To better understand advertising, one must first define advertising. Advertising is best defined by Belch and Belch (2011) as the “structured and composed nonpersonal communication of information… about products… by identified sponsors through various media” (p.5) Typically advertising is promotional presented to represent a company’s products, goods, services or ideas in a way that is meant not just to sell, but also build a company’s brand and establish loyalty among potential clients and consumers (Belch and Belch, p. 5). Advertising may also be used to promote awareness of an organization as a communication tool, and to help a company create relationships with individuals, groups, and with a community. A marketer can create and structure an advertisement or group of ads in various ways, and present the resulting material via mass publication or one-on-one depending on the goal of an advertisement (Belch and Belch, 2011).
In times past, advertising typically took the form of newspaper or magazine advertisements, or in its earliest forms in public servicemen announcements, which were often provided by non-profits and therefore not provided for a charge, because these types of advertisements were considered a service to the public (Belch and Belch, 2011). Most people were more than happy in the past to open a newspaper or magazine and review the ads or classifieds. Some advertisements were provided via bulletin boards or via posters, promoting various community events or gatherings. As today, these earliest forms of advertisements would promote a business, in the way of what a business had to offer, whether that was in goods, products, or services; it also served marketing purposes and in the way of administration.
Marketing includes the delivering of messages to consumers. Most marketing messages were contained in newspapers or advertisements in the paper and other advertisements during the last few decades. This is not the case today however, as the Business Insider (2013) reports that visiting social media sites and other popular websites are the main source of news and information for most, and a method for advertisers to promote business goods, products and services to consumers. Most audiences expect to find information about products and services from the Internet, and even look to the Net for information about the latest trends and news, thus advertising online is the way to go, and reflects how advertising has changed in recent years. Not only that, but advertisers are adapting their ads not just for traditional PCs, but also mobile devices.
Changes Taking Place in Today’s Advertising Industry
New technology has changed the way advertising works. Whereas product placement and positioning have always been critical to advertising in the past, as have market segmentation, and branding, new concepts particularly technology are now dominating how advertising works in the 21st century and will likely in the next several decades (Belch and Belch, 2011). Some of the latest technologies include “narrowcasting as a medium,” and “one-to-one relationships” with advertisers, even “two-way interactions with viewers” and the option for viewers online to “opt-in” where they can choose who will advertise to them (Belch and Belch, 2011, p. 19). This allows the viewer to have more control over what advertising agents will present ads to them. Computer technology keeps databases and cookies of customer’s so they can target ads specifically to their clients and customers. Advertising is no longer a one-way but rather a “two-way medium” (Belch and Belch, 2011, p. 19). Rapidly becoming more interactive, researchers are increasingly looking for interesting and adaptive ways to provide product information to consumers about services, goods and products (Belch and Belch, 2011, p. 19).
Advertisers refer to this new concept as “relationship marketing” providing this service so they can identify products consistently that customers will want, and so that customers will remain loyal (Belch and Belch, 2011, p. 20). According to researchers, it is not enough to provide “outstanding advertising” but rather, it is only enough to provide what consumers want information about, or consumers will no longer tune in (Belch and Belch, 2011, p. 20).
How Target Market Helps Manager in Advertising Plan
Treadaway and Smith (2012) note one of the simplest ways to effectively advertise and market to an audience is vial target marketing. Facebook is one example of social media, a practice that more and more advertisers and marketers have adopted to target their audiences. Target marketing is a process that allows advertisers to constantly evolve and adapt to the changing needs of their customers, because you can interact with customers in real time (Treadaway and Smith, 2012). Facebook is an example of social advertising; this form of advertising is increasingly popular with researchers suggesting that 50% of mobile users regularly clicking through social media websites and advertisements (Business Insider, 2012). Because mobile devices are increasingly popular, this represents another reason to target social media. A “target” market is the group of individuals, including “potential prospects and consumers” that a company expects is most likely to purchase goods and services (Entrepreneur, 2013). These are the individuals an advertiser will most likely consider when drawing up advertisements. By focusing on a specific target market, sales may increase significantly, instead of generalizing advertisements to the population at large.
What Role Does Economics Play in Advertising?
Economics includes many principles including the self-interest of consumers or the interest to provide the best value for a consumer, providing as much information as possible to the consumer, having many different buyers and sellers, so there is adequate response to advertisements and to the products, goods, and services an advertisement is aimed at, and the absence of “social costs” or restrictions which some refer to as “externalities” (Belch and Belch, 2011, p. 8). Economics incorporates all of these factors, so that advertising performs ideally considering market conditions; the goal is ultimately to communicate information given the expectations of the consumer, the wants of the consumer and the external market conditions including how much of a product a consumer is likely to purchase given market conditions including the state of the economic (Belch and Belch, 2011). Advertising may be an instrument that may help stimulate an economy, as advertisers may focus on basic needs, including stimulating jobs, or relating advertising to a consumers basic needs which may include food, shelter, or related goods and services (Belch and Belch, 2011, p. 10).