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Belch: Advertising and
Promotion, Sixth Edition
IV. Objectives and
Budgeting for Integrated
Marketing
Communications Programs
7. Establishing Objectives
and Budgeting for the
Promotional Program
Does It Really Matter What We Spend
on Advertising?
As you can imagine, marketers have probably
always wondered whether their advertising dol-
lars have an impact. This is particularly true now,
as advertising budgets are being slashed in virtually
every industry due to the downturn in the
U.S. economy. Simply put, marketers want to
know whether it is worth advertising their brand,
and how much they should be spending if it is.
There are some out there who think that the
amount spent on media has little or no impact—
at least as it relates to consumers’ perceptions of
the brand’s quality. In a study commissioned by
Brandweek magazine, a Princeton-based research
company concluded: “Consumer opinions pertaining
to quality bear little correlation to the
amount of time and money companies spend
advertising their wares on Friends, FM radio or
© The McGraw−Hill
Companies, 2003
Foxsports.com.” According to Total Research
Corp., none of the 10 brands most heavily advertised
in the United States were recognized as
among the top 100 “quality” brands—even
though they accounted for over $3.5 billion in
expenditures. On the other hand, the brands considered
in the top 10 spent only approximately
$150 million. The top three media spenders—
McDonald’s, Burger King, and Circuit City—didn’t
make the top 100 list! (List numbers 1 to 3 were
Waterford Crystal, Craftsman tools, and the Discovery
Channel.)
When asked why this might be the case, some
consultants noted that advertising may be less
effective than initially thought or that it lacked
credibility in general. Others argued that advertising
is too weak to establish a brand and that
word of mouth or customer experience is far
more valuable in establishing quality.
But not everyone is ready to dismiss advertising
as ineffective. Even those that conclude that
advertising is not effective in creating a quality
image are not yet ready to recommend that
companies stop advertising. They agree that
while advertising may be weak for this objective,
it is (if well designed and placed) quite
effective, particularly when it comes to creating
awareness and reinforcing the product’s message.
Further, Robert Passikoff, president of the
Brand Keys consulting agency, notes that advertising
has different objectives depending on the
product category. He notes that “quality is less
important in hamburgers than in crystal” and if
the list was about fun, “Waterford would be
down at the bottom.”
Others agree with Passikoff, contending that
stressing quality may be only one objective of
advertising and that many companies do not use