5 causes of Why Advertising is Not Effective. Cause V: People Do Not Remember the Message

One of the most acute problems with advertising messages is that they are not remembered. One day after the message was sent to consumers, it is “thrown” away from their minds. Here is a demonstration:

After a 4 week advertising campaign on TV and radio over 30% of potential users were reached by the advertising message. The question was whether all these 30% remember the message some time later. Researchers said only half of these, who were reached, can remember the message 4 weeks after the end of the campaign (I am giving approximate figures, which do not have to be precise as it is not the purpose here).

Logically, it is necessary to repeat the message to keep it in the people’s minds. It needs additional funds. This might be possible with low prices for advertising. Today’s growing prices for ads in all media make these repetitions a very hard burden for any company’s budget.

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5 Causes of Why Advertising Efficiency Drops. Cause IV: Oversaturated Markets and High Ad Pricing

Saying today’s markets are saturated is like saying two plus two equals four. We all see that markets are overcrowded with manufacturers, their brands, new products. Let’s take the car market as an example: today a car maker has over 20-30 models of cars grouped in a number of categories, which, in their turn, are sub grouped in smaller categories. And it is a product – the car – that is not bought and sold every now and then. Leave alone consumer products, which are so much alike, of the same quality and properties, that consumers hardly differentiate between them.

Within such a multitude of products companies set up price wars. These reflect only on the margin. If the margin is the revenue minus the cost of the product, then any price reduction is done on the account of the margin only, as it is hardly possible to lower production and other costs making up the cost of the product.

See the graph below:

With this companies cut their budgets.

At the same time advertising prices do not cease going up.
All in all, small budgets allocated for advertising and high advertising prices come into conflict, which results in low-quality budget advertsing.

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5 Causes of Why Advertising Efficiency Drops. Cause III: Ads Are Massive, It Killing Their Effect

In the great majority of cases advertising targets non-buyers or new customers or first-time-buyers. Advertising is a massive marketing tool, able to reach thousands, millions and, in rare cases, billions. Unfortunately the omnipresent character of advertising has turned into its main drawback. To see it clearly, let’s see it from the segmentation standpoint:

a. While advertising a product or a service we are sure the ad will reach existing and new customers. Let’s call them “buyers” and “non-buyers”.
b. Buyers are aware of the product as they have already been in touch with it and they do not need to be explained what this is.
c. Non-buyers are not aware of the product and should be impacted to get acquainted with it. They are the target for almost all advertisements.

Preliminary conclusion:

TV, radio, billboard advertising is massive. It cannot but inform “unnecessary” clients, who will never buy the product as they are stuck with other brands or do not use this category of products.

To see a case and full conclusions, see below:

5 Causes of Why Advertising Efficiency Drops. Cause II: Smart Customer

It goes without saying customers are no stupid. Customers have tested and used a lot of products from the same category. If 30-40 years ago a fridge was bought once for the whole life time, now a fridge serves from 3 to 10 years (I think so as I changed a fridge three years ago and am thinking of buying a new one next year). In the beginning advertising is the main source of information about a product. That was normal for my parents. I already refer to other sources besides pure advertising.

Still, different ratio for sources used refers to new and existing products.

5 Causes of Why Advertising Efficiency Drops. Cause I: Information Overload Deadens Ads

Picture:http://howtosplitanatom.com/

Along with advertising efficiency models researchers have seen that the impact of an advertisements drops while a client moves along from “Informed” to “First Buy” (see Lavidge Model). This is true as any one of us (in quality of client) is influenced by a number of factors before drawing the credit card or cash out to pay:

- the sales assistant -> the way s/he speaks, is dressed, smells, etc.
- the looks of the surroundings;
- the packaging;
- the feedback from friends and acquaintances…etc

30-40 years ago this effect could be neglected as the information flow was scarce. Today the voice of the advertising is deadened by the rolling informational ball (here is a full report of how much information is produced each new year /PDF file/). To be heard advertising needs to be louder, more aggressive and repetitive. That needs money and a lot of it.

Thus, advertising is no more the engine for sales as it used to be some decades ago: it has turned into the engine of “informing” the public. This is what advertising should be taken for.

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5 Causes of Why Advertising Efficiency Drops. – INTRO

5 Causes of Why Advertising Efficiency Drops – WHAT THEY PERCEIVE

5 Causes of Why Advertising Efficiency Drops – WHAT THEY PERCEIVE

If you are in for marketing and sales, you might be familiar with the model elaborated by R. Lavidge in the far-away year of 1961. To me this model as well as the AIDA model are the ones to pay much attention, too. These point how clients buy and what stage they get through to buy.

To put it simply, Lavidge shows the way advertising influences the buying behavior. First, it informs, then creates a positive attitude, then invites to make the first buy and, finally, involves the buyer to make another and another buy.

By informing a perspective customer the message is meant to attract, then interest, then provoke to decide to buy and, finally, bring the customer to action -> to buy.

Possible scenarios:

5 Causes of Why Advertising Efficiency Drops – Intro

As a customer and a marketing specialist having worked in a specialized magazine and a couple of production companies, I kept thinking of why advertising continues bringing in bad results and why its efficiency is dropping. In its very core mass advertising is a good idea as it is massive, that is, it should cover large numbers of population. But it has lately turned to be ineffective. How come?

Our too informed society faces increasing volumes of media. We all become more sophisticated and knowledgeable in terms of consummation. Margins fall low and marketing costs go high. These are just a few factors that make advertising efficiency drop.

Managing the advertising department of a magazine I had to face complaints from advertisers and even refusals to advertise on. The main claims were that the feedback from the advertisement is not satisfactory: companies receive fewer calls, there are fewer buyers after the ad campaign, the product awareness is low, and advertising costs are constantly increasing.

So I thought about this phenomenon. To us it was vital to keep our customers as we were dependent of their payments. I knew such a business banking only on one single ways of income was shaky, but it is not the topic for this story. Let’s get back to the ad issue.