Advertising is one of the four primary forms of promotional (or integrated marketing communications) activity employed by marketing organizations to informatively and/or persuasively communicate with consumers and other targeted audiences. Advertising differs from other major forms of promotional activity (i.e., personal selling, sales promotion, and public relations) in that it is a paid, non-personal form of communication typically transmitted through mass media (e.g., television, the internet, radio, newspapers, magazines, and billboards). It is “paid” in that when a marketer, for example, places a full-page ad in BusinessWeek or runs a 30-second television ad during a broadcast of 60 Minutes, the sponsor/marketer pays the media organization for the space or time used to promote itself or its products. Advertising is “nonpersonal” in that it is not, like personal selling, customized according to the needs, wants, and expectations of individual message recipients. Instead, advertising is typically standardized in that the vast majority of persons seeing and/or hearing any one advertisement receive the exact same message.
When most people think of advertising, what usually first comes to mind are celebrity endorsers, music, and highly creative, attention-grabbing imagery and catchphrases. However, successful advertising entails far more than this. Marketers wishing to effectively—and efficiently—communicate through advertising must first know their target audience and then, typically with the assistance of advertising agencies, carefully choose which media types and vehicles to employ. They, along with their ad agencies, then create messages that not only grab the attention of the target audience but, eventually, inform and/or persuade them in some desired manner. This is never easy.
For the international marketer, performing these challenging tasks is further complicated by the fact that cultural and legal environments often vary significantly from nation to nation. As a result, advertising that works spectacularly in one country may be perceived by the target audience in another nation as irrelevant, ridiculous, and/or offensive. When the latter occurs, not only have international advertisers made themselves look bad; they have, in most cases, also spent a lot of money to do so.
Advantages
The international marketer should be aware that advertising possesses both strengths and weaknesses relative to other forms of promotion. Arguably advertising’s main advantage over other forms of promotion is its ability to cost-effectively reach a very large, geographically dispersed target audience. Let us say that a large, global consumer products firm like Colgate-Palmolive is planning on introducing a new brand of toothpaste worldwide. A good way to cost effectively promote the new product to the target audience would be to advertise in a general interest news magazine sold and read in many regions and countries of the world, such as Time. This media vehicle is produced in several editions each week—with each edition created for and distributed in a specific region of the world.
Advertisers can, as Colgate-Palmolive would likely want to do with its new toothpaste, purchase advertisements in each edition of Time. Running a half page ad in each edition for three weeks—say one week prior to and two weeks after product introduction— would cost the company a total of approximately US$740,000. Given Time’s worldwide (weekly) circulation of nearly 4.4 million people and the fact that roughly three people can, on average, be expected to view each magazine circulated, a total of 39.6 million people—and potential consumers of the new toothpaste—will at least have the opportunity to see and be influenced by Colgate-Palmolive’s advertisements.
The US$740,000 may seem like a lot of money to spend on advertising but global companies with large, globally dispersed target audiences—and large ad budgets—like Colgate-Palmolive are more concerned about the cost of reaching each potential buyer (and the return on this investment in advertising). In this case, the cost of reaching each of the nearly 39.6 million consumers with the firm’s advertisements in Time is approximately US$.02. If only 5 percent—one out of every 20—of the 39.6 million persons seeing the advertisements in Time buy the new toothpaste just one time—priced, say, at US$2.00—the $740,000 has been well spent, with a revenue of nearly US$4 million generated.
Related to advertising’s ability to cost effectively reach a large, geographically dispersed audience is its ability to also reach a narrowly targeted/niche target audience with minimal waste circulation. A “narrowly targeted” or ”niche” audience means a very specific group of people with particular, shared interests or organizations in a specific industry (or group of related industries). “Waste circulation” implies that advertising—particularly when done through magazines and Web pages—can cost-effectively get the marketer’s promotional message out to the niche audience with very few people or organizations outside the targeted group also seeing the message. The minimization of waste circulation is very important to marketers because paying to communicate with persons or organizations outside the target market is a waste of money (in that those outside the target market are not very likely to be interested in the message and/or the advertised product).
A good example of a media vehicle that allows advertisers to cost effectively reach a large, geographically dispersed, niche target audience with minimal waste circulation is The Journal of Commerce (JOC). The JOC, which began publication in 1827, is a weekly magazine containing content of interest to high-level international trade, transportation, and logistics executives around the globe. Marketers wishing to promote their goods or services to these—and pretty much exclusively these—executive decision makers can run advertisements in the JOC in a variety of sizes up to 52 times per year. For example, international marketers with a relatively small budget could run six quarter-page, black-and-white advertisements over the course of the year in the JOC at a total cost of approximately US$13,620. The advertising would, in this case, be reaching a total of roughly 150,000 readers highly likely to be interested in its message (with a cost-per-reader of slightly over US$.09). An international marketer with a larger ad budget could, for example, place and run 26 of the same quarter page ads in the JOC (i.e., one every other week over the course of a year) at a total cost of approximately US$44,400. These ads—and the precisely targeted promotional messages they contain—would be reaching a total of about 650,000 readers (with a cost-per reader of approximately US$.068).
While the cost-per-reader associated with advertising in the JOC is much higher than the previous example of US$.02 to reach consumers worldwide by advertising in Time magazine, it should be kept in mind that the JOC is targeted at a very specific and specialized group of organizational managers in many different countries. It is likely well worth the extra per-reader cost to advertise in the JOC if doing so allows you to reach your target audience—and only your target audience.
Suggested in the latter part of the JOC example above is another strength of advertising. With advertising, the marketer can repeat the message as many times as their budget will allow them to do so. An advertiser could, for example, run ads in the JOC each week it is published (i.e., 52 times in a year). The same marketer could also run dozens of 30-second radio or television advertisements in local markets where their target market members are located. This ability to repeat the message is important because seldom will anyone promotional message—run just one time—have the informative and/or persuasive impact desired by the marketer. And, luckily for international marketers with large ad budgets, buying ads in volume typically translates into: (1) lower per-ad cost, and (2) lower per-reader cost.
Finally, advertising, relative to other forms of promotional activity, is also good at both creating a prestige image for the marketer as well as appealing to the target audience in multisensory fashion. With regard to prestige, it enhances the image of the marketer—especially when the marketer is relatively unknown—to be seen advertising: (1) in well-known, well-respected magazines and newspapers, and (2) on major television networks or radio stations. Prestige can also be created or enhanced via the employment of well-known, respected celebrities in advertisements. With regard to the multisensory nature of advertising, television and Web page advertising offer the marketer unmatched potential to grab the attention and inform and/or persuade target audiences through the simultaneous and synergistic use of both sight and sound. Even radio advertising, limited only to sound, offers the creatively inclined international marketer much potential to appeal to the senses of the listener. Radio has been, in this regard, referred to as “the theater of the mind.”
Disadvantages
While advertising has some significant advantages over other forms of promotional activity it also has some distinct disadvantages. One primary disadvantage of advertising is its high absolute cost. Earlier, in the context of demonstrating the relative cost-effectiveness of advertising when communicating with large, geographically dispersed target audiences, a hypothetical example was provided wherein Colgate-Palmolive could possibly generate US$4 million in sales as the result of a US$740,000 investment in advertising. This is, indeed, a good return on investment. However, if a marketer does not have $740,000 to invest in advertising then there is no opportunity to realize this kind of return. While large global firms like Colgate-Palmolive have budgets allowing such large expenditures on advertising many other—particularly smaller—firms do not. Simply put, advertising can be a great investment but the absolute dollar volume required to create and run advertisements on a global—even national or regional or local—scale can be great.
Another relative weakness of advertising is its inability to provide the marketer with timely feed-back with regard to how effective it is (or has been). This weakness is particularly strong when comparing advertising to personal selling (i.e., using salespeople to promote the company or its products). For example, when a salesperson is making a sales presentation to a client, he or she can assess in real time the extent to which their promotional message is: (1) being paid attention to, and (2) having the hoped-for informational and/or persuasive effect. With advertising, due to the fact that the marketer is not present when the message is being received and the fact that multiple exposures to an advertisement are necessary for it to have any impact, it may take weeks or even months to know how effective promotional efforts have been— and it may take a significant investment in marketing research to make this (belated) determination.
Related to the issue of slow feedback on effectiveness is another relative weakness of advertising. Not only does it take considerable time to judge the effectiveness of advertising, it is also relatively difficult to accurately measure the informational and/or persuasive impact of advertising. Think back again to our hypothetical example of Colgate-Palmolive possibly generating US$4 million in sales as the result of a US$740,000 investment in advertising. Saying that advertising caused this level of sales is not, in practice, easy to do (at least with a great deal of confidence). This is because so many other factors in addition to advertising can effect the sales—and, to an even greater extent, the profits—of an organization. Thus: (1) in order to determine what has caused sales (or profits) all factors having an impact on it must be taken into consideration, and (2) one cannot accurately say to what extent advertising has caused sales (or profits) unless the causal impact of all these other factors has been taken into account. Web page advertising is somewhat an exception here, as far more precise measurement of impact on sales can be discerned (e.g., through tracking how many viewers clicked on links in advertising and then purchased the advertised products).
Finally, it is relatively impractical—if not impossible—to customize promotional messages with advertising. Personal selling, for example, allows the marketer the opportunity to customize each message transmitted to the exact needs, wants, and expectations of every targeted person. Although major magazines do allow some level of customization due to the publication of specialized regional or national editions every one of perhaps hundreds of thousands of persons receiving any one edition of the magazine sees the exact same advertisement. With major broadcast media such as radio and television individualized customization is essentially impossible—even if it were possible it would be very expensive.
The Global Advertising Industry
Advertising’s scope is increasingly global. Business organizations large and small and in virtually all industries and countries are using advertising—and increasingly more of it—to promote themselves and their products to prospective and existing consumers. Thus suggested is that the strengths of advertising discussed above generally outweigh its weaknesses— with the latter just placing limits on what can be done with advertising.
According to Advertising Age, the preeminent authority on virtually all matters related to advertising, the world’s top 100 marketers alone spent nearly US$98 billion on advertising in 2006 (the latest year for which complete data is readily available). For the sixth year in a row, U.S.-based consumer products giant Procter & Gamble—marketer of brands such as Bounty, Camay, Charmin, Gillette, Head & Shoulders, Ivory, Luvs, Max Factor, Mr. Clean, Noxzema, Pampers, Pepto-Bismol, Scope, Tide, and Vicks—topped the list of global advertisers. Rounding out the list of the top five advertisers in the world in 2006 were Unilever, General Motors, L’Oréal, and Toyota. Automotive firms in Advertising Age’s Global Top 100 for 2006 spent more on advertising than companies in any other industry and accounted for almost 23 percent of all advertising expenditures by the top 100.
With respect to advertising expenditures by the top 100 global advertisers by region of the world in 2006, the U.S. tops the list with US$46.02 billion. This is followed by Europe (US$31.12 billion), Asia and Pacific (US$14.92 billion), Latin America (US$2.48 billion), Canada (US$2.09 billion), Africa (US$711 million), and the Middle East (US$422 million). The region of the world exhibiting the greatest increase in ad spending was Latin America, with 2006 spending up 12.7 percent from 2005.
Overall, the nearly US$98 billion in global ad expenditures in 2006 represents a 1.1 percent increase over 2005 spending. Interestingly, this growth is in spite of the fact that U.S. marketers ranking among Advertising Age’s Global Top 100 cut ad spending by 2.2 percent in 2006. Some of the largest U.S. advertisers were those showing the greatest percentage decrease in expenditures. General Motors tops the list with a 17.4 percent decline, followed by Time Warner (down 13.8 percent) and Johnson & Johnson (down 13.2 percent). This decline in U.S. ad spending was offset by significant increases in advertising by non-U.S. marketers such as Sharp Corporation (Japan), Fiat (Italy), Moët Hennessy Louis Vuitton (France), LG Group (South Korea), and Aldi Group (Germany).
Finally, the large global marketers/advertisers such as those discussed above are not the only “major players” in the global advertising industry. Also heavily involved—albeit not as conspicuously as advertisers— are the media firms that, by virtue of producing magazines, newspapers, and Web sites and running radio and television stations as well as billboard advertising companies, provide advertisers the vehicles through which to reach target audiences worldwide.
A third “major player” in global advertising that is even more “behind the scenes” than media firms are the advertising agencies that provide media planning/buying and creative and production services to marketers/advertisers. It is common, in this regard, for large, international marketers to work with multiple advertising agencies. According to an Advertising Age report published in November 2007, the world’s largest global advertiser, Procter & Gamble, employs the services of 10 different ad agencies to help it plan for, create, and run advertisements. According to this same report, the three advertising agencies with the largest number of Global Top 100 clients/assignments are: (1) Euro RSCG Worldwide (42 clients), (2) McCann Erickson Worldwide (40 clients), and (3) Ogilvy & Mather Worldwide (35 clients). Euro RSCG Worldwide, the largest ad agency in the world in terms of “global assignments” (i.e., major clients served), is based in New York and has a total of more than 230 offices in 75 countries. Euro RSCG Worldwide, by virtue of working with 10 of the top 20 and 42 of the top 100 global advertisers, exemplifies the global advertising agency.
Cross-Cultural Considerations
It is often said that strategic marketing decisions involving advertising are those most likely to be significantly impacted by cultural variation between nations. It should be of little surprise, then, that failure to carefully consider the appropriateness and likely acceptance of an advertisement through the cultural lens of the targeted audience puts marketers at high risk of—at a minimum—considerable embarrassment. Consider, in this regard, a few “classic blunders” of international advertisers. The United States Dairy Association’s successful “Got Milk” advertising campaign was introduced in Mexico. The association was later informed that the Spanish translation used for “Got Milk” could be taken to mean “Are you lactating?” Pepsi’s “Come Alive With the Pepsi Generation” advertising slogan translated into “Pepsi Brings Your Ancestors Back From the Grave” in China. And in the United States, Scandinavian vacuum manufacturer Electrolux used the—well-rhymed albeit ill-advised—slogan “Nothing sucks like an Electrolux.”
While the validity of several of these “classic blunders” has been debated, they clearly illustrate, at the very least, what can potentially happen when just one cross-cultural factor—language—is ignored or misunderstood by international advertisers. Creating and running just one high-quality television or magazine advertisement can cost an organization hundreds of thousands—perhaps even millions—of dollars. Spending this magnitude of money to make oneself look silly in the eyes of and/or offend members of the target audience—including one’s potential and existing customers—is, to say the least, not good strategy.
Language Considerations
Language is, as demonstrated in the “classic blunders” listed above, a particularly perilous cross-cultural domain for international advertisers. In this regard, it is far from enough to have translations be done in literal/“dictionary” fashion by persons who are not fluent in the language of the targeted audience—and, most importantly, the language as actually spoken by the target audience. This is due largely to the fact that literal translations found in most dictionaries fail to adequately account for regional variations, slang, and symbolic meaning in language as spoken by persons in a given country (or region thereof ). Further, superficial knowledge of a given foreign language may be more dangerous than no knowledge at all for the international advertiser.
To avoid potentially embarrassing and costly mistakes due to the often subtle yet critical intricacies of cross-cultural language variation, international marketers must take the task of translating what it wants to say in one language into its advertising in another language very, very seriously. At a minimum, translations should be done by persons highly fluent in both focal languages—wherein “highly fluent” with regard to the language of the targeted audience means knowing how the language is actually spoken by members of the audience in their local environments.
In addition, just one translation done by one person is often not sufficient. In this regard, what are known as back translations are commonly done. In the process of back translation, advertising content is translated by one bilingual person from one language (e.g., Spanish as spoken in Mexico) into the language of the target audience (e.g., Portuguese as spoken in Brazil) and then translated back—from Brazilian Portuguese to Mexican Spanish—by another competent, bilingual translator. The results of the two translations are then compared to ensure consistency and, ultimately, effective communication through advertising. If, for example, the second translation comes back saying exactly what was meant to be said in the first place—in the same language—then the marketer knows they are on the right track. If, however, the second translation is significantly different than what was originally meant to be said, then the marketer still has much work in translation to be done.
Cultural Considerations
Language is, however, but just one of many potentially arduous cross-cultural hurdles frequently encountered by international advertisers. Indeed, being “culturally fluent” entails far more than being fluent only in the language of a given foreign country or group of people. One prime example of a nonlanguage, culture-based factor that international advertisers must be cognizant of involves what are called cultural values (i.e., what is considered appropriate versus not appropriate by persons in a given nation or group of people).
Variation in cultural values between one nation and another creates a host of potentially important considerations for marketers wishing to effectively advertise in multiple countries. Take, for example, the appropriateness of certain words used to identify people in two nations that speak the same language— say the United States and Australia. It would, in this regard, generally be acceptable for a U.S. firm to tout itself in domestic—particularly regional or local— advertising as employing “native” persons. This would likely be taken by most recipients of the message to imply that the sponsor of the advertising creates jobs locally and that their employees are not only from the area but are also highly similar to other local persons in many ways (i.e., by virtue of being from the same approximate place and having similar values). Using the word native in this manner in advertising in Australia would carry a different meaning. In Australia, native usually implies indigenous/Aboriginal persons. This is a mistake that could easily be made by persons working in advertising for foreign firms from countries with less contentious histories with regard to the plight of indigenous persons. Required in this instance is guidance from Australian locals—including but not limited to Aboriginal persons—well versed in Australian cultural values.
Another potentially critical cross-cultural, value based consideration for international advertisers involves the use of humor. Simply put, what is considered humorous by members of one target audience in one country may be seen—even if adequately translated—as meaningless, ridiculous, and/or offensive by persons in another country (or region thereof ). Again, as with language translations and word appropriateness, successfully using humor across cultures requires the input of persons fluent in the local culture of the targeted audience. Effective international advertising thus requires that the foreign marketer employ persons from the local culture at least as agents or consultants—if not as fulltime managerial employees responsible for making key advertising decisions.
Legal Considerations
Just as international advertisers should expect to encounter cross-cultural obstacles so too should they assume that variations in laws across nations may significantly impact their ability to effectively communicate with targeted audiences. Generally, when doing business in foreign countries, the marketer: (1) should not assume that the laws of their home country are applicable abroad, and (2) should be familiar with and abide by the law of the host nation—particularly those laws which impact the ability of the foreign firm to market its specific type of product. These general points reign very true in the context of advertising. The international advertiser should never assume either that: (1) home-country advertising-related law applies abroad, or (2) they will be able to advertise their product in the exact same manner abroad as they do domestically.
A good example of not being legally able to advertise products in a foreign country in the same manner as done in the domestic marketplace is comparative advertising. In this form of advertising, the sponsor directly—and favorably—compares its products to those of a competitor. Comparative advertising law differs significantly from nation to nation. In the United States, it is not only legal to compare your products to those of a competitor but also legal to name the competitor in the advertisement (as long as the comparative statements in the ad can be objectively substantiated). In some Western European nations (e.g., Ireland, Spain, the United Kingdom, and Portugal) comparisons can be legally made but only as long as the comparison is implicit and does not specifically name the competitor. Comparative advertising is illegal, however, in other Western European countries (e.g., Germany, Belgium, and Luxembourg). Comparative advertising is also heavily regulated in other regions of the world. As a result, marketers that commonly (and legally) employ this form of advertising in their home countries must be very careful about using it abroad.
Sometimes an international marketer will find that it cannot advertise its products at all in a given foreign nation. For example, toy, tobacco, liquor, and pharmaceutical drug ads are banned or at least heavily restricted in many nations of the world while advertising these products is perfectly legal in others. Marketers of a product that cannot be legally advertised in a given nation in which the marketer wishes to sell the product must find an alternative means of promotional communication.
At other times, international marketers may discover that they cannot legally advertise via a certain type of media in some countries. Advertising on television, for example, is regulated in many nations. In Kuwait, for instance, only 32 minutes of television advertising per day is allowed on the government-controlled television network. In China, the government has only in the last several years begun to ease some regulations significantly restricting the use of TV advertising. However, the Chinese government has, at the same time, also increased regulation of other aspects of TV advertising (e.g., the required provision of proof of claims made in ads). The bottom line for the international advertiser is to know the law relevant to the marketing of your product in the given country in which you are doing business and to: (1) abide by it, and (2) adapt your advertising efforts accordingly.
Bibliography:
- Advertising Age, adage.com/datacenter (cited March 2009);
- Philip Cateora and John Graham, International Marketing, 13th ed. (McGraw-Hill/Irwin, 2007);
- Ian Dow, “Your Ad Is a Tad Mad!: It’s a Marketing Chief ’s Worst Nightmare When the Catchy Slogan for the Expensive Ad Campaign Translates to Mean Something Hilarious for Foreign Shoppers,” Daily Record (October 5, 2002);
- Nadeem Firoz and Taghi Ramin, “Understanding Cultural Variables Is Critical to Success in International Business,” International Journal of Management (v.21/3, 2004);
- Ali Kanso and Richard Nelson, “Multinational Corporations and the Challenge of Global Advertising: What Do U.S. Headquarters Consider Important in Making Media-Selection Decisions?,” International Marketing Review (v.24/5, 2007);
- Yih Hwai Lee and Elison Ai Ching Lim, “What’s Funny and What’s Not: The Moderating Role of Cultural Orientation in Ad Humor,” Journal of Advertising (v.37/2, 2008).
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