Monday July 14th 2008

Advertising is the best most cost effective tool available to marketers in expanding markets, far more so than in static or declining markets

An unambiguous conclusion reached from my work not only in established markets but also in expanding markets, is that advertising is more effective in attracting non customers to buy for the first time, than it is in getting existing customers to buy again. But never overlook the value of advertising in justifying those higher prices and better margins in established markets; (#8 of our "25 Things.." refers)

When marketers launch a completely new brand or new proposition, they have 100% non- customers. And advertising is one of the most efficient and cost effective ways of creating trial. So it's not just a coincidence that propositions that embrace "new" "different" "faster" "better" etc permeate the advertising vocabulary and have passed the effectiveness proof.

Expand that notion geographically and hence it's no surprise to read the accelerating volume of successful advertising case histories streaming from the previous Eastern bloc & expanding Eastern economies.

Create a satisfying marketing effectiveness meal as follows.

• (1) Take a ample spoonful of rapid expansion of consumer wealth and
• (2) Add some growing aspirations of previously held back consumers.
• (3) Add a healthy amount of potential consumers"thrill" of the new & unexpected and
• (4) Finish off with cheaper advertising and communication audience contact costs,

and you have a fulfilling recipe for advertising cost effectiveness.

You can then luxuriate in the warm glow of success that comes from knowing  that user satisfaction is the best driver of repeat purchase.Advertising just doesn't work so well where these (1-4) points aren't available

For those marketers stuck with brands that have no added consumer value in non-expanding markets all the evidence suggests its best to save money on advertising and turn to other alternative consumer incentive marketing.

For the luckier marketers with brands not yet realising their potential, working in expanding markets, throw a ton of cash into advertising - making sure your agency is top of the heap.