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How Does Advertising Affect Demand?

Every business owner wonders if the money they are funneling into advertising costs are really making the return they desire. Although it is much easier to measure results now than it was, say, 10 years ago, the abstractness of it all is still present.

Producing and understanding results are still not entirely clear, but you NEED to know what you’re doing is working, and you need to understand how.

So how does advertising affect demand? The answer is divided, there is no definitive way to say that YES in all cases, it does, or NO, it doesn’t.

Now what? You’re spending all of this money on advertising and hoping to get returns, but what are you actually doing, and is it successful? Let’s look into a product and understand how in some cases it can create demand, in some it creates awareness, and in some, it just does both.

No, Advertising Can’t Create Demand

It creates awareness instead.

Often today car sales are generated on the basis of necessity. People need a mode of transportation, cars are often the most reliable, so they begin to look into them. Many consumers don’t go out and purchase cars based on their advertisements.

However, this doesn’t necessarily debunk the importance of advertising. Car advertising often creates awareness, and this awareness can be the basis of where consumers go to research what brand and model of the car they are going to buy.

Jaguar provides a great example of this. In their Great Villain campaign launched earlier this year, they are creating an awareness of their brand. By providing a story, some history and information to their potential customers, they are igniting product awareness within others. So although viewers may not run out and buy a Jaguar that day, if they connect well enough with and remember the advertisement when they are in the market for the car, then the advertisement was successful in creating awareness for the product.

So while Jaguar created no demand or urgency for their product, they provided the tools to launch awareness, a key part of the buyer’s journey.

A Jaguar hood ornament illustrating how advertising affects demand

Yes, Advertising Can Create Demand

If done right.

So, your target consumer is in the market for a car. You’re on the way there. Now, it’s your turn to ignite and drive demand through your advertising. But how does advertising affect demand? By creating some sense of urgency, you can create demand for the product.

Johnston’s Toyota of Middletown, NY, does a good job of instilling this sense of urgency, thereby creating demand. At the start of May 2014, they began to run advertisements that offered a $500 rebate on new Toyotas to all military personnel. The promotion and advertising contained no push for a certain model and gave no sense of the product. It was simply an advertised offer. The dealership advertised the deal through a variety of mediums and made the promotion time-sensitive by setting an end date of July 7, 2014. This way the dealership created a demand for the product for a group of potential consumers, military personnel, by offering them a reason why and a sense of urgency in making a purchase.

There you have it, an example of creating a demand for your product. When attempting to generate a demand for your product, it’s important that you keep in mind the varying needs of your different buyer personas.

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What If I Do Both?

In some cases, it may be possible to create awareness and demand.

Combining these goals creates really awesome advertising. Like I said earlier, creating awareness of your product is a vital step in the buyer’s journey. After making a consumer aware, creating demand is next. It’s not an easy process, but when done right the success of your advertising has even more potential than before.

Volkswagen, of course, does an excellent job combining these two things. Let’s look at their Sign then Drive sales event advertising that they offer about once a year. This commercial begins by informing the consumer that the event is back. It then notes the different awards and features available on the 2014 Volkswagen Passat, giving the consumer an awareness factor of the vehicle. It closes by explaining that for a limited time (keywords: limited time), you can lease this car for $0 down, $0 due at signing, $0 for the first month (AKA a really great deal). Volkswagen consistently does a great job at both creating awareness and demand for their products, showing how advertising affects demand.

The Answer Is Both Yes and No

It really depends on what you’re selling.

This is difficult, I know. But because the market is changing so rapidly, every product needs to be advertised in different ways to target and meet the needs and desires of all of a brand’s audiences. Some professionals will tell you definitively no, others the opposite. But it is important to understand that it absolutely depends on factors such as your buyer personas, buyer’s journey and the type and necessity of the product you are trying to sell.

Advertising Drives Demand

In any case, your advertising should in some way be a vehicle for demand. If it isn’t creating the demand, ensure that the ad does something to drive a consumer’s demand. What would this look like?

Let’s consider a consumer is in the market for a service, such as quick delivery food. They are hungry, so the need for food has already created a demand for a service or product. Now, let’s drive this demand by offering something to aid it – such as FAST delivery pizza; a classic “15-minute guarantee,” or something of the like. You have now driven that demand into the possibility of sealing the last step of the buyer’s journey: the decision stage.

So the conclusion to the question, how does advertising affect demand, begged by this article is that it truly depends; in some cases advertising creates demand, in some cases, it can only create awareness and in some cases, it does both. With that being said, though, a better, more overarching answer to this question is that all advertising should drive demand. That way, you can be more sure that you’re doing something to help your brand.

What kind of product or service do you offer, and have you found that you can create a demand for it? How do you do this? Comment below and let us know!

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