Modern consumers are constantly subjected to advertisements, even while performing routine daily activities like checking e-mail or driving to work. Companies use a wide variety of strategies to advertise goods and services, including billboards, web ads, TV commercials, radio commercials, phone calls and direct mailings. Advertising can be advantageous to companies and consumers in some cases, but advertising has some notable drawbacks.
Raising Market Awareness
The primary benefit of advertising from the perspective of businesses is that it has the potential to increase the consumer awareness about a product or service. Consumers will not buy a company's products or services if they do not know the company exists or if they are not aware of how a company's offerings can benefit them. Businesses advertise to generate demand for their goods and services, which has the potential to increase revenue.
The main drawback of advertising for businesses is the cost associated with producing advertisements. Businesses have to pay to put advertisements on TV, the radio, billboards and the Internet. There is no guarantee that the cost of making an advertisement will be recouped by increased sales that result from the advertisement. In some cases ads can be extremely costly. For instance, according to CBS News, 30-second advertisements during the Super Bowl can cost as much as $3 million.
From the perspective of consumers, advertisements can be advantageous in that they can increase awareness about the range of products and services available. The more informed consumers are about the benefits and costs of different products and services, the better decisions they can make about what to buy. For instance, if you always go to a certain fast-food restaurant, but you see an advertisement for a different restaurant with better prices, you could choose to eat at the cheaper business to save money.
Perhaps the biggest disadvantage of advertising from the perspective of consumers is that ads can be misleading or make false statements about products and services. Ads sometimes overstate the usefulness or effectiveness of products and services, which can lead consumers to make decisions based on bad information. In some cases ads may be a part of scams aimed at defrauding consumers out of money.