TV commercials

TV commercials
Originally uploaded by Gregory Barbier.
"I know that an half of my advertising costs is inefficient. The problem is that I don't know which one."This sentence was pronounced by John Wanamaker, the creator of the first department store of the United States at the end of the nineteenth century.

Today world-wide companies spend billions of dollars in commercials in order to make their sales rise. But a large part of this sum is a real loss. So why do companies continue to spend such an amount of money?

There are some rules which could explain the spent amounts by companies. They think the following assumptions to be true:
- To raise the market share, the broadcasting frequency has to be higher than the current market share
- Every people has to see the commercial at least three times in order that it has a real effect on TV watcher
- It is worth too much commercials than not enough
- A commercial needs more time than any other ad to produce its effect

These rules are considered by marketers as being dogmatic. That is why they still believe in them although some studies have proved they are not. For instance a commercial is more effective when concentrated on a short period instead of spread on a long period. Also only new products need to be broadcast quite frequently because they are not known. Finally commercials concerning famous brands are really inefficient if there is no change in terms of product or image.

As a conclusion we could say that the efforts have to be made on the use of money. If managers manage to know on which aspect they could save money, they will be able to say:"I know that an half of my advertising costs is inefficient, but I know which one."