Advertising II: Advantages & Disadvantages of Advertising – SS1 Marketing Lesson Note (Third Term)

Advertising is a paid way of telling people about goods and services through media such as newspapers, radio and television.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Define advertising.
2. State the benefits of advertising to the community or society.
3. State the disadvantages of advertising.
4. List the media of advertising.

What is advertising?

Advertising is the paid, public promotion of goods, services or ideas to attract buyers.

• Sponsor: the firm or person who pays for the advertisement.
• Medium: the channel that carries the message, such as radio or a billboard.
• Audience: the people the message is meant to reach, such as buyers and users.
• Purpose: to inform people, persuade them to buy and remind them of a product.

What are the benefits of advertising to society?

The benefits of advertising to society are education, employment, a higher standard of living, a cheaper press and a record of a people’s way of life.

• Education: advertising teaches people about useful products and how to use them.
• Employment: advertising leads to large-scale production, which creates jobs for the public, directly or indirectly.
• Higher standard of living: advertising creates more wants and so encourages people to work for better things.
• Popular inventions: advertising has made automobiles, radios and household appliances more popular and widely used.
• Support for the press: money from advertisements keeps newspapers cheap and available to many readers.
• Jobs for professionals and artists: copywriters, designers, photographers, models and musicians earn income from advertising.
• Record of way of life: advertisements show how people live and behave, and they hint at future trends.

A well-known view on advertising

• Roosevelt, the late President of the USA, is quoted as saying: “Advertising brings to the greatest number of people actual knowledge concerning useful things.”
• He added that it is essentially a form of education, and that the progress of civilisation depends on education.

How does advertising sustain the press?

1. Newspapers and magazines sell space to advertisers.
2. The money from this space pays part of the cost of printing.
3. Because of this, the selling price can stay low.
4. More people can then afford to buy the paper.

What are the disadvantages of advertising?

The disadvantages of advertising are materialism, higher prices, barriers to new firms, misleading claims, ethical breaches, impulse buying, distraction and high cost.

• Encouragement of materialism: it makes people desire goods and services they cannot afford.
• Higher prices: consumers bear the cost of advertising, so they pay more for advertised goods and services.
• Restriction of new entrants: heavy advertising by existing firms makes it hard for new firms to join the industry, because of the high advertising budget needed.
• Misleading advertisements: some advertisements mislead consumers in their choice of goods and services.
• Ethical issues: models and celebrities used in advertisements sometimes breach ethical standards.
• Impulse buying: it encourages people to buy on sudden urge, without planning.
• Distraction: it draws attention away from programmes, work or study.
• High cost of advertisement: advertising is expensive and drains the funds of a company.

How does advertising raise prices?

1. The firm spends money on advertising.
2. The firm treats this money as part of its cost of doing business.
3. The cost is added to the selling price.
4. The consumer pays the higher price.

How does heavy advertising restrict new entrants?

1. Established firms spend large sums on advertising, so their brands are well known.
2. A new firm must also advertise heavily to be noticed.
3. Few new firms can afford such a large advertising budget.
4. Fewer firms then enter the industry.

What are the media of advertising?

The media of advertising are the channels used to carry an advertisement to the public, such as newspapers, radio, television and the internet.

Evaluation

1. Define advertising.
2. State four benefits of advertising to society.
3. Explain how advertising can lead to higher prices for consumers.
4. Explain how heavy advertising can restrict new entrants into an industry.
5. List six media of advertising.

Assignment

1. State five disadvantages of advertising and explain how advertising sustains the press.