The Effectiveness of Advertising: a Literature Review

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The effectiveness of advertising: a literature review

Elisabetta Corvi
Associate Professor of Economics and Business Management
University of Brescia
corvi@eco.unibs.it

Michelle Bonera (corresponding author)
Assistant Professor of Economics and Business Management
University of Brescia
+39 333 2341484
mbonera@eco.unibs.it

Abstract

The aim of the paper is to propose a simple approach to monitor and control the encoding phase, too often neglected by the doctrine and operators in the communication process. The paper is discusses a possible methodology to investigate the degree of coincidence / discordance between what is conveyed through the advertising and what is actually understood by some consumers. The object of investigation is the verbal text of the spot in order to verify the level of understanding of the message and, if necessary, to find the reasons of a wrong perceived meaning.

Introduction
Advertising effectiveness can be defined as the extent to which advertising generates a certain desired effect. Measuring the effects of advertising is very important, given the amount of investments needed for advertising. While it is not possible to obtain a global measure of the advertising effectiveness, we should seek to develop and apply methods and measures for a partial verification of results. Regarding the difficulty of measuring the overall effectiveness, we believe that it is due essentially to the following considerations:

advertising interacts with other business variables (behavior, marketing policies, financial decisions etc.) and environmental variables (competition, economic conjuncture etc.), hardly isolable; •the effects of advertising are varied and not always translatable into quantitative terms; •advertising causes long-term effects, not always, therefore, the results occur in the same period in which are the costs.

In literature and practice the evaluation of advertising effectiveness has used two basic models:

the dichotomous model;
the three-dimensional model.

The dichotomous model is applied mainly in product and brand advertising, tending to isolate and evaluate separately the following:

sales effect;
communication effect.

The sales effect refers to the assessment of the capability of advertising to affect the sales volume and/or the market share, regardless of the possible influence of other variables. For Batra et al. (1995), the effectiveness of advertising should be considered for its effect on sales in the short term. This advertising performance measurement is based on the marginal theory (Chamberlin, 1948). The advertising is therefore regarded as an independent variable that can be combined with other marketing variables to have a certain effect on the dependent variable, i.e. sales. The aim is to seek the best combination of the determinants of the sales increase.

The effect of communication refers to the ability to reach, with appropriate messages, a more significant share of public. Such effect is examined in literature with different approaches:

sociological;
semiotic;
psychological;
socio-psychological.

Sociological analysis focuses on the community, considered as a system governed by rules and social norms, and on the social behavior (Moingeon, 1993). The role of advertising and consumption in the society change is a very fertile topic. Sociology has examined how advertising influences opinions, attitudes and behaviors of individuals and social groups. There are two opposite sociological perspectives to the advertising function in contemporary society. The first maintains a positive approach to advertising. It is believed that the role advertising is to better organize economic and social relations, to harmonize social behaviors, to make people adhere to common values and to help them to better live together without problems. The second approach is, by contrast, rather critic, because...
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