Advertising and consumer behaviour ISBA Briefing Paper

BRIEFING PAPER OCTOBER 2004

ADVERTISING AND CONSUMER BEHAVIOUR

Introduction
The role of advertising in determining consumer behaviour has been under the microscope for several years. However, some of the arguments, assumptions and policy options proposed for example in relation recently to food advertising - are not based on an in-depth understanding of the way advertising works with consumers and its influence on markets. The misconceptions seem to be based on an entirely understandable intuitive reaction: how can advertisers claim that advertising does not increase consumption and sales and still spend so much money on it? Towards a theoretical explanation In the academic literature on the effects of advertising on consumer behaviour there are broadly two schools: 1) Advertising as a strongly persuasive force (Barry 1987, Shankar 1999) This is the intuitive view, ingrained in the collective mind, despite being criticised for the last three decades by other eminent academics (Ehrenberg, 1997, Ambler 2000). Proponents of this view are invariably critical of advertising. They contend that accurate knowledge about consumers how they buy, why they buy and where they buy is unnecessary as it is possible to manipulate hapless buyers into parting with their money in return for products that they do not want. These types of models have survived despite various empirical studies showing that the view of advertising as a strongly persuasive force is largely unfounded.1 These latter scholars propose an alternative view of advertising, suggesting a much weaker and less predictable and uneven impact on consumers.

Tellis & Weiss, 1995; Ambler, 2000; Helgesen, 1996

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Advertising and consumer behaviour ISBA Briefing Paper

2) Advertising as a tool of competition For almost thirty years, a considerable number of academics have asserted that the strong force theory does not apply in all market sectors. These scholars suggest that when it comes to marketing of frequently purchased goods (such as food) in mature markets volumes of advertising merely reflect an attempt to maintain a market share in highly competitive but fragmented markets, the total volume of advertising does not affect total market size.2 The simple, yet highly complex reality is that advertising works in different ways and to different effects depending on many intrinsic and extrinsic variables. Why do advertisers advertise? Primarily to develop consumer value in their brands. The overwhelming majority of ads are for brands, with the obvious exceptions of political, public service and charity advertising. Brands deliver choice, innovation, confidence and consumer value. The value of most businesses does not reflect their tangible assets, but their brand assets and therefore leads to business success being very largely driven by the ability of a companys brands delivering a higher level of consumer satisfaction than competing brands. Advertising is principally a tool of brand competition and it is brand competition that puts consumers in charge and renders businesses entirely vulnerable to the consumer - in effect a continuous, real time election. The role of advertising Advertising fulfils a number of tasks usually in the context of brands. Advertising: creates awareness communicates attributes and benefits (rational and emotional) reminds and refreshes to ensure top of mind awareness and that a brand is in consumers consideration set therefore generates repeat purchase and over time contributes to loyalty and the franchise of a brand

it does not persuade consumers against their will to do things they do not wish to do, or to purchase things they do not wish to purchase.

Contact Ian Twinn, ISBA Director of Public Affairs Tel: 020 7291 9020/ E-mail: iant@isba.org.uk

Eagle, 2002
ISBA - The Voice of British Advertisers www.isba.org.uk