It's Only A Theory!

My post about Why Advertising Does Not Work, seemed to cause a bit of a stir.


The whole point of that post was just to convey another way of looking at advertising and the effects of it. Personally I can see how the theory works, and that we probably should factor it in when we consider advertising campaigns. However I was not saying that no one should be advertising altogether. 


The theory was established back in 1944. The original Game Theory was created to try to explain how a game could end in different ways depending what decisions were made at the beginning. This same theory was then applied to other areas of life.


The problem is though that this theory is nearly 70 years old, and was diluted somewhat when it was applied to other examples. However I do still believe there is a degree of logic in what is being said. 


I'm still all for advertising, but just for it to be done properly. If the company I work for came up to me and said that we were not going to do any form of advertising at all, I would say they were being reckless and over the top. 


For advertising to work, it needs to be appealing to the customer visually and audibly. With something in it that will make customers want to get of their arse and buy whatever it is you're selling. At the moment, I think double glazing ads are lacking a little bit. Though to be honest, I've always thought that you can never make a decent advert about double glazing anyway! 

Why Advertising Does Not Work

Flicking through the TV channels last night, I heard a rather interesting theory which went on to explain that advertising may not actually work.


I forget exactly how the explanation of that theory goes (think it's called Game Theory, created by John von Neumann and Oskar Morgenstern in 1944), but I do know how it was applied to advertising. The theory goes; if two companies were advertising at the same time (which a lot of windows companies are), spending roughly the same amount of money (which will be relevant as most go on ITV from our sector), any advantage gained from that advertising will cancel each other's out. If that company had never advertised in the first place, the market would remain unchanged - no worse off, and that company would have saved all that extra cash, and their business would be in roughly the same place anyway.


Most businesses probably haven't considered this theory. The thinking of business has always been that advertising has been beneficial. During the recession businesses were urged to increase advertising to boost revenues and exposure. But very few would have considered that if other businesses in their sector advertised at the same time, the effect of their advertising campaign would have been nullified - therefore a waste of time and money.


From previous experience, advertising hasn't always been beneficial. Yes it increases exposure, but if the economic conditions aren't right and people are not in the mood to spend, it's doesn't matter how many times you tell them these deals will end at the end of the week, people just won't spend. No matter how effective you think your ad campaign is. 


Perhaps it's a theory worth considering now. Times are hard and set to get harder. Maybe it's high time we took a long, hard, critical look at advertising and work out whether it really is one of the necessary tools that businesses need to use to boost revenues.