12.6 The Huge Impact of Advertising
- How are advertising media selected?
Most Americans are bombarded daily with advertisements to buy things. Traditional advertising is any paid form of company or organization promotion that is delivered in a variety of ways and formats. For example, outdoor advertising, broadcast advertising, or printed promotional pieces are traditional forms of advertising. In the United States, children are exposed to more than 20,000 ads each year. Adults are exposed to between 4,000 and 10,000 ads each day, which is more than two million advertisements yearly.6
The money that big corporations spend on advertising is in the billions of dollars. Total advertising expenses in the U.S. were estimated at nearly $400 billion in 2025.7 Global advertising expenditures are over $1 trillion annually.8 Amazon has been the largest advertiser in the U.S. annually in the 2020s, with $21.4 billion in spending in 2024. It is also the largest global spender at over $20 billion in 2023.9
Samsung was a sponsor of the 2026 Olympics in Milan and provided special edition phones to the athletes. Ads for the 2026 Super Bowl cost between $8 and $10 million for a 30-second commercial. Apple secured exclusive rights to advertise with Major League Soccer (MLS) for the next 10 years at a cost of $2.5 billion.
The Impact of Technology and the Internet on Traditional Advertising
Digital technology is delivering content anytime, anywhere. Audiences are fragmented and their attention is spread across multiple channels and devices, making them tougher than ever to reach. Each year, the Super Bowl captures millions of viewers. But events such as the World Cup and the Olympic games are capturing over 2 billion viewers each.
Entertainment is widely digitized. Magazines, books, movies, games, and many other forms of entertainment can all be accessed through a device. In 2025, 94 percent of the U.S. population has access to broadband connections. That percentage is lower in rural areas at 72 percent.10
Technology is driving many of the changes in advertising, but so is consumer behavior. Advertiser questions abound. How do you adjust your marketing strategy to reach younger consumers through their devices? How do you optimize your TV advertising when users often have the ability to skip ads? How can you leverage social media platforms to promote your product or service and extend your reach to new audiences? How do you control the message across social media platforms? What role do influencers play in promoting your business? How do you create a website that fosters sales, is informative, and engaging? Do you consider other forms of promotion such as product placement or podcasts? We will touch on each of these later in the chapter.
Choosing Advertising Media
The channels through which advertising is carried to prospective customers are the advertising media. Both product and institutional ads appear in all the major advertising media. Each company must decide which media are best for its products. Two of the main factors in making that choice are the cost of the medium and the audience reached by it.
Advertising Costs and Market Penetration
Cost per contact is the cost of reaching one member of the target market. Naturally, as the size of the audience increases, so does the total cost. Cost per contact enables an advertiser to compare media vehicles, such as broadcast media versus print media. An advertiser debating whether to spend local advertising dollars for media spots such as at local sporting events or through sponsorship of a youth sports team could consider the cost per contact of each. The advertiser might then pick the vehicle with the lowest cost per contact to maximize advertising punch for the money spent. Often costs are expressed on a cost per thousand (CPM) contacts basis.
Reach is the number of different target consumers who are exposed to a commercial at least once during a specific period. Media plans for product introductions and attempts at increasing brand awareness usually emphasize reach. For example, an advertiser might try to reach 70 percent of the target audience during the first three months of the campaign. Because the typical ad is short-lived and often only a small portion of an ad may be perceived at one time, advertisers repeat their ads so consumers will remember the message. Frequency is the number of times an individual is exposed to a message. Average frequency is used by advertisers to measure the intensity of a specific medium’s coverage.
Media selection is also a matter of matching the advertising medium with the product’s target market. If marketers are trying to reach teenagers, they might select TikTok or Instagram. If they are trying to reach older consumers, they might consider print media rather than online targeted ads. A medium’s ability to reach a precisely defined market is its audience selectivity. Some media vehicles, such as broadcast media and local advertising might appeal to a wide cross section of the population. Others—such as interest-specific websites or genre-specific radio stations—appeal to very specific groups. Marketers must also consider utilizing various social media platforms and which platforms are most likely to reach the targeted market.
Concept Check
- How is technology impacting the way advertisers reach their markets?
- What are the two main factors that should be considered when selecting advertising media?