Advertising

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Advertising

Advertising, the paid use of selected space or time in a communications medium by an identified organization or individual to present a message, is essentially a 20th-century development. Advertisers may want to persuade people that certain goods or services are worth buying, to enhance the advertiser's image or to present a viewpoint. Advertising and the communications media have developed together; as technology and communications have progressed, the forms and uses of advertising have changed. In style and content, advertising reflects and personifies the constantly changing political, social, economic and artistic climate of the times. The internet is a prime example of rapid technological change and development. Introduced as an advertising communications tool in the late 1980s, the Internet is predicted to link some 300 million users worldwide by the year 2000. Its potential to revolutionize marketing and advertising practices is seen as limitless.

The first formal advertisement in Canada was an offer of butter for sale that appeared in 1752 in an official government publication called the Halifax Gazette. In 1764 the Québec Gazette (later renamed the Chronicle-Telegraph) was founded, as much to carry news of merchandise as events. To reach Canada's 5 million people in 1900, advertisers could choose among 4 print media: 112 daily newspapers serving 570 000 subscribers; general-interest magazines; special-interest magazines; and street posters, which delivered inexpensive and graphic messages, often at or near retail stores. The most effective vehicle for fostering a national market was the mail-order catalogue, especially the Eaton Company's. Not an advertising medium in the strictest sense (because space was not for sale), the seasonal catalogues reached millions of farm and town people with advertising for a wide range of merchandise.

Canada's First Advertising Agency

By 1889 newspapers were carrying enough advertising to encourage Anson McKim to open an office in Montréal to arrange the placement of advertisements in Ontario newspapers. He created a completely new type of business and his company became Canada's first advertising agency. He was remunerated by collecting a commission provided by the newspapers in which advertising, prepared by his agency, appeared. To this day, commissions, paid by the advertisers themselves, remain the principal source of advertising agency income. He also brought some order to the newspaper advertising business and deflated newspapers' exaggerated circulation claims by publishing the Canadian Newspaper Directory. Another early agency was McConnell Advertising, launched in London, Ontario, in the early 1900s.

Radio Emerges

In 1919 Canada issued its first radio-transmitting licence to Marconi's experimental wireless telephony station in Montréal (XWA, which later became CIQC), and by 1928 more than 60 radio stations had been licensed to operate. Radio became an extremely successful advertising medium; by the end of the 1920s Canadians were complaining of too much broadcast advertising. In 1932 the federal government, deciding that broadcasting should not be left entirely to private enterprise, created the Canadian Radio Broadcasting Commission, later renamed the Canadian Broadcasting Corporation, with authority to own stations in major cities and a monopoly to operate radio networks. In 1953 the government stopped collecting the annual licence fee, remunerating the CBC directly from public funds, and by the mid-1970s paid advertising had been dropped entirely from the network of CBC radio stations.

The Persuasions of Television

Soon after WWII, TV signals started flowing into Canada from US border cities. Alarmed at the number of Canadian antennae tuned to US stations, CBC opened TV stations in Toronto and Montréal in 1952 and licensed privately owned stations for other centres. TV's persuasive blend of sight, sound and motion (and later colour) made it a powerful advertising medium. Within 8 years, advertisers were spending $50 million a year in TV. Canadians' appetite for a diverse selection of TV programming led to the creation of huge cable TV systems in the 1970s, thereby multiplying the number of channels available in millions of homes. In 1996, 76% of Canadians lived in cable-equipped homes - the highest such penetration in the world (see Cable Television).

Advertisers wanting to reach a mass audience must now spread their expenditures among an ever-increasing number (now over 130) of commercial stations. Typical adult viewing averages over 23 hours weekly and is divided between national/regional networks, local stations, US pay TV and cable stations. Canadian stations attract over 60% of viewing, US tuning is approximately 20% and the remainder is made up of cable, pay and VCR viewing. With the increasing delivery of television signals to the home by satellite and fibre optic cable comes the opportunity for an even greater variety of programming - that oft-discussed 500-channel universe - and potential two-way interaction between viewer and advertiser.

In 1994 advertisers spent about $8.3 billion in the various media, up from nearly $6.7 billion in 1986. Two of the largest advertisers, General Motors of Canada and Bell Canada Enterprises, spent $178 million on advertising in Canada in 1995. Other big spenders are in the food, automobile, retail, communication, beer and soft drink categories.

Advertisers are classified as either national or local. National advertisers sell their products or services in more than one market, usually in the major markets across the country. The local advertiser, typically a retailer, serves one market only and restricts advertising to that audience. A fast-growing segment of advertising aimed to promote ideas is "advocacy advertising," undertaken by corporations, professional associations, special-interest groups or labour unions that want to communicate their viewpoints in space where they have control of the message, rather than relying on the news media to interpret and carry their views.

Federal and provincial elections are examples of advocacy advertising campaigns. Politicians already in power use advertising to define and explain their programs and policies to the electorate. Governments have consistently been significant advertisers; the various departments of the federal government constituted the sixth largest advertiser in Canada in 1995, spending $68 million; the Ontario and Québec governments together spent $72 million. Advertising by other provinces and by crown corporations added several more millions of dollars.

Major Advertising Media

Television, at 21%, garners the largest share of paid Canadian advertising revenue (+17%) over the past 5 years. This is exemplified by the cost of a 30-second commercial on the 18 stations of the CTV network, Canada's largest private broadcaster. The rate for one 30-second commercial during the 1997 Academy Awards - one of the highest-rated shows of the year - could be as high as $50 000.

There are 108 daily newspapers in Canada with an average paid daily circulation of 5 million, providing for a penetration of 63% of Canadian homes. Daily newspapers receive over 13% of the dollars spent on advertising. In 1994 total advertising revenue for all daily newspapers in Canada was $1.1 billion, a loss of more than 25% over a 5-year period - the most significant revenue loss of all the major media. National advertising accounted for 30% of the total. Conrad Black's purchase of around 50 daily Canadian newspapers in the 1990s has increased discussion of the spectre of media domination by a few powerful individuals. The trend, however, is not limited to newspapers. Canadian broadcasting is also in the hands of a limited number of companies (see Media Ownership).

Radio was forced to redefine its strengths with the advent of TV. Today, it has re-emerged re-invigorated and is again successful as a leading advertising medium. Comparatively inexpensive, it is useful for advertisers who want to repeat their messages frequently. Used creatively, it can evoke the listener's own imagination. Canada's 793 originating radio stations earned almost 9% of total advertising spending, or some $740 million, in 1994, 77% of that from local advertisers.

General magazines in Canada, aimed at general and leisure interests rather than business or professional interests, are also very important to advertisers. Consumer magazines have 2 methods of distribution: paid-circulation magazines are those available only to a paying audience; controlled-circulation magazines are provided free to selected audiences whom the publishers believe to be valuable to a limited category of advertisers. Although controlled circulation has been common among business publications, it was only in the 1970s that the technique was adopted for many consumer magazines. The 1970s also saw the advent of local TV and entertainment magazines produced by daily newspapers as part of their weekend packages. Net advertising revenues for general magazines rose from $198 million in 1986 to $260 million in 1994.

Community newspapers are usually published once or twice a week. They have changed their role since the 1950s, when most were owned by local printing plants. Now, many are group owned, sell to national advertisers via sales groups organized by province and, editorially, serve population segments within or surrounding cities. Many have relatively small circulations of 2000-3000 but those covering larger populations, such as the Mississauga News in Ontario, can be as high as 118 500. In 1994, there were almost 940 French and English community papers in Canada with an average weekly circulation of 8.8 million copies. Independent research reveals that 60% of Canadians have read a community paper in the past 7 days. Advertising revenues of $55.6 million in 1971 climbed to a total of $568 million by 1994 and a high proportion, over 90%, of this advertising expenditure ($512 million) is local.

Canada has almost 750 business publications, with circulations ranging from a few thousand to more than 50 000. They carry advertising and editorial content of interest to people in business or the professions. The majority of Canadian business publications are produced by a large number of small, competing publishing houses. The largest Canadian business publishers, printing approximately 40 titles annually, are Maclean Hunter Limited and Southam Business Information Group. Many magazines offer their advertisers other services and activities, such as trade shows and seminars. Revenues increased from $55 million in 1975 to $170 million in 1994.

In the 1970s the outdoor advertising industry faced a challenge to its existence, when Canadians became increasingly concerned about protecting all aspects of the environment. In self-defence, the companies and the advertising industry turned to strict self-regulation. They eliminated some signs, restricted others to commercial thoroughfares and declared a 0.4 km setback from highways and improved design.

Outdoor advertising is now regarded as a key media component. And the industry has expanded in other directions: advertising in bus shelters and on shopping-mall posters, and spectacular displays with moving parts and elaborate lighting. Outdoor advertising is an economical medium. The advertiser can make a prominent statement at low cost, often to supplement advertising in other media, but the sales message must be effective even when seen for only a moment. Transit advertising, located on the inside and outside of vehicles and in subway, bus and commuter stations, is widespread. Point-of-purchase communication includes both sign and package advertising. This form of outdoor advertising offers a reminder message in or near the retail outlet, in the form of window or shelf stickers and special display cases. Total outdoor advertising revenue increased from $484 million in 1986 to $813 million by 1994.

Advertising Agencies

Whilst some of the largest advertisers have advertising departments within their companies, and a few even have their own in-house agency operations and place advertising themselves, most national advertising is prepared and placed by ad agencies. Agencies are complex organizations that offer clients a comprehensive range of services: media planning and placement, account management, marketing intelligence, graphic design and copy writing, print and broadcast production and research to study audience reaction and response. The number of Canadian-owned and managed advertising agencies has fallen dramatically since the 1960s, with most large Canadian agencies now in the hands of the US agencies with extensive international networks. As a result, these multi-national agencies can better service the communication needs of a growing number of global consumer goods advertisers requiring the development and execution of multi-lingual advertising strategies and platforms. The last 20 years have seen the advent and rapid growth of creative and media-management companies in Canada and many other countries. They provide clients access to specific talent specialities and are generally regarded as providing a product equal to that offered by large, full-service agencies.

There are 2 organizations in Canada providing advertisers, agencies and the media with regular reports of television viewing and radio listening. A.C. Nielsen, the largest such company in the world, has offered, since 1989, daily reporting of all network and, from 1995, Toronto TV programming via their unique People Meter facility, which electronically registers individual viewing preferences. The Bureau of Broadcast Measurement (BBM) covers all other regional and local television market viewing through reports issued up to 4 times annually. BBM also measures radio listening in over 130 markets across Canada. Both Nielsen and BBM surveys categorize audiences by sex, age and other key demographic criteria. The Print Measurement Bureau (PMB) each year analyses the readership of over 70 English and French consumer magazines and provides demographic and psychographic information on readers' age, education, income, marital status, occupation and product usage data on 1100 products and services, based upon the habits of a sample of 20 000 consumers. It is regarded as one of the best such studies of its type in the world. NADbank offers annual readership and product purchase data on over 50 daily newspapers circulating in 32 major Canadian markets. The report was first made available in 1984. Other research companies specialize in measuring the degree to which people remember specific advertising content they have watched, heard or read.

Advertising Regulation

Advertising in Canada is highly regulated and the practice of advertising law has become a profitable legal specialty. Government licences are required for all radio and TV stations and, as a result, broadcasting is regulated more than the print media. Established by the 1968 Broadcast Act, the Canadian Radio-television and Telecommunications Commission (CRTC) issues preclearance numbers for all alcoholic broadcast advertising - beer, wine, cider. Health Canada provides commercial content approval for all non-prescription, consumer-directed drugs. The Canadian Advertising Foundation (CAF) is an industry-funded body responsible for ensuring CRTC compliance by its members for commercials directed to children and advertising in the cosmetic/fragrance, food and non-alcoholic beverage categories. Québec has unique legislation relating to advertising directed at children under the age of 13 years. In 1972 the Telecaster Committee was formed. It is a voluntary, self-regulated body consisting of 65 television members and provides a further level of approval beyond that given by the CAF and CRTC processes. Additional approvals must also be obtained for television advertising to be aired on CBC stations.

Following the ruling by the Supreme Court in 1995, the federal government afforded tobacco companies increased scope to promote brands. Essentially, legislation now allows print ads in adult publications, billboards and direct mailings. Tobacco advertising, however, is still prohibited on broadcast media and proposed legislation may soon prevent advertising on billboards, street kiosks, bus panels and point-of-sale displays.

Careers in Advertising

Advertising includes business, show business, science and art. The industry offers a range of work, in agencies, advertising departments of large companies and among the broadcast and print media and related suppliers. No single course of education covers them all. Employers often require university, or at least community college, education. Advertising agencies want commerce and business administration graduates for account management work, art college training for art directors and illustrators, sociology and psychology majors for market research, journalism or English literature backgrounds for copy writing. Several industry associations offer night courses in advertising. The Institute of Canadian Advertising, an association representing the interests of advertising agencies, sponsors a 3-year night course leading to designation as a certified advertising agency practitioner (CAAP), open to those with at least one year's practical experience. An increasing number of colleges and universities also offer access to a comprehensive range of advertising and marketing programs.