How to Start a Business, Finances and Marketing

Spending on Advertising is huge. One often quoted statistic by market research firm ZenithOptimedia estimates that worldwide spending on advertising exceeds (US) $400 billion.

This level of spending supports thousands of companies and millions of jobs. In fact, in many countries most media outlets, such as television, radio and newspapers, would not be in business without revenue generated through the sale of advertising.

While worldwide advertising is an important contributor to economic growth, individual marketing organizations differ on the role advertising plays. For some organizations little advertising may be done, instead promotional money is spent on other promotion options such a personal selling through a sales team.

For some smaller companies advertising may consist of occasional advertisement and on a very small scale, such as placing small ads in the classified section of a local newspaper.

But most organizations, large and small, that rely on marketing to create customer interest are engaged in consistent use of advertising to help meet marketing objectives. This includes regularly developing advertising campaigns, which involve a series of decisions for planning, creating, delivering and evaluating an advertising effort.

In the marketing mix there are the four Ps. Product, Place Price and Promotion. In order to have an efficient, effective, successful and profitable Business you have to take into consideration all the four Ps.

Leaving out Advertising of your products (Part of the Promotion mix) means that your existing customers and also the new potential customers will not be able to learn for your products henceforth not asking for them and finally not buying.

By Not buying, I think I do not have to explain the consequences of this senario. The stronger and more targeted oriented is an advertising campaign the more successful it is.

First, there is the issue of what is advertising. Traditionally, advertising included things like TV, print ad (newspapers, magazines), radio, maybe outdoor (billboards and buses). However, today many less formal media are apart of the mix even if they are not what the industry used to call "measured media"- media which they could tell you things like "the demographics for the "Today Show" on NBC are X, Y, Z and roll up to 7 million people each day."

Things like social media (Facebook) or even pr or word of mouth campaigns are increasingly used by companies instead of or in addition to traditional advertising. Small brands in fact may find traditional media too expensive for their needs (i.e. you hit your target but you are also hitting a huge number of people who are not in the target that you are paying for as well) and so these newer tools are becoming even more important.

E-mail campaigns are often not thought of as advertising but once you have a customer database they are a great way to reach a narrower target- probably far better than traditional advertising. Sponsorships are also a form of advertising that might not often fall under the banner of advertising.

Even historically, however, advertising might not be the right choice for more niche brands or products-- think of selling Yoga apparel before it was trendy. Someone like Luluemon surely spends some dollars on advertising but their brand ambassador approach is famous now as a more grass roots way to reach your market (they basically get the local yoga instructors to wear and/or endorse their products).

Why run an ad in the newspaper where 90% of the people might be off target when you can go to this approach. Perhaps more expensive per impression (people who see the ad) but ultimately a much better investment.

Finally, there are also some brands where they target businesses. In those cases a direct sales approach might be the winer for them, perhaps supported with some trade show appearances. In these cases advertising might be a tiny part of the marketing mix.

Where advertising has traditionally been a big part of the budget has been for mass-marketed consumer products (laundry detergents, soap) or automobiles (where someone like Honda needs to reach the masses a lot to drive Honda Accord sales).

If you need to drive awareness in a hurry advertising can be the key tool. Ultimately, for many brands that's the role it plays- either building awareness or maintinng it. Few people are unaware of Budweiser but it helps to keep in front of people when there are so many brands out there competing for your attention.