Advertising and Promotion: What’s the Difference?

advertising and promotionAdvertising and promotion are two marketing terms that often get used synonymously. Let’s set the record straight and say that they are not the same thing, in fact, they are quite different. Both advertising and promotion are part of the marketing communications mix along with public relations, personal selling and direct marketing. This mix of marketing tools shows the dynamic approach marketers use to promote a business, venture or event. The 5 P’s of marketing cover every necessary detail in designing an advertisement or promotion: person, place, price, product and promotion. Learn more about these in the 5 P’s of Marketing course. So what is the difference between advertising and promotion?

Advertising

Advertising is any paid form of non-personal presentation by an identified sponsor. In other words, when a company pays the local newspaper to advertise their business it would be considered advertising.

Advertising Objective

The advertising objective is pretty simple. What do you intend to accomplish with your advertisement? The best way to identify your specific goal is to include the task of which you wish to accomplish with a target audience during a specific period of time. An example of an objective would be:

To increase the amount of consumers by 15% who actively choose OurBrand over our primary competitor TheirBrand during the course of one year.

As you can see this objective clearly states what the advertisement is intended to do. However, as we will discuss a little later, one of the downsides of advertising is the inability to accurately measure its effectiveness.

Ways to Advertise

So we know that advertising is usually paid for by the company to gain exposure to fulfill their objective. More exposure equals more money which is better for the business. Most companies plan advertisements to get maximum exposure by assessing their target audience, the media platforms available to them (inside of the budget and applicable to the target audience), and the message they are trying to convey. These variables ultimately determine how the advertisement ends up reaching the public. The most popular outlets for advertisements are newspapers, social media, television, direct mail, radio, magazines and outdoor media. Take this course on Facebook Advertising to learn about a crucial media platform. Each one of these avenues has its own set of advantages and limitations. Furthermore, the advantage of one media platform in connection with a specific advertisement could be a disadvantage with a different kind of ad.

Selecting which platform to use is a matter of assessment. First, the ad designer must think about the message or product being advertised. What demographic are you targeting? What are the habits of these consumers? Do you have a lot of competition that you need to overcome? Here are some other things to consider:

  • How long do you want this advertisement to run?
  • How many people are aiming at advertising to? Is it a niche group or the general public?
  • What are you hoping to happen from your ad? More sales? Awareness?
  • How much does it cost to run an ad for your top three media choices? Will you gain your exposure goal by taking the cheaper route?
  • What is the pattern of the ad? Is it continuous or more like a pulse?

These are just a few examples. Designing the ad to tailor to your objective while taking in all of your goals requires a lot of insight into your customer base. It also requires understanding if your ad is going to be informative, persuasive or a reminder advertisement. Informative advertising is often used by non-profit campaigns looking to raise awareness about a cause – like the AIDS campaign posters you see all over New York City. This kind of advertising is called primary demand. Persuasive advertising is used to convert customers to your brand and products. It’s called selective demand because you want to persuade them to select you and the ad message indicates why. Lastly, there is the reminder advertisement type and this is simply reminding the consumer about a product or service that they are probably already familiar with. Learn what the best online advertising sources are in this course.

Pros to Advertising

The benefits of advertising are pretty obvious. If you’re a new company seeking a customer base, advertising is the quickest and most efficient way to get your name out there. Exposure can be very high if the ads are designed correctly and the appropriate media outlets are chosen. Secondly, ads can be incredibly versatile which allows for maximum expression through video, audio, painting, photography, spoken word, and so on. The sky is the limit. Just think about Flo from Progressive, when she popped on the scene Progressive saw a serious increase in profits. People love her for her quirkiness, the advertisers knew what they were doing to grab the attention of potential consumers. Lastly, advertising crosses boundaries. Geography doesn’t matter in advertising (unless your target demographic is only those who live in say, Harlem). National advertisements reach people from all over the country, of all different backgrounds and create a sort of unified consumer community.

Cons to Advertising

Advertising can be expensive, it can be tuned out by the masses and it’s rather hard to measure its effectiveness. Advertising can cause a sort of public “tune out” where the target audience is being so bombarded with advertisements from all of the other companies that they turn a blind eye to it all (think about when you watch TV and you mute the volume through the 10 minutes of commercials). Advertising is also very expensive. When I worked on the playbill for a theater production in college we were charging somewhere in the arena of $300 for a half-page advertisement. This was for a small university play, not for a full color page in the Food Network magazine. For tips on cheap advertising for a small business take this course. Additionally, when the ad is finally ready to go live – how are you to tell who saw the ad and thus became a customer? You can’t 0 unless you ask for customer feedback. This is highly recommended. It tells advertisers what methods of communication are most effective for the audience they are trying to reach. Advertisers have to weigh the pros and cons of running ads to make sure the benefits outweigh the costs.

Alright, so advertisements are all around us and almost every business utilizes them for their benefit. Enhance your ad design by reading 5 advertisement techniques that work. Next, what are promotions?

Promotions

Promotion is a short-term incentive to encourage trial or purchase of a good or service. This is paralleled to say, Proactiv’s promotional campaign for a risk-tree trial of the Proactiv skin care set for 30-days. After the 30-days, if you are not entirely satisfied with the product you can return it at no cost to you.

Promotions act as mini-advertisements that come equipped with incentives for the consumer. Consumers love incentives, if you give someone a reason to shop with you (like free products, coupons, discounts or risk-free trials) customers are most likely to act impulsively and sign up for whatever it is you are offering. Companies use promotions when they are releasing a new product, when they can’t breech the brick wall that surrounds their target audience or when they have a profit goal they would like to reach. Much like advertising, promotions usually begin with an objective and then break down into promotional planning and execution. Learn everything you need to know about sales promotion in this course. There are two primary channels of promotions: trade/retail and consumer. Let’s look at each.

Trade/Retail Promotion

Trade and retail promotion is a little bit behind the scenes. It’s something most consumers probably aren’t aware of, but it’s important from a promotional perspective. Trade and retail promotion objectives include:

  • Convince retailers to carry a brand or product
  • Get a shelf or space for the product
  • Promote the brand as a newcomer at the retail store to create a buzz
  • Push the brand to consumers

When attempting a trade or retail promotion, marketing specialists use trade-promotion tools to accomplish their goal. These tools include:

  • Unique displays
  • Discounts
  • Buy-back guarantees
  • Contests
  • Push money
  • Price-offs
  • Allowances
  • Free goods

The idea here is for promotion developers to find a way to push the product into a new market.

Consumer Promotion

Consumer promotion is the most well-known of the promotional channels. Promotion designers develop customer promotion objectives to secure business. These objectives are:

  • Get customers to try a product
  • Persuade customers away from competitors
  • Get consumers to purchase the product after the trial runs out
  • Have customer loyalty programs that retain these new customers
  • Build long-term relationships with the customers

So how do companies do it? They use consumer promotional tools, like:

  • Samples/trials
  • Cash refunds
  • Premiums
  • Coupons
  • Bundles
  • Contests
  • Patronage awards
  • Games
  • Limited time specialty items

The goal is to pull the customer into your business and make it so good for them that they don’t ever want to go anywhere else.

Pros

The pros are quite simple: promotions attract attention and incentivize consumers to try a product. The business running the promotion will have a better chance of securing a customer base if they can just get the product into their hands (this exhibits confidence and pride in the product being offered). Promotions encourage customer to try a product that they may not normally have. This is a great marketing scheme because it draws in consumers from inside and outside the usual audience. If you’ve ever stayed up late watching infomercials on television than you know all about promotional ads. You can tell promo’s by the tone of immediacy in the advertisement, “get it now before we sell out of this great once-in-a-lifetime deal!” This urgency creates a quick response from consumers who don’t want to be left behind when the promotion is over. A quick response is ideal for campaigns that are trying to increase revenue within a short-period of time.

Cons

Promotional advertising has a lot of pluses, but these pluses all have their shadows. In general, advertisers want to create one-of-a-kind campaigns that leave no room for competition. The idea is to be so good and so unique that customers don’t even bother with other companies in your industry. However, when it comes to promotions, competitors can imitate what you’re doing and cause customers to be stuck questioning which promo they should take advantage of. There is no real way around this as once your campaign is live – everyone can see it, including competitors.

Another con to promotional advertising is the cost. Think about how many people probably call Bare Escentuals in reference to their promotional ad on the radio. They are giving out a full-set of make-up to callers, risk-free, all they have to do is pay shipping and handling. Now let’s say the customer ends up hating the product and never becomes a customer. The promotional campaign just lost the full value of the product they gave as a trial. Now multiply this by 100,000 people and you’ve got one big empty pocket. However, the opposite can also happen and this could be a lot of money in the bank account and the start of a loyal customer base. On top of the cost for running promotions, you have the effect of cost sensitivity on customers. Once you give them something for free they aren’t going to want to pay full price for it.

So now that we’ve gone over the basics of both advertising and promotions, we can see that promotions are a type of advertisement, but that advertising is different. Both have common goals, however, to reel in customers and retain them for long-term business. For more details about both advertising and promotions take this marketing communications course.