Advertising Is a Waste of Money

Topics: Advertising, Television program, Online advertising Pages: 6 (1760 words) Published: June 25, 2013
Advertising Is a Waste of Money
Joe Shotwell Economics & Institutions (SEMBA2)

Globally, advertising has become a waste on money. In the past, the evolution of advertising has mitigated the advancement of technology. Since 3000BC, word-of-mouth and signs were the only forms of advertising.2,7 Businesses had storefronts on Main Street and advertised by using window dressings and signs such as sandwich boards. Eventually, the advent of the printing press allowed for a wider distribution of information and advertisements soon followed in newspaper and magazines.7 Stores were still “downtown” and people had to travel to the business, but businesses that advertised in local circulations received more foot traffic, thus more sales and revenue. Some say that this was the start of marketing and advertising agencies.7 During the 1920s, radio was mainstream and a commercial medium. For the first time, advertising could be heard as well as be seen.7 A radio was virtually in every home in America and Europe. Serial adventures and music captivated their audiences and in 1841, the first advertising agency was formed in Philadelphia.2,7 Volney B. Palmer contracted with local printing and radio agencies for ad space. Palmer implemented a unique campaign – it sold their contracted ad space to other agencies for more money.7 Sales of advertised products soared and advertisers rushed to produce catchy jingles – a practice that is still used today. Televisions were beginning to become affordable in the 1950s. For the first time, advertisements were in motion. Advertisers needed to make mini-movies in 30 or 60 second clips to effectively entice potential buyers. With the advent of television, demographics now played an important role in marketing.7 Moreover, cable television expanded the channel selection by providing more specific programming. This allowed advertisers to narrowcast via demographics. Originally, advertisers used specific time slots as a reflection of age groups. With channel expansion, programs are catering to specific age groups, making marketing more specific. The internet drastically changed the way advertisers work. The internet is basically one big network of computers and advertisers needed to figure out a way to exploit that. After some time, advertisers learned that by advertising on popular websites, exposure to their product was at its greatest. Counters that count the number of visits to a particular website proved to be invaluable to advertisers however, more recently, that isn’t as important as search engine data. Search engines save metrics regarding types of searches, where they originate and

the most common website visited from the searches. Search engines, like Google, profit off of those data by selling tier-priced ads. For example, Town Fair Tire would be smart to pay the premium for advertisement on searches from east coast IP addresses searching for “tires”. With all of this ad space available, critics speculate that advertising has become too diluted.6,8 Marketers have to prioritize which outlet to use for an advertising campaign. Of course, a broad, blanketed approach for a campaign is best, but that would be too expensive for most companies. Advertisers have to do research to collect data for what kind of campaign to run. That, in turn, increases the cost to businesses. In 2008, American businesses spent over $21 billion in online advertising,3,4,6 because advertising is an investment in the company instead of an expenditure. Banner ads on websites use up real estate on pages and generate very few sales.3 Latest data suggest that the number of visitors of websites who actually click on a banner is less than a quarter of one percent.3 In other words, one out of 400 people open the ad. Moreover, conversion rates suggest that only one in 40,000 people who open the ad will actually purchase that product.3 Online ads have become the “white noise” of the internet; most people have become annoyed by...
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