Advertising's Effects on Demand

According to the Lost Angeles Times, marketers in the United States spent $144 billion in 2011 to promote their brands, which is an increase from 2010, especially in television and Internet promotions. An advertisement, or advertising campaign, can have different influences on demand, depending on its target audience. Effective advertising aims at winning over consumers who are likely to be compelled to purchase the advertised brand.

The demand for a product or service is not just what the consumer wants or needs, but also what the target consumer will pay for. Having an effect on demand means having an effect on sales. Learning as much as possible about the interests and buying power of target consumers can help a company design the ads that will have the most ideal impact on a brand’s demand.

Effective advertising creates an emotional experience for the consumer that compels consumer action. When a soft drink commercial shows sandy beaches and bikini parties, or a health drink commercial shows fit people living active lives, marketers behind these ads want their consumers to "feel" the product enough to add it to their shopping lists. As social media and mobile device advertising evolves, online audiences have a more direct and interactive experience with marketers. Ads online contribute to an ongoing relationship with consumers through likes, comments, shares, contests, survey participation, and votes. Ads online also impact demand immediately through orders that can be placed with a mouse click or tap of a screen.

Advertising keeps consumers focused on your brand rather than on the competition. It can help win over new consumers who may be looking to switch from a competitor, or who simply want to try something new. Advertising can increase consumer awareness and expectations about the benefits of your product, and increase the number of people willing to buy your product for the right price. Ultimately, advertising affects demand by building a desire for a product or brand in consumers’ minds.

Some advertising can have controversial effects on the audience. For example, in 2011, The Yale Rudd Center for Food Policy and Obesity found that children ages 6 to 11 watch approximately 700 cereal commercials per year, directly influencing increased sugar consumption in kids, according to a July 2012 blog article in The New York Times. The article also states that a study by the University of British Columbia found that children in Quebec have the lowest obesity rate in all of Canada, directly influenced by Quebec’s long-standing ban on advertising of fast-food to children. Advertising impacts kids, not yet spending their own money, by priming them for brand loyalty. While young, they pressure parents, but when they’re older, they are more apt to purchase brands that they’ve been conditioned to want through advertising aimed at them as children.