Advertising: An Inefficient Marketing Tool

Tiong Wei Fang Natalie ESL 408 Group L 19th April 2011

Advertising: An Inefficient Marketing Tool

1. Introduction

1.1 Background Advertising is a marketing tool used by many companies today to give their products a competitive edge over their rival companies. With the rampant advent of many new media avenues and the trend of many companies making use of such avenues, it is no wonder why many companies are willing to spend much of their budget in the advertising of their goods just to stay competitive in the market. During the past few decades, expenditures in manufacturing and general management have been declining while marketing costs have risen (Sheth and Sisodia, 1995). However, there are many problems that cause advertising to be ineffective. It is undeniable that many advertisements are interesting and eye-catching and can serve as a source of entertainment. For example, the Cadbury Chocolate eyebrow advertisement where two children synchronized the movement of their eyebrows to a song really did raise many eyebrows in the end. However, not many people enjoy them. Reports that over half of consumers do not like TV advertising and would prefer it did not exist (Forrester Research, 2007). This paper will serve to discover the possible inefficiencies in advertising and also find out the impact of the inefficiencies present. In short, advertising is being increasingly ineffective as a result of it being used too extensively over-advertising; it is becoming less effective and the cost spent on the marketing of the good is not justified.

Advertising: An Inefficient Marketing Tool

1.2 Significance The effects of advertising are widespread, however, advertisements often do not reach their targeted audiences or the intended message is not being received by the audience. Also, too much money is being spent on the advertising of products; however, the cost is not being justified. This should be a cause of concern among people as we are directly involved in this industry. This paper will cover the audiences of advertisements in general, as I believe the effects that will be discussed is widespread. Also, it covers both advertising in both the traditional and new media arena. 2. Literature Review After doing a literature review on the efficiency and effectiveness of advertising, I realized that there are many factors that constitutes to what a good advertisement is. From the readings I have found, the efficiency and effectiveness of advertising can be due to the simplicity or complexity of the message, cluttering of advertisements, and the absurdity of advertisements. However, as the point of my research is to dwell further into the why advertising is increasingly being inefficient due to over-advertising, these factors alone will not suffice in explaining this phenomenon. For example, Arias-Boltzmann et al. (2000) found out that absurdity has a positive influence on advertising. While a slight degree of absurdity might improve the advertisement, too much of absurdity in advertising would be an overkill and audiences might not believe advertisements at face value any longer. Also, Pieters et al. (2010) discovered that the comprehensibility of an advertisement is independent from the simplicity or complexity of the message.Understanding the advertisement is not affected by how simplistic or complicated the advertisement might be. The failure of the advertisements might or might not be attributed to the factors mentioned.

Advertising: An Inefficient Marketing Tool

Hence, I conclude that the abovementioned factors accompanied together with overadvertising has led to the drop in the efficiency and effectiveness of advertisements. 3. The Failure of the Purpose of Advertisements Advertisements often do not reach their targeted audiences or the intended message is not being received by the audience. This could be due to external noise in the environment that distracts the audiences. However, the failures within the advertisements will be discussed rather than the external factors as if inefficiencies are already present within the advertisement itself, the role of external noise in distracting the audiences will be insignificant. David Ogilvy said, The consumer isn't a moron; she is your wife. (Mishra, 2009) It is important to target the problems within advertising to protect the welfare of the audiences.

3.1 Failure in Message Delivery of Advertising Advertising is inefficient as it constantly fails to bring across its intended message to audiences. Hence, to compete for the audiences attention in such a competitive advertising environment, many eye-catching and stimulating methods are used. However, once the audience are stimulated with such an advertisement, it takes a lot more from the newer advertisements to compete for the attention, rendering those unable to capture the audiences attention as useless. Companies have to constantly churn out newer and more stimulating advertisements to stay competitive, while the audiences senses are increasingly being dulled by the over-exposure to such advertisements. This can be seen from the many luxury brands advertising campaigns such as brands like Louis Vuitton, MiuMiu, and Chanel. Despite spending a huge amount of money on advertisements and engaging prominent celebrities to

Advertising: An Inefficient Marketing Tool

front their products, many view their efforts as just another advertising campaign. There is nothing novel about the luxury brand campaigns that are able to captivate the audiences. For example, in the advertising campaigns or Louis Vuitton (figure 1.1), MiuMiu(figure 1.2), and Chanel (figure 1.3), their concepts are very much similar with a single girl posing with their goods. There is not much that the audiences can differentiate each advertisement from each other. Hence, the advertisement fails to create brand recognition among audiences, causing the audience to perceive the product as just another good. Moreover, some commercials are too cluttered together that the audiences often do not get the main point of the companies messages. White and Dawson (2007) found out that advertising clutter across media is at an all-time high and now has reached daunting proportions in many countries. This can be seen from the large number of 104 advertisements being broadcasted in 48 minutes during the Super Bowl game. Despite the cost of $3 million on a 30 second spot, many companies choose the Super Bowl as it attracts a large number of audience.It is highly questionable how much advertisements audiences can absorb during that 48 minute period. It is a challenge for the companies advertisements to stand out in that that amount of clutter. In another case, some advertisements might even send the wrong messages out to its audiences. Examples of suchadvertisements are aesthetic companies promoting their lunchtime facelift procedures where people can get fixed up during their lunch breaks through Botox injections and fillers. Although such advertisements may seem harmless at face value, it actually perpetuates the message that those procedures are a fast and easy way to look good and downplays its complications such as botched jobs and the addiction that follows.

Advertising: An Inefficient Marketing Tool

3.2 Deception and Creativity in Advertising Sometimes, the failures of advertisements might even be an intentional effort on the part of the companies to further be successful in garnering the attention of the audience. Sending out the wrong message or having similar advertising campaigns might be unintentional on the part of the advertisers. However, in such a competitive environment, advertisers have deliberately tweaked the information in the advertisements so that it will be more captivating, without giving a concern to its accuracy. Advertisements fail due to the inaccurate portrayal of goods and under-utilization of the best tools to promote the goods.Inaccurate portrayal of goods can be deemed as a type of deception in advertising. Deceptive advertising can come in many forms such as false evaluations of its own product and rivals product, omitting vital product information, and implication of their brands superiority which may not necessarily be true and may just be an inflated reality. Some advertisements are so absurd nowadays that the content displayed may not even be relevant to the product itself. In a survey undertaken by a regulatory agency, Advertising Standards found out that accuracy and clarity in advertisements was the second highest clause for receiving complaints for from consumers. For instance, some advertisements may be too ambiguous, which leads its audiences to interpret them on their own, which may be a cause of misunderstanding. This can be illustrated from the use humour and parody in advertisements. Though it may increase the creativity factor and may be a novel stimulus for the audience, it may undermine message recall.The benefits of using humour in advertising as stated by Zinkhan (n.d.), is that humour has its positive effects such as enhancing the audiences attention span, fostering optimism, and hence, the audiences whole outlook toward the advertisement.However, all these benefits are redundant if the audiences are unable to have a recollection of the product itself

Advertising: An Inefficient Marketing Tool

at the end. Recollection of the production is especially affected if the humour used in the advertisement is not even related to the product being marketed. In the end, it just serves as a form of entertainment for the audience and they are not being educated of the new product. Also, the use of humour and parody may be creative and interesting to the audiences; however, it can bring up other issues that are detrimental to the advertising industry. For instance, it can be controversial and cause public uproar. Unethical ones may cause activist groups to rise up against the corresponding companies. Hence, social costs of advertising are unjustified. The audiences senses are continuously being dulled, yet, they are unable to receive the advertisers intended message, they might be duped by the advertisers and advertisements may cause public unhappiness. 4. The Unjustified Expenditure on Advertising The cost of advertising has risen rapidly with the advent of many companies trying to vie for advertising slots to reach their audiences. However, the expenditure on advertising is not necessarily mirrored by an increase in the sales of product causing a loss on the side of the companies. 4.1 Broadcast Time is Not Proportional to the Cost Money spent on advertising does not directly correlate to the increase of knowledge of the good or product being marketed.A 15-second advertisement has only half as much time as a 30-second advertisement to achieve any advertising objective. However, despite being half the length, the media cost of a 15-second advertisement is reported to be 60 to 80 per cent the cost of a standard 30-second spot (Alsop, 1987; Patzer, 1991). The airtime of the advertisements is not proportional to its cost. How much of the money spent on advertising is actually being recouped from the sales figures? Moreover, to

Advertising: An Inefficient Marketing Tool

draw attention from the audiences, companies use prominent people to help market their goods by engaging them to be the poster child of their extensive advertising campaign. Prominent people can range from people like movie stars and high-rolling athletes. Having the faces of such prominent people being plastered all over comes at a heavy fee. This adds to the already disproportionate cost many companies pay for the advertisement of their goods. There exist diminishing returns on investment as a firm continues to add to the advertising budget, and such spending above the point at which additional gains are exceeded by the incremental expenditures in advertising is not worthwhile (Simon and Arndt 1980; Albion and Farris 1981; Aaker and Carman 1982; Stewart 1989; Aaker, Batra and Myers 1992; Briggs and Stuart 2006). 4.2 Difficulty in Gauging the Right Amount that should be Spent Next, it is difficult to gauge a budget that is just appropriate for the company to work with to market their goods. It is difficult to estimate how much spent on advertising is too much, and what is too little. The advertising industry is very fluid. Information comes out as fast as it goes in. Hence, even if estimation is made, its relevance to current times will be highly questionable. As a result, we are unable to have a clear idea as to how much spending is sufficient for the advertisement to be cost-effective. As noted by Ogilvy and Mather in an in-house presentation, too little spending on advertising may lead to a failure of even the most brilliant campaign, and too much spending on advertising often results in a waste of money, no matter how effective the campaign is (Sissors and Bumba 1996).

Advertising: An Inefficient Marketing Tool

5. Why advertising used rampantly despite its inefficiencies and why it is unwise to do so Despite all that is being discussed in the above sections, many companies still rely on the use of advertising to market their goods. Companies still see advertising as cost-effective and efficient. 5.1 Advertising Rakes in Larger Sales One reason could be due to the phenomenon that a larger advertising budget can bring about a larger sales report. For instance, the people over at Yahoo conducted a research. Researchers found a random sample of over 1 million users, and assigned them to either the treatment or control group for one of their retailers online advertising campaign. People in the treatment group were made to see three advertisement campaigns while the control group did not see those same campaigns. In the course of the project, the sales figures of the retailer were tracked. By comparing purchases made by the treatment group and the control group, researchers were enabled to measure the impact of advertising on sales while holding all other factors constant. It was found out that advertising increased total revenue of the retailer by approximately 5% for those in the treatment group compared to those in the control group. 5.2 Advertising: A Vicious Cycle Also, the high spending on advertising may be a double-edged sword. The high spending on advertising is due to the pressure placed upon by other companies. For instance, the companyies Pepsi and Coca-Cola have been involved in an advertising war since the 1980s (figure 5.1). The rival companies has repeatedly tried to outdo each other that the term, cola wars has been formed to refer to the feud between the two cola companies.

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Lastly, the cost of advertising falls into the burdens of regular consumers ultimately. High advertising cost is being translated into a high product price. This is unfair to consumers as instead of their main motive of purchasing the product alone, their money is being funded into the production of extravagant advertising campaigns without their apparent knowledge. In the end, consumers are just at the losing end. 6. Conclusion In this advertising war where so many companies are trying to fight for their audiencesattention, they might not realize how much they are splurging on advertising are going to waste. Efficiency is doing things right; effectiveness is doing the right things. Peter Drucker (Peters, 2010). Companies are efficient in using advertising to market their goods. It reaches a wide range of consumers easily and many other companies are using it. Hence, a sensible thing for other companies is to use advertising too, so that they do not lose out on its benefits. However, being efficient is not enough. Blindly following industrial trends to advertise will only cause companies to lose its profits to it. Companies should also find ways to be effective in advertising. Perhaps more research can be done to discover the best advertising tool and optimum conditions that will help capture audiences attention so advertisers can maximize their budget it to its fullest.

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7. Limitations and Implications In my study, I have searched for the negative aspects of advertising that has rendered it to be inefficient or ineffective. However, I have not discussed the benefits of advertising that could perhaps make the consequences of the negative aspects worthwhile. From this study, I believe advertisers can further improve on the advertising industry so that its inefficiencies can be minimized to its bare minimum. After all, advertising is beneficial, but we should seek to develop it so that its potential can be fully realized.

8. References Arias-Bolzmann, L., Chakraborty, G., &Mowen, J.C. (2000).Effects of absurdity in advertising: the moderating role of product category attitude and the mediating role of cognitive responses. Journal of Advertising, Volume XXIX, Number 1 Spring 2000, 35-49. This reading first explains what absurdity in advertising is and elaborates on the four different forms of absurdity. After which, the effectiveness of the use of absurdity in advertisements is being examined on how it influences persuasion. The reading postulates two reasons why absurdity makes advertisements more effective; it being comparatively more noticeable and new, sudden stimuli is being process more thoroughly by the brain. However, a problem arising from the ambiguous nature of absurd advertisements is that audience are able to interpret it in any way they can. In conclusion, results from an experiment they conducted showed that absurd advertisements had a positive influence on the effectiveness of advertising. It affected especially those who had a negative perception of the brand initially as they gradually change their evaluation of the product over time. This article

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may be old; however, it explains clearly the boundaries of absurd advertising and has even conducted a study to prove itself. Anonymous. (2011). Advertising works. Retrieved from http://research.yahoo.com/project/2616 Anonymous. (2009). Advertising standards Canada 2008-2009 annual report. Retrieved from http://www.adstandards.com/en/AboutASC/2009AnnualReport.pdf Anonymous. (2010, February 1). Coca-Cola vs. Pepsi, Revised Edition. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7126053/Pepsi-vsCoke-advertising-battle-turns-to-social-media.html Baumer, K. (2011, February 3). Here's a look at the cost of super bowl ads through the years. Retrieved fromhttp://www.businessinsider.com/cost-super-bowl-ads-through-the-years-20112#ixzz1JFkcSaoK Bither, S.W., & PETER L. Wright, P.L. (1973, May).The self-confidence advertising response relationship: a function of situational distraction. Journal of Marketing Research, Vol. X, 146-152. Drake, R.P., & Ritchie, R.J.B. (2007, February). The defensive consumer: advertising deception, defensive processing, and distrust. Journal of Marketing Research, 114-126. Fichera, J. (2011, February 4). Super bowl ads: not just for sports fans. Retrieved from http://www.bu.edu/today/node/12246 Hammer, P., Riebe, E., & Kennedy, R. (2009). How clutter affects advertising effectiveness.Journal of Advertising Research, June 2009, 159-163. In this article, the authors focused on answering whether clutter in advertisements affected the audience in any way. Their findings showed that clutter does not really affect the

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audiences tendency or choice to view them or not. As such, with the cluttering of advertisements, the audience are exposed to more advertisements. The audience are able to recall an advertisement better when the medium is less cluttered. Also, the audience is able to identify the brands with more accuracy in cluttered environments. In conclusion, the authors found that the effect of cluttering advertisements is not significant as compared to the creative execution of the advertisement itself. This article is very relevant in our time as we are constantly being bombarded by many messages from the advertisers as once. Beezy Marsh, B. (2006, September 17). Fear over the 'lunchtime facelift' as experts say Botox is addictive. Retrieved from http://www.telegraph.co.uk/news/uknews/1529036/Fear-over-thelunchtime-facelift-as-experts-say-Botox-is-addictive.html Mishra, S.V. (2009, November). Today's mega corporations, tomorrow's big brands. Retrieved from http://economictimes.indiatimes.com/features/et500/Todays-mega-corporationstomorrows-big-brands/articleshow/5261603.cms Pergelova, A., Prior, D., &Rialp, J. (2010).Assessing advertising efficiency: does the internet play a role? The Journal of Advertising, Fall 2010, 39-51. This article is focused on looking into the claims of advertising being inefficient and not cost effective. The article also assesses if internet advertising is really as efficient as it is touted to be. The authors conducted a study to see if internet advertising increases advertising efficiency, and also another study to see if conventional forms of advertising complemented with internet advertising will lead to greater advertising efficiency. In conclusion, the researchers found out that internet advertising is a good way to increase advertising efficiency and also, having a mix of both offline and online advertisements did report a significant increase in advertising efficiency. Although this article focuses much on internet advertising specifically, it gives a clear idea of what constitutes efficient advertising.

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Peters, A. (2010, April 6). Effective Leadership. Retrieved from http://www.faithreaders.com/article-details.php?article=14415 Pieters, R., Wedel, M., &Batra, R. (2010). The stopping power of advertising: measures and effects of visual complexity. Journal of Marketing, September 2010, 48-60. The article first raises the importance of advertisements having the ability to be eyecatching to attract the audiences attention. The article also states that the simplicity or complexity of the image in an advertisement is independent from the comprehensibility of the message of the advertisement. Through the study, the authors found two distinct types of visual complexity; feature complexity and design complexity. The former affects attention and attitudes audiences have for the brand while the latter aids in the attitude, comprehensibility and attention towards the advertisement. This article helps to judge whether the advertisements we are bombarded with today are actually beneficial to the brand memory of the audiences. It helps to pin-point where an advertisement has gone wrong in its design and how it is being impacted on the audience.

10. Appendix

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Figure 1.1: Louis Vuitton Advertisement

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Figure 1.2: MiuMiu Advertisement

Figure 1.3: Chanel Advertisement

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Figure 5.1: Pepsi and Coca-Cola advertising and branding