What is Advertising?

Definition of Advertising: – Advertising is an effective marketing tool used to promote and sell or services. Advertising is a means of communication with the users of a product or service. It involves communicating directly through a strong and effective message about a business, product or service to influence consumer behavior towards purchasing a product or service. Successful advertising campaigns shift the market demand curve to the right by influencing consumer preferences or it may introduce new products to products consumers.


Advertisements are a good way for a company to increase awareness of its name, products or brands. Most advertising involves promoting a good or a product that is for sale, but similar methods are used to encourage people to drive safely, to support various charities, or to vote for political candidates, among many other examples. In the 21st century, with an intensely competitive consumer market, advertisers increasingly used digital technology to call greater attention to products. 

What are the types of Advertising?

The types of Advertising are as follows: –

  1. Product Advertising: – Product advertising is any method of communication about a product being promoted in an attempt to convince potential customers to purchase the product. The general purpose is to increase brand awareness or to demonstrate the difference between a product and a competitor’s products so that they can be sold. Product advertising aims to spread information about product content, generate primary demand in the target market, and counteract similar products launched by competitors. Special features are highlighted to attract potential consumers.
  1. Institutional Advertising: – Institutional advertising consists of promotional activities aimed at improving reputation, creating a positive image or encouraging support for an organization. The term is applied to actions oriented to the promotion of the firm. Print and electronic media are the first type of institutional advertising. This includes advertising in newspapers, magazines, email, text messages and other forms of media. The second type of institutional advertising is infomercials and advertisements created specifically for television and radio.
  1. Corporate Advertising: – Corporate Advertising identifies the strengths of the customers and highlights them in the right way. By choosing the right media, it makes the corporate identity of the clients shine. The main objective of corporate advertising is to improve the image of the company and make it a more desirable workplace at times and also a desirable corporation to buy from. Whatever an advertising agency does for a client – from strategy to creative concept to media planning, the company’s preferences meet the client’s basic need to be recognized by its target audience.
  1. Financial Advertising: – Financial advertising is the practice of advertising to the investor, loan, banking, and mortgage consumer. It combines an in-depth understanding of the financial market with superb creative skills to deliver campaigns that influence the decisions of institutional and retail investors. A large part of financial advertising has to do with the promotion of the image of financial corporations with the hope that the corporation will become a trusted name that will appeal to investors.
  1. Brand Advertising: – Brand advertising is a form of advertisement which helps establish connections and build strong, long-term relationships with consumers over time. Companies use brand advertising aim to get long-term positive recognition. Outstanding creativity brings brands to life while creating an enduring product image in the minds of consumers. Today, brands place more value than the product itself, to the extent that young consumers sporting a popular brand name such as Lacoste, Nike or Adidas are as willing to pick up counterfeits as they are associated with status.
  1. Government Advertising: – Government advertising or information campaigns are an accepted means by which governments inform the public about new initiatives, policies or programs. They help to advise people on how they might benefit or be affected by or what they need to do to comply with new requirements. This category includes a wide range of design and print jobs in corporate campaigns, product campaigns, public service campaigns as well as to take the messages of the government to its people. Messages include information about diseases, family planning, vaccines, government bonds, etc.
  1. Recruitment Advertising: – Recruitment advertising includes all communications used by an organization to attract talent to work within it. Recruitment advertisements may be the first impression of a company for many job seekers. Recruitment is a major corporate activity. A recruitment ad should describe not only what it looks for in a candidate, but also what it can offer, making it more attractive not only to the aspiring candidate but also to the reader in general. Most importantly, it should inspire the right people to respond.
  1. Social Advertising: – Social advertising is advertising that relies on social information or networks in generating, targeting, and delivering marketing communications. Many current examples of social advertising use a particular Internet service to collect social information, establish and maintain relationships with consumers, and for delivering communications. Social advertising aims to change public attitudes and behavior and encourage positive social change. This includes advertisements by NGOs and public sector companies about the protection of historical monuments or the use of energy efficient fuels. Social advertising is challenging because it requires that the message be retained while making it attractive to the public.

What are the modes of Advertising methods?

Companies may use various advertisements to reach their target consumers or inform the public. Here are 14 types of advertisement methods: –

  1. Print Advertising: – Print advertising refers to printed advertisements, often seen in newspapers and magazines. However, this category also includes other printed materials, such as brochures, directories and flyers. To target consumers within a geographic location, companies may advertise in local newspapers whether throughout the paper or in the classifieds section.
  1. Direct Mail Advertising: – Direct mail is a type of print advertising that sends advertisements to customers through the mail. Direct mail means writing to customers directly. The more precise your mailing list or distribution area, the more of your target market you will reach. A direct mail approach is more personal, as you can select your audience and plan the timing to suit your business. Examples include brochures, catalogs, newsletters and flyers. This approach enables companies to identify a greater target market than other print ad formats because it delivers advertising directly through the mailing list. For example, someone who opens a hair salon might create a flyer announcing their grand opening. To attract new customers, the owner may also include a discount coupon with the mailer.
  1. Television Commercials: – Television advertising is a type of broadcast advertising where companies advertise their products or services through 20, 30 or 60 seconds TV commercials. Television has an extensive reach and advertising this way is ideal if you cater to a large market in a large area. Television advertisements have the advantage of sight, sound, movement and colour to persuade a customer to buy from you. This can be costly but enables companies to repeat their ads on a regular basis. The cost of airing television commercials can vary due to the following factors: –
    • Ad Length
    • Day time
    • Television show
    • Transmission frequency
    • Geographical reach
    • Number of networks
  1. Radio Advertising: – Radio broadcasting is another form of advertising that runs advertisements during programming breaks. Advertising on the radio is a great way to reach your target audience. If your target market listens to a particular station, then regular advertising can attract new customers. Customers may listen to radio ads while doing other activities such as driving or doing household chores. Like television, radio enables the repetition of advertisements, allowing companies to identify more with consumers. They can also find out what time of day these customers listen to the radio the most. For example, they may try to advertise during the morning time slot when they know that many of their customers will be driving to work.
  1. Podcast Advertising: In podcast advertising, companies can sponsor podcasts or run ads for their products or services during episodes. Typically, podcasts run ads at the beginning, middle and end of the episode. Similar to radio advertising, companies can research which podcasts are most popular with their target audience. Some podcast hosts read from company-provided scripts or create their own, which can be an entertaining way for listeners to consume advertising material.
  1. Mobile Advertising: – Mobile advertising reaches consumers through any mobile device with Internet connectivity, such as a cellphone or tablet. These ads may appear to consumers on social media, webpages or within apps. For example, a customer playing a mobile game may receive ads for the same game between gameplay rounds. The advantage is that these ads can reach consumers no matter where they are.
  1. Social Media Advertising: – Companies use social media advertising to promote their products or services on various platforms. Social media advertising serves promotions via social media platforms. Advertising on social media gives you a quick return on investment (ROI) because everything on social is done in real-time. Social media advertising, like other digital advertising, enables companies to target specific audiences. They can focus on reaching customers based on their geographic location, age group or buying habits. They can either pay for the platforms to promote their advertisements, or they can use more organic methods.
  1. Paid Search Advertising: – Paid search is a type of online advertising, sometimes referred to as pay-per-click (PPC) advertising. Paid search advertising involves bidding on keywords so that advertisements related to specific keywords are placed at the top of the search engine results page (SERP). With paid search, advertisers only pay when their advertisement is clicked, providing the alter-ego pay-per-click (PPC). Companies that use PPC advertising pay a fee only when users click on their ad. They bid on specific keywords, usually related to their business, along with the placement of their ad on search engines. For example, a company that sells folding bicycles includes the keyword “foldable bikes” in its bid. When users search for that phrase, the company’s products appear as an ad in search results; usually at the top of the page.
  1. Native Advertising: – Native advertising is a type of digital advertising in which the ads look identical to the rest of the page content. Pay-per-click ads can work as native advertising because the products advertised are often mixed with other results. Businesses enjoy using this format because it does not disrupt the user experience, unlike display advertising. For example, a website that publishes articles about professional development may also include sponsored articles.
  1. Display Advertising: – Display advertising is a type of digital advertising that uses identifiable advertisements. Display advertisements can be designed to be animated or stagnant, and are typically found along the top or sides of web pages. Display ads aim for quick conversions and their potential reach is enormous because search engines can match an ad with millions of websites based on keyword and targeting preferences. These can include banner ads and pop-up ads at the top or sides of web pages. Another example would be video ads appearing before or during video content streaming. Display advertising encourages users to visit a company’s website, often by clicking on them to make a purchase.
  1. Outdoor Advertising: – Outdoor advertising refers to the advertisements that consumers see outside their homes. As a result, this type of advertising is sometimes called out-of-home advertising. Just like broadcast advertising, outdoor advertising is considered a mass-market medium and is intended to support broad messaging and branding efforts. Examples include billboards and advertisements seen in public places or transit vehicles, such as on the side of buses or inside subway cars.
  1. Guerrilla Advertising: – Guerrilla marketing is the creating use of novel or unconventional methods in order to boost sales or attract interest in a brand or business. Guerrilla advertising refers to less traditional methods that are generally low cost and employ creative techniques to capture attention. These methods are often low or no-cost and involve the widespread use of more personal interactions or through viral social media messaging. A common strategy in this category is ambient advertising, in which a company advertises in public places but uses it in an unconventional way. For example, instead of advertising at a bus stop, a company might paint a mural to advertise its services on the sidewalk.
  1. Product Placement Advertising: – In product placement advertising, a company pays to embed its product in media content, such as a television show or movie. Product placement is a form of advertising in which branded goods and services are featured in a production that targets a large audience. The content sometimes does not explicitly mention the product, but it can be seen by the audience. This method can help companies reach target groups more carefully. For example, a soda brand may want to target teenagers.
  1. Public Service Advertising:- Public service advertising refers to advertisements that promote a cause or initiative rather than a product. Often called public service announcements (PSAs), these advertisements are intended to inform the public about a topic in a way that benefits them or others. It is mainly used as a tool to promote social welfare. The Governments, Local Bodies, the NGOs and civil society undertake such advertising for multiple reasons, with the central idea of influencing people. Organizations may use public service advertising in a variety of formats, such as television, radio or online video advertising.

What is advertising cost?

Meaning of Advertising cost: – Advertising cost is a type of financial accounting that covers expenses related with promoting an industry, entity, brand, product or service. They cover advertisements in print media and online venues, broadcast times, radio times and direct mail advertising. Advertising costs are in most cases covered under selling, general and administrative (SG&A) expenses on a company’s income statement. They are sometimes recorded as prepaid expenses on the balance sheet and then carried over to the income statement when sales are directly related to those costs.

For a company to record advertising expenses as an asset, it must have reason to believe that those specific expenses are tied to specific future sales. Then, as those sales occur, those advertising expenses are transferred from the balance sheet (prepaid expenses) to the income statement (SG&A). Whatever a business spends on advertising, the point is to maximize the ROI of advertising costs. This can be difficult because there is no shortage of advertising opportunities out there to consider. Advertising is a way to increase a company’s sales through brand or product awareness and to inform about new products or features. Several studies show that advertising does, generally speaking, work to boost revenues

For example, if a company launches a direct mail campaign and learns that future sales are due for that campaign, it will record the cost of the campaign as an asset, a prepaid expense, on its balance sheet. Over time, as customers respond to the campaign, those direct mail expenses will move from the prepaid spend category to the advertising cost category.

What are the advantages of advertisements?

Following are the advantages of advertisements: –

  1. Introduces a new product to the market: – Advertisements plays an important role in introducing a new product in the market. It motivates people to buy the product.
  1. Expansion of the Market: – It enables the manufacturer to expand his market. It helps in exploring new markets for the product and retaining the existing markets. It plays a sheet anchor role in widening the marketing for the manufacturer’s products even by conveying the customers living at the far flung and remote areas.
  1. Increased Sales: – Advertisement facilitates mass production to goods and increases the volume of sales. In other words, sales can be increased with additional expenditure on advertising with every increase in sale, selling expenses will decrease.
  1. Fights Competition: – Advertisements are very helpful in countering the forces of competition prevailing in the market. Continuous advertising is very essential to protect the product from the clutches of the competitors.
  1. Enhances Goodwill: – Advertising plays a vital role in increasing the goodwill of the concern. It presents the manufacturer and its product to the public. Repeated advertisements and better quality of products bring more reputation for the manufacturer and increase goodwill for the concern.
  1. Educates consumers: – Advertising is educational and dynamic in nature. It introduces customers to new products and their diverse uses and also educates them about new uses of existing products.
  1. Elimination of Middlemen: – Advertisement’s objective is to establish a direct link between the producer and the consumer, thereby eliminating marketing intermediaries. This increases the profit of the producer and the consumer gets the product at a lower price.
  1. Better Quality Products: – Various items are advertised under different brand names. A branded product assures the consumers of a standard quality. The manufacturer provides quality goods to the consumers and tries to win their trust in its product.
  1. Supports Sales Skills: – Advertising greatly facilitates the work of a seller. Customers are already familiar with the product the seller sells. A salesperson’s selling efforts are heavily complemented by advertisements. It is rightly pointed out that “sales and advertising are cup and saucer, hook and eye, or key and lock ward.”
  1. More Employment Opportunities: Advertising provides and creates more employment opportunities for many talented people like painters, photographers, singers, cartoonists, musicians, models and people working in different advertising agencies.

What are the disadvantages of advertisement?

Following are the disadvantages of Advertisement: –

  1. Cost: – One of the major disadvantages of advertisement is the cost involved in the whole process. It starts with spending money on design, printing and average cost. Some companies, especially start-ups or newly created companies, do not have enough funds to support this expensive form of advertising.
  1. False Claims: – Some advertisements make false promises and keep customers in the dark. Once the customers purchase the product, they realize that the features promised by the products are not exactly as advertised.
  1. Price Effect: – When a company uses different advertisement channels, it adds cost to the product. The cost of advertising is added to the price of the product and passed on to the customers. In the end, it makes products and services more expensive to purchase.
  1. Creates Monopoly Situations: – Large companies can afford expensive advertising while small businesses cannot. This creates imbalance in the industry and people become more aware of the products sold by big industries by looking at their advertisements. Small businesses have no chance and therefore lose the market.
  1. Impact on children: – Some ads target children directly, encouraging them and their parents to buy products that are not useful to them. For example, a new chocolate brand creates an advertising campaign and children start buying the product. The product may not be good for health, but because of advertisements childerns keep on demanding it.
  1. Compromise on Ethical Values: ​​- Some advertisements are not suitable for all age groups and audience levels. However, companies use unfair ethical practices when advertising products and services, in order to sell products and increase their profits.
  1. This makes it possible to sell less good products even if the products are not of high quality, the attractiveness of advertisements makes them attractive. Of course, customers have to do their research, but due to lack of public information about products and services, they pay high amount for substandard products.

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