Another Texas VC

Contrary to what others are saying, advertising is not dead. Far from it, advertising has never been more exciting. That’s because there has never been a greater need for what advertising does.

 Firms advertise to generate awareness. Awareness induces trial, and if the user is satisfied trial can translate into recurring purchases. Firms need to generate awareness when they introduce a new product, re-position their current product, or are simply trying to maintain ‘top-of-mind’ status.

 Consumers don’t spend hours researching every cereal or pen purchase they make. Multiple Studies show that many consumers don’t even know the prices of items in their shopping cart. In reality consumers (me included) are an extraordinarily lazy bunch that buy stuff based on our memory’s ability to juxtapose product benefits with our immediate needs. Our purchases are seldom rational, which may explain why 397 of 426 House and 30 of 32 Senate elections in 2008 were won by the biggest advertiser. Every advertiser worth his salt field tests their ad’s to verify that their messaging influences buying behavior.

 So even though the internet has made product information incredibly easy to obtain, it doesn’t change the fact that companies will still want to push messaging towards consumers, and that consumers still respond to advertisements. If the sole purpose of advertising was to help consumers with information retrieval and quality assurance, advertising would have ended in 1909 with the Good Housekeeping Seal of Approval. It didn’t end in 1909 and isn’t going to end now.