Advertising industry - Business in United States of America

Definition: Enterprises that use various media to announce, offer, or promote goods, services, or ideas to create a demand for them.
Significance: The advertising industry persuades people to buy products and services that, without advertising, might go unnoticed by the consumer. Consequently, advertising has been vital in promoting all kinds of businesses and products, often creating a demand for things neither necessary nor of any real value. On the other hand, it has created competition among businesses and organizations that causes them to continually improve their products and services to the advantage of the consumers.
Making other people aware of something for sale is mostly beneficial and profitable. Advertising goes back to ancient times. For centuries, vendors of foods, items of clothing, and other necessities used painted signboards and symbols to show potential customers what could be obtained at a particular location. This method’s drawback, however, was that customers had no way of knowing where a vendor was located except by passing by and seeing the sign or by word of mouth.
By the sixteenth century, the printing press allowed posters and handouts containing information about goods and services for sale to be printed on easily distributed sheets. The first newspaper advertisement in the American colonies appeared in the eighteenth century: A person owning property in New York advertised it in The Boston News-Letter. In 1729, Benjamin Franklin placed advertisements in his Pennsylvania Gazette, and by 1742, his General Magazine carried the first magazine advertisements in the colonies. Franklin cleverly used illustrations and headlines to catch the reader’s eye and call attention to what was for sale. Also, rather than bunch all the advertisements together on a separate page, as had been the practice, he placed some advertisements near editorial material to ensure that readers would see them.
Some early American outdoor signs using drawings or statuettes—such as the wooden Indian and the little black boy—were used by tobacco shops. Such devices, along with product illustrations, were useful and necessary to communicate to a population with limited literacy. People who could not read well, or at all, could still recognize what was being offered. Advertising of this type was widespread because many painters and art students were available to create the signboards and carve the statuettes, and they were more reliable than printing presses, which were prone to frequent breakdowns.
When the printing press ushered in weekly, then daily, newspapers in the American colonies, it did not take long for advertising to become an integral feature of newspapers. The one-cent dailies that came out after 1830 were so affordable that they increased newspaper readership, making advertising in the newspaper a good way to reach the public. Advertisements were placed not only by legitimate businesses but also by some makers of quack remedies, as well as brothels and prostitutes. Everyone who had something to sell recognized the value of advertising it.

The Advent of Agencies

Though illustrations usually were what attracted readers to advertisements, copy also was important. Well-written, interesting, and informative copy was vital to selling a product. Early on, copy was written by professional writers, known as literary men, who either freelanced, providing their writing services for a fee to anyone who hired them, or were employed by a business to write copy solely for that company.
In 1841 in Philadelphia, Volney Palmer set up what is considered the first advertising agency. His agency and those that quickly followed concerned themselves with soliciting advertisements for newspapers. Then George P. Rowell found it more profitable for an advertising agency to buy newspaper space cheaply and sell it at retail price to businesses wanting to advertise. To bolster his contention that newspaper advertising was profitable, he published the first volume listing all the newspapers in the United States, along with fairly accurate estimates of their circulation numbers. In this way, he showed customers that by using his services, they could guarantee their advertisements would be seen by a certain number of potential customers. These early agencies were mainly brokers for newspaper space.
With the mission of advertising agencies firmly established—they were to ensure that advertisements were bought and paid for—agencies expanded their services to include writing the ad copy. Depending on the product or the newspaper in which the advertisement would run, the copywriters concerned themselves with aiming at “Everyman” and “Everywoman,” without worrying too much about the diversity of the readers. However, as more media became available and specialization of content became the rule and not the exception, copywriters adjusted by adapting their copy to the specialized interests of the consumers. They also recognized that copy for newspapers, for magazines, and for direct mail had to be different: Newspaper readers were usually more apt to scan and toss; magazines readers, on the other hand, often kept the magazine around for days if not weeks and, therefore, would have occasion to retrace their reading and have numerous opportunities to see an advertisement. Direct mail, because of its resemblance to a personal communication, had to immediately convince readers that the message was meant for them in particular.
During the late 1860’s, copywriter John Powers developed a writing style called “honest copy,” in which he wrote the literal truth about a product. Telling the sometimes “awful truth” about a product was risky, but Powers thought that if the consumer believed the company was telling the complete truth about the product, the company, and therefore the product, could be trusted. Some clients did not like the style; possibly they felt the bad might overshadow the good and cost them sales. However, many other clients experienced excellent sales with this style of copywriting, which became known as the Powers style and was considered to be years before its time.
During the mid-nineteenth century, new technologies allowed businesses to produce new products quickly. However, the existence of these new products and even some older ones went unnoticed in many areas of the United States. Manufacturers wanted to make potential consumers not only aware of the products but also eager to buy them. They wanted to create new markets for the goods being produced. To help them do this, advertising agencies became full-service agencies, meeting all their clients’ needs, not only producing the ad copy and artwork but also doing market research and ultimately placing the advertisements in the various media.
The oldest full-service agency was N. W. Ayer & Son, which started in 1869 and for a while mainly served the patent medicine business. It went on to work for Montgomery Ward, Ferry Seeds, and Singer Sewing Machines, and later Procter & Gamble, Burpee Seeds, and Gold Dust Cleanser. Though at first it used only newspaper advertising, it gradually was pressured by the competition to add magazine and outdoor advertising by 1898.
The 1880’s saw the beginning of national advertising of branded products. Companies such as Montgomery Ward and Sears, Roebuck and Company started using mail-order catalogs to inform and entice rural customers, who made up the majority of the American population until the 1920’s. Advertising volume rose from about $200 million in 1880 to almost $3 billion in 1920.

Media

During the early 1920’s, advertising got a new medium when radio stations began broadcasting. Most early radio programs were used to promote the sale of radios, but before long, other entities— nonprofit organizations such as schools, civic groups, and clubs—set up radio stations of their own, sponsored by businesses in exchange for acknowledgment by name on the air. Soon station owners realized they could generate more money if they got more sponsors, so they began the practice of selling small segments of air time on each program to as many businesses as could be fitted into the air space. The radio advertisements not only entertained the listeners, as they were often creative, dramatic, or humorous, but also, and most important, informed them. The new products or services offered were presented in such a way as to persuade the listeners that they should be one of the first to own them or that the product was something they needed. Sometimes the commercials, as the radio advertisements were called, explained new uses for products that were already familiar to the consumer.
Radio programs were written to appeal to particular audiences. There were shows meant mainly for children, teenagers, women, men, the family, and for adults in general. Advertisers could place commercials for specific products on programs with the appropriate audience. This practice of target marketing proved a valuable technique when television came along.
Television programs have identifiable demographics, as do cable channels, which are sometimes devoted to a particular audience, such as sports enthusiasts, women, or ethnic minorities. Early television advertisers had editorial control of programming, allowing them to control a program’s content. They could veto certain aspects of a proposed program or insist on additions or deletions to favor their product, with little concern for the effect such changes might have on the program’s creative aspects. Selling small blocks of broadcast time to several advertisers was seen as the way to limit the power of any one business to control the programming. This strategy, credited to National Broadcasting Company (NBC) executive Sylvester Weaver, was known as the magazine concept and participation advertising. It ushered in “the commercial break” that most television programs use approximately every fifteen minutes.
In addition to commercials, television shows allow for product placement, which allows advertisers to circumvent the tendency of some viewers to fast forward past commercials on shows that they have recorded. The clearly labeled product is highly visible in a scene and even sometimes is called to the reader’s attention by dialogue. This technique is also used to include advertising in films.
In the twentieth century, print media became increasingly diversified, as newspapers and magazines targeted to a specific age group, gender, or interest became more prevalent than ever. Knowing the demographics of the readers was a boon to advertisers, who could target the people most likely to be interested in specific products.
Other advertising media include direct mail, outdoor billboards, transit advertising, and the Internet. Direct mail is advertising that sends its message to individual consumers, first using the United States postal service and later adding the telephone (telemarketing) and e-mail. Although letters or flyers, using words and pictures alone to persuade the reader to take a particular action, are a relatively inexpensive direct-mail medium, direct mail has also taken the form of coupons, samples, and specialty items such as magnets, key chains, pencils, or ballpoint pens inscribed with a business logo or message. Specialty items tend to be kept and used by consumers and therefore remind them of products or services for a longer period.
Outdoor advertising, which harks back to the earliest advertising strategies, uses billboards of various kinds and sizes as well as wallscapes (advertisements displayed on already standing surfaces, such as the sides of buildings). Traditional billboards were set up along well-traveled highways to catch drivers’ eyes. Some were huge, impossible-to-ignore displays, 14 feet high and 48 feet wide, but others were smaller. Few were as small as the famous sequential Burma Shave shaving cream signs so popular between 1925 and 1963. They were a sequence of five or six 18-by-40-inch boards, painted red with white lettering, placed alongside the road about 100 feet apart. They always spelled out, a few words at a time, a jingle-style message about almost anything as long as the punch line clearly referred to Burma Shave, the only words on the last board. One jingle on six signs read, “I proposed/ To Ida/ Ida refused/ Ida won my Ida/ If Ida used/ Burma Shave.” Outdoor advertising is also common at sporting venues such as baseball and football stadiums, racetracks, and soccer fields.
Transit advertising is advertising placed on or in major forms of transit and at points where passengers board or exit transit. Advertisements range from small posters in and on buses, trolleys, and trains to wraps that cover entire cars and buses.
Advertisements on bus shelters and benches, walls, and pillars in subway or train stops are daily reminders of the product or service advertised. Airplanes and blimps have also been used to advertise products in areas where many people are gathered, such as outdoor sporting events.
The advent of the Internet brought another advertising medium to the mix. The Internet allows numerous outlets for advertisements, including banners, pop-ups, links to advertisements that appear during searches, and mass e-mails. Many sites also send targeted advertisements to those who visit them.

Strategies

As media for distributing advertising messages increased, the strategies for competing for consumer dollars changed. Advertising agencies have become more specialized in all aspects of their services. To learn the needs, desires, aspirations, and incomes of potential customers for their products, they do extensive and even intensive research. They analyze age, gender, ethnicity, and educational demographics of the targeted consumer. They ascertain consumer behavior. For example, they might consider advertising a particular toiletry in a particular magazine. They will then research the magazine’s readership to decide if their proposed advertisement would appeal to the consumer likely to use the product. When they are satisfied that the magazine is a good choice, they must then decide what would be the best approach, visually and verbally, to grab that consumer’s attention amid all the other editorial and pictorial distractions as the consumer reads through the magazine.
The same kind of strategizing is necessary for advertising successfully on radio or television. With so many programs aired on the media, advertisers need to know who actually listens to or watches particular programs. The kind of advertisement is vital: Placing a frivolous commercial on a serious program or an earnest one on a comedic program would more likely repel than attract the consumer. With the high cost of both making commercials and airing them on popular programs, advertisers must also consider whether the size of the audience is worthwhile. Some advertisers apparently feel that quantity is more important than quality and are apt to spend their advertising dollars to run short, ten to fifteen-second commercials several times during an hour or two of television programming. Others believe an engrossing thirty-second commercial strategically placed in a popular prime-time program will reap more impressive benefits.

Impact

Advertising is so much a part of the twenty-first century world that its impact is constantly debated. It invades public spaces such as schools and is considered by some to be a kind of child exploitation. Those who favor its positive effects are often those who profit the most from it. There is little doubt that advertisements and commercials have a strong influence on the buying practices of the American public. In the years since pharmaceutical companies, law firms, and other such entities began advertising, these businesses have grown. Brand names are so well known that many of them have become part of the national vocabulary. People are as likely to say “Kleenex” as to say “tissue.” Many toys and food items are purchased at the insistence of children who have watched television commercials promoting the products.
The idea that advertising helps to sell a profusion of products goes hand in hand with the idea that more and more goods are manufactured because advertising creates a demand for them. Advertisements increasingly equate consumers’ personal happiness with their consumption of goods. Because people often feel owning things is a sign of success, advertisers are quick to encourage conspicuous consumption. Excessive consumption of some products, however, has the potential to cause social harm, and therefore many people are critical of advertising for alcoholic beverages, tobacco products, gambling venues, junk food, and fast food restaurants, especially when the advertisements are directed toward minority populations or children.
The original mission of advertising was to apprise potential consumers of the availability of things they needed and could use. Over time it came to affect the media it uses. Television programs, ostensibly presented for the entertainment and edification of the viewer, are often modified, at the insistence of the advertiser, so that viewers will pay at least as much attention to the commercials as to the program. Researchers have found that programs that require little concentration and barely stimulate the viewer’s mental abilities make the viewer sit longer and thus sit through the commercials. When the commercials are more entertaining than the actual program, the viewer pays them more attention, thereby achieving the aim of the advertiser.
Advertisements are almost everywhere consumers go—on the walls of airports, on public address systems in stores, on the telephone when consumers are put on hold, and even on grocery carts. Advertising pays off for the agencies as well as for the businesses that use it. According to TNS Media Intelligence, advertisers in the United States in 2006 spent more than $150 billion. Worldwide expenditure was $385 billion. The industry sees only progressive growth, with a projected advertising expenditure by 2010 of $500 billion.