The Myth of Advertising's Effectiveness

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The argument made by the proponents of advertising is almost pathetically simple-minded: If you can measure the benefits of advertising on your business, advertising works; if you can't, then your measurements aren't good enough. Or you need more ads. Or you need a different type of ad. It's much the same type of rationalization put forth by the proponents of making yourself rich by visualizing yourself as being prosperous.

Paradoxically, even though some small-business owners are beginning to realize that advertising doesn't work, many still advertise. Why? For a number of reasons: because they have been conditioned to believe that advertising works, because there are no other models to follow, and because bankers expect to see " advertising costs" as part of a business proposal.

It's important to realize that your judgment regarding advertising is likely to be severely skewed. You have been surrounded by ads all your life and you've heard countless times that advertising works. To look at advertising objectively may require you to reexamine some deeply held beliefs.

According to E magazine, advertising budgets have doubled since 1976 and grown by 50% in the last 10 years. " Companies now spend about $162 billion each year to bombard us with print and broadcast ads; that works out to about $623 for every man, woman, and child in the United States" (" Marketing Madness," May/June 1996). Information Resources studied the effect of advertising and concluded, " There is no simple correspondence between advertising and higher sales. ... The relationship between high copy scores and increased sales is tenuous at best." Or as George Orwell said, " Advertising is the rattling of a stick inside of a swill bucket."

To illustrate how pervasive the " advertising works" belief system is, consider that if the sales of a particular product fall off dramatically, most people look for all sorts of explanations - without ever considering that the falloff may be a result of counterproductive advertising.

Skeptics may claim that you simply can't sell certain consumer products - beer, for example - without an endless array of mindless TV ads. We refer these skeptics to the Anchor Steam Brewing Co. of San Francisco, which very profitably sold 103,000 barrels of excellent beer in 1995 without an ad campaign. They believe in slow and steady growth and maintain a loyal and satisfied client base.

Even apparent successes may not be what they seem. The California Raisin Advisory Board ran an ad campaign that produced the most recognized ad in history. In the mid-1980s its advertising agency, Foote Cone & Belding, used the first popular national clay animation campaign. (Claymation is a trademark of the Will Vinton Studios.) The annual budget was over $40 million. The dancing raisins and their song " I Heard It on the Grapevine" created such a popular image that sales from dolls, other toys, mugs, and secondary products generated nearly $200 million in revenue and resulted in a Saturday children's television program using the raisin characters. Raisin sales went up for the first two years of the campaign, largely because cold breakfast cereal marketers were so impressed with the popularity of the ad campaign that they increased the raisin content of their raisin cereals and joined in the advertising.

After four years, the dancing raisin campaign was discontinued. Sales were lower than before the ads started (Forbes, June 17, 1996). By the early 1990s, the California Raisin Advisory Board had been abolished.

Copyright © 2000 Nolo.com Inc.

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