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Why Do Businesses Advertise?

Advertising is the process of informing the general public about your business’s products or services. Advertising ideally is the first point of contact between your company and its customers.

If your business understands the power of first impressions and makes a strong first impression with customers, it will be primed for success. The challenge is that at any given time, your business will be vying for the customers’ attention alongside other companies.

There are dozens of examples of advertising being the main factor in the enduring success of a company, which is why it is common wisdom to invest heavily in advertising to get a significant advantage over rivals. Through the years, advertising has evolved into many different forms, each of which provide a range of unique benefits to the companies that use them.

What Are Different Types of Advertising?

The two main types of advertising are traditional advertising and digital advertising. Both traditional and digital advertising encompass a host of advertising strategies.

Traditional advertising is all pre-internet forms of communication, including:

1. Television advertising like commercials
2. Radio advertising like audio broadcasts
3. Print advertising such as magazines, newspapers, and billboards

Digital advertising is advertising that relies on the internet to deliver information and includes:

1. Search advertising, which are the advertisements that appear on internet browsers like Google whenever users perform a search.
2. Social media advertising, which are advertisements that appear on social media platforms such as Facebook and YouTube.
3. Display advertising, in which advertisements appear on websites as either banners or sidebars that can be animated or static.
4. Native advertising, which are advertisements, similar to display ads, but formatted to match or approximate the rest of the content on a website.

How Much Does Advertising Cost?

The cost of advertising depends on the platform used and the goals of the advertising campaign. Traditional advertising is commonly much more expensive because of the labor and materials that go into producing and disseminating it. Print advertisements are more expensive as they grow in page size. Typically, print advertisements cost between $500 and $20,000, though it can cost more than $500,000 for some magazine advertisements.

The cost of radio and television advertisements depends on the length of the ad and the market it is placed in. A 30-second radio ad can cost between $900 and $8,000, depending on the market. A 30-second local television advertisement usually costs between $5 and $10 per 1,000 views; a 30-second national advertisement will cost more than $100,000.

Digital advertising costs are usually cheaper but more varied. For example, a small business can expect to run a full Google Ad campaign for $9,000-$10,000 per month.

How Do Businesses Choose an Advertising Medium?

Your company should consider several factors when choosing an advertising medium. Typical considerations include:

1. The nature of the product or service being advertised
2. The market and audience your business wants to target
3. Your business’s advertising objectives and goals
4. The cost of each potential advertising medium
5. The advertising mediums and strategies used by your competitors.

Considering these factors helps your business decide on a cost-benefit analysis for each advertising medium. Once your business has selected an advertising medium, you can begin to take the necessary business measures to secure airtime, print space, or digital presence.

How Do Businesses Measure Effective Advertising Strategies?

There are several methods your company can use to measure the effectiveness of an advertising campaign, including:

1. Pre- and post-testing: Pre-testing is the measure taken before advertising material is sent to specific media. Post-testing includes measures taken after advertising is published.
2. Commercial and sales testing, which are the communication tests that measure how well the intended audience understands the messaging. Sales tests are metrics-based measurements to see how much of an effect the ad has on your company’s bottom line.
3. Message and media tests: Message tests involve measuring if consumers understand the intended messages of the advertising material. Media tests seek to measure if a specific media channel is effective at delivering your message.