Running

head: ADVERTISING MARKET CHANGES

Changing Advertising Methods in a Diversifying Culture

Jonathon T. Davis
Jtdavis102@gmail.com

Waxahachie Global High School

Mrs. April Moon
11/6/14

ADVERTISING MARKET CHANGES

Table of Contents
Section Topic

Page

ABSTRACT.......3
INTRODUCTION. 4
ADVERTISING IN THE TWENTIENTH CENTURY4
FIGURE 1......5
METHODS OF ADVERTISING. 5
ADVERTISING IN THE TWENTY FIRST CENTURY.6
FIGURE 2......7
ADVERTISING SUB-DIVISIONS...8
CONCLUSION..9
REFERENCES11
APPENDIX A...13
APPENDIX B...14

ADVERTISING MARKET CHANGES

Abstract
Advertising has been prevalent in human culture throughout the twentieth and
twenty-first centuries. The effectiveness of various advertising methods,
mediums, and tactics has swayed with the technological and cultural changes
that society has undergone. Recent developments that have taken place
following the turn of the century have begun to reduce the effectiveness of
advertising through conventional means. Netflix has funneled billions in revenue
away from conventional ad campaigns in their effort to expand their video
streaming empire (C. Smith, n.d.). It is shifts like these that have begun to reduce
the effectiveness of conventional advertisement campaigns. Although advertising
continues to benefit corporations, organizations, and nations, newer and more
up-to-date methods will need to be employed on a grander scale if improved
results are desired. Research shows that advertisement revenue in the internet
sector is growing rapidly and will likely soon outpace that of conventional
television ads (Statista, 2012). Changes in the industry are liable to happen
within the coming years (Forbs, n.d.).

KEY WORDS: ADVERTISING, REVENUE, BUSINESS, MEDIA,

PROFIT, CULTURE, VIDEO GAME, INTERNET, PRINT NEWS,
BROADCAST

ADVERTISING MARKET CHANGES

Introduction
Revenue collected in the advertising industry has been in a state of steady
incline since the turn of the twenty-first century. In 2001, advertising profits finally
broke the eighty billion dollar barrier in the United States. Since then it has risen
to over one-hundred billion in 2012 (Statistia, 2014). Revenue increases in
advertising generally lead those in the industry to believe that the effectiveness of
the advertisements is on the rise as well. However, the overall effectiveness of
advertisements has been in decline. This trend is most visible when investigating
fraudulent views in both online and televised advertisement delivery programs.
According to Outsell Incorporated (2006), On average, advertisers estimate that
14.6 percent of the clicks they are billed for are fraudulent. Technological
advances in media sharing in recent years have begun to outpace the rate in
which current advertising methods can reach their audiences. Services such as
Netflix are causing large shifts in the ways in which advertising corporations
conduct business (D. Jayson, 2012).
Advertising in the Twentieth Century
Throughout the twentieth century, print based advertisements accounted
for the vast majority of advertising views. Prior to the turn of the millennium,
advertising revenue from newsprint and magazines alone totaled over seventy
billion USD (Statista, 2014). However, in years as recent as 2012, revenues from
such sources have dropped to just below thirty billion (Statista, 2014). These
numbers began their ever-downward spiral upon the introduction of the

ADVERTISING MARKET CHANGES

television. By the year 1950, over fifty percent of families in the United States
owned a television (P. Farnsworth, 1950). After just twelve years in 1962, it was
estimated that over ninety percent of
families had joined the everexpanding market (T. Genoa, 2001).
The days where everyone's dad
would walk out to grab the paper
were fading. United States adverting
in the twentieth century cannot be
better exemplified than by the
propaganda efforts made by the
nation during World War Two. During

Figure 1: An example of a WWII propaganda

poster. These were very common for the time.

the Second World War, the United

States government utilized

television and radio broadcasts, posters and flyers, and movie theater showings
and public speeches (National WWII Museum, 2014). These propaganda adverts
were used to for a multitude of reasons. Desired effects ranged from spurring the
purchasing of war bonds, increased enlistment rates, or possibly to instill the fear
of the enemy into the general public (Wikipedia, 2014). An example may be seen
in figure one (pictured above).The twentieth century brought about for the first
time, the ability to advertise to large amounts of people via radio and television. It
created a large boom in the industry and allowed more businesses and
organizations to reach more people than ever before.

ADVERTISING MARKET CHANGES

Methods of Advertising
Throughout history, companies, organizations, and nations have worked
to perfect the art of advertising. Hundreds of advertising methods exist, but only a
select few can be noticed in the scope of everyday life. The following advertising
methods are currently implemented and are effective in todays market. The first
mentionable method of advertising delivery is print advertising. Print adverts are
one of the oldest conventional forms of media delivery. They are simple
advertisements that are placed in journals, newspapers, magazines, booklets,
flyers, and direct mail (P. Suggett, 2014). Secondly, wide stream media
broadcasting is among the most popular today. Movie previews, radio
commercials, televised paid programing, and spot advertisements all fall into this
category (P. Sugget, 2014). Wide stream media broadcasting operates on the
simplest and most central advertising principal,
To inform as many people about new products and services offered by an
organization, persuade people to buy these products or make use of the
services offered and then to remind people about the organization and
encourage repeat purchase and use. (N. Za, 2007)
The last frontier of advertising is by digital online adverts. These consist of any
advertisement that is delivered to the viewer via Internet service connection. In
recent years this felid has grow considerably. Large, more conventional
companies have begun to put forth efforts to distribute advertisements on these
newer mediums.
Advertising in the Twenty-First Century

ADVERTISING MARKET CHANGES

Internet advertising has managed to reach more viewers in the last ten
years then all collective advertisements of the twentieth century (Marketing Land,
2013). The Google
owned website
YouTube Manages
to receive an
estimated forty-five
million views per
day. A single ad on
the YouTube
homepage runs up a
charge of $375,000
USD per twenty-four
hours of airtime
Figure 2: A graph depicting the advertising spending of the
United States industry in the year 2013.

(Dave, 2011).
Companies like

Google have lead the way in creating and exploiting new and innovative
advertising mediums that are required for the twenty-first century. A Douglass
Rushkoff exclaimed;
Google did a great job hacking the Web to create search - and then
monetizing search with advertising. And Apple did a great job humanizing
hardware and software so that formerly daunting computers and
applications could become consumer-friendly devices - even a lifestyle

ADVERTISING MARKET CHANGES

brand. (D. Rushkoff, n.d.)

As of 2013 Internet advertisements extend to the largest of audiences. However,
thanks to the ease of publication over the World Wide Web, it accounts for only a
small percentage of overall advertisement spending. Internet advertising
currently only accounts for 9.7 percent of all reported advertisement spending in
the United States (Statista, 2013).
Advertising Sub-Divisions
In the modern age, over ninety nine percent of advertising expenders are
funneled through in descending order (see figure 2): cable television, network
television, consumer magazines, spot television, local newspapers, internet,
syndicated television, foreign language television, outdoor billboards, local radio
broadcast, B-to-B magazines, national newspapers, national spot radio, Sunday
magazines, network radio, foreign language newspapers, and local magazines.
Appendices one and two may be referenced for additional representation of
industry revenue and expenses. Recently advertising turnouts for prime time
television networks have been in great decline. Services such as Netflix, Amazon
Prime, and Hulu plus are online video streaming services, in which subscribers
pay premiums in order to access to thousands of titles. These services direct
billions in revenue away from advertising every quarter. Netflix heading the pack
with over fifty million subscribers in over twenty countries accounts for over one
third of all personal Internet bandwidth usage in the United States. The
advertising industry of the United States has shifted over the last fourteen years.
It has become a young mans game. It is a market of high-speed Internet and

ADVERTISING MARKET CHANGES

flashy electronic billboards. Companies must adapt quickly to respond to the

changing audience demands (S. Albert, 2014). Additionally, the newest form of
advertising in the global market to date is the addition of in-game advertising (S.
Hicks, 2014). In-game advertising is the systematic implementation of
advertisements inside of a virtual world; witch is navigated by human players.
These advertisings are extremely cost effective and have the potential to reach
millions of youthful participants. The largest advantage to in-game advertising is
that it allows subliminal adverts to be distributed to individuals in an entertained
and enjoyable environment (Dr. A Ghirvu, 2012). For most, advertisements
present themselves as distracting, bothersome, and general annoyances.
Additionally, many game companies advertise their own products within games
developed. Companies such as Microsoft have advertised products such as the
Xbox One, within games that are played on the earlier Xbox platform, Xbox 360.
Viewers tend to be put off by unwanted advertisements and in tern are less
receptive to the ideals that are in delivery. Whilst the individual is playing a video
game, they are immersed inside of a world built for fun and entertainment. This
new state of mind helps a recipient of an advert message to be more receptive
and increases the effectiveness of the advertisement on the whole (Dr. A Ghirvu,
2012). The realm of in-game advertising promises an effective way to distribute
not just advertisements, but advertisements that will be perceived as more
trusting and enjoyable by their viewers.
Conclusion
Good advertising does not just circulate information. It penetrates the

ADVERTISING MARKET CHANGES

10

public mind with desires and belief (Leo Burnett, n.d.). The art of advertisement
has changed drastically since 1900. New technologies, new people, new ways of
thinking all come into play. With the worlds population having increased by over
5.3 billion people in the last hundred years, there are more people than ever
before to be marketed (Geohive, 2011). If corporations seek to effectively
advertise their products and services in the future, it is imperative that they invest
in the new mediums that have presented themselves in recent years.

ADVERTISING MARKET CHANGES

11
References

Advertising In 2020: The industry's key players weigh in with divergent strategies.
(n.d.). Retrieved November 13, 2014, from
http://www.forbes.com/sites/onmarketing/2014/05/14/advertising-in-2020the-industrys-key-players-weigh-in-with-divergent-strategies/
Albert, S. (n.d.). 20 reasons your small business should use social media.
Retrieved November 6, 2014, from http://blissfullydomestic.com/lifebliss/20-reasons-small-businesses-should-use-social-media/7414/
American propaganda during world war II. (2014, October 27). Retrieved
November 6, 2014, from http://en.wikipedia.org/wiki/
American_propaganda_during_World_War_II
Outsell Inc., Analytics for the information industry. (2014, January 1). Retrieved
November 6, 2014, from http://www.outsellinc.com
Distribution of U.S. advertising spending by medium 2013. Statistic. (2013,
January 1). Retrieved November 6, 2014, from
http://www.statista.com/statistics/183704/us-advertising-spend-bymedium-in-2009/
GeoHive. (2011, January 1). Retrieved November 6, 2014, from
http://www.geohive.com/earth/his_history1.aspx
Ghirvu, Alinia. (2012). In game advertising: advantages and limitations for
advertisers. The USV Annals of Economics and Public Administration,
15(2.1), 116-119

ADVERTISING MARKET CHANGES

Hicks, S. (2014, January 1). Does the video game industry hold the keys to the
future of advertising? Retrieved November 6, 2014, from
http://www.adweek.com/news/advertising-branding/engage-consumersbrain-chemistry-155531
Jayson, D. (2012, December 21). How netflix Is quietly shaping the online
advertising industry. Retrieved November 6, 2014, from
http://www.huffingtonpost.com/dean-jayson/how-netflix-is-quietlysh_b_2339132.html
Marvin, G. (2014, January 1). Statistics: online advertising | marketing land.
Retrieved November 6, 2014, from
http://marketingland.com/library/statistics/statistics-online-advertising
Propaganda poster at a glance:. (n.d.). Retrieved November 6, 2014, from
http://www.nationalww2museum.org/learn/education/for-students/ww2history/at-a-glance/propaganda-posters.html
Revenue of the U.S. advertising industry 2012 | Statistic. (2014, January 1).
Retrieved November 6, 2014, from http://www.statista.com/statistics/
183932/estimated-revenue-in-advertising-and-related-services-since2000/
Smith, Craig. "40 Amazing netflix statistics and facts." DMR Digital Marketing
Ramblings. N.p., n.d. Web. 05 Nov. 2014.
<http://expandedramblings.com/index.php/netflix_statistics-facts/>.
Suggett, P. (2014, January 1). 8 Major tactics used in modern advertising.
Retrieved November 6, 2014, from http://advertising.about.com/

12

ADVERTISING MARKET CHANGES

13

od/advertisingprojects/a/Different-Types-Of-Advertising-Methods.htm
Suggett, P. (2014, January 1). Broadcast advertising. Retrieved November 6,
2014, from http://advertising.about.com/od/advertisingglossaryb/
g/Broadcast- Advertising.htm
Television History - Invention of television. (n.d.). Retrieved November 6, 2014,
from http://www.ideafinder.com/history/inventions/television.htm
Television History - The first 75 years. (n.d.). Retrieved November 6, 2014, from
http://www.tvhistory.tv/index.html
Wolfe, D., & Pittenger, M. (1998). Corporate and commercial practice in the
delaware court of chancery. Charlottesville, Va.: LEXIS Law Pub.

ADVERTISING MARKET CHANGES

14
Appendix A

Total U.S. Advertising Spending by Medium ($ in Millions), 2000-2010E

Appendix A: Shown above gives in detail the total U.S. advertising industry spending over a
ten year period from the years of 2000 to 2010.

ADVERTISING MARKET CHANGES

15

Appendix B
Share of Advertisement Spending by Medium

Appendix B: Shown above gives in detail the total U.S. advertising industry revenue by
medium of audience delivery.