Advertising is big business and a recent outlook forecasts the Australian advertising market to hit a mega $13.5 billion in 2016 (Mason 2016).
So why spend the big bucks on advertising? Iacobucci (2015) endorses advertising as facilitating customers’ awareness by luring potential customers and claims it strengthens brand awareness, positive attitudes and perceptions of brand equity. This then enables the consumers to behave just how we would like them to – buy buy buy! As it stimulates behaviours that result in more purchases, more frequently and for the more expensive stuff, and to ensure they tell all their friends via word-of-mouth (Iacobucci 2014).
Old school media
Television advertising growth is forecasted to remain relatively flat at a lousy $4 billion in 2016 (Mason 2016). Television is old school and continues to be viewed as the established and reliable main vehicle for building a brand (Draganska et al 2014).
This pricey media continues to dominate the Australian media choices, as it yields the largest reach numbers (Iacobucci 2014). Let’s take a look at Kmart, a heavy user of television advertising.
Kmart’s target audience are women and mothers, and Kmart nailed their reach by exposing as many of their target customers to their ads, airing them on prime-time television spots with heavy frequency, enticing them with rotating catchy pop songs that are hip, fun and funky.
But what about the other traditional ‘nonintrusive’ media players of newspapers and magazines you ask? Well, it turns out these two old fogies are falling behind, with newspaper advertising forecast to decrease 18% and magazine to decrease 17.1% in 2016 (Mason 2016).
Direct mail is old school and serves as a cheaper option targeting those consumers wanting a whole lot of detailed product information (Iacobucci, 2015). Consumers perceive print advertising as allowing a clearer message of the advertisement and information of the message, compared to other media such as radio and the internet (Roozen and Meulders, 2014).
Kmart’s version of direct mail is otherwise known as “junk mail” or aka catalogues to the budget-savvy consumer. Kmart advertising does not utilise elaborate and expensive celebrity endorsements, but instead includes a diverse group of models intended to represent all consumers. Media recently praised Kmart for the inclusion of disabled children in their catalogues.
New school media
Internet advertising in Australia is charging ahead, with growth for 2016 forecasted at 12.1% to total a whopping $6 billion (Mason 2016). Not too shabby, despite Draganska et al (2014) argument that there is still hesitation amongst advertisers to transition their advertising spend from television campaigns to the Internet.
Kmart’s recent success has been attributed to the use of social media, with a reported explosion of social media buzz fuelling the “cult of Kmart” on Facebook and Instagram. Kmart’s word-of-mouth advertising has taken-off with a multitude of online communities such as Kmart Lovers Australia and Kmartaus_inspire that share images and DIY styling details of the naturally exciting Kmart’s products.
Kmart has officially been titled as the jewel in Wesfarmers crown, with news.com.au reporting a 17.9% growth in sales in the most recent quarter (Murphy 2016).
Kmart’s recent revival could be viewed as the ultimate return on marketing investment (ROMI), with improved earnings positively correlated with the revised marketing campaign.
One thing is for certain, Kmart is doing something right as it successfully demonstrates advertising across a number of media – television, social media, direct mail, in a consistent yet complementary manner (Iacobucci 2014).
So will Kmart continue to adopt the strategic approach of spending the big bucks on advertising, viewing it as a worthy investment? Or does it believe it has already successfully achieved the long-term benefits of brand building?
Blog by Annika Bate, wordpress username: annikampk732, student ID: 214448725. email: firstname.lastname@example.org
Create Revolution 2016, Cut-Price Chic: Six Strategies that made Kmart cool, retrieved 8 May 2016, <http://www.creativerevolution.com.au/mi/cut-price-chic-six-strategies-made-kmart-cool>
Draganska, M, Hartmann, W, Stanglein, G 2014, Internet Versus Television Advertising: A Brand-Building Comparison, Journal of Marketing Research (JMR). Oct2014, Vol. 51 Issue 5, p578-590. 13p. 12 Charts, 2 Graphs. Database: Business Source Complete
Iacobucci, D 2014, ‘Marketing Management (MM), 4th Edition, Cenage Learning, Mason.
Lewis, M 2013, Why Newspapers Will be Dead Soon, retrieved 5 May 2016, <http://loo.me/2013/02/why-newspapers-will-be-dead-soon/>
Lomp, S 2016, ‘Old Media vs New Media’, Stephan Lomp Impressum, <http://www.lomp.de/illustration/old-media-vs-new-media/>
Mason, M 2016 “Australian advertising market to hit $13.5 billion in 2016”, The Sydney Morning Herald, retrieved 7 May 2016, <http://www.smh.com.au/business/media-and-marketing/australian-advertising-market-to-hit-135-billion-in-2016-20151220-glrs3i.html>
Mennega, D, 2008 retrieved 5 May <https://dmennega.wordpress.com/tag/b2b/>
Murphy, J 2016, “Why Kmart is Wesfarmers’ jewel in the crown” News.com.au retrieved 7 May 2016, <http://www.news.com.au/finance/business/retail/why-kmart-is-wesfarmers-jewel-in-the-crown/news-story/c1e288b797e17d9e7757967ad8b771bf>
Roozen, I and Meulders, M 2015, Has TV advertising lost its effectiveness to other touch points? Communications: The European Journal of Communication Research. Nov2015, Vol. 40 Issue 4, p447-470. 24p. Database: Communication & Mass Media Complete
Varun, 2015, Internet vs. Traditional Marketing – 10 Points to Settle the Battle, Fatbit Technologies, retrieved 8 May 2016, < http://www.fatbit.com/fab/internet-vs-traditional-marketing-10-points-settle-battle/>