While researching the topic of advertising, I happened upon an infographic on How Advertising Makes Us Buy. The infographic below opens with the notion that companies are rich and have piles of money and they use it to manipulate their poor audience. I think that’s a rather disturbing, unfortunate, and unlikely notion.
The first notion that only rich companies advertise is a bizarre idea. Our company is not wealthy and, in fact, had a couple years of losses – yet we still advertised. Advertising, especially via digital channels, is very affordable. You can deposit $100 into any social or search engine pay per click account and push some highly targeted advertisements to drive awareness to your business.
Attitudes on business don’t align well with the actual statistics in a social media world. About a quarter of all businesses fail within the first two years according to multiple studies. While people believe the average company makes a 36% profit margin, the average profit margin for the most recent quarter was 7.5% and the median profit margin was 6.5%.
Angie’s List, for example, continued to operate at a loss while spending $80 million on marketing – with a large portion of that going to the television commercials you repeatedly see on television. While a public company that’s increasing revenue quarter over quarter, they’re hardly rich. Not only are they not rich, but they’re also not advertising to make their customers feel rich. Angie’s List provides a service to protect home services customers from getting ripped off from the plethora of shady providers out there.
Advertising works on different levels; it’s not as simple as trying to get someone to buy something. Over the last decade of content, search, and social marketing, I believe companies are becoming more keen to the fact that advertising needs to be much deeper than manipulating a consumers’ insecurities. Targeted advertising on consumers who are similar to your audience increases profitability by acquiring and keeping great customers.
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