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New High for U.S. Advertising expected in 2016

photo of Time Square in NYC

EFFECTIVE ADVERTISING INCREASES REVENUE

It has been proven that effective advertising positively correlates with an increase in revenue for companies. Advertising is one of the most essential components to a successful business. In the most basic sense, advertising calls the attention of a specific target audience to a certain product or service. It is a reminder to the public why one organization’s services are better than their competitors are. Since its inception centuries ago, advertising has played an integral role in the overall success and longevity of a company and its offerings.

U.S. ADVERTISING EXPECTED TO HIT 150 BILLION IN 2016

headline showing 146 billion will be spent on advertising in 2016 with the two largest categories being 44 billion on automotive demonstrated by a blue icon and 30 billion on wireless demonstrating through a gold icon Sell-the-Sizzle researchers are already predicting a projected high in advertising revenue for 2016. [1] A United States Local Advertising forecast for next year has calculated a total of approximately $146 billion to be spent towards these efforts. This total is a significant increase, up from $141 billion dollars this year, representing a growth rate of over 3 percent. The report designated local advertising as all advertising platforms that provide access to audiences for national, regional and local marketers. Also taken into consideration for the projections are the stronger economy and the political advertising due to the race for presidential election.

When the recession occurred, advertising levels experienced a sharp decline however, yearly since this time, advertising has been steadily increasing. Advertising strategies have spread and organizations are now combining the efforts of print and digital advertisements. Industries that will spend the most next year on advertising are:

  • The automotive industry: Will spend over $44 billion in advertising, an increase from 2.8 percent last year. Ford, General Motors, Honda and Volkswagen will lead the pack in money spent in advertising campaigns.
  • Food and beverage companies:  Budweiser, McDonald’s and Coca Cola have been known for their memorable advertisements with resonating messages.
  • Wireless communications industry: Companies such as Verizon and AT&T will be promoting their services by spending approximately $30 billion on advertisements in 2016.

The top advertising spending organization in 2016 will be L’Oréal Cosmetics. L’Oréal, the world’s largest cosmetic company, will have an advertising budget of $11 billion. Advertising budgets and ratios are widely compiled and used for strategic planning by ad agencies for a variety of reasons. These rates allow organizations to monitor competitors, identify new potential business prospects and to evaluate their advertising budget, along with those of other companies.

THE PRACTICE OF SUPPLY AND DEMAND

Effective advertising will positively affect the public’s view on a product and increase demand for that particular thing.

Supply and demand is one of the cornerstone principles of business, economics and advertising. Advertising can affect consumer’s perspectives on a product either negatively or positively. Demand refers to the quantity of a product or service that is desired by prospective buyers.

It is the amount of a certain good producers are willing to supply when receiving a certain price. Supply represents how much the market can offer. Effective and well-crafted advertising will positively affect the public’s view on a product and increases the demand for that particular thing. Advertising positively correlates with the sales of specific products or services.

SELLING THE SIZZLE, NOT THE STEAK

clip art image of a sizzling steak with caption that reads "sell the sizzle, not the steak"Effective advertising can increase sales, generate awareness and build a companies brand. A key insight to understanding the advertising industry is to “sell the sizzle, not the steak.” This well-known advertising adage conveys one of the main missions within the industry. Advertisers strive to sell the benefits of a product or service, not necessarily the actual product or service itself. [2] Companies understand that there are countless other businesses across the globe or in their specific market, most likely, selling a similar product. The goal is to differentiate oneself and to aid the public in identifying why they should buy and use a particular thing.

Take for example, Irish Spring soap. Advertisements have promoted its fresh scent and cleaning capabilities. Irish Spring understands that an individual can purchase a wide array of soaps from a large group of companies however, Irish Spring wants to convey a depiction of uniqueness. The organization wants the public to believe that only their unique product can make them feel a particular way. Other common techniques used by advertising executives to grab a target audience’s attention are:

  • clip art of musical tab with colorfully written music notes to the famous effective advertising jingle from McDonald's "I'm lovin it"Jingles and Slogans: These catchy phrases or songs can be mesmerizing and become stuck in a person’s head for days. For example, McDonald’s “I’m lovin it,” or American Express’s “don’t leave home without it.” Due to these marketing and advertising tactics, individuals may be more enticed to buy a particular product or service.
  • Mascots: The Energizer Bunny and Chuck E. Cheese, all figures, such as these, that for good or bad can become imprinted in an individual’s brain. Much like slogans and jingles, these figures can aid an organization in standing out and generating more sales.
  • Testimonials and Endorsements: Having a celebrity petition for an organization is generally well received. These celebrities, that are actual customers, aid in generating a sense of quality. The public also tend to hold celebrities on a pedestal, so if something is of high quality enough for an A-lister to use, the public is more likely to use it as well.

THE CORRELATION BETWEEN EFFECTIVE ADVERTISING AND BRAND RECOGNITION

Without advertising, it would be extremely difficult to know of an organization’s existence. Effective advertising is the backbone of sales efforts. It is the liaison between the manufacturer and the consumer and its all-encompassing reach directly affects the success of a product or service and the organization as a whole.

For over two decades, Mary Pomerantz Advertising has successfully and creatively executed advertising services for a wide array of clients. Our organization is dedicated to creating a unique advertising experience for each company and developing a memorable and effective advertising campaigns.

From commercials and graphics to ad placements and copywriting, any task dealing with advertising, Mary Pomerantz can execute. Allow our team of seasoned professionals to provide innovative advertising services for your organization. Whether you need advertising for a product or a service we can help. Let us successfully create the next slogan or commercial of the year, that leaves the public singing your organization’s tune. Contact us today at 732-214-9600 to get started.

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