Benefits of Investing in Advertising

by Aaron Huang You See It Everywhere Advertising is everywhere. As you commute to work or school, you will always find advertisements in train stations, buses, and even on Divvy bikes. Whenever you check your phone, you are bound to find advertisements on websites like Google or YouTube and social media apps such as Instagram or Snapchat. According to Ivan de Luce with the Business Insider, U.S. companies spent approximately $163 billion on advertising in 2018. With advertising being such a significant expense, it begs the question: what makes advertising so important for businesses (Ivan Luce, Business Insider 2018)? One reason why businesses have constantly invested so much in advertising is because of gaining recognition. In an interview with Ann Pitcher, the owner of Pitcher Communications, she stated: “No one is going to buy your product if no one knows about it,” (Pitcher). Moreover, Pitcher highly emphasized that some companies require advertising in order to grow their businesses; however, she does acknowledge the fact that some companies may find it less useful especially if they are more focused on financing. Another important factor to consider is the long-term effects of advertising. Candice Bonfiglio, the Assistant Vice President and Marketing Officer of the Republic Bank of Chicago, explains that advertising is necessary for brand recognition, customer loyalty, and corporate image. In an interview, she points out a study analyzing the effects of advertising during the Great Depression. The study finds that “companies that continued to advertise survived” throughout the economic state (Bonfiglio). For example, even though Coca-Cola did not cut marketing costs, they were still able to maintain profits during the Great Depression. Moreover, in 1931, they increased in profits from $13.5 the previous year to $14 million dollars (“The Coca-Cola Company: 1930-1934”). Thus, this study also found that Coca-Cola was able to maintain brand loyalty through consistent advertising. This allowed the company to prosper during the Great Depression and created additional growth once the depression ended. With visual advertisements surrounding the city from Chik-fil-a billboards to Super Bowl ads, it is apparent that advertising has constantly played a key role in the success of companies around the world. Additionally, as seen throughout economic depressions, investing in advertising has, for the most part, led to positive results.

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