Page 39 - Encyclopedia of Business and Finance

eobf_A 7/5/06 2:54 PM Page 16

Advertising

Billboards, such as these along the Palmetto Expressway in Miami, Florida, are a popular form of advertising. AP IMAGES

including airlines and automobile manufacturers. One especially appealing to small-store owners who, on their
drawback of comparative advertising is that customers own, could not afford to advertise the product adequately.
have become more skeptical about claims made by a com- For examples of cooperative advertising programs, see
pany about its competitors because accurate information the John Wiley & Sons, Inc. (http://www.wiley.com/
has not always been provided, thus making the effective- WileyCDA/Section/id-10671.html) and the New Mexico
ness of comparison advertising questionable. In addition, Department of Tourism (http://www.newmexico.org/
companies that engage in comparative advertising must be go/loc/department/page/dept-coop-advertising.html)
careful not to misinform the public about a competitor’s Web sites.
product. Incorrect or misleading information may trigger
a lawsuit by the aggrieved company or regulatory action Direct Mail. Brochures, catalogs, flyers, letters, and post-
by a governmental agency such as the Federal Trade Com- cards are just a few of the direct-mail advertising options.
mission (FTC; see the FTC’s statement of policy regard- Direct-mail advertising has several advantages, including
ing comparative advertising at http://www.ftc.gov/bcp/ detail of information, personalization, selectivity, and
policystmt/ad-compare.htm). speed. But while direct mail has advantages, it carries an
expensive per-head price, is dependent on the appropri-
Cooperative Advertising. Cooperative advertising is a sys- ateness of the mailing list, and is resented by some cus-
tem that allows two parties to share advertising costs. tomers, who consider it junk mail.
Manufacturers and distributors, because of their shared
interest in selling the product, usually use this cooperative Informational Advertising. In informational advertising,
advertising technique. An example might be when a soft- which is used when a new product is first being introduced,
drink manufacturer and a local grocery store split the cost the emphasis is on promoting the product name, benefits,
of advertising the manufacturer’s soft drinks; both the and possible uses. Thus, informational advertising is used
manufacturer and the store benefit from increased store early in the product life cycle. Car manufacturers used this
traffic and its associated sales. Cooperative advertising is strategy when sport-utility vehicles were first introduced.

16 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION