Advertisements: Profitable to business

Nabeel Tariq
Talha Hassan
Tayyab Imran
Rao Ihtesham
Muhammad Saad.
 Choice of topic and its relevance

As we know advertising is one of the major media players which is significantly important for

every firm. However, in this, we would analyze that how the advertisement is contributing to the

profitability of the firms. In the modern world, advertisement has grown its importance in

different contexts whether it is the launching of a campaign or a new product, Advertising is a

medium to inform people about the product. Overall in a technology-driven world to increase

sales and improve profitability over time being. For both the short term and long run how the

advertisement is important in the growth of the business. Overall this is how our topic would be

focusing on all those important aspects.

Introduction

Advertising is paid form of persuasive communication that uses mass and interactive media to

reach broad audiences. Usually, it is used to provide product information and connect to an

identified target market that a firm is targeting. Advertisement can be played in various mediums

such as print, broadcast, and outdoor advertisement. In print advertisements usually, we can see

the use of newspapers, magazines, and brochure is excessive. Usually, we can see local

businesses use this medium a lot, and the use of local newspapers is also increasing over time

being. We can see many firms which are pitching for new recruits, they use newspapers to reach

the audience. The broadcast includes television and radio, as these are used by both large and

small scale firms. For small-scale firms radio works well as usually many small-scale firms are

locally based. So we can see radio networks are also divided according to the local stations.

According to that, the firm tries to pitch its ad. Lastly, outdoor advertisements include banners,

hoardings, etc. In a broad context if we analyze these fits everywhere every firm uses this a lot

according to its target audience.

Profitability and advertisement are quite inter-linked to each other. Many firms believe that if the

advertisement is well made, and covers all the points then it would result in higher sales and

profits. Ahead of this, we can see the big giants worldwide are successful due to their effective

advertisement campaigns. Such as Apple one of the biggest electronic manufacturers has relied a

lot on advertisements. Their CEO Tim Cook is also of the view that effective advertisement is

important for the profitability and growth of a firm.

This is how the whole scenario works for the other firms too. Overall it is considered that 72%

well managed and good advertisement campaigns create profits for the businesses in the long

run. In short run also some businesses try to plan up there campaigns according to the situation in

which they are. Such as when business have access stock and business want to sell whole of this

stock. For example clothing brands, and shoe manufacturer. Usually this includes price

promotions, and buy one get one free. What through this they try to achieve is persuade customer

to buy product at the lower price.

Digital marketing has changed the whole scenario for advertisement. Usually the firms now goes

for social media advertisement such as Facebook, Twitter, and Instagram. As many Firms belief

through this they would be able to reach large number of customer segment over time. Specific

firms try to generate the consumer generated content and analyze the whole scenario in which

they see what consumer wants in market. According to that the try to launch there product and

service. Furthermore they hire different bloggers to promote there product. As this is some thing

a new trend which has completely transformed it into a different way.

Than it also helps businesses to carry long term branding, through which they are able to keep up

there customers quiet engaged over the period of time. Customer engagement is also an

important aspect of the advertising. However many marketers try to use digital platform for this
as they respond to consumer messages and try to create ad which give awareness about the use

and after sale service.

However if we come across some ethical laws some firms had tried to create ads which recive

quiet negative feed back, and many people were also of view that this should not be done. Such

as AXE( Body Spray). Usually they in there ad try to hire a beautiful model and a young man

with AXE spray. Young man use that spray and in return model is attracted towards him. Overall

what they tried to show was use “Spray more, get more”. Basically they were of view more use

of more AXE more ladies would be attracted towards you. AXE received a lot of black lash from

people and many experts belief that they try to discriminate a particular gender.

Fair and lovely they were known for producing racist content. In their ads they try to

discriminate black people in a unique way. In their ads they show like a completely pale black

individual and he uses fair and lovely. Individual using that cream is transformed into white.

However they ere of view “ more than just fairness, clear fairness”.

To remove all of these un ethical conducts Code Of Advertising Practice is introduced in

Pakistan, Federal Trade commission in USA etc. These are the government based which try to

eradicate unethical acts in the advertisements.

Rationale and Background of advertisement

Rationale
Advertisements have been helping brands and companies generate customers for a very long

time. If the advertisement is not introduced for a company or brand it is hard for them to grow

and gain profit. I will explain this with an example, a sports company creates amazing cricket

bats which is made of willow of the finest quality but they do not advertise their product, so they

are not able to expand their company they will have their regular customer within their city or

town but they won’t be able to grow. If the same company starts advertising their product on

print media, online media, and other channels they will be able to grow their company and also

expand the number of products created by their company. according to (Lenhart, 2018) The

advertising revenue that media and other information providers get is used to cover operating

costs and content development. Most private media firms, which are part of a central promoting

mechanism for the democracy and freedoms we enjoy, would not be able to operate without this

money. It is critical for the media to acquire advertising income by providing chances or vehicles

that advertisers and sponsors would find appealing. As a result, the media frequently creates

information that is in high demand or that will appeal to a diverse variety of residents. These

groups can be classified based on age, race, gender, income, and other factors. Advertising

penetrates practically every part of the planet in some shape or another. Advertising is used by

businesses, organizations, citizens, and governments to sell products and services as well as to

impart information, views, and ideas. Advertising's information or messages are critical to the

public's decision-making process. Teachers should comprehend what goes into creating effective

advertising and be able to evaluate advertisements as sources of information, considering the

major role of advertising in our communities today. Teachers should also learn about the

channels that allow citizens to submit comments on advertisements to the advertising business

and government officials. However, advertising can have a harmful impact on the media.
Advertiser pressure may cause journalists to avoid writing about contentious topics. It has the

potential to push out public-interest information in favor of entertainment that appeals to a

specific demographic.

Background:

Advertisement has been in the world for many years and it has been used by brands for the

selling of their goods. A good advertising campaign allows the brands to sell their product on a

bigger level and to a big amount of audience from all around the world. Advertisement has

changed throughout the world, the type of advertisement which was used in earlier years has now

changed. The medium which was used for advertising in the past time was very limited and the

method of advertising was different; the medium which is used by advertisement now and the

methods of producing an advertisement campaign have evolved and have many different plans.

Discussing the past, the arising was mostly based on word of mouth, a brand or business working

well would succeed by people talking about it and it would spread in their town, city and from,

one city to another. (The Editors of Encyclopedia Britannica, 2018) has mentioned in their article

that advertisement in the 16th, 17th century was only in terms of print media. And then in the 18th

century newspapers advertising campaigns on their newspaper. With years’ advertisements

progressed and agencies developed which then shifted their focus from print to television media

and people were able to see brands from different parts of the world through their media screens.

Advertisement has not only changed the way the market works but has also introduced different

ways each product can be promoted. We have athletes wearing outfits, colognes, glasses of

different brands which then increases the number of customers they generate. An impact of a

celebrity on a brand is so high that it can change the number of sales for them. For example,

Cristiano Ronaldo a famous athlete of Portugal who plays for the Manchester United football
club once removed the bottles of Coca-Cola from his presentation, this act of his dropped $4.3

billion worth of shares for Coca-Cola Advertisements in the past years was not fancy rather they

would just showcase the product and let the brand logo appear; but now the advertisement

concept has changed as the advertisement contains humor, usage, and additional information

about the product. According to (Quick, 2018) When it arrived on radio and television in the

early 1900s, advertising became a movement. It felt more personalized since it spoke directly to

people through their radios and televisions. In 1922, advertising made its debut on the radio. At

the Hawthorne Court Apartments in Jackson Heights, Queens, radio personality H.M. Blackwell

devised his own "indirect direct" method: a 10-minute discourse about the benefits of living a

carefree life. It cost $50 for 10 minutes. In 1930, Rosser Reeves established the concept of a

unique selling proposition, which revolutionized personalization once more. Because a USP

(also known as a unique value proposition) defines how your company will solve a customer's

problem, it should be very detailed and highly tailored to distinguish your brand. George Gallup

created market research in 1935, which involves obtaining information about customers to relate

to and advertise to them. The second key turning point in the history of advertising occurred on

July 1, 1941, when the first legal and continental commercial aired on WNBT. Despite the fact

that this Bulova Watch Company advertisement was brief. Despite the fact that the 1950s were

tense for America due to the Cold War, television viewers began to feel optimistic. As prosperity

returned, they began to open their wallets more, and a significant part of this was due to a shift in

advertising strategies (not just mediums). From the 1960s through the late 1980s, it was known

as the "Golden Age of Advertising," a period marked by great ideas and large people. To create a

stronger connection between viewers and brands, companies began creating characters based on
their products. Tony the Tiger for Frosted Flakes or the Snap, Crackle, and Pop gnomes for Rice

Krispies both of these characters can still be found on cereal boxes today.

Significance:

To advertise is to promote a product, a brand or a service to people and potential customers. It is

intended to increase and create interest, attract customers and most importantly sell what you are

offering. The motive of any business is to create as much profit as possible. When there are more

sales there will be more profits. In today’s world advertising is of extreme essence for any

business. Large emphasis lies on advertising as it is what helps the business to come under a

spotlight and attract customers. Advertising campaigns help the business to get their message

across and most importantly the message reaches the right people which in turn helps them boost

their sales and increase profits. Advertising is an extremely important component of marketing

your product or a service. It helps a business in reaching and achieving its goals and building a

customer base.

Firstly, and most importantly through advertisements a business is able to build awareness of its

brand. In order to make yourself known people need to remember you. Effective advertisements

help a business in achieving this. One of the most important and significant way to expand the

customer base is through advertisements. It helps a brand or a business to reach its target market

and get known. This in turn increases the chances of people purchasing from that business as

they know it and are familiar with what it offers and what it stands for. This also helps the

business in dominating the market.

Secondly, through advertisements the business is able to educate its customers. It can educate

them about their products and services and convince the target market to purchase from them. It
can offer them a unique selling point of their services and products. Customers due to this they

will feel a stronger association with the brand and will be attracted to it. This will lead them to

purchase from the business.

Advertisements also help a business in acquiring a new customer base and exploring the market.

It is an essential component of business growth. It helps one to reach more people and offer them

the services and products that attracts them. Through advertising the business is able to save

costs as the message reaches the right target audience and to those for whom the message was

intended for. It is however important that right channels are chosen to be as effective as possible.

More consumers are able to discover a brand through advertisements and can even understand

the important features of the product being advertised. If a brand or a business wants to enter into

a new market using its existing products, the advertisements are way very effective way of

achieving it. By reaching more people business is able to attract more customers, make more

sales and in turn generate more profits.

In addition to attracting more customer’s advertisements also help a business in retention of

current customers. To generate profits, it is important for a business to retain customers. For this

they need loyal customers who have their trust on the brand. According to the pareto principle

80% of the profit of sales come from 20% of the customers. This depicts the importance of the

loyal customers. They are the ones who are most likely to come again and again and make

purchases and even be the advocates of the brand.

Effective advertisements allow business to increase their reputation. This increases the sales and

in turn the profits of the business as advertisements effect perceptions and builds perspectives of

the consumers. Moreover, advertisements allow the brands to stay ahead of the competitors.

Continuous exposure of a brand helps it to stay under the radar of the customers. It increases its
reach which helps it to make profits. If the business fails to advertise its products continuously its

competitors might take its place and they might lose its customers which can be very damaging

to a business in terms of sales and profits. This shows how important the advertisements are in

the proper running of the business.

All of this shows the significance of advertisement in the business world. The importance of

advertisement in today’s era is such that without proper advertisements a brand is not able to

flourish. It cannot create a customer base nor it can attract a broad market because for most of

the consumers it will be unknown. However, through proper advertisements run through proper

channels aimed at the target market there will be a positive impact on its sales which in turn will

help the brand get more profits. It is true that an investment will be required in advertisements

but it will be a safe investment which will be very helpful for a business in the long run. It will

help them in expanding their customer base, reaching a wider audience and entering into the new

markets while effectively conveying their message.

References:

Profit ability: The business case for advertising. thinkbox. (n.d.). Retrieved March 29, 2022,
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%20a%20profitable%20return.

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(M. Madden, Ed.). Yaaka Digital Network. https://www.yaaka.cc/unit/advertising-

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 The Editors of Encyclopedia Britannica. (2018). Advertising | communication. In

Encyclopædia Britannica. https://www.britannica.com/topic/advertising

 Quick, T. (2018, November 16). The Evolution of Advertising & How Personalization

Improved Over Time. Instapage.com. https://instapage.com/blog/evolution-of-advertising

 . (PDF) Analysis of the Effect of Advertising on Sales and Profitability of Company.

(n.d.-b). Retrieved from ResearchGate website:

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