Advertising plays a crucial role in
the development of a brand, accounting for a large portion of the marketing
investment in the brand. However, with the continued fragmentation of media,
the returns on investment have been deteriorating. These factors emphasize
the importance of understanding how advertising works to effectively
strengthen and grow a brand.
Since John Wanamaker lamented the
uncertainty of advertising returns, considerable progress has been made in
advertising theory and research. However, with markets becoming increasingly
complex, it has not become any easier to predict the efficacy of a
commercial.
Gauging from the advertising elasticity of demand,
we do know that the short-term impact of most advertisements on sales of
established brands is far too small to pay for advertising. Only ads that
convey a powerful new message can immediately impact sales. Furthermore,
as pointed out by Gordon Brown (Brown 1991), core perceptions and assessments
such as “good overall” or “favourite brand” are difficult to immediately
improve through advertising. Improvement in such perceptions usually occurs
after the consumer has bought the brand.
Why then do brands like Coca-Cola or Pepsi that do
not have any powerful new message to convey, persistently advertise?
Exhibit 12.4 Coca-Cola Hilltop ad – “I’d like to buy the world a Coke and keep it company”.
Take a moment to reflect on an advertisement from the past
that you vividly remember. For me, the Hilltop ad
(“I’d like to buy the
world a Coke and keep it company”, Exhibit 12.4) from the early
1970s, with its memorable lyrics and images, is one that remains etched in
my memory even after 50 years. This and other remarkable advertisements
highlight two key points. Firstly, advertising has a long-lasting impact on
consumers, as it builds brand associations and enhances perceptions,
sustaining their interest in the brand over time. While its impact on sales
may decline over time, it remains recurring and significant. Secondly, the
quality of advertising matters much more than quantity.
Central to our understanding of advertising
therefore, is this question: What is it that makes some advertisements work
better than others?
There are hundreds of theories on advertising,
many hypotheses too, but relatively few facts. The theories attempt to explain
how the consumer processes or interprets advertising, and the implications on
advertising development and advertising analytics.
The basis for most of the theories on advertising can be
traced to six frequently repeated themes — salience, persuasion,
likeability, symbolism, relationship, emotion. While none of these in
isolation can fully explain how advertising works, collectively they do
provide an understanding of the fundamental mechanisms of advertising.
