Advertising works

How does advertising work? Easily explained

Advertising is ubiquitous. In this practical tip we explain how advertising works from a marketing point of view and how you can earn money through advertising.

How does advertising work from a marketing point of view?

In business administration, advertising is understood as a marketing instrument:

  • For a company, the goal of advertising is always to generate more profits.
  • Romantic notions that advertising puts a brand in the right light, deepens the bond between brand and buyer, should entertain or even inform the customer, are not the goal but the means that advertising uses.
  • For example, the relationship between how expensive the advertisement is and how many customers will ultimately buy the advertised product is important.
  • The ratio can be optimized by reaching as many people as possible through the advertising, such as in high-circulation print media, television advertising with high ratings, or Internet advertising on a high-click website.
  • Another type of optimization is to place the advertising where the primary target group can be found.
  • Half-time advertising at the Superbowl may reach most people worldwide at the same time, but it also costs many millions of dollars.
  • Good advertising stays in people's minds and spreads beyond the advertising platform via word-of-mouth.
  • Advertising agencies optimize advertising campaigns, i.e. advertising channels, advertising placement and frequency, scope and concept. They know their way around or have relationships with professionals in the creation of text, graphics, video and sound.
  • Many companies advertise countercyclically. That means, the worse the current economic situation of the company, the more money is put into advertising, which should ensure an upswing.
  • If the advertising is cheeky enough, the media may even report how CHIP caused a sensation when the Samsung advertisement shot against Apple, or the Katjes advertisement.

How does advertising work for the advertising medium?

If you put advertisements on your property, like your website or your car, you can make money from it. It works like this:

  • If you are a celebrity, you can make money just by taking pictures of yourself using products for Snapchat. This also works with photos and product reviews on Instagram.
  • Even if you are not that famous, you may still be able to print advertisements on your car.
  • If you post promotional pictures on Facebook, you often earn a few euros per thousand clicks.
  • For example, you can refer to Amazon products in Amazon-Partner Net. If enough people click the link, they'll pay a few cents for it. If someone buys the product after clicking, you will usually receive around five percent of the purchase price.
  • You can also earn money with this principle through advertising on blogs. The more people click, the more money you get.
  • One problem with Internet advertising is that you get little or no money per click, and usually only receive commission if a purchase or at least a registration has been made after the click.
  • But be careful: many surfers vehemently suppress advertising with ad blockers. This makes it all the more difficult to earn money by advertising on your website.
  • Sponsoring is another way of making money, especially well-known clubs and individuals. The sponsor typically makes their products available free of charge and may also pay money if the product is well placed. In return, members of the association must then, for example, make themselves available for further advertising measures.
  • Most likely nobody will pay anything for advertising posters and signs on your house wall if your house is not located on a busy street with exactly the right target group.

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