This appeared originally as my answer to a question on Quora, which can be found here: Does TV and advertising actually influence the way we spend money?
Yes, they do. Research done over decades has shown that advertising helps companies achieve several goals, a few of which are listed underneath:
- Helps get the word out about their products and services. If no one knows about your products and services, how will your company get any sales?
- Helps create an image of the company. Would you think of Nike as a cool, youthful brand if you never knew about the company and their amazing products?
- Helps announce new products/special deals. Such ads are very widely seen during festive periods, when people are looking to buy gifts for family and friends. Any information about great new products, or deals on which people can save money, would be preferred during such periods because that’s what people are on the lookout for around festivals;
- Helps in spreading public awareness. Imagine that a country’s government wants to make the public aware about a new taxation method, which taxes luxury spends more than the previous years. For that, it starts an advertising campaign issued in public interest. Would such an advertisement influence your decision to spend money on luxury goods and services? It definitely would, correct?
Based on the points above, you can definitely imagine how advertisements influence people’s decisions to spend their money.
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