The role of huge advertising

In modern society, many merchants spend a lot of money asking stars to be spokespersons and advertising their products. We know that the basic function of advertising is to convey information. If it is just to convey information, why are these merchants willing to invite such expensive stars and spend so much money to advertise?

Inviting a star to advertise, there is an important question, that is, whether the star should be responsible for the quality of the product for which it is endorsed.

There are such regulations in the United States that are specifically designed to constrain the celebrity spokespersons – the stars speak for a product and use it personally. If you advertise for TV, you should install this TV at home; if you advertise for a certain mineral water, you need to drink that kind of mineral water; if you advertise for a certain shampoo, you should use this shampoo when you wash your hair.

What is wrong with this regulation? The downside is: First, it is difficult to monitor whether the stars really use the products they endorse. Even if you really use it, how can you know how many times they used and how often? Second, and more importantly, stars are not experts in the production of these products. They cannot be forced to use the expertise to improve the quality of products.

When the star decides to accept or not accept the endorsement invitation, the main consideration is that they have not earned enough money. If they make enough money, they will pick up the single business. In the future, if there is a problem with this product, they will apologize at most, saying that they are also victims and they don’t know. This prescribed endorsement responsibility cannot be translated into an improvement in quality.

So where is the role of huge advertising? To answer this question, let’s take an example of mineral water.

Let’s imagine who is more likely to manipulate between mineral water producers and consumers? Consumers basically only have two ways to bully the manufacturer, that is, not paying or paying counterfeit money. In contrast, mineral water manufacturers have countless ways to manipulate and deceive consumers. For example, a bottle filled with mineral water may emit a toxic substance when the room temperature reaches 40 ° C or higher, but it is not easy to be found when it is more than 30 degrees and more than 20 degrees. For example, a batch of mineral water is Clean, another batch is problematic, but ordinary consumers can’t drink it, and they won’t get sick right away… There is a serious information asymmetry between manufacturers and consumers.

If consumers can’t tell which mineral water is of better quality, it will lead to completely not drinking mineral water. At this time, the entire mineral water market will shrink and collapse.

Is there any way for manufacturers to win the trust of consumers? One way to do this is to spend a hundred million and ask a star to make an advertisement. This one hundred million flower goes out and becomes a sunk cost. The manufacturer told the consumers with practical actions that I have spent a hundred million. In the future, there is only one way to recover this one hundred yuan: that is, in the next few years, we will continue to sell 1 billion bottles of water, each bottle of water is guaranteed. Quality, each bottle of water is charged a dime. During the sales period of selling this 1 billion bottles of water, if quality problems are found, consumers will reduce or even stop buying, and the one billion that the manufacturer has paid in front of them will be lost.

By first spending the cost of one billion yuan, the manufacturer has weakened the position of manipulating consumers and handed over the initiative to consumers. The role of manufacturers in spending huge amounts of money on advertising is to squander money through stars, so as to win the trust of consumers, in order to show their determination not to bully consumers.

The money that was squandered was finally paid by the consumers, but it bought the goodwill of the manufacturers, bought the enthusiasm of the manufacturers to continuously monitor the quality of the products, bought the peace of mind of the consumers, and the money was not white.