Market research
is a major part of the advertising business.
Manufacturer The
money comes from here. For example, XYZ Automakers may budget $100 million
for national advertising. Eventually, this cost of advertising will be passed
on to the buyers because it is included in the selling price. For example, $400
added on to the price of each car.
Ad Agency The agency hired to prepare the ads
usually gets 15%. Thus, of the $100 million in this example, $15 million goes
to the ad agency to pay their expenses (the creative writers,
artists, researchers, production and technical costs, and profit).
Production Companies.
Then the agency will hire various production companies (film studios, recording
studios, voice-over studios, etc.) to do the actual production and technical
work of an ad. Some
expensive national ads (complicated scenes, new technologies, big celebrities)
may cost nearly a million dollars in production costs alone. Local ads
may cost only a few hundred dollars by inserting a few graphics and voice-overs
into existing stock footage.
The Media The other 85% of the manufacturer's money will go to the various media (TV, radio, newspapers, etc.) to buy time or space. Ad agencies (using their market researchers) will try to pick the most effective media (or mix of several) to reach the target audiences Media companies (using their market researchers) obviously will try to persuade advertisers that their particular medium (television networks, magazines, and newspapers) is the most effective way to reach the target audiences.
For example, the Networks' advertising rates for "renting" 30-seconds of their air time on TV during 2005-2006 Prime-Time for the 5 most expensive spots during programs were: "American Idol"(Fox) ($705,000, on Wed); "American Idol"(Fox) ($660,000, on Tues); "Desperate Housewives" (ABC) ($560,000);"CSI" (CBS) ($465,000); "Grey's Anatomy" ($440,000). The longest running animated program, "The Simpsons" still gets $330,000 for every 30-second space. If you watch these programs, count how many 30-second spots you see in an hour. The single most expensive time slot: Superbowl 2006 charged its advertisers $2.5 million for 30 seconds of air time. In 2007, Budweiser bought Superbowl time for 10 ads at $2.6 million each.
The media, in turn, will have to lure audiences by providing entertainments, programs people want to watch. So, TV networks will have to pay big money to studios and producers( and their writers, actors, technicians) to create programs; or pay sports groups (NFL, MLB, NCAA) for exclusive rights to televise sports events.
Young children, as they watch TV, often don't know that they are not the target audience for most ads; often they will complain about "stupid" ads -- which are really directed at other people within the total audience.
Some adults are equally egocentric or provincial because it's really hard for them to grasp the immensity and diversity of a viewing audience of 80 or 100 million people.
A specific "target audience" -- as a sub-group within the much larger total audience covered by the mass media -- is a concept emphasized by radio, television, and advertising only during the past generation. When broadcasting first began, some eighty years ago, audience concern was very haphazard and naive. Most people thought that the function of radio and TV was to deliver information and entertainment to the public. However, broadcasters soon realized that their economic function was to deliver audiences to the advertisers.
For more relating to the obesity crisis, junk food, fast food, and fatties: First Analysis of Online Food Advertising Targeting Children
As ad costs increased, sellers became more interested in avoiding the "waste" of broadcasting messages to people who were not potential buyers of their specific products Two new strategies emerged. In one strategy ("narrowcasting"), advertisers used other media (esp. mailing lists and new channels on cable TV) to pinpoint audiences for specific items. But, the major "cost effective" strategy used by the radio and TV broadcasters was demographic research to identify their audiences more precisely -- who was watching what program.
Demographics is the statistical study of audiences. The advertising industry now spends several billion dollars a year with various research companies which attempt to identify or estimate audiences. Using sophisticated techniques, they are now better able to identify different segments of the audience (by age, sex, race, income, and spending patterns) related to when, where, and what they see and hear.
For example, a major technical change took place in August, 2004 when more than 100 major advertisers, trade associations, and the 4 broadcast networks announced a new 12-character digital code system, called Ad-ID, to identify and track ads (comparable to the earlier UPC bar codes used in scanning products). Very soon now, advertisers will be able to merge data from other sources (e.g. grocery customer cards, public records) and electronically send different ads, precisely targeted, to specific individual households.
Nielsen Media Research is the best known (of many) research companies which try to provide neutral, independent information about TV viewing: the "Nielsen ratings."Nielsen has installed electronic people-meters in the TV sets of 5,000 homes to record data about their viewing habits. From this small statistical sample, they try to estimate (guess?) the number of millions watching nationwide. Quarterly, Nielsen mails out 2.5 million paper "TV Diaries" asking selected viewers to record their viewing habits during a one week period. In such "sweeps" weeks, TV networks put out their best programs (specials, celebrities, expensive movies) in order to attract the largest audiences. The statistics gathered here will then influence the ad rates for the months ahead.
Radio also uses such tactics to influence their ratings. During radio "sweeps" week, the stations use many kinds of contests, giveaways, and prizes to attract listeners, especially those who answer a phone call with a mention to what station they're listening.
Advertisers and their research companies are also constantly trying to find out the effectiveness of an ad: if an ad really works, of it moves people to buy, if it sells the product. In the 1950s, researchers thought they could measure attention by analyzing eyeball focus ("pupilmetrics"), but that didn't work. The search for a valid measurement still continues: in 2006, researchers were measuring MRI brain scans: Who Really Won the Superbowl? (No one really knows.)
Most college Advertising textbooks, designed to teach the future persuaders, begin with a basic defense of advertising. Essentially, these introductions expand on these ideas as presented succinctly (in a full page open-letter "political advocacy" ad) by the American Advertising Federation: "Dear Mr. President: As you and the Congress are hard at work on ways to improve our country's economy, we respectfully remind you of advertising's role as an engine of economic growth. It raises capital, creates jobs and spurs production. It launches new products, provides consumer information and furthers competition, thereby lowering consumer prices. It increases government revenues since jobs produce taxable income, and greater sales increase sales taxes."
After 9/11, some defenders of the importance of advertising even equated shopping with patriotism ("Keep spending money, otherwise the terrorists will have won!"), urging even poor and debt-ridden consumers to add more to their credit cards."Advertising is the educational program of capitalism, the sponsored
art of capitalism, the language of capitalism, the pornography of capitalism.
Most of all, for all the high-sounding phrases, advertising is the culture developed
to expedite the central problem of capitalism: the distribution of surplus goods.
The industrial revolution is usually studied from the point of view of the producer,
how machines made things. But the real revolution was in how things were distributed,
how advertising made things worth buying."
-- James Twitchell, AdCultUSA
Thus, I speak as one who believes in advertising, in the system,
and in the right of everyone to persuade. It is totally consistent to say that
certain reforms, certain limits and restraints, are needed, desirable, and possible
....
In the past I have also attacked other critics of advertising as being Rousseauists
(that is, those who deny an institution the right to persuade) or Luddites
(those crazies who simply want to destroy the system). I am not against advertising.
I believe advertising can play an important and useful part in the manufacture
and the distribution of consumer goods., I'm not against "the system."
It is important that human effort be coherently organized so as to feed, clothe,
house, and serve the needs and wants of the hundred of millions of people who
will be coming into the world in the next generations.
Teachers can help "do something" about the current and future propaganda
blitz. English teachers especially have a good opportunity because they are
directly involved in language at all levels of our educational system.
However, in my opinion, many of the kinds of reformers I've observed in the
past few years are not very useful, effective, or coherent. Let me oversimplify
by pointing out some "types":
Potshotters, Assassins, Single-Issue People, Ivory-Tower Dwellers, Preachers,
Puritans, Rousseauists, Luddites, and Cuddlers