Advertising: Investment or Expense?

MrSS · Share | #1 (**permalink**) 07-09-2012, 08:58 PM

Many people are thinking advertising is only an expense, mostly for small business owners. Because the first thing comes in their mind is the cost of advertisement, it's profitability and effectiveness. As for large businesses, some of them are really believer of it, willing to try something new that they think will help their business to build more awareness and branding. Budget might be the secondary concern.

v7n members, marketers, I want to know, how do you perceive advertising, is it an expense or investment? ... Why?

sybrant · #2 (**permalink**) 07-12-2012, 03:48 AM

if the price is reasonable then we give an ad can be investment but the sane does not worth it we mean to say it expense or waste of money so trust matters in all

webcosmo · #3 (**permalink**) 07-12-2012, 05:15 PM

Every business should have a good advertising/marketing plan based on their financial situations.

**ScriptMan** · #4 (**permalink**) 07-12-2012, 05:25 PM

IMO, it can be either. A new product launch must have advertising or it will never find market share. Then advertising to go grow or maintain market share is a continual expense. From an accounting viewpoint it is always an expense.

MrSS · #5 (**permalink**) 07-12-2012, 06:52 PM

Quote:

Originally Posted by sybrant

if the price is reasonable then we give an ad can be investment but the sane does not worth it we mean to say it expense or waste of money so trust matters in all

Yes, definitely the price will dictate if you will pursue of not. Though we cannot discount the fact that timing is also a big factor, esp. those products / services in seasonal phase.

Quote:

Originally Posted by webcosmo

Every business should have a good advertising/marketing plan based on their financial situations.

That's true. Without a plan, the advertising fee might consume all the profit.

Quote:

Originally Posted by ScriptMan

IMO, it can be either. A new product launch must have advertising or it will never find market share. Then advertising to go grow or maintain market share is a continual expense. From an accounting viewpoint it is always an expense.

Again, you presented a neutral answer having clear point. I agree to test the water first before getting really on it. What about giving at least a month and see how effective it is? I remember one of our advertiser mentioned this to one of our rep "If the feedback is good, we'll extend our ads longer".

**ScriptMan** · #6 (**permalink**) 07-13-2012, 05:42 AM

Quote:

Originally Posted by MrSS

Again, you presented a neutral answer having clear point. I agree to test the water first before getting really on it. What about giving at least a month and see how effective it is? I remember one of our advertiser mentioned this to one of our rep "If the feedback is good, we'll extend our ads longer".

Actually, I think I said you poll is missing a choice.

I don't understand the last part of your statement. Before using and acting on any poll results you should ask more detailed questions both here and elsewhere.

From what little I recall of dealing with a national advertising plan, a heavy month is no where near enough for a launch and probably not enough for any kind of campaign. The smart boys always told us that the average consumer never even noticed your 30 second ad enough for it to 'register' until they saw it 3-4 times. 'Break through the clutter' factor was what they called it.

Surminga · #7 (**permalink**) 07-15-2012, 03:46 AM

Definitely an investment until you see the product off the ground and gaining traction until the advertisements are there to simply boost a few more sales or gain knowledge of a new feature etc.

WebOut · #8 (**permalink**) 07-15-2012, 08:23 PM

You can totally say that Advertisement is an investment or expenses. Why? because it is relative; it depends upon the result and result varies from one company to another. Advertisement is an investment if your sales or image improves. If not, we can consider it as an expense.

manojob · #9 (**permalink**) 07-15-2012, 10:36 PM

According to my opinion, Advertisement is an Expense thing to do.

**snakeair** · #10 (**permalink**) 07-16-2012, 07:54 AM

Quote:

Originally Posted by manojob

According to my opinion, Advertisement is an Expense thing to do.

The thread creator also wants to know why you picked what you did. Check out the quote from his initial post below.

Quote:

v7n members, marketers, I want to know, how do you perceive advertising, is it an expense or investment? ... Why?

ChrisTrack · #11 (**permalink**) 07-16-2012, 01:30 PM

I consider it to be an investment. I look at it as a machine. If I can put $5 in this machine and it spits out $10 on the other side then I'm going to try to invest as much money as I can into this machine as long as its spitting out more money on the other side.