Advertising is needed for a company to maintain its marketplace niche.
No tool is more effective for businesses than advertising, which provides information quickly about a company's products and services -- while persuading consumers to support them with their money. Yet many business owners fail to advertise, or they do so half-heartedly, unsure if it makes any sense. Dollar for dollar, however, advertising remains the best way of building customer loyalty, carving out market share and remaining competitive -- whether the competition is large or small.
Function
At its core, advertising conveys basic facts, while reminding people of when a company's products or services change. Nearly all the great advertising campaigns have been based on well-established facts, says "Entrepreneur." One example is the David Ogilvy Rolls-Royce ad, whose headline read, "At 50 miles an hour, the loudest noise you hear is the ticking of the dashboard clock." By focusing on an overlooked part of the car, the statement connected with buyers.
Identification
Advertising enables businesses to appeal directly to an audience that wants to buy the product. When Scottish businessman Michael Welch started his independent tire retailing business, Black Circles, he studied magazines like "Revs" and "Max Power." Figuring that fast car lovers made a captive market, Welch used the circulation and demographic data gleaned from these magazines to develop his earliest ads. He estimated that about 70 percent of the company's ad spending translated into sales.
Effects
The timing of advertising is equally important in forming buying decisions. This is especially true during a slumping economy, when many business owners cut back media spending. More than 85 percent of executives polled in a Yankelovich Partners and Harris Interactive survey found it essential to advertise in bad economic times -- because it shows a company's confidence, while conveying an impression of dominance. Frequent advertising helps business owners "close the deal" with consumers.
Features
Shaping consumer perceptions typically is best done by advertising, such as the six campaigns rolled out by Geico. Using images of talking lizards, metrosexual cavemen and omnipresent piles of cash, the insurer gained wider awareness of its services -- while reminding consumers of the company's willingness to provide more value for less money. On the downside, this type of outreach requires a massive investment. In Geico's case, that figure amounts to about $500 million, "The Financial Brand" reported.
Considerations
Without advertising, business owners experience a much more difficult time tilting the playing field in their favor. This is especially true of startup businesses, as Welch reminded viewers of the "Business Link" website. However, in Welch's opinion, his 70 percent turnover into sales has been made possible only by targeted messages that appeal directly to his company's core audience. In Welch's eyes, this sort of focused approach pays greater dividends than bigger spending.
Tags: business owners, appeal directly, company products, company products services, especially true