Advertising - Meaning, Importance, Types, Components & Example

Published by MBA Skool Team in Marketing and Strategy Terms Last Updated: June 16, 2023Read time:

What is Advertising?

Advertising is the concept of communicating a message about products and services to a customer so that the customer can understand the offering along with its features, uniqueness, price, offer, benefits and value to get convinced about making a purchase. Advertising is done using various media like TV, print, radio, online, digital, social media, outdoor and more where advertisements are showcased showing the value to the customer. It is one of the most critical components of marketing.

Importance of Advertising

Several companies are producing goods and products, which are critical for a customer to fulfil their needs. However, with tremendous competition and limited span of attention for a customer, it becomes difficult for a customer to know about a product or a service. Companies also have a limited & stagnated market share. Hence it plays an important role in communication the value proposition of a company’s offering to the customer.

An advertisement clearly highlights the product/ service, its utility and also builds a connect with the customer. Advertising and marketing a brand enables to reach out, teach about the product and ensure that the customer is aware about the company. All these things can influence the buying behavior of a customer, and can be driven by having a good marketing budget to cover the marketing costs.

These days companies have dedicated teams and managers who look after the advertising strategy of a company. The role of these employees is to have an advertising plan, allocate a budget, create a campaign and ensure that the ad reaches out to as many customers as possible. Apart from products and services, companies also promote themselves through institutional advertising, which helps build their name in the market. The ultimate objective is to increase sales revenue.

Components of Advertising

Advertising can be broadly broken down into four major components:

1. Strategy

Focuses on the message, customer segment to be targeted, integrated marketing communication (IMC) channels and the budget which is core of the advertising campaign. The overall product strategy should be aligned with the advertising messaging and channels.

Advertising components

2. Media

Choosing the most appropriate channel, medium or media to reach out to the customers is very important based on the target audience demographics and other attributes. Reaching customers on a channel where they are not present will not benefit at all.

3. Creative idea

This is the message, theme or the visual which can be made to attract the customer. Sometimes straight forward information advertising can work but many times they need to be creative and should have a theme around which the entire messaging is based on.

4. Creative execution

The final advertisement created based on the creative idea. Without proper execution of the strategy, media and the idea, campaign would not be able to fulfil the purpose and it will lead to losses. The execution needs to be done in a planned manner so that the idea is presented well to the customer.

Types of Advertising Media

It is a massive exercise for any company. There are many options where ads can be showcases through an advertising medium. Companies often use all the media available to do a 360 degree branding. Some different types of media used by companies are mentioned below:

1. TV

Television is one of the most developed ways to advertise. Advertising on TV is an effective way to reach to millions of people, as TVs have an extremely high penetration worldwide.

The ad slots are given by broadcasting companies. Higher TRP and GRP programs help reach out to  wider audience.

2. Radio

Radio channels offer ad slots to companies who can communicate their message to the customers.

3. Print

This type of media includes magazines, newspapers, brochures etc. which can be used to advertise about the products and services offered by a company. This has been the most widely used media till date.

4. Online

With the growth in internet penetration, companies often use digital media with online advertising to reach out to customer using social media, browsing websites etc. It also includes content marketing, blogging, viral marketing etc.

5. Outdoor

Using hoardings, standees, OOH (out of home) media are covered under outdoor advertising. This enables companies to reach out to those who are not an home but are outside their homes or office during transit.

6. Mobile

Use of services like SMS and social media groups has also made mobile an effective tool for advertising.

Advantages of Advertising

There are certain benefits of advertising. Some advantages are:

1. It helps marketers to reach out to make people by creating awareness.

2. It promotes the value and utility of the brand to customers

3. Good advertisements help build a strong community and induce brand loyalty

4. Companies who focus on advertising are also perceived as big brands, which pushes customers to believe that products and services are also good

5. Creative teams form advertising agencies give good inputs about a brand by creating more brand awareness.

6. Helps sales force, retailers, shop owners to promote the products in a much better way

7. It helps build trust between customers, retailers, suppliers and manufacturers

Disadvantages of Advertising

Despite all the benefits, there are some critical disadvantages of advertising for a business:

1. It means that the company has to do a lot of spending

2. Extremely time consuming process

3. Only advertising cannot help build a good business. Unless the product, services and customer service are good, promotion can only bring in customers but cannot retain them.

Example of Advertising

One of the great examples of effective advertising can be the Apple's campaign of 1984 which was based on the theme of 'Think Different' and was launched during the Super Bowl along with other channels. It is a very famous campaign which established Apple as personal computer company and launched Macintosh as a ground breaking product.

It represented the Apple brand for many years. It had a message which connected to the audience along with the theme. Also the execution of the creative idea was done quite well.

Hence, this concludes the definition of Advertising along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.

Continue Reading:

Share this Page on:
Facebook ShareTweetShare on Linkedin