how does advertising affect your business

In the 19th century agencies functioned primarily to buy space in newspapers for their clients. In the 20th century, that changed: Advertising agencies began writing copy, designing images and eventually crafting whole advertising campaigns for their clients. Originally newspaper-centric, advertising spread to radio, television and now the internet.

Effective advertising can be a big boost to your company branding and your sales success. However it comes at a price, often a steep one. It can also be frustratingly hard to measure the advertising effects on your sales: Does a ​$20,000​ ad campaign generate more profits than expenses? Calculating the impact of advertising can become even harder when you’re weighing the merits of Facebook ads vs. Amazon ads vs. putting up a billboard.

39 Celsius says spending the money can generate positive advertising effects for entrepreneurs, but you have to put thought into what you’re doing. Many small businesses rush to buy advertising without any sort of plan and end up wasting their money. Even low-cost advertising is a waste if it doesn’t generate more revenue than the campaign cost you. Treat advertising that doesn’t work the same way you would treat an employee who doesn’t earn their keep: Show it the door.

Planning your advertising includes figuring out how much you can afford to spend and how much you need to bring in as a return on your investment. For instance, a ​$1,000​ advertising campaign that brings in ​$1,200​ in sales revenue generates a better impact of advertisement than a ​$2,000​ campaign that brings in ​$1,900​ in sales revenue. It may take some trial and error before you figure out what works best for you.

Big companies that have established their brand can often increase sales simply by launching a new product with their name attached to it. If you’re just starting out, part of your planning should be whether you want to emphasize branding as well as the benefits of your product or services, MEWS says. You can also advertise yourself by promoting your charitable donations or linking your brand with a cause, but as always, you have to watch the return on investment.

If your advertising is effective, Sendian Creations says, you can see multiple positive impacts of advertising on your bottom line:

• It makes people aware of your company, your brand and your products. If there’s no awareness, there’s no business. Even if you’re well-known, you want to make consumers aware whenever you launch a new product.
• Advertising can attract customers. Awareness is important, but it’s not enough. Customers have to choose to visit your store or shop on your website. Advertising helps with that.
• It distinguishes you from the competition. Whether you’re competing on efficiency, price, prestige or convenience, advertising can help you stand out in your industry. Rather than just creating new customers, you may be able to win them away from your rivals.
• Advertising can educate consumers. A landscaping company that sends out emails or posts videos with gardening advice gives valuable information and enhances its image at the same time.

Bad advertising, Amped says, will have negative effects on top of a poor return on investment.

• If your advertising makes promises you can’t live up to, that’s going to hurt your brand. Even if you’re not making outright fraudulent claims, writing checks your products can’t cash will badly injure your reputation.
• Advertising that unintentionally comes off racist or sexist can hurt your brand, too. 1950s ads sometimes showed husbands spanking their wives for not keeping the house clean enough. Anyone trying that today would be in for a world of negative feedback.
• You have to know the demographic you want to reach. If you’re marketing to teens, you need to advertise where teens will see it. If you advertise in media popular primarily with 40-somethings, you’re flushing your money away.

Not everyone sees the impact of advertising as a good thing. In the 1950s, Nurture Development says, people worried that advertising was something close to brainwashing, a method of manipulating people to buy stuff they didn’t really want. It was more worrisome that ads often didn’t focus on the rational merits of products but played upon people’s insecurities and fears to get them to buy.

Worries about advertising harms haven’t gone away. A 2018 paper says, for example, that ads portraying women as housewives, or purely as eye candy, can unintentionally promote negative stereotypes in the mind of consumers. Because the models in so many ads are beautiful — and then their photos are retouched — they can also create an artificially high standard of what normal women look like.

An article on Medium lists other negative advertising effects:

• Advertising frequently distorts the truth about the products. Ads for prescription drugs, for instance, often create exaggerated views of the product’s benefits while soft-pedaling the side effects.
• Advertising can make potentially harmful practices, such as heavy drinking or driving at super-fast speeds, look glamorous and cool.
• Advertising creates false needs or concerns in people’s minds, then offers them a product to fix the non-existent problem.

The article pointed out that advertising does have positive benefits as well:

• Advertising can give consumers information about products, helping them select the one that’s right for them.
• Many ads are fun to watch. Super Bowl commercials, for example, are entertainment in their own right.
• Organizations can use advertising to promote charities or share valuable information.
• Advertising is a multibillion-dollar industry. The money the industry pumps into newspapers, local TV stations and other media helps keep the media in the black.