On the surface, marketing and advertising seem to be synonymous; two words that can be used interchangeably to describe a process that helps you sell more products or services. However, there's a huge difference, and being able to differentiate between the two will help you create a more complete, "whole" approach to achieving your business goals, which will ultimately impact your bottom line.
So what's what? By definition, marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. In other words, it is the systematic planning, implementation and analysis of business activities intended to exchange value offerings for sales.
So what's advertising then? It's the action of calling something to the attention of the public, especially by paid announcements, otherwise know as the paid, non-personal announcements of a business's products or services to existing and prospective customers.
Let's break these definitions down a bit further.
How Marketing Works
Creating a marketing plan involves a great deal of time and research, preparing your product for the marketplace, and starts with developing a unique selling proposition (USP) that differentiates your business. This proposition then acts as a guide, or a mission statement, that helps you develop the marketing strategy.
You must understand who your potential customers are and what they might want to gain from your products or services. If you understand how your customers think and behave, you can define yourself as a brand, and develop assets that will speak to them.
Colors, logos and other design elements must align with preferences of your target audience. Market research gives you the data to support the actions of your marketing efforts. It lets you know when and where to place advertising, helps you gain market share and gives insights into the right formats to use in your advertising (such as image, copy, video).
You must conduct successful market research to have a successful advertising campaign. It's market research that helps identify your target audience and increases the likelihood of successfully acquiring new customers. Through market research, you can determine not only the demand for your products or services, but also gauge potential competition and sales trends.
Marketing companies focus on sales strategies, monitoring consumer behavior through a number of avenues, including surveys and questionnaires, monitoring online behavior and even face-to-face interaction with customers.
Marketing strategy can be broken down into four phases, or what is often referred to as the 4 P's: product, place, price and promotion.
- Product: This refers to both products and services that are brought to the marketplace to meet consumer demand. This can include presently existing or unknown need/void in the current space.
- Price: Setting the right price is important to success. Many factors come into deciding pricing including margins, perceived value and opportunity costs of not buying.
- Place: Placement is supply. Place involves considering strategies such as selective distribution, franchising and exclusive distribution. Place can also mean physical outlets such as brick and mortar vs. e-commerce, or online sales platforms.
- Promotion: All vehicles of communication used by a brand to relay the message about its products and services falls under this phase of marketing, or where advertising lives.
How Advertising Works
Advertising supports marketing by creating the right exposure for a company's products or services. It generates curiosity in the minds of the target audience, creates buy-in and ultimately works to support the overall marketing plan to convert to sales.
Once you decipher who your target audience is, and how to best speak to them, your marketing plan then should include a strategy to best position yourself in the marketplace.
While it's through marketing that you convince potential buyers that you have the right product for them, it's through advertising that you communicate that the product exists and influence buying behavior. To do this, advertising must be timely and strategic, and should focus on creative positioning and media.
Communicating with your potentials customers in the right way includes speaking to them differently depending on what part of the buyer cycle they are in. Buyer purchasing behavior is split into six stages (awareness, knowledge, liking, preference, conviction and purchase), which are divided into three categories (cognitive, affective and conative). Your advertising strategy will help you explain, teach and promote your offerings to the right audience through a variety of means throughout these phases.
- Cognitive (awareness and knowledge): Consumers are processing the information provided through advertising communication. Advertising should present information on the product benefits to create interest.
- Affective (liking and preference): When consumers are in the affective stage, they want to relate to the brand. Advertising should connect emotionally.
- Conative (conviction and purchase): In this stage, consumers are either showing intent to buy, or actually purchasing. At this stage, advertising evolves into a method of expediting the purchasing process.
So What Does That Mean for My Business?
To be successful in a modern, sometimes oversaturated market, companies must develop a marketing strategy that is the overarching strategic plan to take a product or service to market. Advertising is a piece of that marketing plan.
Other pieces include market research, media planning, public relations, brand and product development, distribution, positioning and segmentation, customer support, sales strategy and pricing. All of these pieces require budget, and advertising is often the largest expense of any marketing plan.
Advertising must work well with the other pieces of the overall marketing strategy to translate to sales, and a well-executed ad campaign is run on multiple channels and at a high frequency to create the desired impact.
It's really critical to understand how marketing and advertising differ, as well as how they work together, to understand why allocating specific budget for both will successfully bring your product to market.
So....ready for the quiz? ;)