Running

head: ADVERTISING MARKET CHANGES

Changing Advertising Methods in a Diversifying Culture

Jonathon T. Davis
Jtdavis102@gmail.com

Waxahachie Global High School

Mrs. April Moon
11/6/14

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Table of Contents

Abstract........3
Introduction..... 4
Advertising In the Twentieth Century.4
Figure 1......5
Methods of Advertising.. 5
Advertising in the Twenty-First Century.6
Figure 2........7
Advertising Sub-Divisions...8
Conclusion...9
References..11
Appendix A....13
Appendix B....14

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Abstract
Advertising has been prevalent in human culture throughout the 20th and 21st centuries.
The effectiveness of various advertising methods, mediums, and tactics has swayed with
the technological and cultural changes that society has undergone. Recent developments
that have taken place following the turn of the century have begun to reduce the
effectiveness of advertising through conventional means. Netflix has funneled billions in
revenue away from conventional ad campaigns in their effort to expand their video
streaming empire (C. Smith, n.d.). It is shifts like these that have begun to reduce the
effectiveness of conventional advertisement campaigns. Although advertising continues
to benefit corporations, organizations, and nations, newer and more up-to-date methods
will need to be employed on a grander scale if improved results are desired. Research
shows that advertisement revenue in the internet sector is growing rapidly and will likely
soon outpace that of conventional television ads (Statista, 2012). Changes in the industry
are liable to happen within the coming years (Forbs, n.d.).

KEY WORDS: Advertising, Revenue, Business, Media, Profit, Culture,

Video Game, Internet, Print News, Broadcast

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4
Introduction

Revenue collected in the advertising industry has been in a state of steady incline
since the turn of the twenty-first century. In 2001, advertising profits finally broke the 80
billion dollar barrier in the United States. Since then it has risen to over 100 billion in
2012 (Statistia, 2014). Revenue increases in advertising generally lead those in the
industry to believe that the effectiveness of the advertisements is on the rise as well.
However, the overall effectiveness of advertisements has been in decline. This trend is
most visible when investigating fraudulent views in both online and televised
advertisement delivery programs. According to Outsell Incorporated (2006), On
average, advertisers estimate that 14.6 percent of the inquiries they are billed for are
fraudulent. Technological advances in media sharing in recent years have begun to
outpace the rate in which current advertising methods can reach their audiences. Services
such as Netflix, are causing large shifts in the ways in which advertising corporations
conduct business (Jayson, 2012).
Advertising in the Twentieth Century
Throughout the twentieth century, print based
advertisements accounted for the vast majority of
advertising views. Prior to the turn of the millennium,
advertising revenue from newsprint and magazines
alone totaled over seventy billion USD (Statista,
2014). However, in years as recent as 2012, revenues
from such sources have dropped to just below thirty
billion (Statista, 2014). These numbers began their

Figure 1: An example of a WWII propaganda

poster. These were very common for the time.

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ever-downward spiral upon the introduction of the television. By the year 1950, over fifty
percent of families in the United States owned a television (Farnsworth, 1950). After just
12 years in 1962, it was estimated that over ninety percent of families had joined the
ever-expanding market (Genoa, 2001). The days where everyone's dad would walk out to
grab the paper were fading.
United States advertising in the twentieth century cannot be better exemplified
than by the propaganda efforts made by the nation during World War II. During the
Second World War, the United States government utilized television and radio
broadcasts, posters and flyers, and movie theater showings and public speeches (National
WWII Museum, 2014). These propaganda adverts were used to for a multitude of
reasons. Desired effects ranged from spurring the purchasing of war bonds, increasing
enlistment rates, or possibly instilling the fear of the enemy into the general public
(Wikipedia, 2014). An example may be seen in figure one (pictured above).The twentieth
century brought about for the first time, the ability to advertise to large amounts of people
via radio and television. It created a large boom in the industry and allowed more
businesses and organizations to reach more people than ever before.
Methods of Advertising
Throughout history, companies, organizations, and nations have worked to perfect
the art of advertising. Hundreds of advertising methods exist, but only a select few can be
noticed in the scope of everyday life. The following advertising methods are currently
implemented and are effective in todays market. The first mentionable method of
advertising delivery is print advertising. Print adverts are one of the oldest conventional

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forms of media delivery. They are simple advertisements that are placed in journals,
newspapers, magazines, booklets, flyers, and direct mail (Suggett, 2014).
Secondly, wide stream media broadcasting is among the most popular today.
Movie previews, radio commercials, televised paid programing, and spot advertisements
all fall into this category (Sugget, 2014). Wide stream media broadcasting operates on the
simplest and most central advertising principal.
To inform as many people about new products and services offered by an
organization, persuade people to buy these products or make use of the
services offered and then to remind people about the organization and
encourage repeat purchase and use (Za, 2007)
The last frontier of advertising is by digital online adverts. These consist of any
advertisement that is delivered to the viewer via an Internet service connection. In recent
years, this felid has grown considerably. Large, more conventional companies have
begun to put forth efforts to distribute advertisements on these newer mediums.
Advertising in the 21st Century
Internet advertising has managed to reach more viewers in the last ten years then
all collective advertisements of the twentieth
century (Marketing Land, 2013). The Google
owned website, YouTube, manages to receive an
estimated forty-five million views per day. A
single ad on the YouTube homepage runs up a
charge of $375,000 USD per 24 hours of airtime
(Dave, 2011). Companies like Google have lead

Figure 2: A graph depicting the advertising spending of the

United States industry in the year 2013.

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the way in creating and exploiting new and innovative advertising mediums that are
required for the twenty-first century. A Douglass Rushkoff exclaimed,
Google did a great job hacking the Web to create search - and then monetizing
search with advertising. And Apple did a great job humanizing
software so that formerly daunting computers and

hardware and

applications could become

consumer-friendly devices - even a lifestyle brand. (Rushkoff, n.d.)

As of 2013, internet advertisements extend to the largest of audiences. However, thanks
to the ease of publication over the World Wide Web, accounts for only a small
percentage of overall advertisement spending. Internet advertising currently only
accounts for 9.7 percent of all reported advertisement spending in the United States
(Statista, 2013).
Advertising Sub-Divisions
In the modern age, over ninety nine percent of advertising expenders are funneled
through in descending order (see figure 2): cable television, network television, consumer
magazines, spot television, local newspapers, internet, syndicated television, foreign
language television, outdoor billboards, local radio broadcast, B-to-B magazines, national
newspapers, national spot radio, Sunday magazines, network radio, foreign language
newspapers, and local magazines. Appendices A and B may be referenced for additional
representation of industry revenue and expenses.
Recently, advertising turnouts for prime time television networks have been in
great decline. Services, such as Netflix, Amazon Prime, and Hulu plus, are online video
streaming services, in which subscribers pay premiums in order to access to thousands of
movie titles. These services direct billions in revenue away from advertising every

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quarter. Netflix, heading the pack with over fifty million subscribers in over twenty
countries, accounts for over one third of all personal internet bandwidth usage in the
United States.
The advertising industry of the United States has shifted over the last fourteen
years. It has become a young mans game. It is a market of high-speed internet and flashy
electronic billboards. Companies must adapt quickly to respond to the changing audience
demands (Albert, 2014). Additionally, the newest form of advertising in the global
market to date is the addition of in-game advertising (Hicks, 2014). In-game
advertising is the systematic implementation of advertisements inside of a virtual world;
which is navigated by human players. These advertisings are extremely cost effective and
have the potential to reach millions of youthful participants. The largest advantage to ingame advertising is that it allows subliminal adverts to be distributed to individuals in an
entertained and enjoyable environment (Ghirvu, 2012).
For most, advertisements present themselves as distracting, bothersome, and
general annoyances. Additionally, many game companies advertise their own products
within games developed. Companies, such as Microsoft, have advertised products, such
as the Xbox One, within the games that they are played on the earlier Xbox platform,
Xbox 360. Viewers tend to be put off by unwanted advertisements and in turn are less
receptive to the ideas that are in delivery. Whilst the individual is playing a video game,
they are immersed inside of a world built for fun and entertainment. This new state of
mind helps a recipient of an advert message to be more receptive and increases the
effectiveness of the advertisement on the whole (Ghirvu, 2012). The realm of in-game
advertising promises an effective way to distribute not just advertisements, but

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advertisements that will be perceived as more trusting and enjoyable by their viewers.
Conclusion
Good advertising does not just circulate information. It penetrates the public
mind with desires and belief (Burnett, n.d.). The art of advertisement has changed
drastically since 1900. New technologies, new people, new ways of thinking all come
into play. With the worlds population having increased by over 5.3 billion people in the
last hundred years, there are more people than ever before to be marketed to (Geohive,
2011). If corporations seek to effectively advertise their products and services in the
future, it is imperative that they invest in the new mediums that have presented
themselves in recent years.

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10
References

Advertising In 2020: The industry's key players weigh in with divergent strategies.
(n.d.). Retrieved November 13, 2014, from
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Albert, S. (n.d.). 20 reasons your small business should use social media.
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American propaganda during world war II. (2014, October 27). Retrieved
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American_propaganda_during_World_War_II
Outsell Inc., Analytics for the information industry. (2014, January 1). Retrieved
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GeoHive. (2011, January 1). Retrieved November 6, 2014, from
http://www.geohive.com/earth/his_history1.aspx
Ghirvu, Alinia. (2012). In game advertising: advantages and limitations for
advertisers. The USV Annals of Economics and Public Administration,
15(2.1), 116-119

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Hicks, S. (2014, January 1). Does the video game industry hold the keys to the
future of advertising? Retrieved November 6, 2014, from
http://www.adweek.com/news/advertising-branding/engage-consumersbrain-chemistry-155531
Jayson, D. (2012, December 21). How netflix Is quietly shaping the online
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Suggett, P. (2014, January 1). 8 Major tactics used in modern advertising.
Retrieved November 6, 2014, from http://advertising.about.com/

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od/advertisingprojects/a/Different-Types-Of-Advertising-Methods.htm
Suggett, P. (2014, January 1). Broadcast advertising. Retrieved November 6,
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Appendix A

Total U.S. Advertising Spending by Medium ($ in Millions), 2000-2010E

Appendix A: Shown above gives in detail the total U.S. advertising industry spending over a
ten year period from the years of 2000 to 2010.

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14

Appendix B
Share of Advertisement Spending by Medium

Appendix B: Shown above gives in detail the total U.S. advertising industry revenue by
medium of audience delivery.