There are some great advertisements and though there are more poor, irrelevant and wasteful ones, the good successful ads help justify a huge industry and the many clever people it employs. Advertising expenditure accounts for about 1.4% of the gross domestic product. That’s more than 16 billion pounds sterling.
One explanation why it’s so hard to eliminate waste in advertising is the mass-market nature of the business.
Most advertisers need to influence only a small proportion of the people reached by their advertising. Household detergents hold no interest for most people who see their commercials. Yet Proctor and Gamble continue to invest heavily on Television. Tena panty liners are used by even fewer women, yet can support a £4 Million TV spend. Perhaps this is demonstrated more simply by an example from direct response advertising.
You wish to sell a lightweight vacuum cleaner for £19.95 inclusive of Vat. You can make a profit if you spend no more than £5 on advertising per sale. A colour page in a leading up market colour supplement is negotiated for £4000, so it needs to generate 800 sales. The magazine has a circulation of 800,000 and a readership of 2,000,000. Success therefore requires one out of 2,500 readers to buy.
Even targeted online advertising impressions, have a click through rate on average of 0.6 %, and a click to your website is still only an indication of interest and a long way from an actual sale.
Another problem is the lack of interest in advertising by the general public. A leading French expert said:
“We interrupt people’s activity when they watch TV, read a newspaper or travel around by bombarding them with advertisement messages for cars, chocolate and other more mundane products. Not surprisingly, most are ignored.”
Successful campaigns emerge from a clear brief, more precise media targeting, relevant messaging and engaging advertisements.