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Trade



From Wikipedia, the free encyclopedia



This article is about the economic mechanism. For other uses, see Trade (disambiguation).

Look up trade in Wiktionary, the free dictionary.

A trader in Germany, 16th century

A San Juan de Dios Market in Guadalajara, Jalisco.

The Liberty to Trade as Buttressed by National Law (1909) by George Howard Earle, Jr.

Trade involves the transfer of the ownership of goods or services from one person or entity to another in exchange for other goods or services or for money. Possible synonyms of "trade" include "commerce" and "financial transaction". Types of trade include barter. A network that allows trade is called a market.

The original form of trade, barter, saw the direct exchange of goods and services for other goods and services. Later one side of the barter started to involve precious metals, which gained symbolic as well as practical importance. Modern traders generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.

Trade exists due to the specialization and division of labor, in which most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able commodity, or because different regions' size may encourage mass production. As such, trade at market prices between locations can benefit both locations.

Retail trade consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, online or by mail, in small or individual lots for direct consumption or use by the purchaser.[1] Wholesale trade is defined as the sale of goods that are sold as merchandise to retailers, and/or industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services.[2]

Trading is a value-added function: it is the economic process by which a product finds its end user, in which specific risks are borne by the trader.

Trading can also refer to the action performed by traders and other market agents in the financial markets.



Contents

History

See also: Economic history and Timeline of international trade

Prehistory

Part of a series on

Trade routes


Trade originated with human communication in prehistoric times. Trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of modern day currency. Peter Watson dates the history of long-distance commerce from circa 150,000 years ago.[3]

In the mediterranean region the earliest contact between cultures were of members of the species Homo sapiens principally using the Danube river, at a time beginning 35-30,000 BC.[4][5][6]

Ancient history

Trade is believed to have taken place throughout much of recorded human history. There is evidence of the exchange of obsidian and flint during the stone age.

Obsidian

Main article: Obsidian

Guinea

Trade in obsidian is believed to have taken place in Guinea from 17,000 BC.[7][8]

Mediterranean and Near East
The earliest use of obsidian in the Near East dates to the Lower and Middle paleolithic.[9]
— HIH Prince Mikasa no Miya Takahito

Trade in the stone was investigated by Robert Carr Bosanquet in excavations of 1901.[10][11] Trade is believed to have first begun in south west of Asia.[12][13]

Archaeological evidence of obsidian use provides data on how this material was increasingly the preferred choice rather than chert from the late Mesolithic to Neolithic, requiring exchange as deposits of obsidian are rare in the Mediterranean region.[14][15][16]

Obsidian is thought to have provided the material to make cutting utensils or tools, although since other more easily obtainable material were available, use was found exclusive to the higher status of the tribe using "the rich man's flint".[12]

Obsidian was traded at distances of 900 kilometres within the region.[17]

Trade in the Mediterranean during the Neolithic of Europe was greatest in this material.[14][18] Networks were in existence at around 12,000 BCE[19] Anatolia was the source primarily for trade with the Levant, Iran and Egypt according to Zarins study of 1990.[20][21][22] Melos and Lipari sources produced among the most widespread trading in the Mediterranean region as known to archaeology.[23]

Lapis Lazuli

The Sari-i-Sang mine in the mountains of Afghanistan was the largest source for trade.[24][25] The material was most largely traded during the Kassite period of Babylonia beginning 1595 BCE.[26][27]

Later trade

Mediterranean and Near East

Ebla was a prominent trading centre during the third millennia, with a network reaching into Anatolia and north Mesopotamia.[23][28][29][30]

A map of the Silk Road trade route between Europe and Asia.

Materials used for creating jewelry were traded with Egypt since 3000 BC. Long-range trade routes first appeared in the 3rd millennium BC, when Sumerians in Mesopotamia traded with the Harappan civilization of the Indus Valley. The Phoenicians were noted sea traders, traveling across the Mediterranean Sea, and as far north as Britain for sources of tin to manufacture bronze. For this purpose they established trade colonies the Greeks called emporia.[citation needed]

From the beginning of Greek civilization until the fall of the Roman empire in the 5th century, a financially lucrative trade brought valuable spice to Europe from the far east, including India and China. Roman commerce allowed its empire to flourish and endure. The Roman empire produced a stable and secure transportation network that enabled the shipment of trade goods without fear of significant piracy.[citation needed]

In ancient Greece Hermes was the god of trade[31][32] (commerce) and weights and measures,[33] for Romans Mercurius also god of merchants, whose festival was celebrated by traders on the 25th day of the fifth month.[34][35] The concept of free trade was an antithesis to the will and economic direction of the sovereigns of the ancient Greek states. Free trade between states was stifled by the need for strict internal controls (via taxation) to maintain security within the treasury of the sovereign, which nevertheless enabled the maintenance of a modicum of civility within the structures of functional community life.[36][37]

The fall of the Roman empire, and the succeeding Dark Ages brought instability to Western Europe and a near collapse of the trade network in the western world. Trade however continued to flourish among the kingdoms of Africa, Middle East, India, China and Southeast Asia. Some trade did occur in the west. For instance, Radhanites were a medieval guild or group (the precise meaning of the word is lost to history) of Jewish merchants who traded between the Christians in Europe and the Muslims of the Near East.[citation needed]

the Orient

Archaeological evidence (Greenberg 1951) of the first use of trade-marks are from China dated about 2700 BC.[38]

Central America

The emergence of exchange networks in the primitive societies of and near to Mexico are known to have occurred within recent years before and after 1500 BC.[39]

Middle Ages

A map showing the main trade routes for goods within late medieval Europe.

During the Middle Ages, Central Asia was the economic center of the world.[40] The Sogdians dominated the East-West trade route known as the Silk Road after the 4th century AD up to the 8th century AD, with Suyab and Talas ranking among their main centers in the north. They were the main caravan merchants of Central Asia.

From the 8th to the 11th century, the Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Russia. The Hanseatic League was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Baltic, between the 13th and 17th centuries.

The Age of Sail and the Industrial Revolution

Vasco da Gama pioneered the European Spice trade in 1498 when he reached Calicut after sailing around the Cape of Good Hope at the southern tip of the African continent. Prior to this, the flow of spice into Europe from India was controlled by Islamic powers, especially Egypt. The spice trade was of major economic importance and helped spur the Age of Discovery in Europe. Spices brought to Europe from the Eastern world were some of the most valuable commodities for their weight, sometimes rivaling gold.

In the 16th century, the Seventeen Provinces were the centre of free trade, imposing no exchange controls, and advocating the free movement of goods. Trade in the East Indies was dominated by Portugal in the 16th century, the Dutch Republic in the 17th century, and the British in the 18th century. The Spanish Empire developed regular trade links across both the Atlantic and the Pacific Oceans.

Danzig in the 17th century, a port of the Hanseatic League.

In 1776, Adam Smith published the paper An Inquiry into the Nature and Causes of the Wealth of Nations. It criticised Mercantilism, and argued that economic specialisation could benefit nations just as much as firms. Since the division of labour was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labour more efficiently and thereby become more productive. Smith said that he considered all rationalisations of import and export controls "dupery", which hurt the trading nation as a whole for the benefit of specific industries.

In 1799, the Dutch East India Company, formerly the world's largest company, became bankrupt, partly due to the rise of competitive free trade.

Berber trade with Timbuktu, 1853.

19th century

In 1817, David Ricardo, James Mill and Robert Torrens showed that free trade would benefit the industrially weak as well as the strong, in the famous theory of comparative advantage. In Principles of Political Economy and Taxation Ricardo advanced the doctrine still considered the most counterintuitive in economics:

When an inefficient producer sends the merchandise it produces best to a country able to produce it more efficiently, both countries benefit.

The ascendancy of free trade was primarily based on national advantage in the mid 19th century. That is, the calculation made was whether it was in any particular country's self-interest to open its borders to imports.

John Stuart Mill proved that a country with monopoly pricing power on the international market could manipulate the terms of trade through maintaining tariffs, and that the response to this might be reciprocity in trade policy. Ricardo and others had suggested this earlier. This was taken as evidence against the universal doctrine of free trade, as it was believed that more of the economic surplus of trade would accrue to a country following reciprocal, rather than completely free, trade policies. This was followed within a few years by the infant industry scenario developed by Mill promoting the theory that government had the "duty" to protect young industries, although only for a time necessary for them to develop full capacity. This became the policy in many countries attempting to industrialise and out-compete English exporters. Milton Friedman later continued this vein of thought, showing that in a few circumstances tariffs might be beneficial to the host country; but never for the world at large.[41]

20th century

The Great Depression was a major economic recession that ran from 1929 to the late 1930s. During this period, there was a great drop in trade and other economic indicators.

The lack of free trade was considered by many as a principal cause of the depression.[citation needed] Only during the World War II the recession ended in the United States. Also during the war, in 1944, 44 countries signed the Bretton Woods Agreement, intended to prevent national trade barriers, to avoid depressions. It set up rules and institutions to regulate the international political economy: the International Monetary Fund and the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements). These organisations became operational in 1946 after enough countries ratified the agreement. In 1947, 23 countries agreed to the General Agreement on Tariffs and Trade to promote free trade.

During the early years of the Cold-war, the United States of America and the then Soviet USSR were engaged in talks to exchange two captured military personnel, a "trade" carried out during 1962 (Polmar p. 142).[42][43][44]

Free trade

Main article: Free trade

Free trade advanced further in the late 20th century and early 2000s:

Perspectives

Protectionism

Main article: Protectionism

Protectionism is the policy of restraining and discouraging trade between states and contrasts with the policy of free trade. This policy often takes of form of tariffs and restrictive quotas. Protectionist policies were particularly prevalent in the 1930s, between the great depression and the onset of World War II.

Religion

Muslim teachings encourage trading (and condemn usury or interest). By trade the whole society get benefits but interest makes the rich richer and the poor poorer.[45][46]

Judeao-Christian teachings prohibit fraud and dishonest measures.[47][48]

Development of money

Main article: History of money

A Roman denarius.

The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In Mexico under Montezuma cocoa beans were money. [9]

Currency was introduced as a standardised money to facilitate a wider exchange of goods and services. This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent for over 1500 years.

Numismatists have examples of coins from the earliest large-scale societies, although these were initially unmarked lumps of precious metal.[49]

Trends

Doha rounds

Main article: Doha round

The Doha round of World Trade Organization negotiations aimed to lower barriers to trade around the world, with a focus on making trade fairer for developing countries. Talks have been hung over a divide between the rich developed countries, represented by the G20, and the major developing countries. Agricultural subsidies are the most significant issue upon which agreement has been hardest to negotiate. By contrast, there was much agreement on trade facilitation and capacity building. The Doha round began in Doha, Qatar, and negotiations were continued in: Cancún, Mexico; Geneva, Switzerland; and Paris, France and Hong Kong.[citation needed]

China

Beginning around 1978, the government of the People's Republic of China (PRC) began an experiment in economic reform. In contrast to the previous Soviet-style centrally planned economy, the new measures progressively relaxed restrictions on farming, agricultural distribution and, several years later, urban enterprises and labor. The more market-oriented approach reduced inefficiencies and stimulated private investment, particularly by farmers, that led to increased productivity and output. One feature was the establishment of four (later five) Special Economic Zones located along the South-east coast.[citation needed]

The reforms proved spectacularly successful in terms of increased output, variety, quality, price and demand. In real terms, the economy doubled in size between 1978 and 1986, doubled again by 1994, and again by 2003. On a real per capita basis, doubling from the 1978 base took place in 1987, 1996 and 2006. By 2008, the economy was 16.7 times the size it was in 1978, and 12.1 times its previous per capita levels. International trade progressed even more rapidly, doubling on average every 4.5 years. Total two-way trade in January 1998 exceeded that for all of 1978; in the first quarter of 2009, trade exceeded the full-year 1998 level. In 2008, China's two-way trade totaled US$2.56 trillion.[citation needed]

In 1991 China joined the Asia-Pacific Economic Cooperation group, a trade-promotion forum. In 2001, it also joined the World Trade Organization.[citation needed]

International trade

Main article: International trade

Part of a series on

World trade

International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.[citation needed]

Empirical evidence for the success of trade can be seen in the contrast between countries such as South Korea, which adopted a policy of export-oriented industrialization, and India, which historically had a more closed policy. South Korea has done much better by economic criteria than India over the past fifty years, though its success also has to do with effective state institutions.[citation needed]

Trade sanctions

Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an embargo against Cuba for over 40 years.[citation needed]

Trade barriers

International trade, which is governed by the World Trade Organization, can be restricted by both tariff and non-tariff barriers. International trade is usually regulated by governmental quotas and restrictions, and often taxed by tariffs. Tariffs are usually on imports, but sometimes countries may impose export tariffs or subsidies. Non-tariff barriers include Sanitary and Phytosanitary rules, labeling requirements and food safety regulations. All of these are called trade barriers. If a government removes all trade barriers, a condition of free trade exists. A government that implements a protectionist policy establishes trade barriers. There are usually few trade restrictions within countries although a common feature of many developing countries is police and other road blocks along main highways, that primarily exist to extract bribes.[citation needed]

Fair trade

The fair trade movement, also known as the trade justice movement, promotes the use of labour, environmental and social standards for the production of commodities, particularly those exported from the Third and Second Worlds to the First World. Such ideas have also sparked a debate on whether trade itself should be codified as a human right.[50]

Importing firms voluntarily adhere to fair trade standards or governments may enforce them through a combination of employment and commercial law. Proposed and practiced fair trade policies vary widely, ranging from the common prohibition of goods made using slave labour to minimum price support schemes such as those for coffee in the 1980s. Non-governmental organizations also play a role in promoting fair trade standards by serving as independent monitors of compliance with labeling requirements.[citation needed] As such, it is a form of Protectionism.

See also

Economics portal

Notes

  • 2nds-[1] Retrieved 2012-06-26

  • secondary - P Singh Neolithic cultures of western Asia[3] Seminar Press, 20 Aug 1974

  • D Collon - Near Eastern Seals University of California Press, 4 Dec 1990 Retrieved 2012-07-03 ISBN 0520073088 (Interpreting the past: British Museum PublicationsArmenian Research Center collection)

  • Cambridge dictionaries online

  • AS Greenberg - J. Pat. Off. Soc'y, 1951 - HeinOnline

  • Price theory Milton Friedman

  • N Polmar - Spyplane: The U-2 History Declassified Zenith Imprint, 14 Apr 2001 ISBN 0760309574 Retrieved 2012-06-28

  • Nomani & Rahnema (1994), p. ?. "I want nine out of ten people from my Ummah (nation) as traders" and "Trader, who did trading in truth, and sold the right quantity and quality of goods, he will stand along Prophets and Martyrs, on Judgment day".

  • "O ye who believe! Eat not up your property among yourselves in vanities; but let there be among you traffic and trade by mutual good-will." Quran 4:29 and "Allah has allowed trading and forbidden usury." Quran 2:275

  • Gold was an especially common form of early money, as described in Davies (2002).

  1. "Should trade be considered a human right?". COPLA. 9 December 2008.

Bibliography

Wikimedia Commons has media related to Trade.

External links


Advertising



From Wikipedia, the free encyclopedia



Changes must be reviewed before being displayed on this page.show/hide details


"Advertiser" redirects here. For other uses, see Advertiser (disambiguation).

"Adverts" redirects here. For the English punk band, see The Adverts.

For advertising in Wikipedia articles, see Wikipedia:Spam. For proposal on advertising about Wikipedia, see Wikipedia:Advertisements.

A Coca-Cola advertisement from the 1890s

Marketing

Key concepts

Promotional contents

Promotional media

Advertising (or advertizing)[1][2][3] is a form of marketing communication used to persuade an audience to take or continue some action, usually with respect to a commercial offering, or political or ideological support.

In Latin, ad vertere means "to turn toward".[4] The purpose of advertising may also be to reassure employees or shareholders that a company is viable or successful. Advertising messages are usually paid for by sponsors and viewed via various old media; including mass media such as newspaper, magazines, television advertisement, radio advertisement, outdoor advertising or direct mail; or new media such as blogs, websites or text messages.

Commercial advertisers often seek to generate increased consumption of their products or services through "branding", which involves associating a product name or image with certain qualities in the minds of consumers. Non-commercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement (PSA).

Modern advertising was created with the innovative techniques introduced with tobacco advertising in the 1920s, most significantly with the campaigns of Edward Bernays, which is often considered the founder of modern, Madison Avenue advertising.[5][6][7]

In 2010, spending on advertising was estimated at $143 billion in the United States and $467 billion worldwide[8]

Internationally, the largest ("big four") advertising conglomerates are Interpublic, Omnicom, Publicis, and WPP.[9]



Contents

History

Egyptians used papyrus to make sales messages and wall posters. Commercial messages and political campaign displays have been found in the ruins of Pompeii and ancient Arabia. Lost and found advertising on papyrus was common in Ancient Greece and Ancient Rome. Wall or rock painting for commercial advertising is another manifestation of an ancient advertising form, which is present to this day in many parts of Asia, Africa, and South America. The tradition of wall painting can be traced back to Indian rock art paintings that date back to 4000 BC.[10]

In ancient China, the earliest advertising known was oral, as recorded in the Classic of Poetry (11th to 7th centuries BC) of bamboo flutes played to sell candy. Advertisement usually takes in the form of calligraphic signboards and inked papers. A copper printing plate dated back to the Song dynasty used to print posters in the form of a square sheet of paper with a rabbit logo with "Jinan Liu’s Fine Needle Shop" and "We buy high quality steel rods and make fine quality needles, to be ready for use at home in no time" written above and below[11] is considered the world's earliest identified printed advertising medium.[12]

In Europe, as the towns and cities of the Middle Ages began to grow, and the general populace was unable to read, instead of signs that read "cobbler", "miller", "tailor", or "blacksmith" would use an image associated with their trade such as a boot, a suit, a hat, a clock, a diamond, a horse shoe, a candle or even a bag of flour. Fruits and vegetables were sold in the city square from the backs of carts and wagons and their proprietors used street callers (town criers) to announce their whereabouts for the convenience of the customers.

In the 18th century advertisements started to appear in weekly newspapers in England. These early print advertisements were used mainly to promote books and newspapers, which became increasingly affordable with advances in the printing press; and medicines, which were increasingly sought after as disease ravaged Europe. However, false advertising and so-called "quack" advertisements became a problem, which ushered in the regulation of advertising content.

19th century

Edo period advertising flyer from 1806 for a traditional medicine called Kinseitan

Thomas J. Barratt from London has been called "the father of modern advertising".[13][14][15] Working for the Pears Soap company, Barratt created an effective advertising campaign for the company products, which involved the use of targeted slogans, images and phrases. One of his slogans, ""Good morning. Have you used Pears' soap?" was famous in its day and into the 20th century.[16][17]

An advertising tactic that he used was to associate the Pears brand with high culture and quality. Most famously, he used the painting Bubbles by John Everett Millais as an advertisement by adding a bar of Pears soap into the foreground. (Millais protested at this alteration of his work, but in vain as Barrat had bought the copyright.[18]) Barratt continued this theme with a series of adverts of well groomed middle-class children, associating Pears with domestic comfort and aspirations of high society.

Barrat established Pears Annual in 1891 as a spin-off magazine which promoted contemporary illustration and colour printing and in 1897 added the Pears Cyclopedia a one-volume encyclopedia.[19] From the early 20th century Pears was famous for the annual "Miss Pears" competition in which parents entered their children into the high-profile hunt for a young brand ambassador to be used on packaging and in consumer promotions. He recruited scientists and the celebrities of the day to publicly endorse the product. Lillie Langtry, a British music hall singer and stage actress with a famous ivory complexion, received income as the first woman to endorse a commercial product, advertising Pears Soap.

Barratt introduced many of the crucial ideas that lie behind successful advertising and these were widely circulated in his day. He constantly stressed the importance of a strong and exclusive brand image for Pears and of emphasizing the product's availability through saturation campaigns. He also understood the importance of constantly reevaluating the market for changing tastes and mores, stating in 1907 that "tastes change, fashions change, and the advertiser has to change with them. An idea that was effective a generation ago would fall flat, stale, and unprofitable if presented to the public today. Not that the idea of today is always better than the older idea, but it is different – it hits the present taste."[14]

As the economy expanded across the world during the 19th century, advertising grew alongside. In the United States, the success of this advertising format eventually led to the growth of mail-order advertising.

In June 1836, French newspaper La Presse was the first to include paid advertising in its pages, allowing it to lower its price, extend its readership and increase its profitability and the formula was soon copied by all titles. Around 1840, Volney B. Palmer established the roots of the modern day advertising agency in Philadelphia. In 1842 Palmer bought large amounts of space in various newspapers at a discounted rate then resold the space at higher rates to advertisers. The actual ad – the copy, layout, and artwork – was still prepared by the company wishing to advertise; in effect, Palmer was a space broker. The situation changed in the late 19th century when the advertising agency of N.W. Ayer & Son was founded. Ayer and Son offered to plan, create, and execute complete advertising campaigns for its customers. By 1900 the advertising agency had become the focal point of creative planning, and advertising was firmly established as a profession. [20] Around the same time, in France, Charles-Louis Havas extended the services of his news agency, Havas to include advertisement brokerage, making it the first French group to organize. At first, agencies were brokers for advertisement space in newspapers. N. W. Ayer & Son was the first full-service agency to assume responsibility for advertising content. N.W. Ayer opened in 1869, and was located in Philadelphia.[20]

20th century

A 1900 advertisement for Pears soap

A print advertisement for the 1913 issue of the Encyclopædia Britannica

Advertising increased dramatically in the United States as industrialization expanded the supply of manufactured products. In order to profit from this higher rate of production, industry needed to recruit workers as consumers of factory products. It did so through the invention of mass marketing designed to influence the population's economic behavior on a larger scale.[21] In the 1910s and 1920s, advertisers in the U.S. adopted the doctrine that human instincts could be targeted and harnessed – "sublimated" into the desire to purchase commodities.[22] Edward Bernays, a nephew of Sigmund Freud, became associated with the method and is now often considered the founder of modern advertising.[5][6][7]

The tobacco industry was one of the firsts to make use of mass production, with the introduction of the Bonsack machine to roll cigarettes. The Bonsack machine allowed the production of cigarettes for a mass markets, and the tobacco industry needed to match such an increase in supply with the creation of a demand from the masses through advertising.[23] The tobacco companies pioneered the new advertising techniques when they hired Bernays to create positive associations with tobacco smoking.[5][6][7]

Advertising was also used as a vehicle for cultural assimilation, encouraging workers to exchange their traditional habits and community structure in favor of a shared "modern" lifestyle.[24] An important tool for influencing immigrant workers was the American Association of Foreign Language Newspapers (AAFLN). The AAFLN was primarily an advertising agency but also gained heavily centralized control over much of the immigrant press.[25][26]

At the turn of the 20th century, there were few career choices for women in business; however, advertising was one of the few. Since women were responsible for most of the purchasing done in their household, advertisers and agencies recognized the value of women's insight during the creative process. In fact, the first American advertising to use a sexual sell was created by a woman – for a soap product. Although tame by today's standards, the advertisement featured a couple with the message "A skin you love to touch".[27][non-primary source needed]

Influence of early psychology

In the early 20th century, psychologists Walter D. Scott and John B. Watson contributed applied psychological theory to the field of advertising. Scott said, “Man has been called the reasoning animal but he could with greater truthfulness be called the creature of suggestion. He is reasonable, but he is to a greater extent suggestible”.[28] He demonstrated this through his advertising technique of a direct command to the consumer. The former chair at Johns Hopkins University, John B. Watson was a highly recognized psychologist in the 1920s. After leaving the field of academia he turned his attention towards advertising where he implemented the concepts of behaviorism into advertising. This focused on appealing to the basic emotions of the consumer: love, hate, and fear. This type of advertising proved to be extremely effective as it suited the changing social context which led to heavy influence of future advertising strategy and cemented the place of psychology in advertising.[citation needed]

On the radio from the 1920s

Advertisement for a live radio broadcast, sponsored by a milk company and published in the Los Angeles Times on May 6, 1930

In the early 1920s, the first radio stations were established by radio equipment manufacturers and retailers who offered programs in order to sell more radios to consumers. As time passed, many non-profit organizations followed suit in setting up their own radio stations, and included: schools, clubs and civic groups.[29]

When the practice of sponsoring programs was popularized, each individual radio program was usually sponsored by a single business in exchange for a brief mention of the business' name at the beginning and end of the sponsored shows. However, radio station owners soon realized they could earn more money by selling sponsorship rights in small time allocations to multiple businesses throughout their radio station's broadcasts, rather than selling the sponsorship rights to single businesses per show.

[citation needed]

Public service advertising in WW2

The advertising techniques used to promote commercial goods and services can be used to inform, educate and motivate the public about non-commercial issues, such as HIV/AIDS,[citation needed] political ideology, energy conservation and deforestation.

Advertising, in its non-commercial guise, is a powerful educational tool capable of reaching and motivating large audiences. The phrase "Advertising justifies its existence when used in the public interest – it is much too powerful a tool to use solely for commercial purposes" is attributed to Howard Gossage by David Ogilvy.[citation needed]

Public service advertising, non-commercial advertising, public interest advertising, cause marketing, and social marketing are different terms for (or aspects of) the use of sophisticated advertising and marketing communications techniques (generally associated with commercial enterprise) on behalf of non-commercial, public interest issues and initiatives.

In the United States, the granting of television and radio licenses by the FCC is contingent upon the station broadcasting a certain amount of public service advertising. To meet these requirements, many broadcast stations in America air the bulk of their required public service announcements during the late night or early morning when the smallest percentage of viewers are watching, leaving more day and prime time commercial slots available for high-paying advertisers.[citation needed]

Public service advertising in the United States reached its height during World War I and World War II under the direction of more than one government. During WWII President Roosevelt commissioned the creation of The War Advertising Council (now known as the Ad Council) which is the United States' largest developer of PSA campaigns on behalf of government agencies and non-profit organizations, including the longest-running PSA campaign, Smokey Bear.[citation needed]

Commercial television in the 1950s

This practice was carried over to commercial television in the late 1940s and early 1950s. A fierce battle was fought between those seeking to commercialise the radio and people who argued that the radio spectrum should be considered a part of the commons – to be used only non-commercially and for the public good. The United Kingdom pursued a public funding model for the BBC, originally a private company, the British Broadcasting Company, but incorporated as a public body by Royal Charter in 1927. In Canada, advocates like Graham Spry were likewise able to persuade the federal government to adopt a public funding model, creating the Canadian Broadcasting Corporation. However, in the United States, the capitalist model prevailed with the passage of the Communications Act of 1934 which created the Federal Communications Commission (FCC).[29] However, the U.S. Congress did require commercial broadcasting companies to operate in the "public interest, convenience, and necessity".[30] Public broadcasting now exists in the United States due to the 1967 Public Broadcasting Act which led to the Public Broadcasting Service (PBS) and National Public Radio (NPR).

In the early 1950s, the DuMont Television Network began the modern practice of selling advertisement time to multiple sponsors. Previously, DuMont had trouble finding sponsors for many of their programs and compensated by selling smaller blocks of advertising time to several businesses. This eventually became the standard for the commercial television industry in the United States. However, it was still a common practice to have single sponsor shows, such as The United States Steel Hour. In some instances the sponsors exercised great control over the content of the show – up to and including having one's advertising agency actually writing the show.[citation needed] The single sponsor model is much less prevalent now, a notable exception being the Hallmark Hall of Fame.[citation needed]

Media diversification in the 1960s

In the 1960s, campaigns featuring heavy spending in different mass media channels became more prominent. For example, the Esso gasoline company spent hundreds of millions of dollars on a brand awareness campaign built around the simple and alliterative[31] theme Put a Tiger in Your Tank.[32] Psychologist Ernest Dichter[33] and DDB Worldwide copywriter Sandy Sulcer[34] learned that motorists desired both power and play while driving, and chose the tiger as an easy-to-remember symbol to communicate those feelings. The North American and later European campaign featured extensive television and radio and magazine ads, including photos with tiger tails supposedly emerging from car gas tanks, promotional events featuring real tigers, billboards, and in Europe station pump hoses "wrapped in tiger stripes" as well as pop music songs.[32] Tiger imagery can still be seen on the pumps of successor firm ExxonMobil.

Cable television from the 1980s

The late 1980s and early 1990s saw the introduction of cable television and particularly MTV. Pioneering the concept of the music video, MTV ushered in a new type of advertising: the consumer tunes in for the advertising message, rather than it being a by-product or afterthought. As cable and satellite television became increasingly prevalent, specialty channels emerged, including channels entirely devoted to advertising, such as QVC, Home Shopping Network, and ShopTV Canada.

On the Internet from the 1990s

Main article: Online advertising

With the advent of the ad server, marketing through the Internet opened new frontiers for advertisers and contributed to the "dot-com" boom of the 1990s. Entire corporations operated solely on advertising revenue, offering everything from coupons to free Internet access. At the turn of the 21st century, a number of websites, including the search engine Google, started a change in online advertising by emphasizing contextually relevant ads based on an individual's browsing interests. This has led to a plethora of similar efforts and an increasing trend of interactive advertising.[citation needed]

The share of advertising spending relative to GDP has changed little across large changes in media. For example, in the US in 1925, the main advertising media were newspapers, magazines, signs on streetcars, and outdoor posters. Advertising spending as a share of GDP was about 2.9 percent. By 1998, television and radio had become major advertising media. Nonetheless, advertising spending as a share of GDP was slightly lower – about 2.4 percent.[35]

Guerrilla marketing involves unusual approaches such as staged encounters in public places, giveaways of products such as cars that are covered with brand messages, and interactive advertising where the viewer can respond to become part of the advertising message. This type of advertising is unpredictable, which causes consumers to buy the product or idea.[citation needed] This reflects an increasing trend of interactive and "embedded" ads, such as via product placement, having consumers vote through text messages, and various campaigns utilizing social network services such as Facebook or Twitter.[citation needed]

The advertising business model has also been adapted in recent years.[when?] In media for equity, advertising is not sold, but provided to start-up companies in return for equity. If the company grows and is sold, the media companies receive cash for their shares.

Domain name registrants (usually those who register and renew domains as an investment) sometimes "park" their domains and allow advertising companies to place ads on their sites in return for per-click payments.[36] These ads are typically driven by pay per click search engines like Google or Yahoo, but ads can sometimes be placed directly on targeted domain names through a domain lease or by making contact with the registrant of a domain name that describes a product.[37] Domain name registrants are generally easy to identify through WHOIS records that are publicly available at registrar websites.[38]

Advertising theory

Hierarchy-of-effects models

Various competing models of hierarchies of effects attempt to provide a theoretical underpinning to advertising practice.[39]

  • The model of Clow and Baack[40] clarifies the objectives of an advertising campaign and for each individual advertisement. The model postulates six steps a buyer moves through when making a purchase:

    1. Awareness

    2. Knowledge

    3. Liking

    4. Preference

    5. Conviction

    6. Purchase

  • Means-End Theory suggests that an advertisement should contain a message or means that leads the consumer to a desired end-state.

  • Leverage Points aim to move the consumer from understanding a product's benefits to linking those benefits with personal values.

Marketing mix

Main article: Marketing mix

The marketing mix it was proposed by professor E. Jerome McCarthy in the 1960s. It consists of four basic elements called the "four P's". Product is the first P representing the actual product. Price represents the process of determining the value of a product. Place represents the variables of getting the product to the consumer such as distribution channels, market coverage and movement organization. The last P stands for Promotion which is the process of reaching the target market and convincing them to buy the product.[41]

Types of advertising

An advertisement for the Wikimedia Foundation

An advertisement for a diner. Such signs are common on storefronts.

Paying people to hold signs is one of the oldest forms of advertising, as with this human billboard.

A bus with an advertisement for GAP in Singapore. Buses and other vehicles are popular media for advertisers.

Mobile Billboard in East Coast Park, Singapore

A DBAG Class 101 with UNICEF ads at Ingolstadt main railway station

A London Bus, with a film advertisement along its side.

Virtually any medium can be used for advertising. Commercial advertising media can include wall paintings, billboards, street furniture components, printed flyers and rack cards, radio, cinema and television adverts, web banners, mobile telephone screens, shopping carts, web popups, skywriting, bus stop benches, human billboards and forehead advertising, magazines, newspapers, town criers, sides of buses, banners attached to or sides of airplanes ("logojets"), in-flight advertisements on seatback tray tables or overhead storage bins, taxicab doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, doors of bathroom stalls, stickers on apples in supermarkets, shopping cart handles (grabertising), the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising.[citation needed]

Television advertising / Music in advertising
In 2014, a study conducted over 7 years found that the television commercial is still the most effective mass-market advertising format.[42] The study's findings stated that for every £1 (GBP) invested in TV advertising, it returned £1.79.[43] This is reflected by the high prices television networks charge for commercial airtime during popular events. The annual Super Bowl football game in the United States is known as the most prominent advertising event on television - with an audience of over 108 million and studies showing that 50% of those only tuned in to see the advertisements.[44] The average cost of a single thirty-second television spot during this game reached US$4 million & a 60-second spot double that figure in 2014.[44] Virtual advertisements may be inserted into regular programming through computer graphics. It is typically inserted into otherwise blank backdrops[45] or used to replace local billboards that are not relevant to the remote broadcast audience.[46] More controversially, virtual billboards may be inserted into the background[47] where none exist in real-life. This technique is especially used in televised sporting events.[48][49] Virtual product placement is also possible.[50][51]
Infomercials
An infomercial is a long-format television commercial, typically five minutes or longer. The word "infomercial" is a portmanteau of the words "information" and "commercial". The main objective in an infomercial is to create an impulse purchase, so that the target sees the presentation and then immediately buys the product through the advertised toll-free telephone number or website. Infomercials describe, display, and often demonstrate products and their features, and commonly have testimonials from customers and industry professionals.[citation needed]
Radio advertising
Radio advertisements are broadcast as radio waves to the air from a transmitter to an antenna and a thus to a receiving device. Airtime is purchased from a station or network in exchange for airing the commercials. While radio has the limitation of being restricted to sound, proponents of radio advertising often cite this as an advantage. Radio is an expanding medium that can be found on air, and also online. According to Arbitron, radio has approximately 241.6 million weekly listeners, or more than 93 percent of the U.S. population.[citation needed]
Online advertising
Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Online ads are delivered by an ad server. Examples of online advertising include contextual ads that appear on search engine results pages, banner ads, in pay per click text ads, rich media ads, Social network advertising, online classified advertising, advertising networks and e-mail marketing, including e-mail spam.[citation needed]
Domain name advertising
Domain name advertising is most commonly done through pay per click search engines, however, advertisers often lease space directly on domain names that generically describe their products.[37] When an Internet user visits a website by typing a domain name directly into their web browser, this is known as "direct navigation", or "type in" web traffic. Although many Internet users search for ideas and products using search engines and mobile phones, a large number of users around the world still use the address bar. They will type a keyword into the address bar such as "geraniums" and add ".com" to the end of it. Sometimes they will do the same with ".org" or a country-code Top Level Domain (TLD such as ".co.uk" for the United Kingdom or ".ca" for Canada). When Internet users type in a generic keyword and add .com or another top-level domain (TLD) ending, it produces a targeted sales lead.[52] Domain name advertising was originally developed by Oingo (later known as Applied Semantics), one of Google's early acquisitions.[53]
New media
Technological development and economic globalization favors the emergence of new communication channels and new techniques of commercial messaging.[citation needed]
Product placements
Covert advertising, is when a product or brand is embedded in entertainment and media. For example, in a film, the main character can use an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's character John Anderton owns a phone with the Nokia logo clearly written in the top corner, or his watch engraved with the Bulgari logo. Another example of advertising in film is in I, Robot, where main character played by Will Smith mentions his Converse shoes several times, calling them "classics", because the film is set far in the future. I, Robot and Spaceballs also showcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles. Cadillac chose to advertise in the movie The Matrix Reloaded, which as a result contained many scenes in which Cadillac cars were used. Similarly, product placement for Omega Watches, Ford, VAIO, BMW and Aston Martin cars are featured in recent James Bond films, most notably Casino Royale. In "Fantastic Four: Rise of the Silver Surfer", the main transport vehicle shows a large Dodge logo on the front. Blade Runner includes some of the most obvious product placement; the whole film stops to show a Coca-Cola billboard.[citation needed]
Press advertising
Press advertising describes advertising in a printed medium such as a newspaper, magazine, or trade journal. This encompasses everything from media with a very broad readership base, such as a major national newspaper or magazine, to more narrowly targeted media such as local newspapers and trade journals on very specialized topics. A form of press advertising is classified advertising, which allows private individuals or companies to purchase a small, narrowly targeted ad for a low fee advertising a product or service. Another form of press advertising is the display ad, which is a larger ad (which can include art) that typically run in an article section of a newspaper.[citation needed]
Billboard advertising
Billboards are large structures located in public places which display advertisements to passing pedestrians and motorists. Most often, they are located on main roads with a large amount of passing motor and pedestrian traffic; however, they can be placed in any location with large amounts of viewers, such as on mass transit vehicles and in stations, in shopping malls or office buildings, and in stadiums.[54]

The RedEye newspaper advertised to its target market at North Avenue Beach with a sailboat billboard on Lake Michigan.

Mobile billboard advertising
Mobile billboards are generally vehicle mounted billboards or digital screens. These can be on dedicated vehicles built solely for carrying advertisements along routes preselected by clients, they can also be specially equipped cargo trucks or, in some cases, large banners strewn from planes. The billboards are often lighted; some being backlit, and others employing spotlights. Some billboard displays are static, while others change; for example, continuously or periodically rotating among a set of advertisements. Mobile displays are used for various situations in metropolitan areas throughout the world, including: target advertising, one-day and long-term campaigns, conventions, sporting events, store openings and similar promotional events, and big advertisements from smaller companies.[citation needed]
In-store advertising
In-store advertising is any advertisement placed in a retail store. It includes placement of a product in visible locations in a store, such as at eye level, at the ends of aisles and near checkout counters (a.k.a. POP – point of purchase display), eye-catching displays promoting a specific product, and advertisements in such places as shopping carts and in-store video displays.[citation needed]
Coffee cup advertising
coffee cup advertising is any advertisement placed upon a coffee cup that is distributed out of an office, café, or drive-through coffee shop. This form of advertising was first popularized in Australia, and has begun growing in popularity in the United States, India, and parts of the Middle East.[citation needed]
Street advertising
This type of advertising first came to prominence in the UK by Street Advertising Services to create outdoor advertising on street furniture and pavements. Working with products such as Reverse Graffiti, air dancers and 3D pavement advertising, for getting brand messages out into public spaces.[citation needed]
Sheltered outdoor advertising
this type of advertising combines outdoor with indoor advertisement by placing large mobile, structures (tents) in public places on temporary bases. The large outer advertising space aims to exert a strong pull on the observer, the product is promoted indoors, where the creative decor can intensify the impression.[citation needed]
Celebrity branding
This type of advertising focuses upon using celebrity power, fame, money, popularity to gain recognition for their products and promote specific stores or products. Advertisers often advertise their products, for example, when celebrities share their favorite products or wear clothes by specific brands or designers. Celebrities are often involved in advertising campaigns such as television or print adverts to advertise specific or general products. The use of celebrities to endorse a brand can have its downsides, however; one mistake by a celebrity can be detrimental to the public relations of a brand. For example, following his performance of eight gold medals at the 2008 Olympic Games in Beijing, China, swimmer Michael Phelps' contract with Kelloggs was terminated, as Kellogg's did not want to associate with him after he was photographed smoking marijuana.[citation needed] Celebrities such as Britney Spears have advertised for multiple products including Pepsi, Candies from Kohl's, Twister, NASCAR, and Toyota.[citation needed]
customer-generated advertising
This involves getting customers to generate advertising through blogs, websites, wikis and forums, for some kind of payment.[citation needed]
Aerial advertising
Using aircraft, balloons or airships to create or display advertising media. Skywriting is a notable example.[citation needed]

Purpose of advertising

Advertising is at the front of delivering the proper message to customers and prospective customers. The purpose of advertising is to convince customers that a company's services or products are the best, enhance the image of the company, point out and create a need for products or services, demonstrate new uses for established products, announce new products and programs, reinforce the salespeople's individual messages, draw customers to the business, and to hold existing customers.[55]

Sales promotions

Sales promotions are another way to advertise. Sales promotions are double purposed because they are used to gather information about what type of customers one draws in and where they are, and to jumpstart sales. Sales promotions include things like contests and games, sweepstakes, product giveaways, samples coupons, loyalty programs, and discounts. The ultimate goal of sales promotions is to stimulate potential customers to action.[56]

Media and advertising approaches

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Increasingly, other media are overtaking many of the "traditional" media such as television, radio and newspaper because of a shift toward the usage of the Internet for news and music as well as devices like digital video recorders (DVRs) such as TiVo.[57]

Digital signage is poised to become a major mass media because of its ability to reach larger audiences for less money. Digital signage also offers the unique ability to see the target audience where they are reached by the medium. Technological advances have also made it possible to control the message on digital signage with much precision, enabling the messages to be relevant to the target audience at any given time and location which in turn, gets more response from the advertising. Digital signage is being successfully employed in supermarkets.[58] Another successful use of digital signage is in hospitality locations such as restaurants[59] and malls.[60]

Advertising on the World Wide Web is a recent[when?] phenomenon. Prices of Web-based advertising space are dependent on the "relevance" of the surrounding web content and the traffic that the website receives.[citation needed]

In online display advertising, display ads generate awareness quickly. Unlike search, which requires someone to be aware of a need, display advertising can drive awareness of something new and without previous knowledge. Display works well for direct response. Display is not only used for generating awareness, it’s used for direct response campaigns that link to a landing page with a clear ‘call to action’.[citation needed]

E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail advertising is known as "e-mail spam". Spam has been a problem for e-mail users for many years.

A new form of advertising that is growing rapidly is social network advertising. It is online advertising with a focus on social networking sites. This is a relatively immature market, but it has shown a lot of promise as advertisers are able to take advantage of the demographic information the user has provided to the social networking site. Friendertising is a more precise advertising term in which people are able to direct advertisements toward others directly using social network services.[citation needed]

As the mobile phone became a new mass medium in 1998 when the first paid downloadable content appeared on mobile phones in Finland,[citation needed] mobile advertising followed, also first launched in Finland in 2000.[citation needed] By 2007 the value of mobile advertising had reached $2 billion and providers such as Admob delivered billions of mobile ads.[citation needed]

More advanced mobile ads include banner ads, coupons, Multimedia Messaging Service picture and video messages, advergames and various engagement marketing campaigns. A particular feature driving mobile ads is the 2D barcode, which replaces the need to do any typing of web addresses, and uses the camera feature of modern phones to gain immediate access to web content. 83 percent of Japanese mobile phone users already are active users of 2D barcodes.[citation needed]

Some companies have proposed placing messages or corporate logos on the side of booster rockets and the International Space Station.[citation needed]

Unpaid advertising (also called "publicity advertising"), can include personal recommendations ("bring a friend", "sell it"), spreading buzz, or achieving the feat of equating a brand with a common noun (in the United States, "Xerox" = "photocopier", "Kleenex" = tissue, "Vaseline" = petroleum jelly, "Hoover" = vacuum cleaner, and "Band-Aid" = adhesive bandage). However, some companies[which?] oppose the use of their brand name to label an object. Equating a brand with a common noun also risks turning that brand into a genericized trademark – turning it into a generic term which means that its legal protection as a trademark is lost.[citation needed]

From time to time, The CW Television Network airs short programming breaks called "Content Wraps", to advertise one company's product during an entire commercial break. The CW pioneered "content wraps" and some products featured were Herbal Essences, Crest, Guitar Hero II, CoverGirl, and recently Toyota.[citation needed]

A new promotion concept has appeared, "ARvertising", advertising on Augmented Reality technology.[61]

Controversy exists on the effectiveness of subliminal advertising (see mind control), and the pervasiveness of mass messages (see propaganda).

Rise in new media

US Newspaper Advertising Revenue
Newspaper Association of America published data [62]

With the Internet came many new advertising opportunities. Popup, Flash, banner, Popunder, advergaming, and email advertisements (all of which are often unwanted or spam in the case of email) are now commonplace. Particularly since the rise of "entertaining" advertising, some people may like an advertisement enough to wish to watch it later or show a friend.[citation needed] In general, the advertising community has not yet made this easy, although some have used the Internet to widely distribute their ads to anyone willing to see or hear them. In the last three-quarters of 2009 mobile and internet advertising grew by 18% and 9% respectively. Older media advertising saw declines: −10.1% (TV), −11.7% (radio), −14.8% (magazines) and −18.7% (newspapers).[citation needed]

Niche marketing

Another significant trend regarding future of advertising is the growing importance of the niche market using niche or targeted ads. Also brought about by the Internet and the theory of The Long Tail, advertisers will have an increasing ability to reach specific audiences. In the past, the most efficient way to deliver a message was to blanket the largest mass market audience possible.[citation needed] However, usage tracking, customer profiles and the growing popularity of niche content brought about by everything from blogs to social networking sites, provide advertisers with audiences that are smaller but much better defined,[citation needed] leading to ads that are more relevant to viewers and more effective for companies' marketing products. Among others, Comcast Spotlight is one such advertiser employing this method in their video on demand menus. These advertisements are targeted to a specific group and can be viewed by anyone wishing to find out more about a particular business or practice, from their home. This causes the viewer to become proactive and actually choose what advertisements they want to view.[63]

Google AdSense is an example of niche marketing. Google calculates the primary purpose of a website and adjusts ads accordingly; it uses key words on the page (or even in emails) to find the general ideas of topics disused and places ads that will most likely be clicked on by viewers of the email account or website visitors.[citation needed]

Crowdsourcing

Main article: Crowdsourcing

The concept of crowdsourcing has given way to the trend of user-generated advertisements. User-generated ads are created by people, as opposed to an advertising agency or the company themselves, often resulting from brand sponsored advertising competitions. For the 2007 Super Bowl, the Frito-Lays division of PepsiCo held the Crash the Super Bowl contest, allowing people to create their own Doritos commercial.[64] Chevrolet held a similar competition for their Tahoe line of SUVs.[64] Due to the success of the Doritos user-generated ads in the 2007 Super Bowl, Frito-Lays relaunched the competition for the 2009 and 2010 Super Bowl. The resulting ads were among the most-watched and most-liked Super Bowl ads. In fact, the winning ad that aired in the 2009 Super Bowl was ranked by the USA Today Super Bowl Ad Meter as the top ad for the year while the winning ads that aired in the 2010 Super Bowl were found by Nielsen's BuzzMetrics to be the "most buzzed-about".[65][66]

This trend has given rise to several online platforms that host user-generated advertising competitions on behalf of a company. Founded in 2007, Zooppa has launched ad competitions for brands such as Google, Nike, Hershey's, General Mills, Microsoft, NBC Universal, Zinio, and Mini Cooper.[citation needed] Crowdsourced remains controversial, as the long-term impact on the advertising industry is still unclear.[67]

Global advertising

Main article: Global marketing

Advertising has gone through five major stages of development: domestic, export, international, multi-national, and global. For global advertisers, there are four, potentially competing, business objectives that must be balanced when developing worldwide advertising: building a brand while speaking with one voice, developing economies of scale in the creative process, maximising local effectiveness of ads, and increasing the company's speed of implementation. Born from the evolutionary stages of global marketing are the three primary and fundamentally different approaches to the development of global advertising executions: exporting executions, producing local executions, and importing ideas that travel.[68]

Advertising research is key to determining the success of an ad in any country or region. The ability to identify which elements and/or moments of an ad contribute to its success is how economies of scale are maximised. Once one knows what works in an ad, that idea or ideas can be imported by any other market. Market research measures, such as Flow of Attention, Flow of Emotion and branding moments provide insight into what is working in an ad in any country or region because the measures are based on the visual, not verbal, elements of the ad.[69]

Foreign public messaging

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See also: Soft power and International tourism advertising

Foreign governments,[which?] particularly those that own marketable commercial products or services, often promote their interests and positions through the advertising of those goods because the target audience is not only largely unaware of the forum as a vehicle for foreign messaging but also willing to receive the message while in a mental state of absorbing information from advertisements during television commercial breaks, while reading a periodical, or while passing by billboards in public spaces. A prime example of this messaging technique is advertising campaigns to promote international travel. While advertising foreign destinations and services may stem from the typical goal of increasing revenue by drawing more tourism, some travel campaigns carry the additional or alternative intended purpose of promoting good sentiments or improving existing ones among the target audience towards a given nation or region. It is common for advertising promoting foreign countries to be produced and distributed by the tourism ministries of those countries, so these ads often carry political statements and/or depictions of the foreign government's desired international public perception. Additionally, a wide range of foreign airlines and travel-related services which advertise separately from the destinations, themselves, are owned by their respective governments; examples include, though are not limited to, the Emirates airline (Dubai), Singapore Airlines (Singapore), Qatar Airways (Qatar), China Airlines (Taiwan/Republic of China), and Air China (People's Republic of China). By depicting their destinations, airlines, and other services in a favorable and pleasant light, countries market themselves to populations abroad in a manner that could mitigate prior public impressions.

Diversification

In the realm of advertising agencies, continued industry diversification has seen observers note that "big global clients don't need big global agencies any more".[70] This is reflected by the growth of non-traditional agencies in various global markets, such as Canadian business TAXI and SMART in Australia and has been referred to as "a revolution in the ad world".[71]

New technology

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The ability to record shows on digital video recorders (such as TiVo) allow watchers to record the programs for later viewing, enabling them to fast forward through commercials. Additionally, as more seasons of pre-recorded box sets are offered for sale of television programs; fewer people watch the shows on TV. However, the fact that these sets are sold, means the company will receive additional profits from the these sets.

To counter this effect, a variety of strategies have been employed. Many advertisers have opted for product placement on TV shows like Survivor. Other strategies include integrating advertising with internet-connected EPGs, advertising on companion devices (like smartphones and tablets) during the show, and creating TV apps. Additionally, some like brands have opted for social television sponsorship.

Advertising education

Advertising education has become popular with bachelor, master and doctorate degrees becoming available in the emphasis.[citation needed] A surge in advertising interest is typically attributed to the strong relationship advertising plays in cultural and technological changes, such as the advance of online social networking.[citation needed] A unique model for teaching advertising is the student-run advertising agency, where advertising students create campaigns for real companies.[72] Organizations such as the American Advertising Federation establish companies with students to create these campaigns.[citation needed]

Criticisms

Main article: Criticism of advertising

While advertising can be seen as necessary for economic growth,[citation needed] it is not without social costs. Unsolicited commercial e-mail and other forms of spam have become so prevalent as to have become a major nuisance to users of these services, as well as being a financial burden on internet service providers.[73] Advertising is increasingly invading public spaces, such as schools, which some critics argue is a form of child exploitation.[74]

One of the most controversial criticisms of advertisement in the present day is that of the predominance of advertising of foods high in sugar, fat, and salt specifically to children. Critics claim that food advertisements targeting children are exploitive and are not sufficiently balanced with proper nutritional education to help children understand the consequences of their food choices. Additionally, children may not understand that they are being sold something, and are therefore more impressionable.[75][better source needed] Michelle Obama has criticized large food companies for advertising unhealthy foods largely towards children and has requested that food companies either limit their advertising to children or advertise foods that are more in line with dietary guidelines.[76]

Regulation

Main article: Advertising regulation

There have been increasing efforts to protect the public interest by regulating the content and the influence of advertising. Some examples are: the ban on television tobacco advertising imposed in many countries, and the total ban of advertising to children under 12 imposed by the Swedish government in 1991. Though that regulation continues in effect for broadcasts originating within the country, the European Court of Justice ruled that Sweden was obliged to accept foreign programming, including those from neighboring countries or via satellite. Greece's regulations are of a similar nature, "banning advertisements for children's toys between 7 am and 10 pm and a total ban on advertisement for war toys".[77]

In Europe and elsewhere,[where?] there is a vigorous debate on whether (or how much) advertising to children should be regulated.[citation needed] This debate was exacerbated by a report released by the Kaiser Family Foundation in February 2004 which suggested fast food advertising that targets children was an important factor in the epidemic of childhood obesity in the United States.[citation needed]

In New Zealand, South Africa, Pakistan, Afghanistan, Canada, and many European countries, the advertising industry operates a system of self-regulation.[citation needed] Advertisers, advertising agencies and the media agree on a code of advertising standards that they attempt to uphold. The general aim of such codes is to ensure that any advertising is 'legal, decent, honest and truthful'. Some self-regulatory organizations are funded by the industry, but remain independent, with the intent of upholding the standards or codes like the Advertising Standards Authority in the UK.[citation needed]

In the UK, most forms of outdoor advertising such as the display of billboards is regulated by the UK Town and County Planning system. Currently, the display of an advertisement without consent from the Planning Authority is a criminal offense liable to a fine of £2,500 per offence.[citation needed] All of the major outdoor billboard companies in the UK have convictions of this nature.[citation needed]

In the US, many communities believe that many forms of outdoor advertising blight the public realm.[78] As long ago as the 1960s in the US there were attempts to ban billboard advertising in the open countryside.[79] Cities such as São Paulo have introduced an outright ban[80] with London also having specific legislation to control unlawful displays.

Many advertisers employ a wide-variety of linguistic devices to bypass regulatory laws (e.g. In France, printing English words in bold and French translations in fine print to deal with the Article 120 of the 1994 Toubon Law limiting the use of English).[81] The advertisement of controversial products such as cigarettes and condoms are subject to government regulation in many countries. For instance, the tobacco industry is required by law in most countries to display warnings cautioning consumers about the health hazards of their products.[citation needed] Linguistic variation is often used by advertisers as a creative device to reduce the impact of such requirements.[citation needed]

Advertising research

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Main article: Advertising research

Advertising research is a specialized form of research that works to improve the effectiveness and efficiency of advertising. It entails numerous forms of research which employ different methodologies. Advertising research includes pre-testing (also known as copy testing) and post-testing of ads and/or campaigns – pre-testing is done before an ad airs to gauge how well it will perform and post-testing is done after an ad airs to determine the in-market impact of the ad or campaign. Continuous ad tracking and the Communicus System are competing examples of post-testing advertising research types.

Semiotics

Main article: Advertising research

Meanings between consumers and marketers depict signs and symbols that are encoded in everyday objects.[82][need quotation to verify] Semiotics is the study of signs and how they are interpreted. Advertising has many hidden signs and meanings[citation needed] within brand names, logos, package designs, print advertisements, and television advertisements. Semiotics aims to study and interpret the message being conveyed in (for example) advertisements. Logos and advertisements can be interpreted at two levels - known as the surface level and the underlying level. The surface level uses signs creatively to create an image or personality for a product.[citation needed] These signs can be images, words, fonts, colors, or slogans. The underlying level is made up of hidden meanings. The combination of images, words, colors, and slogans must be interpreted by the audience or consumer.[83] The "key to advertising analysis" is the signifier and the signified. The signifier is the object and the signified is the mental concept.[84] A product has a signifier and a signified. The signifier is the color, brand name, logo design, and technology. The signified has two meanings known as denotative and connotative. The denotative meaning is the meaning of the product. A television's denotative meaning might be that it is high definition. The connotative meaning is the product's deep and hidden meaning. A connotative meaning of a television would be that it is top-of-the-line.[85]

Apple's commercials[when?] used a black silhouette of a person that was the age of Apple's target market. They placed the silhouette in front of a blue screen so that the picture behind the silhouette could be constantly changing. However, the one thing that stays the same in these ads is that there is music in the background and the silhouette is listening to that music on a white iPod through white headphones. Through advertising, the white color on a set of earphones now signifies that the music device is an iPod. The white color signifies almost all of Apple's products.[86]

The semiotics of gender plays a key influence on the way in which signs are interpreted. When considering gender roles in advertising, individuals are influenced by three categories. Certain characteristics of stimuli may enhance or decrease the elaboration of the message (if the product is perceived as feminine or masculine). Second, the characteristics of individuals can affect attention and elaboration of the message (traditional or non-traditional gender-role orientation). Lastly, situational factors may be important to influence the elaboration of the message.[87]

There are two types of marketing communication claims-objective and subjective.[88] Objective claims stem from the extent to which the claim associates the brand with a tangible product or service feature. For instance, a camera may have auto-focus features. Subjective claims convey emotional, subjective, impressions of intangible aspects of a product or service. They are non-physical features of a product or service that cannot be directly perceived, as they have no physical reality. For instance the brochure has a beautiful design.[89] Males tend to respond better to objective marketing-communications claims while females tend to respond better to subjective marketing-communications claims.[90]

Advertisements tend to represent men as independent,[citation needed] showing them in more occupations than women. Women are represented mainly as housewives and mothers.[citation needed] Men are more likely to be shown advertising cars or business products, while women advertise domestic products.[citation needed] Men are more likely to be shown outdoors or in business settings.[citation needed] Women are depicted in domestic settings.[citation needed] Men are more often portrayed as authorities.[citation needed] As far as ads go, with age men seem to gain wisdom and authority.[citation needed] On the other hand women seem to disappear with age.[citation needed]

Voiceovers are commonly used in advertising. Most voiceovers are done by men, with figures of up to 94% having been reported.[citation needed] There have been more female voiceovers in recent years[when?], but mainly for food, household products, and feminine-care products.[91]

Gender effects in the processing of advertising

According to a 1977 study by David Statt, females process information comprehensively, while males process information through heuristic devices such as procedures, methods or strategies for solving problems, which could have an effect on how they interpret advertising.[92] According to this study, men prefer to have available and apparent cues to interpret the message where females engage in more creative, associative, imagery-laced interpretation. Later research by a Danish team [93] found that advertising attempts to persuade men to improve their appearance or performance, whereas its approach to women is aimed at transformation toward an impossible ideal of female presentation. Advertising's manipulation of women's aspiration to these ideal types, as they are portrayed in film, in erotic art, in advertising, on stage, music video, and other media exposures, requires at least a conditioned rejection of female reality, and thereby takes on a highly ideological cast. Not everyone agrees: one critic viewed this monologic, gender-specific interpretation of advertising as excessively skewed and politicized.[94]

More recently, research by Martin (2003) reveals that males and females differ in how they react to advertising depending on their mood at the time of exposure to the ads, and the affective tone of the advertising. When feeling sad, males prefer happy ads to boost their mood. In contrast, females prefer happy ads when they are feeling happy. The television programs in which the ads are embedded are shown to influence a viewer's mood state.[95]

See also

Business and economics portal

References

Notes

  • Donley T. Studlar (2002) Tobacco Control: Comparative Politics in the United States and Canada p.55 quotation: "...froms. the early days advertising has been intimately intertwined with tobacco. The man who is sometimes considered the founder of modern advertising and Madison Avenue, Edward Bernays, created many of the major cigarette campaigns of the 1920s, including having women march down the street demanding the right to smoke."

  • Donald G. Gifford (2010) Suing the Tobacco and Lead Pigment Industries, p.15 quotation: "...during the early twentieth century, tobacco manufacturers virtually created the modern advertising and marketing industry as it is known today."

  • Stanton Glantz in Mad Men Season 3 Extra – Clearing the Air – The History of Cigarette Advertising, part 1, min 3:38 quotation: "...development of modern advertising. And it was really the tobacco industry, from the beginning, that was at the forefront of the development of modern, innovative, advertising techniques."

  • Bhatia (2000). Advertising in Rural India: Language, Marketing Communication, and Consumerism, 62+68

  • Hong Liu, Chinese Business: Landscapes and Strategies (2013), p.15.

  • He was first described as such in T F G Coates, 'Mr Thomas J Barratt, "The father of modern advertising"', Modern Business, September 1908, pp. 107–15.

  • Matt Haig, Brand failures: the truth about the 100 biggest branding mistakes of all time, Kogan Page Publishers, 2005, pp. 219, 266.

  • Nicholas Mirzoeff, The visual culture reader, Routledge, 2002, p. 510.

  • Eric Partridge, Paul Beale, A Dictionary of Catch Phrases: British and American, from the Sixteenth Century to the Present Day, Routledge, 1986, p.164.

  • Eskilson, Stephen J. (2007). Graphic Design: A New History. New Haven, Connecticut: Yale University Press. p. 58. ISBN 978-0-300-12011-0.

  • Ewen, Captains of Consciousness (1976), p. 33. "As Ford's massive assembly line utilized 'extensive single-purpose machinery' to produce automobiles inexpensively and at a rate that dwarfed traditional methods, the costly machinery of advertising that Coolidge had described set out to produce consumers, likewise inexpensively and at a rate that dwarfed traditional methods."

  • Ewen, Captains of Consciousness (1976), p. 34. "While agreeing that 'human nature is more difficult to control than material nature,' ad men spoke in specific terms of 'human instincts' which if properly understood could induce people 'to buy a given product if it was scientifically presented. If advertising copy appealed to the right instincts, the urge to buy would surely be excited'."

  • Brandt (2009) p.31

  • Ewen, Captains of Consciousness (1976), pp. 68–59. "Widespread within the socially oriented literature of business in the twenties and thirties is a notion of educating people into an acceptance of the products and aesthetics of a mass-produced culture. [...] Beyond this, and perhaps more important to the consciousness of many, were the indigenous networks of social structure which generated mistrust or open opposition to corporate monopolization of culture."

  • Ewen, Captains of Consciousness (1976), pp. 62–65.

  • Petit, The Men and Women We Want (2010), pp. 66–68.

  • Benjamin, L.T., & Baker, D.B. 2004. Industrial-organizational psychology: The new psychology and the business of advertising. From Séance to Science: A History of the Profession of Psychology in America. 118-121. California: Wadsworth/Thomson Learning.

  • William Safire (February 6, 2005). "ON LANGUAGE: Metaphor Madness". The New York Times. Retrieved October 19, 2011. The foolish fearsomeness of this act was vitiated in the 1960s by Esso, which took a smiling tiger as a symbol with the alliterative slogan Put a tiger in your tank.

  • "Western Europe: The Tiger Goes Abroad". Time. May 28, 1965. Retrieved October 19, 2011. "Put a tiger in your tank." The star of one of the most popular advertising campaigns ever hatched on Madison Avenue, Esso's frisky, whimsical tiger with the high-octane tail has become a roaring success all over Europe.

  • David Kaplan (January 23, 2004). "Sulcer, 77, Former DDB Needham Exec, Dies". adweek. Retrieved January 20, 2014. Frederick D. "Sandy" Sulcer... He created the well-known "Put a tiger in your tank" theme line for Esso (now ExxonMobil)

  • Littlejohn, Stephen W., ed. (2009). "Advertising Theories". Encyclopedia of Communication Theory 1. SAGE. p. 19. ISBN 9781412959377. Retrieved August 16, 2013. Originally developed in the personal-selling literature, the hierarchy-of-effects model has undergone various modifications in its historical development such that today we use it in the plural form, indicating that competing models exist.

  • Clow, Kenneth E.; Baack, Donald (2007). Integrated Advertising, Promotion, and Marketing Communications 3rd edition. Pearson Education. pp. 165–71. ISBN 0-13-186622-2.

  • Keith Mcarthur. "Business". globeandmail.com. Archived from the original on May 19, 2009. Retrieved April 20, 2009.

  • Taylor, John (1978). How to start and succeed in a business of your own. p. 293.

  • Altstiel, Tom, and Jean Grow. Advertising Strategy: Creative Tactics From the Outside/In. CA: Sage Publication Inc. 2006. Print.

  • Global marketing Management, 2004, pp. 13–8

  • Young, p.131

  • Gussow, Joan (March 2, 1972). "Counternutritional Messages of TV Ads Aimed at Children". Journal of Nutrition Education: 48–52.

  • Bhatia and Ritchie 2006:542

  • Mick, Devid Glen (September 1986). "Consumer Research and Semiotics: Exploring the Morphology of Signs, Symbols, and Significance". The Journal of Consumer Research 13 (2): 196. doi:10.1086/209060.

  • Beasley, Ron (2002). Persuasive Signs: The Semiotics of Advertising. Berlin, Germany: Walter deGruyter GmbH & KG. ISBN 3-11-017341-7.

  • Umiker-Sebeok, Donna Jean (1987). Marketing and Semiotics. Berlin: Walter de Gruyter & Co.

  • Ademola, Owolabi (2005). "Effects of Gender-Role Orientation, Sex of Advert Presenter and Product Type on Advertising Effectiveness". European Journal of Scientific Research 35 (4): 537–543.

  • Koc, Erdogan (2002). "Impact of gender in marketing communications: the role of cognitive and affective cues". Journal of Marketing Communications 8 (4): 257. doi:10.1080/13527260210145993.

  • Holbrook, Morris (November 1978). "Beyond Attitude Structure: Toward the Informational Determinants of Attitude". Journal of Marketing Research 15 (4): 545. doi:10.2307/3150624.

  • Silverman, Julian; King, Catherine (1970). "Pseudoperceptual defferentiation". Journal of Consulting and Clinical Psychology 34 (1): 119–23. doi:10.1037/h0028807. PMID 5436459.

  • Statt, David (1977). Understanding the Consumer – A Psychological Approach. London: Macmillan Press.

  • Vestergaard and Schrøder, The Language of Advertising, 75

  • Splendora, "Discourse," Review of Vestergaard and Schrøder, The Language of Advertising in Language in Society, 449

  1. Martin, Brett A. S. (2003), "The Influence of Gender on Mood Effects in Advertising", Psychology and Marketing,20 (3), 249–73.

Further reading

  • Bittlingmayer, George (2008). "Advertising". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.

  • Brandt, Allan. The Cigarette Century (2009)

  • Crawford, Robert. But Wait, There's More!: A History of Australian Advertising, 1900-2000 (2008)

  • Ewen, Stuart. Captains of Consciousness: Advertising and the Social Roots of Consumer Culture. New York: McGraw-Hill, 1976. ISBN 0-07-019846-2

  • Fox, Stephen R. The mirror makers: A history of American advertising and its creators (University of Illinois Press, 1984)

  • Friedman, Walter A. Birth of a Salesman (Harvard University Press, 2005), In the United States

  • Jacobson, Lisa. Raising consumers: Children and the American mass market in the early twentieth century (Columbia University Press, 2013)

  • Jamieson, Kathleen Hall. Packaging the presidency: A history and criticism of presidential campaign advertising (Oxford University Press, 1996)

  • Laird, Pamela Walker. Advertising progress: American business and the rise of consumer marketing (Johns Hopkins University Press, 2001.)

  • Lears, Jackson. Fables of abundance: A cultural history of advertising in America (1995)

  • Liguori, Maria Chiara. "North and South: Advertising Prosperity in the Italian Economic Boom Years." Advertising & Society Review (2015) 15#4

  • McFall, Elizabeth Rose Advertising: a cultural economy (2004), cultural and sociological approaches to advertising

  • Meyers, Cynthia B. A Word from Our Sponsor: Admen, Advertising, and the Golden Age of Radio (2014)

  • Mazzarella, William. Shoveling smoke: Advertising and globalization in contemporary India (Duke University Press, 2003)

  • Moriarty, Sandra, et al. Advertising: Principles and practice (Pearson Australia, 2014), Australian perspectives

  • Nevett, Terence R. Advertising in Britain: a history (1982)

  • Oram, Hugh. The advertising book: The history of advertising in Ireland (MOL Books, 1986)

  • Presbrey, Frank. "The history and development of advertising." Advertising & Society Review (2000) 1#1 online

  • Saunders, Thomas J. "Selling under the Swastika: Advertising and Commercial Culture in Nazi Germany." German History (2014): ghu058.

  • Short, John Phillip. "Advertising Empire: Race and Visual Culture in Imperial Germany." Enterprise and Society (2014): khu013.

  • Sivulka, Juliann. Soap, sex, and cigarettes: A cultural history of American advertising (Cengage Learning, 2011)

  • Spring, Dawn. "The Globalization of American Advertising and Brand Management: A Brief History of the J. Walter Thompson Company, Proctor and Gamble, and US Foreign Policy." Global Studies Journal (2013). 5#4

  • Stephenson, Harry Edward, and Carlton McNaught. The Story of Advertising in Canada: A Chronicle of Fifty Years (Ryerson Press, 1940)

  • Tungate, Mark. Adland: a global history of advertising (Kogan Page Publishers, 2007.)

  • Vestergaard, Torben and Schrøder, Kim. The Language of Advertising. Oxford: Basil Blackwell, 1985. ISBN 0-631-12743-7

    • Splendora, Anthony. "Discourse," a Review of Vestergaard and Schrøder, The Language of Advertising in Language in Society Vol. 15, No. 4 (Dec., 1986), pp. 445–449

  • West, Darrell M. Air Wars: Television Advertising and Social Media in Election Campaigns, 1952-2012 (Sage, 2013)

Historiography

  • Schwarzkopf, Stefan. "The subsiding sizzle of advertising history: Methodological and theoretical challenges in the post advertising age." Journal of Historical Research in Marketing (2011) 3#4 pp: 528-548.

External links

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