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Advertising and Promotion
John Philip Jones
Syracuse University, USA

of their net sales value (NSV). In addition, these manu-

I. The Effects of Advertising and Sales Promotions
facturers spend a sum generally three times as large on
II. Advertising Increases, Immediate Sales, and Profit
sales promotions. The sales generated by incremental
III. Changes in Advertising Elasticity over Time
expenditures on advertising and on sales promotions
IV. A Further Look at Consumer Prices
can be estimated and compared. In general, increased
V. Harmony out of Discord
advertising expenditure generates only a small average
volume of additional sales, but this can often be profit-
able. On the other hand, increased promotional ex-
GLOSSARY penditure is likely to produce large but unprofitable
advertising elasticity The response of a brand’s sales to a change in sales increases.
advertising expenditure; normally calculated by estimating the
percentage increase in sales that results from a 1% increase in
advertising spending (excluding the influence of other sales stimuli).
advertising productivity Econometric calculation of the value of a
brand’s sales during a year that are directly generated by advertising I. THE EFFECTS OF ADVERTISING AND SALES
compared with the cost of the advertising; generally measured in PROMOTIONS
sales per advertising dollar.
advertising to sales (A:S) ratio The percentage of a brand’s net Advertising is capable of three orders of effect: short
sales value that is applied to media advertising. term, medium term, and long term. The short-term
direct costs (or variable costs) A manufacturer’s costs that vary with effect can be positive and occasionally large, and
the quantity of a brand manufactured.
is a precondition for all longer term effects. The
econometrics The use of high-order mathematics to establish the
existence or nonexistence of statistical relationships between medium-term (year-end) effect on the brand’s sales is
variables. the product of not only the positive influence of the
gross rating points (or television ratings) A measure of the size of brand’s own advertising, but also the negative influence
the television audience for a particular show or commercial; 1% of the of the advertising for competitive brands. The medium-
total number of television homes that are switched to a show or term effect is therefore invariably smaller than the
commercial is measured as one GRP. short-term one. The long-term effect, which is the result
indirect costs (or fixed costs) A manufacturer’s overhead costs; a of a gradual strengthening of the advertised brand in
sum the manufacturer must pay no matter how much it produces.
consumers’ minds, is manifested through a year-by-
net profit A residual; the amount of money that remains after
deducting all direct and indirect costs from a brand’s net sales value. year improvement in the size of the medium-term
net sales value A manufacturer’s net receipts from the sales of each effect.
of its brands. Sales promotions are capable of a very strong im-
price elasticity The response of a brand’s sales to a change in mediate effect, but almost without exception, this is
consumer price; normally calculated by estimating the percentage the total extent of their influence. When comparing
increase in sales that results from a 1% price reduction. the effects of advertising and promotions, therefore,
share of market A brand’s share of consumer sales in its product it is only realistic to look at their immediate short-
category; a percentage calculated on the basis either of volume term effects exclusively. But we should remember
bought or of dollars paid by the purchasers.
that advertising—unlike promotions—can lead to a
further sales outcome that can be very beneficial be-

T he advertising expenditures of large manufacturers

of consumer goods represent, on average, about 6%
cause of advertising’s ability to generate long-term
effects.

Encyclopedia of International Media and Communications, Volume 1

ß 2003 John Philip Jones. Published by Elsevier, Inc. All rights reserved. 7
8 Advertising and Promotion

II. ADVERTISING INCREASES, IMMEDIATE organization specializing in econometric analysis,

SALES, AND PROFIT Media Marketing Assessment (MMA): typical elastici-
ties in the range of 0.06 to 0.09, varying according
The way in which we measure the short-term effect of to the level of advertising investment behind a brand.
increases or decreases in advertising is with a statistical This general experience, together with the author’s
device called an advertising elasticity. Elasticity means usual caution about interpreting statistics, has led
responsiveness (in this case, of sales) to a given stimulus him to concentrate on the lower range of elasticities,
(in this case, advertising). The calculation is carried out with þ0.2 at the top of the range and not the average.
by regression analysis of multiple changes in advertis- The following levels have been examined: þ0.05,
ing expenditure alongside their effect on sales of an þ0.1, þ0.15, and þ0.2. In Table I, these elasticities
individual brand. The end product of the calculation are applied to four hypothetical brands whose NSV is
is an estimate of the percentage rise in sales that results a uniform $100 million. The table examines the imme-
from a 1% increase in advertising expenditure, the diate sales results of a 20% increase in advertising
extra sales having come from advertising alone given expenditure.
that the effect of the other influences on sales has been Each of the brands shows a sales increase in accord-
allowed for. ance with its advertising elasticity. However, Table I
Any estimate along these lines is, of course, predi- tells us nothing about whether or not the sales increases
cated on the basic assumption that the campaign is are economic. We must now see how costs have been
creatively strong enough to produce some degree of affected. There are three separate expenses that must be
short-term effect. Many campaigns do not fulfill this factored into the calculation:
condition.
1. The dollar cost of the extra advertising. The
The complicated calculations of advertising elasticity
amount depends on the advertising:sales (A:S)
have been made with hundreds of brands. In 1984,
ratio for the brand.
three American analysts, Gert Assmus, John U. Farlet,
2. The increase in direct costs (e.g., raw material,
and Donald R. Lehmann, published a summary of the
packaging) for the extra volume of output sold.
advertising elasticities of 128 separate advertising cam-
This depends not only on the amount of extra
paigns. The elasticity varies according to the product
sales but also on the share of a brand’s total cost
category, the brand, and (most of all) the campaign
that is accounted for by direct costs.
itself. The average published figure was þ0.22. If we
3. The increase—if any—in indirect costs.
round this to þ0.2, we see an approximate 5 to 1 rela-
tionship. As such, a 1% increase in advertising pro- Tables II, III, IV, and V use a grid for each of the
duces a 0.2% boost in sales, a 5% lift in advertising four brands. Each table looks at two variables: the
generates 1% extra sales, a 10% advertising increase brand’s A:S ratio and its ratio of direct costs out of total
boosts sales by 2%, and a 20% advertising lift increases NSV. With such relatively small sales increases—1%,
sales by 4%. Increments in advertising are normally in 2%, 3%, and 4% for the four brands—the realistic
minimum amounts of 10%, while 20% is common for assumption is that these will not cause indirect costs
brand restages. A 5 to 1 relationship is not a high to go up. The assumption is made that the firm’s general
response rate, but this article shows that this average overhead has enough slack in it to cover these modest
sales return can sometimes be economic (i.e., the value sales increases. Therefore, only the extra advertising
of the extra sales can exceed the outlay). cost and the additional direct costs are being estimated.
In the author’s own experience, some elasticity cal-
culations are made with a year’s data, meaning that the
TABLE I
results are likely to be diluted because the period will be
Effect of Extra Advertising on Sales: Four Brands with NSV of $100
long enough for the effect of the advertising to be
Million during Advertised Period
contaminated by the influence of competitive activity.
This analysis is, however, confined to short-term Brand EAA Brand EAB Brand EAC Brand EAD
effects, and all of the figures in the tables in this article
Advertising þ0.05 þ0.1 þ0.15 þ0.2
refer to estimated quantities during the relatively short
elasticity
period when the brand is advertised. This period is not
Additional þ20% þ20% þ20% þ20%
necessarily uniform, but in many cases it would be a advertising
month.
Additional þ$1 million þ$2 million þ$3 million þ$4 million
The author has also found that þ0.2 is a rather high sales
figure. This is confirmed by data from a prominent
Advertising and Promotion 9

TABLE II TABLE IV
Incremental Costs for Brand EAA (millions of dollars): Advertising Incremental Costs for Brand EAC (millions of dollars): Advertising
Elasticity þ0.05, Incremental Sales $1 Million Elasticity þ0.15, Incremental Sales $3 Million

A:S Ratio A:S Ratio

Direct cost ratio 4% 6% 8% Direct cost ratio 4% 6% 8%

40% A 0.8 A 1.2 A 1.6 40% A 0.8 A 1.2 A 1.6

D 0.4 D 0.4 D 0.4 D 1.2 D 1.2 D 1.2
T 1.2 T 1.6 T 2.0 T 2.0* T 2.4* T 2.8*
50% A 0.8 A.1.2 A 1.6 50% A 0.8 A.1.2 A 1.6
D 0.5 D 0.5 D 0.5 D 1.5 D 1.5 D 1.5
T 1.3 T 1.7 T 2.1 T 2.3* T 2.7* T 3.1
60% A.0.8 A.1.2 A 1.6 60% A.0.8 A.1.2 A 1.6
D 0.6 D 0.6 D 0.6 D 1.8 D 1.8 D 1.8
T 1.4 T 1.8 T 2.2 T 2.6* T 3.0 T 3.4

Note. A, additional advertising; D, extra direct costs; T, total. Note. A, additional advertising; D, extra direct costs; T, total.

In Tables II to V, the additional advertising cost is With 20 positive and 16 negative examples, the odds
signified by A, the extra direct costs by D, and the total are better than even that, in the short term, advertising
of the two by T. In the cases in which the extra adver- expenditure will lift sales and also cause no loss of
tising is profitable (i.e., the value of the incremental profit. With advertising run as a more or less continu-
sales exceeds the extra costs), asterisks (*) appear in ous series of exposure periods, there is a better chance
the cells by the total costs. of it running profitably than if it runs intermittently
Tables II to V contain a total of 36 statistical cells over 12 months. This is because, with the latter alter-
representing varying advertising elasticities, A:S ratios, native, the advertised brand will suffer from the
and proportions of total cost accounted for by directs. marketing activities of competitors. Therefore, con-
In 16 cases, the extra advertising is profitable. In 4 tinuity planning not only will maintain sales at a higher
cases, the extra advertising breaks even. In 16 cases— level than a schedule with interruptions but also is
generally those with the low elasticities—the advertis- likely to be an economic rather than a loss-making
ing does not pay for itself. activity.

TABLE III TABLE V

Incremental Costs for Brand EAB (millions of dollars): Advertising Incremental Costs for Brand EAD (millions of dollars): Advertising
Elasticity þ0.1, Incremental Sales $2 Million Elasticity þ0.2, Incremental Sales $4 Million

A:S Ratio A:S Ratio

Direct cost ratio 4% 6% 8% Direct cost ratio 4% 6% 8%

40% A 0.8 A 1.2 A 1.6 40% A 0.8 A 1.2 A 1.6

D 0.8 D 0.8 D 0.8 D 1.6 D 1.6 D 1.6
T 1.6* T 2.0 T 2.4 T 2.4* T 2.8* T 3.2*
50% A 0.8 A.1.2 A 1.6 50% A 0.8 A 1.2 A 1.6
D 1.0 D 1.0 D 1.0 D 2.0 D 2.0 D 2.0
T 1.8* T 2.2 T 2.6 T 2.8* T 3.2* T 3.6*
60% A.0.8 A.1.2 A 1.6 60% A.0.8 A.1.2 A 1.6
D 1.2 D 1.2 D 1.2 D 2.4 D 2.4 D 2.4
T 2.0 T 2.4 T 2.8 T 3.2* T 3.6* T 4.0

Note. A, additional advertising; D, extra direct costs; T, total. Note. A, additional advertising; D, extra direct costs; T, total.
10 Advertising and Promotion

III. CHANGES IN ADVERTISING ELASTICITY

Sales OVER TIME
$4
Extra sales and costs (in millions)

Evidence exists from a small number of brands that an

Costs individual brand’s advertising elasticity—measured re-
Profit
$3 peatedly and accurately with econometric techniques at
the state of the art—can go up and down year by year.
The problem is that the data cannot be published for
reasons of confidentiality.
$2
These annual variations rise and fall in response in
changes in campaign; thus, they provide a valuable
Loss
measure of each campaign’s medium-term effect. The
$1 changes in the actual numbers are not very large, and
small variations above and below the average do not
necessarily indicate any long-term effects from adver-
tising. However, in the examples that illustrate consist-
0.05 0.1 0.15 0.2
ent (albeit small) annual improvements, long-term
Advertising elasticity
effects are making themselves felt. Most important,
progressively rising figures can be extrapolated to pro-
FIGURE 1 Extra sales and extra costs for brands with different
advertising elasticities. A:S ratio 6%; direct cost proportion 50%.
vide year-by-year estimates of increases in profit (or
reductions in loss) from measured doses of advertising,
as shown in Figure 2. The value of an increasing adver-
tising elasticity is its ability to provide another advertis-
Figure 1 concentrates on the average brand, with the ing-related measure of a gradual strengthening of the
middle A:S ratio (6%) and the middle proportion of brand.
direct costs (50%). It plots the incremental income– We need not feel totally frustrated by the lack
incremental cost relationship for the four different of statistical material on the elasticities of specific
levels of advertising elasticity. brands that we are free to publish. Cases are available
As an extension of Figure 1, the profit or loss for each to demonstrate how advertising’s productivity can be
level of advertising for the average brand is plotted in shown to increase over time, although these cases
Figure 2. This diagram also suggests that advertising fall short of providing specific profit and loss estimates
produces an incremental long-term effect, and that one of this long-term effect. Two of them are described
way of evaluating this is by measuring increases over next.
time in the brand’s advertising elasticity.
A progressive increase in advertising elasticity during
subsequent years is a signal of advertising’s ability to
generate measurable long-term effects. The increase
may be partly due to the extra lagged effect on buying
behavior that follows the initial sales increase. The
$1
Profit and loss (in millions)

effect may, to some extent, be coming from increased

purchase frequency from the new consumers triggered
by the initial advertising stimulus. There is a well-
known published example of this process, which de-
0
scribes the leading British brand of toilet tissue, Andrex,
which had a short-term advertising elasticity of þ0.06
and a boosted elasticity of þ0.15 when the added effect
of repeat purchase was included in the calculation. Long-term
−$1 effects of
But although the idea of measuring the long-term advertising
effects of advertising by monitoring increasing adver-
tising elasticity is a persuasive concept, how practicable 0.05 0.1 0.15 0.2
is it not only to measure the elasticity for a single period Advertising elasticity
but also to repeat the difficult calculations year after FIGURE 2 Profit and loss for brands with different advertising elas-
year? ticities. A:S ratio 6%; direct cost proportion 50%.
Advertising and Promotion 11

A. The Orkin Exterminating Company The USMC advertising plays an important role in
stimulating recruitment. It does two jobs:
Orkin is an organization in the business of protecting
homes from termites and roaches, an activity concen- 1. Works directly to generate leads that eventually
trated in the warmer parts of the United States, where encourage a potential candidate to visit a recruit-
infestation is the greatest problem. The information ing office (a task carried out by a large volume of
that follows dates from the 1980s. At that time, Orkin direct mail literature)
was the market leader (as it is today), and it provides a 2. Works indirectly to stimulate and nurture aware-
premium service in quality and price. At the time, the ness of the ethos and spirit of the corps (a job
company treated about 17% of the 16 million Ameri- carried out by skillfully crafted television adver-
can homes that used the services of professional exter- tisements).
minators every year.
The strategy of the USMC campaign has not changed
The total market was declining. The most important
for decades, and there is also strong continuity in the
reason for this was that, although the total housing
creative execution of this strategy.
stock increased slightly every year, the houses that had
The way to evaluate the productivity of the USMC
been treated for insect infestation removed themselves
advertising is to compare its yield with that of the
from the market because the protection lasts for a
advertising for the other branches of the armed ser-
number of years. Therefore, of the total housing stock,
vices—the army, navy, and air force. The proportion
the proportion of protected homes rose year by year,
of young men indicating a propensity to join the USMC
and the proportion of unprotected ones fell.
increased steadily from 30 to 35% over the period from
Orkin’s advertising followed an unchanging strategy,
1976 to 1986. This was almost certainly proof of the
and there was also much continuity in the creative
long-term effectiveness of the television campaign. The
expression. The campaign had always worked rela-
marines’ improvement was specifically at the expense
tively directly to generate a stream of inquiries. Adver-
of the navy and air force and was accomplished with an
tising was in fact an important driving force for the
average advertising budget significantly lower that that
whole business. During the 1980s, the number of in-
for any other branch of the armed services. The USMC
quiries every year showed no signs of decline; in fact,
signed on 14% of all military recruits in the United
the opposite was true, with a general buoyancy and
States with the support of an advertising budget for
frequent increases in the number of leads that came in.
recruitment that was, on a continuous basis, only
With no significantly increased media investment
12% of the total for all the armed services.
behind the Orkin campaign, the maintenance and even
We can conclude from these facts that not only was
improvement in the response to the advertising among a
the USMC advertising more productive, dollar for
shrinking total target audience provided clear evidence
dollar, than that of the other armed services, but the
every year of progressive improvement in the medium-
USMC advertising also had done a progressively more
term response of advertising to uniform media pressure.
efficient job. The advertising campaign was generating
Another way of saying this is that there was, at that
more responses per dollar, year by year, which is another
time, a gradually increasing advertising elasticity.
way of saying that it was producing an increasing elasti-
city of response from a constant advertising investment.
B. The U.S. Marine Corps
C. Other Cases
The facts from this case also date from the 1980s. As
It would be very surprising if there were not many more
with Orkin, the U.S. Marine Corps (USMC) recruit-
cases showing similar effects to those produced by Or-
ment advertising was addressing a declining target
kin and the USMC. However, it is not sufficient merely
population. This was partly because of a shrinkage in
to demonstrate increasing sales year after year. The
the number of young men aged 16 to 21 years, at whom
cases must (as with these two examples) have the
the campaign was directed, a shrinkage caused by
following characteristics:
population trends and reductions in some years in the
propensity to join any branch of the armed services as a 1. There must be no change in the campaign during
result of the competition from civilian job opportun- the period being examined—the same creativity
ities. The ‘‘propensity to join’’ is measured by regularly and approximately the same media expenditure.
repeated research among a large sample of potential 2. There must be clear evidence of a direct influence
recruits. The data accurately predict the actual number of the campaign on sales in the short and medium
of recruits that join shortly afterward. term.
12 Advertising and Promotion

3. There must be a trend, year-by-year, showing the for consumer advertising because of its ability to publi-
following: cize Brand A’s functional excellence and to create and
. very strong share growth in a rising total category build the brand’s added values in the minds of con-
. or increasing sales in a stable category (hence an sumers. Advertising can be seen, then, as a device not
increasing share of market) only to boost demand but also to impede substitution,
. or stable sales in a declining category (which which means that it reduces the price elasticity of
also means increasing share of market). demand for the brand advertised.
The elasticity of demand is worth studying, and in
1988, an American academic, Gerard J. Tellis, pub-
IV. A FURTHER LOOK AT CONSUMER PRICES lished a summary of the price elasticities of 367 differ-
ent brands. The calculation was made for each brand
There is good general evidence that the largest by averaging the response of sales to changes in price on
brands—those that are generally strong because they a number of occasions. Tellis’s average figure was
have benefited from a positive long-term advertising 1.76, which shows a vastly greater raw response of
heritage—can command significantly higher consumer sales to reductions in price than to increases in adver-
prices than can the average brands in their categories. tising. (The phrase ‘‘raw response’’ is used deliberately
The rather obvious reason is that the largest brands because the effect of price reductions on the profitabil-
represent greater subjective value to the consumer, ity of brands is a different story, which is described later
who will therefore pay the premium price. in this article.)
A measurement exists to quantify this subjective Sales promotions are essentially devices to reduce
value—a device well established in the field of micro- temporarily the prices charged by manufacturers to
economics. It is a parallel concept to advertising elasti- the retail trade and the end consumer. The high average
city, discussed earlier in this article. The measure is price elasticity provides a powerful reason why promo-
price elasticity—a quantification of the responsiveness tions are so popular with manufacturers. Manufactur-
of a brand’s sales to changes in consumer price, specif- ers are, however, less conscious of what promotions
ically the measured response of sales to a 1% price cost them in forgone profit.
reduction. Because the relationship between price and Tables VI and VII describe the sales increases
sales is reciprocal (the first down, the second up), a generated by 5% and 10% price reductions, respect-
price elasticity in nearly all circumstances is preceded ively, for four hypothetical brands, each of which has
by a minus symbol. a different price elasticity clustered around Tellis’s
If Brand A has a high price elasticity—if a reduction average.
in its price will greatly increase its sales and if an in- As with advertising elasticity, we can fully judge the
crease in its price will substantially reduce its sales— effect of price reductions only by estimating the influ-
then there is direct substitution between closely com- ence of the price reduction on a manufacturer’s profit
petitive brands within the category. If A’s price goes because its costs will also go up when it sells more
down, then consumers will buy more of A and less of merchandise. Various alternatives are worked out in
B and C. If A’s price goes up, then the opposite will Tables VIII and IX. The cost estimates have been
happen. rounded to the nearest whole numbers. Asterisks indi-
Manufacturers naturally like to price high so as to cate the alternatives in which profit is increased.
maximize profit. To do this, they need to block the Tables VIII and IX do not paint an optimistic picture
substitution of competitive brands. This is a prime role of the value of price reductions. It is only at the lowest

TABLE VI
Effect of 5% Price Reduction on Sales

Brand FAA Brand FAB Brand FAC Brand FAD

Price elasticity 1.6 1.8 2.0 2.2

Initial volume (millions of units) 100 100 100 100
Initial NSV $100 million $100 million $100 million $100 million
Volume from price reduction (millions of units) 108 109 110 111
NSV from price reduction $103 million $104 million $105 million $105 million
Advertising and Promotion 13

TABLE VII
Effect of 10% Price Reduction on Sales

Brand FAA Brand FAB Brand FAC Brand FAD

Price elasticity 1.6 1.8 2.0 2.2

Initial volume (millions of units) 100 100 100 100
Initial NSV $100 million $100 million $100 million $100 million
Volume from price reduction (millions of units) 116 118 120 122
NSV from price reduction $104 million $106 million $108 million $110 million

TABLE VIII
Profit and Loss from 5% Price Reduction

Brand FAA Brand FAB Brand FAC Brand FAD

Price elasticity 1.6 1.8 2.0 2.2

Extra NSV from price reduction þ$3 million þ$4 million þ$5 million þ$5 million
Extra costs at different ratios of direct:
40% þ$3 million þ$4 million þ$4 million* þ$4 million*
50% þ$5 million þ$5 million þ$6 million þ$6 million
60% þ$6 million þ$7 million þ$7 million þ$7 million

ratio of direct costs and at the highest levels of price increase in cost. Price reductions also encourage com-
elasticity that they break even or yield a profit. The petitive retaliation, and they often have a negative influ-
reason is that price reductions take a large bite out of ence on consumers’ image of the brand.
a brand’s NSV. Added to this, the substantial increase in Of greatest concern here is the long-term influence
volume sold has to be paid for in direct costs, perhaps of a brand’s advertising on its responsiveness to price
also by an increase in indirect costs, given that the changes. The most interesting type of response is to
volume increase is so much larger than that brought price increases.
about by an increase in advertising expenditure. (This Table X describes three brands that cover a rather
possibility has not been factored into these calcula- extreme range of price elasticities. Each has an NSV of
tions.) $100 million and a 40% ratio of direct costs. As can be
Remember also that price reductions have only a seen, a 5% price increase causes a slight reduction in
temporary effect; there is generally no hope of a further NSV despite the increased price per unit. But direct
lagged effect to generate more revenue to balance the costs are also slightly increased.

TABLE IX
Profit and Loss from 10% Price Reduction

Brand FAA Brand FAB Brand FAC Brand FAD

Price elasticity 1.6 1.8 2.0 2.2

Extra NSV from price reduction þ$4 million þ$6 million þ$8 million þ$10 million
Extra costs at different ratios of direct:
40% þ$6 million þ$7 million þ$8 million þ$9 million*
50% þ$8 million þ$9 million þ$10 million þ$11 million
60% þ$10 million þ$11 million þ$12 million þ$13 million
14 Advertising and Promotion

TABLE X TABLE XII

Price Increase and Profit: Price +5%, Direct Cost Ratio 40% ‘‘Safe’’ Underinvestment (SOV below SOM)

Brand FAZ Brand FAY Brand FAX SOM ‘‘Safe’’ underinvestment

Price elasticity 1.4 1.8 2.2 Percentage Percentage

Original NSV $100 million $100 million $100 million Group of brands points Index points Index
New NSV $98 million $96 million $93 million Alpha 42 (rounded) 100 24 57
New direct and $97 million $96 million $96 million Beta 20 100 5 25
indirect cost
Gamma 17 100 3 18
Change in net profit + $1 million No change $3 million
Delta 13 100 3 23

Note. SOM, share of market; SOV, share of voice.

The important point about this analysis is that the

profit picture improves with reductions in the brand’s 1. Advertising elasticity tends to be low. Despite this,
price elasticity. The reason is that brands with a low advertising can often be profitable in the short term,
elasticity are not easily substituted. Following a price although it produces a generally small average return in
increase, therefore, they hang onto their sales to a sales. (On the other hand, advertising is rarely profit-
greater degree than is the case with brands with a high able in the medium term—over the course of a year—
price elasticity. although in the medium term it can also produce at
Successful advertising, by its ability to reinforce a least some increase in volume.)
brand’s uniqueness in the minds of its users, impedes 2. One of the important long-term outcomes of ef-
substitution and thereby reduces the brand’s price elas- fective advertising is that it gradually increases its own
ticity. Data from 18 typical brands analyzed by elasticity. Advertising over time becomes increasingly
MMA—data confirmed by other MMA databases— responsive to the amount of money spent on it. A large
confirm that brands with high advertising expenditure strong brand—one that has benefited from the long-
have a lower price elasticity than do brands that spend term effects of previous advertising—is more respon-
less (see Table XI). sive to advertising than is a small weak brand. A large
We can therefore conclude that successful advertis- strong brand, therefore, can underspend on advertis-
ing, by its ability to reduce a brand’s price elasticity, ing, in contrast to a small weak brand, which must
restricts the amount of substitution if the brand’s price overspend. This point is confirmed in Table XII. This
is increased, and this progressively enables the brand to table summarizes the share of voice (SOV)/share of
profit from price increases despite the reduction in sales market (SOM) relationship among four separate
volume that results. groups of large brands. The SOV is consistently and
safely below SOM; the brands analyzed managed to
maintain and sometimes even boost their shares of
V. HARMONY OUT OF DISCORD market despite the significant degree to which they
underspent on advertising.
The study of advertising elasticity and price elasticity 3. The increased productivity of advertising for large
in this article has led to the following five conclu- strong brands is also confirmed by their greater average
sions: payback in response to television advertising than is the
case with small weak brands (see Table XIII).
4. An important manifestation of the long-term
TABLE XI effect of advertising is that it reduces a brand’s price
Price Elasticity Compared with Advertising Expenditure: 18 Typical elasticity because the advertising contributes to making
MMA Brands the brand unique in the estimation of consumers and
thereby impedes the ability of competitive brands to be
Average annual Price substituted for the advertised brand if its price is in-
gross rating points elasticity
creased. Over time, successful advertising brings about
Total (18 brands) 2300 1.2 a gradual reduction in the brand’s price elasticity.
Nine brands with high advertising 3400 1.0 5. Because large strong brands are less price elastic
Nine brands with low advertising 1200 1.4 than small weak ones, the manufacturers of big brands
can control consumer price more efficiently. This means
Advertising and Promotion 15

TABLE XIII See Also the Following Articles

Large and Small Brands: Payback Differences (30 brands)
CZECH REPUBLIC, SLOVAKIA, AND HUNGARY, STATUS OF
MEDIA IN . FRANCE, STATUS OF MEDIA IN . FREEDOM OF
Average Average
THE PRESS IN WESTERN EUROPE . GERMANY, STATUS OF
share of television
MEDIA IN . ITALY, STATUS OF MEDIA IN . NETHERLANDS,
Number market productivity
BELGIUM, AND LUXEMBOURG, STATUS OF MEDIA IN .
Share of market of brands (percentage) (cents per dollar)a
POLAND, STATUS OF MEDIA IN . YUGOSLAVIA (FORMER),
Total 30 32.0 50.6 STATUS OF MEDIA IN
Larger than average 13 61.6 56.0
Smaller than average 17 9.4 46.5 Bibliography
a Assmus, G., Farlet, J. U., and Lehmann, D. R. (1984). How advertis-
Value of directly attributable sales for each dollar of advertising
ing affects sales: Meta analysis of econometric results. Journal of
investment on television.
Marketing Research, pp. 65–74.
Jenkins, E., and Timms, C. (1987). The Andrex story: A soft, strong,
and very long-term success. In Advertising Works, Vol. 4: Papers
that because large brands are, to some extent, protected from the Institute of Practitioners in Advertising (IPA) Advertis-
from competitors, they can command a higher price ing Effectiveness Awards (Channon, C., ed.), pp. 183–187.
Cassell, London.
than can small brands. This is manifestly a description
Jones, J. P. (1989). Does It Pay to Advertise? Cases Illustrating
of the real world, as can be seen in Table XIV. Successful Brand Advertising. Lexington Books, Lexington, MA.
Jones, J. P. (1990). The double jeopardy of sales promotions. Harvard
Business Review, September–October, pp. 145–152.
TABLE XIV Jones, J. P. (1999). Trends in promotions. In The Advertising Busi-
Marketplace Prices of Brands in 12 Product Categories, 1991: ness: Operations, Creativity, Media Planning, Integrated Com-
Indexes Compared with Category Average munications (Jones, J. P., ed.). Sage, Thousand Oaks, CA.
Jones, J. P. (2002). The Ultimate Secrets of Advertising. Sage, Thou-
All brands 100 sand Oaks, CA.
Largest 10 brands 114 Tellis, G. J. (1988). The price elasticity of selective demand: A meta-
analysis of econometric models of sales. Journal of Marketing
Second-largest 10 brands 110
Research, November, pp. 331–341.
Remaining 58 advertised brands 99 Tellis, G. J. (1989). Point of view: Interpreting advertising and price
64 unadvertised brands 97 elasticities. Journal of Advertising Research, August–September,
pp. 40–43.
Books
Murray Seeger
George Washington University, USA

5000 of those years. Early man told stories, illustrated

I. Origins of Books
with marks in dirt or sand, but these records did not
II. Clay to Papyrus
survive. Even today, there exist primitive groups who
III. Printing and Modern Books
keep no written records. A journalist in 1999, at-
IV. American Publishing
tempting to trace an ancient fleet that sailed from China
V. A New Era
to Africa, talked with a senior member of a local
VI. Coming of Age
tribe who related what he had been told by his great-
VII. New Challenges
grandfather: Chinese sailors had been shipwrecked 600
VIII. Future of Books
years before on the island of Pate, offshore from Kenya.
Some of those sailors married local women and pro-
duced descendants who had Asian features and lighter
GLOSSARY skins than residents of the island. But there was no
CD-ROM Compact disc, read-only memory for large computer physical record; the Chinese emperor had destroyed
programs and storage. any reports Captain Zheng made of his 15th century
codex Concept for binding edge of book pages to single binding, voyages.
traced to early Hebrews and Egyptians.
The concept of the book is connected to the develop-
floppy disk Small magnetic disk used for computer programs,
storage, and transferring electronic materials. ment of writing, using symbols for objects or sounds to
Gutenberg, Johann (1400–1468) Of Mainz, Germany, inventor of record information, and the development of materials
movable type and the printing press. to produce records that would survive. The first books
hieroglyphics Picture-writing of Egyptians. were produced in Mesopotamia, modern Iraq and Iran,
lithography Offset, cold type printing from a flat surface. and Egypt, the cradles of modern civilization. The Su-
paper First produced from bark and hemp by Chinese and improved merian people developed the first form of writing, small
by Europeans using wood pulp. pictures of everyday items such as body parts, animals,
papyrus Writing material made from a reed along Nile River. and geographic elements, and metaphysical concepts
Sumerians Ancient residents of Tigris–Euphrates region who made such as God and heaven. They combined two pictures
the first books of clay. to make a verb, such as ‘‘to eat’’ or ‘‘to drink,’’ and
scratched them on flat stones or clay tablets. The Su-
merians also developed more sophisticated written
O nce a form of communication reserved to the highest
and most privileged elements of society, books are
now accessible to nearly everyone in developed coun-
symbols known as cuneiform that have survived since
about 3500 BC.
Other ancient people developed pictographic writing
tries. Books are the foundation for all other com-
in the last centuries before the beginning of the modern
munication; they are warehouses of knowledge and
era. Chinese writing, for instance, has been traced to
information, conveyers of culture, and a medium of
2000 BC with inscriptions on bone dated to 1400 BC.
entertainment, easily available and portable.
Historians believe concepts of writing were carried to
China from the Middle East and were adapted by local
I. ORIGINS OF BOOKS scholars into a language that is still in use.
The Sumerians, who disappeared as a people, built
Of the millions of years that humans have inhabited the the first civilization with a government, taxation, irri-
earth, there is a record or history of no more than some gation, and architecture, as well as writing, literature,

Encyclopedia of International Media and Communications, Volume 1

Copyright 2003, Elsevier Science (USA). All rights reserved. 87
88 Books

and libraries. In the mid-19th century, archeologists in for their next life. These writings were later com-
Mesopotamia uncovered 500,000 clay tablets includ- piled by historians as the Book of the Dead. The
ing some of the earliest Sumerian books. They consisted Egyptians also wrote texts for instruction in math-
of several tablets, labeled, indexed, numbered, and ematics and astronomy and recorded many myths and
stacked on shelves including agricultural and economic collections of folk wisdom speculations on the creation
records, histories, legal and mathematics texts, diction- of man, but no comprehensive histories have been
aries, maps, and grammars. Some ‘‘pages,’’ as in the found.
Epic of Creation, were a yard long. In addition to Starting with stone, wood, leather, and linen as
Sumeria’s central libraries, each palace also appeared writing material, the Egyptians made a major advance
to have a library. by developing a superior material from a reed that grew
The Babylonians absorbed Sumerian stories into new along the shores of the Nile River. The Greek word for
versions. In particular, the Babylonians wrote the Gil- this reed, papyros, with small changes, has become a
gamesh Epic, a heroic poem covering 12 tablets that part of many languages. Splitting papyrus stems and
included a description of The Deluge and suggested peeling the layers produced long sheets of material that
that God formed man from clay. King Hammurabi could be dried in the sun. The long leaves were glued
encouraged writing and scientific study during his reign together in two layers to make sheets of crude paper,
in the 18th century BC. His Code of Laws, which sometimes 50-feet long or longer, suitable for rolling
included rules of conduct from the Sumerians, was around wooden rods.
written in the Babylonian language on an eight foot The government shipped bales of papyrus to other
high block of diorite stone set in the city of Babylon. countries that made their own papers, sometimes in
The Assyrians, who conquered Babylonia, collected, different grades and shapes. Some Greek and Roman
copied, and translated historic tablets and stored them classics were apparently written first on papyrus. This
in a library at Nineveh. Under the second Babylonian invention was complemented by the development of
Empire in 625 BC, the knowledge of bookmaking, black and red stains as writing fluids. Even the best
writing, and learning was spread throughout the qualities of papyrus were fragile, but they were pre-
Middle East and Asia Minor. served remarkably well for millennia because of the
A newer culture started its ascent around 1500 BC in hot, dry climate of Egypt and because many of them
what is now Syria. The Ugarit Library at Ras esh- were buried in airless tombs with historical figures.
Shamrah, discovered in 1929, revealed a treasure of Papyrus was reinforced as the preferred medium for
stone tablets written in the first known alphabet, a recording history and literature after Alexander the
series of wedge-shaped signs that has been compared Great conquered Egypt in 331 BC and established a
to ancient Phoenician and Hebrew. The development of city in his name. A year later, scholars founded two
alphabetic languages, especially Aramaic from the east- libraries that collected more than 700,000 scrolls and
ern end of the Mediterranean, and the invention of new attracted such great thinkers as Euclid, the founder of
writing materials ended the writing of books on clay modern geometry, Ptolemy, the astronomer, and Philo,
tablets about 500 BC. the philosopher. Alexandria was the primary intellec-
tual hub of Greek, Hebrew, and Christian studies until
the libraries were destroyed by fire and Egypt was
II. CLAY TO PAPYRUS conquered by Arab invaders in 640 AD.

Egyptian writing, or hieroglyphics, used pictures and

A. Parchment and Vellum
letters unique to their authors. This language was more
accessible to scholars than other ancient writings be- While papyrus was still popular in the entire Mediterra-
cause of the 1799 discovery in Egypt of the Rosetta nean region, scholars also experimented with animal
Stone, a slab of basalt that contained the same script skins as an alternative writing material. Scribes dis-
written in three vocabularies, hieroglyphic, demotic, covered that if they scraped fur from animal hides they
and Greek. With this key, scholars were able to open could produce a thin, flexible material that accepted
the treasure of Egyptian culture and, especially, its ink. The better skins could be used on two sides and
literature. treated with chemicals to help the material endure in
Egyptian records were less concerned with battles climates that were not well-suited to papyrus. A scribe
and conquests than with writing for pleasure and en- could also erase errors and reuse a skin. When leather
lightenment. Egyptian writing on sarcophagi and pyra- was treated to produce very thin, durable sheets, it was
mid walls around 3000 BC gave the dead guidance called parchment. The finest skins—usually from
Books 89

young animals—produced an even lighter material and impractical because the language required the use
called vellum. of thousands of characters. Koreans also invented a
Librarians and other scholars sought these alterna- separate movable type in the 14th century, but aban-
tives to papyrus to make volumes with tied or bound doned the scheme since its language also required
pages, similar to modern books, for easier handling several thousand characters.
than the long rolls of papyrus. The development of Following the development of books in China is
parchment was spurred by early laws issued in Israel complicated by the fact that different emperors des-
that required religious documents to be written on troyed the written work of predecessors. The first bibli-
parchment, a practice still followed today. A sect of ography of books in the first century BC listed 677
monks, the Essenes, put their treasured, parchment works written on wooden tablets and silk. The early
documents into jars and hid them in caves above use of opened bamboo sticks is considered the reason
the Dead Sea sometime between 150 BC and 68 AD. Chinese script is written in vertical columns from right
These Dead Sea Scrolls, including Old Testament chap- to left, the opposite of Western-style writing.
ters, were found between 1947 and 1956. Europeans, meantime, also carved pictures into
Very few documents have survived the centuries be- wooden blocks that were inked and hammered onto
cause of the poor materials used and because few copies single pages of parchment or vellum to decorate the
were made of texts. Monks hand-copied manuscripts handwriting of scribes. Still, the great texts remained
for distribution from religious centers, especially after in a few libraries at centers of learning while teachers
Constantine the Great declared Christianity to be the taught from lectures. This history was changed with the
state religion of the Roman Empire. There are no invention of movable type by German printers, espe-
manuscripts from Homer, the greatest of Greek writers, cially Johann Gensfleisch zum Gutenberg of Mainz
and it is not known if his stories were ever written down in 1450.
during his lifetime or if they were simply repeated
orally over the years. In Persia, India, China, and
other countries to the east, precious texts such as the III. PRINTING AND MODERN BOOKS
teachings of Confucius and the Buddha were written
on local materials such as palm leaves, bark, leather, In 1456, Gutenberg published the Mazarin Bible, the
and silk. only printed work that carries his name. He had
The production of books changed in the early Chris- borrowed money to develop his invention, but was
tian era as scribes adopted different languages. The bankrupt by 1455; his shop and most of his equipment
Western alphabets, especially Latin and Greek, were were seized. He apparently saved the type in a smaller
made more cursive. Books to teach and guide spread size for another Bible and the Catholicon, a popular
to all continents, following the great explorers and encyclopedia that had been assembled in Genoa in the
missionaries armed with such works as the Koran, 13th century by Johannes Balbus. In this book, printed
Bible, Talmud, Old Narratives of Hinduism, and scrip- in 1460, Gutenberg wrote it was ‘‘accomplished with-
tures of the Buddha. out the help of reed, stylus or pen and by the wondrous
agreement, proportion and harmony of punches and
types . . . .’’
B. China Contributes
Gutenberg also invented an ink that clung to type
The Chinese brought about the next major change in and reproduced on paper on the hand-operated press he
mass communication through the invention of paper adapted from a wine press used by Rhineland vintners.
around 105 AD. Made from bark and hemp, this su- The creation of the press meant that books could be
perior material spread east to Japan and west to Sam- printed in smaller sizes and in greater numbers, which
arkand, where traders took it to Egypt and Spain and made them available to large audiences for the first
the greatest library of the Arabic world in Cordova. In time. Textual changes were made by replacing single
addition, the Chinese developed printing from wooden letters of metal type. Scribes no longer had to spend
blocks in the middle of the first modern century. The their days laboriously copying individual texts and in-
spread of Buddhism into China encouraged the reprint- dividuals no longer had to travel long distances to seek
ing of prayers on the new crude paper that was superior permission to examine books in the few libraries.
to papyrus for duplication. The Chinese made copies by Gutenberg copied Gothic-style writing to make his
laying the paper on top of the blocks. They also de- typeface, but other printers developed their own,
veloped a form of movable type in the first modern more legible types based on the Latin alphabet. Guten-
century, but the process was found to be awkward berg also made pieces of type the same length so
90 Books

craftsmen could more easily put them into words and copies were printed in Germany, the Netherlands, or
sentences. France.
Historians consider the inventions attributed to Gu- The English printers evaded official orders and issued
tenberg as among the greatest technological events in books outside official channels, setting a tradition of
modern history, the first of many that revolutionized publishers resisting efforts by arbitrary governments to
and democratized mass communications. Movable impose prior restraint, the banning of publication in
type and the printing press made possible the wide advance of release, and censorship, the selective expur-
diffusion of knowledge to men and women who previ- gation of text. Caxton extended his influence by pub-
ously had little incentive to learn to read or write. The lishing in the London dialect, thus speeding the decline
development led to the Christian Reformation and laid of other English dialects. Similarly, the dialect Luther
the groundwork for the development of democratic chose became the dominant form of German and
systems worldwide. printed Tuscan ascended in Italy. Paris printers set the
German printers spread the new art rapidly across standard for French in the 1530s.
Europe so that by 1483 printing presses were in oper- In 1586, The English Star Chamber, the king’s coun-
ation as far north as Stockholm, as far south and west cillors, restricted printing to London except for the
as Valencia and Seville, and as far east as Venice. Soon, great universities at Oxford and Cambridge, which
printers were turning out different versions of the Bible were allowed one press each. Although another press
and the Koran. In Rome, two printers in 1472 boasted was allowed at York in 1662, these restrictions gener-
they had published 46 volumes, some in different edi- ally held until 1695. English printers did publish poor
tions, and in as many as 275 copies each. Venice had copies of the King James’s Bible, the folios of William
some 150 presses operating by the end of the century, Shakespeare, Bacon’s Essays, Milton’s Paradise Lost,
including the most famous press of Aldus Mantius, who Bunyan’s Pilgrim’s Progress, and Izaak Walton’s The
was the pioneer in training printers to set type in Greek Compleat Angler, but the finest books of the 16th and
and to distribute the Greek classics across Europe. Ital- 17th centuries were published in continental Europe.
ian printers produced the first books in Hebrew in Printers developed more styles of type, seeking clarity
1475. Two fine illuminated manuscripts from this as well as beauty, and book sales soared. Gothic writing
period, a prayer book and the Cornaro Missal, were faded and the Latin alphabet became predominant
sold at auction in 1999 for $13.3 and $4.4 million, except for printing in Asia, the Middle East, and East-
respectively. ern Europe. Some typefaces created in that era survive
Print shops became centers for philosophical and in artistic shops that use metal type and in the electronic
political discussion since printers, with their machines forms of computer writing programs.
and special skills, were also publishers. Their products, The functions of author, publisher, and printer began
translated into local languages, challenged the monop- to diverge, especially in Europe with its established
oly that palaces and monasteries held on writing and literary institution. First, the writer was separated from
storing manuscripts in Greek or Latin. In 1476, Wil- the printing trade. Then the demand for books encour-
liam Caxton of Westminster, England, who learned his aged the formation of separate companies in publishing
trade in Germany, became the first printer to publish and distribution. In 1709, Great Britain issued a Copy-
books in English. In 1517 a group of religious reformers right Act that protected a writer’s work from uncon-
associated with Martin Luther published his inflamma- trolled copying. This protection, which soon spread
tory works in German. By 1522, the Bible had been around the world, also secured the investments that
translated into every European language. publishers and printers made in agreeing to produce
written works.
A. English Literature
B. Leaps of Technology
Caxton was also the first English bookseller, finding a
ready market for popular literature as well as transla- The rapid expansion of the demand for books put
tions of the classics. In 1478, he published the first pressure on the industry to find ways to speed produc-
edition of Chaucer’s Canterbury Tales. When King tion. In France, in 1803, Nicholas Louis Robert de-
Henry VIII was in conflict with the Roman Catholic veloped a machine to make paper in rolls and specific
Church, the crown issued a list of forbidden books sizes, increasing daily production 10 times over paper
and required printers to have a royal license to practice produced by hand. In 1805, Earl Stanhope of Oxford
their trade. Church authorities barred the printing adopted stereotyping, in which plaster casts of type
of the whole Bible in English, so the first vernacular were used on presses so that new casts only had to be
Books 91

made to replace worn type instead of resetting type; by Linotype, and Monotype machines that cast letters in
1829, cheaper paper-maché mats replaced the plaster. lines that were adjusted for the different shapes of
Earl Stanhope also designed the first press made of individual letters and the width of page columns. The
iron and Friedrich Koenig, a German, adapted the press laborsaving advantages of the new machines frightened
to steam power in 1810, increasing output to 1100 workers who saw their livelihood disappearing as
sheets an hour compared with 300 by its predecessor. the machines were installed. Soon, the typographers,
By 1868, the development of rotary and web-fed presses engravers, and stereotypers learned new skills and were
pushed production to 20,000 sheets per hour. The inven- employed in the industry in large numbers until the
tion of the letter-founding machine by William Church 1960s when they were displaced in large numbers by
in 1822 raised the production of type characters by the widespread adoption of computer-generated type-
400%. At the same time, publishers developed cheaper setting, page composition, and reproduction from
methods to bind the covers of books with cloth, re- photographic images on high-speed presses.
placing the loose stitching or expensive leather that had
been used. In 1843, another German, Friedrich Gottlob
Keller, produced paper made from wood pulp, which is IV. AMERICAN PUBLISHING
still the basis for the basic printing material. The sum of
these technological advances was to make possible the In 1638, 18 years after the Puritans landed at Plymouth
inexpensive production of all printed goods, especially Rock, the first American press was established in Cam-
books. In the early 19th century it was possible to reach a bridge, Massachusetts, residence of the British gov-
mass audience for books of all kinds for the first time. ernor and location of the new Harvard College.
In Asia, Chinese culture was left behind by these Joseph Glover imported the press and three printers
developments. Chinese society exalted scholarship from Cambridge, England, but Glover died on the
and admired literature of all types, but the mass distri- voyage. The immigrants, Stephen Daye and his sons,
bution of writing was hampered by the complexities of Stephen and Mathew, published an ‘‘Oath of Allegiance
language and by the strict controls over the dissemin- to the King’’ in 1639 and The Whole Booke of Psalmes
ation of new ideas by autocratic governments. Japan in 1640. A second press was imported from England in
and Korea suffered the same handicaps. 1659, also to Harvard, which had obtained the exclu-
In other parts of Asia, Africa, and Latin America, sive right of printing in the colonies.
early native examples of writing and illustrating were In 1663, John Eliot, an immigrant from England,
overwhelmed by the invasion of European languages made a translation of the Bible into the Indian language
brought by explorers and missionaries. and had it printed by Marmaduke Johnson, the first
full-time, master printer in the colonies. Johnson broke
the Cambridge monopoly on printing by moving his
C. Lithography
press to Boston. William Bradford, a Quaker from
In 1814, Alois Senefelder of Munich invented the London, opened a press in Philadelphia in 1685 and
second form of printing, lithography. In lithography, then in New York in 1693. Other presses were estab-
drawings were made with crayons on flat stone surfaces lished along the East Coast, but did not arrive in Geor-
and then covered with water. Ink adhered to the waxed gia, the last colony to be formed, until 1763.
image but not the wet stone. Successive layers of differ- The most famous printer in American history, Benja-
ent colors produced glowing images unequaled in letter min Franklin, who went from Boston to England to
press printing. This led to cold type, which 150 years learn his trade, set up shop in Philadelphia in 1723.
later started to displace cast hot metal type. Following He published the Pennsylvania Gazette, the most suc-
the invention of lithography, Europeans designed more cessful newspaper in the colonies, and Poor Richard’s
forms of reproduction including engraving and in- Almanack, a collection of aphorisms and commentaries
taglio, which uses wooden or metal plates in which of his own and others’ inventions. Still, most of the
letters and pictures are carved or etched in reverse to books in the early libraries and those sold in shops were
produce sharp, distinctive images when pressed onto imports from Europe.
paper. These forms made it possible to illustrate Books were the first products of the early printers,
modern books with images as handsome as the hand- followed by newspapers and magazines. Most early
painted images used in books written by scribes. books were collections of sermons, prayers, and poetry
The American inventions that increased the mass such as the popular The Day of Doom, by Michael
production of all printed media even more came in the Wigglesworth. The most influential writers, William
last decade of the 19th century with the Intertype, Bradford (Of Plymouth Plantation, 1620–1647) and
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