create memorable advertising.

So unless you have truckloads of money to spend, you should try one
medium at a time. What works for one product or service may not work for
the next. There are so many different variables that can affect the results of
an advertising campaign—from ad copy to the weather. You will simply have
to test the effectiveness of your message in each medium to find the best
vehicle for promoting your product. Advertising is an art, not a science!

Relative impact of different advertising media

• Direct mail has the highest impact of any medium. Your message
reaches each recipient in a personalized way and at a moment they
have chosen to consider your message. The cost of reaching an

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 individual through direct mail can be even greater than television,
making it the most expensive advertising medium per person reached.

• Television also offers the advertiser an opportunity to speak to a

captive audience. In fact, television viewers are even more apt to fully
“tune into” an advertisement. The cost, though, of purchasing a
television spot is even greater than that of radio.

• Radio offers a dramatic improvement over “print” advertisements. The

“listener” is captive to the message unless they switch stations or turn
the radio off. The cost to reach the same amount of people that a print
ad would reach, however, is significantly higher.

• Outdoor and transit advertisements are hard to avoid viewing. But,

despite the high visibility factor, no one spends any great amount of
time reading them. They are appropriate for very simple messages.

• Magazines offer a slightly better opportunity to catch the reader’s

attention. Readers tend to peruse magazines more carefully than they
do newspapers, and because magazine ads are placed fewer per page,
the competition for the reader’s eye is reduced. But magazine ads cost
more than newspaper ads.

• Newspapers are generally the cheapest way to reach a mass audience.

However, newspapers carry many ads. It is easy for all but the largest
display ads to get lost in the visual clutter. In any case, remember that
newspapers are typically scanned by the reader. If an ad is seen at all,
the headline will be glimpsed and the copy largely ignored.

Price advertising:

Price advertising is used when a benefit is being offered to potential

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customers that is based on price points such as special sales or everyday
discount rates.

• Newspapers are the best bet if you are trying to inform a mass
audience about a short-term sale or special price offer for a product or
service. Newspaper readers are used to looking through the paper for
specials. In some papers certain days are dedicated to certain
categories. Wednesday is typically “food” day, for instance. Saturday is
“automobile” day, and Sunday is “furniture” day. Advertising a
category item on a category day will optimize the number of readers
you reach even though your competition from other manufacturers or
suppliers in your industry will be increased. Just make sure you have a
great headline and a super-great special to offer.

• Radio is a reasonable second best bet for price advertising. The

effectiveness will be increased if your product or service has consumer
recognition in your market. Radio advertising costs more than
newspaper advertising, however, and it is more difficult to convey
price information in this format without overwhelming the listener.

• Television is too expensive for price advertising. Unless you are mixing
a price advertising message with an image-building ad, don’t consider
this medium.

• Direct mail is a real wild card. In order to make this advertising

medium cost effective for a “price” announcement, you will need to
narrow your target audience. If you have access to a highly responsive
small mailing list—of your own customers perhaps—this may be a very
viable advertising option.

• Magazines don’t offer immediate access to an audience. This may

undermine the legitimacy of a special pricing offer, especially if the
sale is for a very limited period of time. Consumers don’t expect price
advertising in magazines and are less likely to respond to such ads
than if they saw them in a newspaper.
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 • Outdoor and transit displays aren’t good for price advertising. Many of
the objections that can be raised for using magazines as
announcement vehicles for product or service sales can be applied
here as well.

Image advertising:

Image advertising is used when the primary advertising goal is to create

company, brand, or product awareness among a group of consumers so that
they may be predisposed to making a purchase from you when they are in
the market for the type of products or services you sell.

• Television is a terrific medium for image advertising. The visual action

and audio allow viewers to feel involved with television. The per person
cost to reach viewers through television, which is typically national in
its reach, is very expensive. The emergence of local cable stations,
however, is opening up this advertising avenue to many businesses
who otherwise would not have been able to afford it. If you are
targeting a small, local marketplace, check out the advertising
programs offered by your local cable station.

• Magazines are not as effective as television as a medium through

which to wage an image advertising campaign. They are a strong
contender, though. The quality of magazine printing offers a nice
venue for conveying exciting imagery. The use of color photography is
especially effective in magazine print advertising.

• Outdoor and transit displays also rely on powerful photographs for

message conveyance. They can be effective for simple image
advertising messages, and especially to reinforce messages already
being presented in other media.

• Radio is significantly less effective than magazines and television when

used for image advertising. Radio can’t effect the strong photographic
impact of print advertising or the drama of television, and is, as such, a
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 much more challenging medium through which to place a strong and
lasting image in the listener’s mind.

• Newspapers are not always an effective medium for carrying an

effective image ad. The graphic reproduction is poor and the consumer
has been conditioned to look at newspaper ads for price
announcements, not image messages. If you do use newspapers as
vehicles for running image advertising, make sure your ad space is
large, perhaps as much as an entire page.

• Direct mail is a very tricky medium to use for image advertising. A

“junk mail” label is the trap you risk here. But it can be effective. The
most successful examples are the lavish four-color catalogs that many
companies send out. If your budget is tight, be creative. For example,
send an announcement piece that looks like an invitation to a society
party.

Local service advertising:

Local service advertising is used when a service is being offered to

consumers within a specific locale or small regional area.

• Yellow Pages or phone book advertising is the most cost-effective local

service advertising medium for many area-specific service businesses.
Advertising in the Yellow Pages requires a firm commitment for one
year. If you are just starting out in business, don’t go hog wild when
you purchase ad space. Wait until you see what kind of results you net
over the year. In this medium, your ad can be smaller than your
competitors’ because you are appealing to consumers who are already
seeking your type of service.

• Newspapers can offer a highly effective format for advertising locally

available services. Localized papers often run a directory of area
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 tradespeople that readers automatically turn to in search of services.
Metropolitan newspapers may group related services, such as
educational or computer related services, together on an editorially
related page on a specific day each week.

Like Yellow Pages advertising, the fact that your ad will be placed
alongside a competitor’s isn’t necessarily a negative. Also, the size of
the ad can be relatively small and still have impact. Interested readers
are already looking for you!

• Direct mail can be a highly effective medium for developing local

service trade. The expense involved in implementing a direct mail
campaign, however, may render this medium cost ineffective.

• Television certainly has impact, but this will be far outweighed by its
expense. Unless your company has an image that must be
communicated in order to attract clientele, such as a dating service
might, this isn’t a great option. However, local cable stations may be
an avenue worth exploring if you are trying to zero in on a particular
town where you expect response to your advertising will be high.

• Radio spots are a poor bet for local service business advertising. Use it
as a last resort if other mediums haven’t panned out for you. Try to
find a station that covers the town or region you serve and is cost
effective.

• Outdoor and transit ads are best left to image ads.

Business-to-business advertising

While business-to-business marketing efforts should be centered on sales or

telemarketing programs, advertising can play an important role in a
successful sales effort. It can help you develop leads that you can follow up
on with a phone call, and it can increase the chances that your sales-people
will have their phone calls accepted or returned.

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• Direct mail allows you to target an audience comprised of those
businesses most likely to respond favorably to your products or
services. Your product or service may have a practical application in
many industries, but try to limit your mailings to those with the most
probable buying potential. Consider placing geographical and industry
size qualifications on your list, too.

Always track your responses. Keep refining your lists as you gain more
experience in direct mail results.

• Magazine advertising in trade-specific publications that cater to your

industry can be effective. But don’t rush out and buy full-page ad
space in a general business national publication! There are hundreds of
trade publications that will allow you to target your customer base
more narrowly and at a much lower cost.

• Radio is a distant third choice for business-to-business advertising. It

can be effective, however, if you find a business-only station or, as a
second bet, a station, such as an all-news station, with a heavy
concentration of listeners who are business people.

This medium will work best if your product or service is unique but has
an appeal to a broad business audience.

• Yellow Pages can be a wonderful venue, and even the best choice, for
a few business-to-business companies in the service sector, but is
totally inappropriate for most others especially product-based
businesses.

• Newspapers aren't generally considered high-impact vehicles for

business-to-business advertising. One obvious place to advertise in
newspapers is in the business sections of both local and national
general and business newspapers. However, most small business won’t
have much luck attracting responses through these fairly general
mediums.

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 • Television may work fine for huge national business-to-business
advertisers like airlines, but is unlikely to work for smaller businesses.

• Outdoor and transit displays have scant applicability in business-to-

business advertising.

Direct response advertising:

Direct response advertising is used when you want to prompt an immediate
response from potential customers. In other words, you want them to make
an on-the-spot decision to purchase your product or service directly from you
and not through a retailer or dealer.

• Direct mail is a good first choice if you are trying to sell a product
directly to consumers that is not available through retail outlets. It is
expensive, but by limiting your target audience to those most likely to
place an order, it can be much more effective than using another
medium that may create interest but not an overwhelming desire to
buy.

• Television is a very remote second choice. Television is, of course, a

high-impact medium, but it is very expensive. It is no coincidence that
most direct response ads you view on television run on weaker
networks or local access channels during nonpeak viewing hours. This
occurs because most direct response television advertisers negotiate
below-rate-card deals in order to afford the exposure, sometimes even
paying for their advertising with a percentage of the revenue from
sales generated.

• Magazines work well if your industry has a specialty publication that

allows you to target a specific audience, such as dollhouse collectors or
sailboat racing enthusiasts. It would be very tough to make a direct
response ad work in a general magazine.

• Newspapers aren’t particularly effective venues for direct response

advertisers. You do find these types of ads in national magazine

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 supplements to Sunday papers. But don’t be fooled into thinking this
tack can work for you. Very few of these ads would gross enough to
cover the advertising costs if rate card prices were paid. Some direct
response advertisers who chose the newspaper medium purchase ad
space at remnant prices, when the publication has odd ad spaces to fill
in at the last moment. Still others negotiate deals to buy ads at further
reduced rates when the publication can’t even find advertisers to place
at remnant rates. Who knows when you might get an appropriate
space in either of these instances!

• Radio can be used, but isn’t recommended. Very few listeners are
likely to copy down product or ordering information.

Organizing the Advertising Function:

Small vs. large companies

Small Business Advertising:-

Small business advertising is a science and an art. Companies often

miss the fundamentals of advertising. Regardless of the size of your
business an understanding of the laws of advertising can reap huge
rewards.

My understanding of these fundamental laws came years ago when I

had the privilege of working for one of the all-time advertising success
stories; NordicTrack. NordicTrack's advertising was based on flawless
execution of fundamentals.

According to Small Business Administration, 5% of an entrepreneur's

gross sales should be budgeted for advertising. A 5% small business
advertising budget can only help if you understand the laws of
advertising.

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6 Laws of Small Business Advertising Success

1. Use One Message: A high response rate ad usually conveys a

single message. NordicTrack's message of the "World's Best Aerobic
Exerciser" was simple and compelling. Your small business advertising
needs to quickly communicate its core message in 3 seconds or less. If
you are fearful and overwhelmed by technology, which computer book
do you buy? "DOS for Dummies" began a best-selling phenomena
because its message was easily understood and to the point.

2. Add Credibility: It has become human nature to distrust

advertising. Claims need to be real and credible. Roy H. Williams, best-
selling author of the "Wizard of Ads" says, "Any claim made in your
advertising which your customer does not perceive as the truth is a
horrible waste of ad dollars."

NordicTrack added enormous credibility from a University of Wisconsin-

LaCrosse research study, ranking the cross-country ski exerciser first in
the areas of weight loss, body fat reduction, and cardiovascular fitness.
Ivory soap's advertising success was attributed to its credible
statement that ivory soap is the 99-44/100% pure.

3. Test Everything: Large businesses have a greater margin to waste

capital and resources without testing advertising. Small businesses do
not have the luxury. Use coupons, codes, and specials to measure the
headline, timing, and placement of your ad. Test only one item at a
time and one medium. Testing can be as simple as asking every
customer for several weeks how they heard of your business.

4. Be Easy to Contact: Every single brochure, box, email and all

company literature should have full contact information including:

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 website and email address, phone and fax numbers, and company
address. It seems simple but is forgotten by most companies. At
NordicTrack, every box a ski machine went into had full contact
information and the "World's Best Aerobic Exerciser" tagline. Be
everywhere.

5. Match Ads to Target: Successful business advertising speaks to

one target market only. At NordicTrack, the ads were tailored to each
market. An ad in a medical publication preached the cardio-vascular
benefits of cross-country skiing to heart patients. Ads in women's
magazines discussed the weight-loss and calorie burn from cross-
country skiing. Focus the message to the target group.

6. Create Curiosity: Successful business advertising does not sell a

product or service. NordicTrack's ads sold the free video. Once a
potential customer watched the video, they contacted the company for
more information. The end result, millions of dollars of sales. Create
ads that generate interest and make the customer want more
information.

Having a poor response is not the medium's fault. Often the problem is
the message. Small business advertising is not a quick fix solution to
marketing your company. It takes planning, testing and constant
exposure to have an impact on your small business. Done correctly,
small business advertising can be a winning strategy.

Large Business Advertising:-

To get marketing ideas, just look at companies with huge successful ad

campaigns. You are looking for new ideas that will work, and theirs do. Now
you are probably thinking about the cost of those big ideas. You can do

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something similar at a much smaller level than what they have done. It is a
good plan and possible.

All you really have to do is look around for a few minutes and you will see
evidence of big advertising. Really if you just think about it, you will have
different businesses and their logos popping into your head quickly. You, like
everyone else gets used to seeing a business name that goes with a logo of
some kind. This isn't something that you even need to think about too much.
It is something that gets stuck in your head.

You know and recognize this because the companies will use the logo
repeatedly like crazy. It goes on the products, the things they sell, the items
made just to be given to people. They use all sorts of little things that get
carried all over. When you see enough of it on a coffee cup, or a grocery bad,
it stays with you.

This is something that you can do as well. It is a gentle yet creative sort of
plan that can get your business a lot of recognition. Any business can start
using their logo on products just like those huge corporations. It isn't the
type of advertising that causes people to stop and stare. It is something that
people see and then see again until they don't even remember why they
know what that logo represents.

Promotional products can really help boost your business and for a very
small investment. So follow the best businesses in the world and invest in
this simple and effective form of advertising. It really can make a difference
in your business growth.

Nature of advertising agencies:

An Advertising Agency or ad agency is a service provider that works for
clients to create an effective and goal oriented advertising campaign aimed
at representing the Company positively in the eyes of its target customers.

Businesses hire advertising agencies to connect with their target customers.

In the face of stiff competition, every Co / brand wants to break through this

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clutter and create a favourable space for itself. Ad agencies help clients to do
just this by creating attention grabbing, persuasive and unique ad
campaigns that make the brand stand out in the minds of customers.

What does an Advertising Agency Do?

A plethora of Businesses, Corporations, Government Organizations and Non

Profit set-ups hire advertising agencies to advertise their products, brands
and services to present and prospective customers.

#1 Understand the Product / Company: An advertising agency begins by

getting well acquainted with the client's goals, products & target audience.
This knowledge proves beneficial in planning and creating an effective
advertising campaign.

#2 Plan & Create an Advertising Campaign: Once an advertising agency

understands its clients' needs, the process of brainstorming and planning
begins. Keeping in mind the client's goals (which can range from

• pushing sales of its products and services

• introducing new products in the market

• reiterating its brand's benefits

• attracting new customers or keeping in touch with old ones

the advertising executives work towards creating an effective advertising

campaign (a single or a series of attention grabbing and unique ads) which is
within the client's marketing goals and budget. This includes creating
interesting slogans, attractive jingles and attention grabbing body copy for
advertisements. The client has the final word and may ask for rework.

#3 Strategize: Some Companies like to outsource their overall marketing

responsibilities to advertising agencies. In such a case, the ad agency takes
over the process of brand building, strategizing and pushing sales through
other promotion techniques like sales promotions etc.

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Advertising Agencies vary in size in India & abroad - from a couple of
people handling all responsibilities to a medium or large sized agency that
hires specialized professionals to function each department. It has been
generally seen that Full Service Ad Agencies are well equipped to plan and
create advertising campaigns for a range of media including TV commercials,
Radio jingles, print advertisements etc. Depending on the budget, client's
select their agency.

International Advertising:-
International advertising entails dissemination of a commercial message to
target audiences in more than one country. Target audiences differ from
country to country in terms of how they perceive or interpret symbols or
stimuli, respond to humor or emotional appeals, as well as in levels of
literacy and languages spoken. How the advertising function is organized
also varies. In some cases, multinational firms centralize advertising
decisions and budgets and use the same or a limited number of agencies
worldwide. In other cases, budgets are decentralized and placed in the hands
of local subsidiaries, resulting in greater use of local advertising agencies.

International advertising can, therefore, be viewed as a communication

process that takes place in multiple cultures that differ in terms of values,

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communication styles, and consumption patterns. International advertising is
also a business activity involving advertisers and the advertising agencies
that create ads and buy media in different countries. The sum total of these
activities constitutes a worldwide industry that is growing in importance.
International advertising is also a major force that both reflects social values,
and propagates certain values worldwide.

In international markets the process of communicating to a target audience

is more complex because communication takes place across multiple
contexts, which differ in terms of language, literacy, and other cultural
factors. In addition, media differ in their effectiveness in carrying different
appeals. A message may, therefore, not get through to the audience
because of people's inability to understand it (due to literacy problems),
because they misinterpret the message by attaching different meanings to
the words or symbols used, or because they do not respond to the message
due to a lack of income to purchase the advertised product. Media limitations
also play a role in the failure of a communication to reach its intended
audience.

The process of communication in international markets involves a number of

steps. First, the advertiser determines the appropriate message for the
target audience. Next, the message is encoded so that it will be clearly
understood in different cultural contexts. The message is then sent through
media channels to the audience who then decodes and reacts to the
message. At each stage in the process, cultural barriers may hamper
effective transmission of the message and result in miscommunication.

In encoding a verbal message, care needs to be taken in translation.

Numerous examples exist of translation problems with colloquial phrases.
For example, when the American Dairy Association entered Mexico with its
"Got Milk?" campaign, the Spanish translation read "Are You Lactating?" Low
levels of literacy may result in the need to use visual symbols. Here again,
pitfalls can arise due to differences in color association or perception. In

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many tropical countries, green is associated with danger and has negative
connotations. Red, on the other hand, is associated with weddings and
happiness in China. Appeals to humor or sex also need to be treated with
considerable care as their expression and effectiveness varies from one
culture to another. The dry British sense of humor does not always translate
effectively even to other English-speaking countries.

In addition to encoding the message so that it attracts the attention of the

target audience and is interpreted correctly, advertisers need to select
media channels that reach the intended target audience. For example, use of
TV advertising may only reach a relatively select audience in certain
countries. Equally, print media will not be effective where there are low
levels of literacy. Certain media may also be more effective in certain
cultures. For example, radio advertising has substantial appeal in South
America where popular music is a key aspect of the local culture.

The cultural context also impacts the effectiveness of communication. In

"high context" cultures, such as the collectivist Asian cultures of Japan and
China, the context in which information is embedded is as important as what
is said (Hall 1976). In low context cultures, which include most Western
societies, the information is contained in the verbal messages. In these
cultures, it is important to provide adequate information relating to the
product or service in order to satisfy their need for content (De Mooij 1998).
Conversely, people in high context cultures are often more effectively
reached by image or mood appeals, and rely on personal networks for
information and content. Awareness of these differences in communication
styles is essential to ensure effective communication.

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