How Advertising Works: What Do We Really Know

How does advertising work? Introduction Advertising is a very important tool in order to make sure a product will be sold and to make sure a company is earning money. It is also one of the most important tools in order to get customers to buy a product or want a service. Ineffective advertising can not only cost the company a lot of money but it can even have a negative influence on the image customers have on a product or brand. So how to set up an effective and positive advertisement is something that has a very high priority in every business.In order to create that positive advertising campaign you need to know what the do and don’ts are and which pitfalls need to be avoided.

I consider it very important to know what advertising exactly means and what the definition of the word advertising is. Advertising is a paid form of communicating a message by the use of various media. It is persuasive, informative, and designed to influence purchasing behavior or thought patterns. The message send in those media could than be called an advertisement. Carter McNamara, MBA, PhD, 2007) Companies spread a message and that message need to be picked up by the target audience. This audience need to be researched first in order to send a message that is understood and accepted by those who the company assumes will buy the product or service. These groups or audience can be differentiated by gender, age, cultural background, religion, social status or many more examples.

We can classify the effects that advertisement has in two categories; intermediate effects and behavioural effects.Intermediate effects are summarized into consumer beliefs and attitudes. The feeling and association people have with a certain brand or product and the attitude they have towards it. Behavioural effects are coping with the behaviour of customers. This could be purchasing behaviour and brand choice. This report will cover both of the effects that could be reached by advertising. Because advertising is a way of communicating to the customer, it is very important to understand the models designed over the last centuries.

These models are communication models, in this report three models will be covered to get a clear view on how advertising works. Schramm’s original model In 1955 Wilbur Schramm developed the basic model of mass communication, as we know and use it these days. Before 1955 several communication experts, such as Shannon & Wever, claimed that communication was only a one-way street. A message was going from point A to B and that is where it stops. A is the sender; this sender sends a message which goes to B, the receiver.There were no distinctions made whether the receiver understood or accepted the message and therefore the sender could not be sure whether the sending of the message was effective and reached the objected goal. (see figure 1.

1) Schramm said that every receiver interprets a message differently and therefore it is extremely important that the sender receives feedback in order to make sure the message is received, understood and accepted. According to the model (figure 1. 2) the message is made up into a format; the message is encoded.This format can be speech or print for example by using (a combination) of appropriate words, pictures, music, symbols etc. The message is send to the receiver by a medium; newspaper, tv, radio etc. The message reaches the receiver and the receiver will decode the message into its own understanding. This is where it is of high importance that the source and the receiver understand each other.

Because the receiver’s field of perception affects the decoding, the message will be understood better and clearer if the perceptions, experiences, attitudes and values of the sender and receiver overlap as much as possible. Egan, 2007) It is not for no reason that marketing departments ask for “people with a feeling for the product” and therefore empathy with the target audience. A young, beer-drinking male will most likely manage the marketing department of Heineken while L’oreal’s marketing department is more likely to be supervised by a woman with a feeling for beauty and appearance. When the message is received and decoded by the receiver, the source needs evidence that the message is understood and had the effect that the company was aiming for; for example higher revenue or a better brand image.This evidence can be shown in the way of feedback. Because the receiver is giving feedback (sends a message) to the sender, their parts will be turned around and now it becomes important that the original sender interprets the feedback in a correct way. Advertising is, according to Schramm’s model a very inter-personal activity where social context and understanding of the audience is extremely important.

(Egan, 2007) A company that, in my opinion, makes great use of this model is Coca Cola, they have several products with almost the same ingredients that have a different target audience.Because of the commercials and feeling they give the audience people buy the product. A strong and masculine man would not be seen with a Diet Coke but more likely with a Coke Zero (which is almost exactly the same product). Coca Cola measures the results of their campaigns by giving away lots of gifts and goodies. Entering numbers given under the cap of the bottle, gives the opportunity to receive those products. Because people love free stuff they go the website, give feedback and Coca Cola knows who the person was that bought the product and if that was the correct and targeted audience.This might help them when they set up new messages.

Figure 1. 1: The transmission model of one-way communication (source: Shannon & Weaver (1949)) Figure 1. 2: Schramm communication model (source: wikimedia. org, 2010) Two-Step communications model What we saw in the first model described above was that Schramm implies that the message goes straight from sender to receiver through a medium. The two-step communications model states that there are others; opinion formers and opinion leaders that have influence or authority over our buying behaviour and even lives. Egan, 2007) The difference between an opinion former and a opinion leader is their knowledge about a particular field or product. The opinion former might be someone that is acknowledged to be an expert and his or her opinion can be trusted.

This might be a journalist, scientist or politician. (Egan, 2007) When we see a commercial of a doctor in a white suite telling us that this new invented pill would guarantee extreme weight loss we would rather believe that than if a fat woman of 45 tells exactly the same story.An opinion leader is mostly someone from a higher social status were people want to identify themselves with. This could be a celebrity, fashion model or athlete. L’oreal uses Eva Longoria, Cheryl Cole and the Dutch supermodel Doutzen Kroes as their fashion icons. Eva says that she gets those beautiful lashes by using the Extra-Volume Colagene mascara and Doutzen claims that she has her shiny highlights because of Color Vive shampoo. It doesn’t really matter whether it is true, women want to be just as beautiful as the people they see in the commercial so why not give it a try and buy the L’oreal products.

When we look at the figure below (1. 3) we see that these opinion leaders and opinion formers are the people who are the first ones to receive a message. We call these opinion formers and leaders connectors; they connect a company and a consumer. (Egan, 2007) If this is done in an effective way, the sales of a certain product are likely to increase. What needs to be taken into account is that the usage of opinion leaders and formers in advertisement can also damage your brand image when those connectors act not in a social desirable way.Tiger Woods cheated on his wife and Rolex decided that was not the image they wanted customers to have. Kate Moss used cocaine, H&M, Chanel and Burberry dropped her immediately.

However the group of connectors is bigger than only celebs and other influential people and could also be. In the Diffusion of Innovation figure (figure 1. 4) by Rogers in 1983 we see that a product is first recognized by innovators. Later on by early adopters and the early majority than comes the late majority and at last the laggards.These so called innovators (and maybe some early adopters) are people who spot trends very early and are willing to pay more money for a new product. If we compare this picture with the two-step communications model we see that those people are most likely the ones who are not reached by the opinion formers and leaders but are the ones who pick up on new things even before the leaders and formers spread the message to the consumer. They are the ones where the arrow goes straight from decode to consumer and not through a leader or former.

These people could also be a connector due to word-of-mouth marketing.People want to be part of a group, consumers identify themselves with others in that group, and this is called a reference group. Whenever someone in a group is an innovator or early adopter and the word is spread that some product is good or an absolute must-have it is likely that it will be picked up by a larger majority of people. (Egan, 2007) So in the two-step model buying behaviour and brand image (the intermediate and behavioural effects of advertising) are influenced by people who can make consumers reconsider their purchase in a positive way for the sender.Apple is the absolute best example when it comes to innovators, they want to have the first new gadget the same day and the prices are high, however there are lines outside the stores for hours. After those people can say that the new product is good the rest will follow. Apple needs no celebrities to sell their products; the opinion formers and the innovators who spread the word actually sell the products.

Left: figure 1. 3 (source: lecture slide D. Lambert, 2010) Below: figure 1. 4 Diffusion of Innovation (source: based on Rogers, 1983) Hierarchy of effects model; AIDA(S)AIDA is maybe the most important model if we look at the hierarchy of effects model. These models show how marketing communications can help the buying process. Consumer research shows that consumers almost never make instant unsupported decisions. It turned out that consumers go through a few stages before they come to the actual purchase phase.

These stages are based on the cognitive, affective and conative processes. Communication experts who adopt this strategy suggest that consumers respond to messages in a very ordered way. They think (cognitive) about something first, than they need to feel (affect) it and at last they do (conative).Barry and Howard defined cognition as mental activity such as knowledge, beliefs of thoughts. People seem to have more attraction to a certain product if they have a feeling to it, the messenger must have created this feeling. When that feeling is there the next step is more expected to be made; the intention of buying the product or actual purchasing a product. (Egan, 2007) E.

St. Elmo Lewis was the first that showed these stages of marketing communications in the early 1900’s with his AIDA model. However it is attributed to Strong in 1925. AIDA means: Attention, Interest, Desire, Action. Egan, 2007) First attention needs to be created; this means that the marketer needs to grab the attention of the potential customer. This can be done in all sorts of ways and with several different media. Here it is very important to come up something catchy and interesting especially when there are lots of substitutes to the product.

When the attention is there the interest needs to be built. The audience need to be informed about your product is and why it is better, in whatever way (cheaper, good looking, faster, stronger) than that of the competition.When this step is taken sufficiently the changes are big that the customer is now attracted to the product and this means that there is desire. Marketing is about getting someone to buy the product so the last step is the actual action; the purchasing of the product. The customer will, according to this model, only buy a product when he is informed and attracted to the product. The customer must have the feeling that without the immediate purchase of this product his or her life will no longer be complete. (Egan, 2007 and http://drypen.

n, 2010, author unknown) However it makes sense that this is the rational way people decide to buy or not to buy there are some pitfalls to this model. For example a little kid that is grocery shopping with his mother will not be fully informed about the product but just wants the lovely green bag with crisps because the appearance of the bag is appealing to him. The same goes, in my opinion, for people at fast food restaurants, I think they decide to buy the food because they need to have a quick meal, if they would have read the exact ingredients of the MacDonalds hamburger they would rather become a vegetarian.So the whole movement from step 1 to step 4 doesn’t have to be in exactly that order. There might be other factors in the buying process that make people decide to buy immediately. At last there is one other important thing to add to this model. The revised version; AIDAS claims that advertising is also important after the purchase to make sure that the customer will be satisfied with the product and decides to come back next time.

This is the beginning of a new communication process. (Egan, 2007) figure 1. 5 the AIDA(S) model source: http://corporatejourney2u. com) Conclusion and my personal favourite A communication model is a simplification of which communication from sender to receiver is going. There are several ways to get a message from A to B. The intention in advertising is to communicate and through the communication attract customers to buy a certain product or get a special service. This could be done with a one-stop model such as Schramm’s, the company sends out a message, the receiver needs to understand and accept it and give feedback.

In this model it is very important that you sender understands the receiver in order to have as much overlap in fields of perception; this will make it more likely that they will understand each other. They is also two-step model; this model relies on the idea that consumers can be influenced by others. These people are called connectors and can be opinion leaders such as journalists or scientists or opinion formers such as athletes and celebrities. These people can influence the buying behaviour of others and are therefore very valuable to senders.The last model discussed is AIDA, which suggests that people take a logic psychological path before the make a decision. The consumer needs to pay attention, be informed and becomes interested, they will later on have a desire for the product or service and will eventually act; buy the product. However I think that this model is not always applicable.

I consider the two-step model very valuable and my favourite. Not only because I notice in my daily-life beautiful or intelligent people attract consumers but also because consumers seem to be easy to influence when it comes to buying new products.Apparently companies are willing to pay millions to get opinion leaders to present their products. While I did the merchandise for a event company we had the DJ’s wearing our shirts and during the event everybody wanted to buy the shirts; it increased the sales and I saw myself that the two-step model really works. I might also think that there could be a revised version of the Schramm communication model with a two-step approach in it as well. In my opinion that would be ideal. This would be a step in between the sender and receiver where connectors spread the message but feedback is given as well.

As we see here, as well as in more field of business and marketing, there is not one correct model. There are more models that show how advertising works. However the top-step model is my favourite.

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