Why do non-consumer businesses advertise?
March 21, 2015 4:36 PM Subscribe
Why would a business that does not sell to consumers advertise on television?
Today during my college basketball-watching I saw, several times, a TV advertisement for Boeing. It was well done, and outlined Boeing's history of excellence, innovation, etc. But...Boeing sells its products to large airlines, not consumers. There are probably several dozen people in the entire country that would ever make a decision about whether or not to buy a Boeing product. I'd wager that 90+ percent of travelers have no idea if they are flying on a Boeing or Airbus airplane on any given flight. So, why would Boeing spend money advertising on television? It seems like they are throwing their money away.
Boeing isn't the only non-consumer company that does this, just the one that's on my mind. I remember seeing BASF (the chemical company) commercials several years ago; their slogan was something like 'We don't make the products you buy, we make them better'. Ok, that's nice, but nobody is going to go seek out a product that uses BASF chemicals. What is the rationale that a company like this uses to justify advertising to normal people?
Today during my college basketball-watching I saw, several times, a TV advertisement for Boeing. It was well done, and outlined Boeing's history of excellence, innovation, etc. But...Boeing sells its products to large airlines, not consumers. There are probably several dozen people in the entire country that would ever make a decision about whether or not to buy a Boeing product. I'd wager that 90+ percent of travelers have no idea if they are flying on a Boeing or Airbus airplane on any given flight. So, why would Boeing spend money advertising on television? It seems like they are throwing their money away.
Boeing isn't the only non-consumer company that does this, just the one that's on my mind. I remember seeing BASF (the chemical company) commercials several years ago; their slogan was something like 'We don't make the products you buy, we make them better'. Ok, that's nice, but nobody is going to go seek out a product that uses BASF chemicals. What is the rationale that a company like this uses to justify advertising to normal people?
People do care. That's why "Intel Inside" worked. You can draw attention to something earlier in the value chain.
It also affects whether people invest, support certain tax and business-related programs, apply for jobs, refer friends to jobs, support the union or management during the current dispute, or buy shares in those companies - or support the upcoming Navy purchase of Boeings or even NASA funding. Boeing has received $13B in state/federal subsidies in the past 15 years. Consumer opinion matters.
Also, I haven't seen the ads. But people do care about the planes and it does influence their choice of airline.
posted by Chaussette and the Pussy Cats at 4:47 PM on March 21, 2015 [6 favorites]
It also affects whether people invest, support certain tax and business-related programs, apply for jobs, refer friends to jobs, support the union or management during the current dispute, or buy shares in those companies - or support the upcoming Navy purchase of Boeings or even NASA funding. Boeing has received $13B in state/federal subsidies in the past 15 years. Consumer opinion matters.
Also, I haven't seen the ads. But people do care about the planes and it does influence their choice of airline.
posted by Chaussette and the Pussy Cats at 4:47 PM on March 21, 2015 [6 favorites]
Here are a couple of reasons I can think of. In the particular case, anyone could apply.
1) They are trying to burnish their image for prospective employees. Certain companies are having a hard time getting employees right now and this could be a differentiator.
1.5) They are trying to burnish their image for current employees and business partners.
2) Their funding is not entirely unconnected from public perception. Improving your image is always a plus
3) People who do make buying decisions that involve Boeing products may be very well be influenced by ads. In the case of Boeing t would only take one decision-maker being influenced to make the whole thing worthwhile.
4) Sometimes, though not likely in this case, certain non-retail facing entities are obliged to spend X dollars on marketing.
5) Sometimes entities "barter" services for services with other commercial entities. The prices on these barters can be favorable enough that Boeing might have gotten ads for pennies on the dollar, making a program that would not be valuable at a full rate at least marginally attractive to them.
I am sure there are lots of other possibilities I will be interested in seeing what others write.
posted by jcworth at 4:48 PM on March 21, 2015 [3 favorites]
1) They are trying to burnish their image for prospective employees. Certain companies are having a hard time getting employees right now and this could be a differentiator.
1.5) They are trying to burnish their image for current employees and business partners.
2) Their funding is not entirely unconnected from public perception. Improving your image is always a plus
3) People who do make buying decisions that involve Boeing products may be very well be influenced by ads. In the case of Boeing t would only take one decision-maker being influenced to make the whole thing worthwhile.
4) Sometimes, though not likely in this case, certain non-retail facing entities are obliged to spend X dollars on marketing.
5) Sometimes entities "barter" services for services with other commercial entities. The prices on these barters can be favorable enough that Boeing might have gotten ads for pennies on the dollar, making a program that would not be valuable at a full rate at least marginally attractive to them.
I am sure there are lots of other possibilities I will be interested in seeing what others write.
posted by jcworth at 4:48 PM on March 21, 2015 [3 favorites]
Also, about 30% of people do care. See this report - there are others too.
posted by Chaussette and the Pussy Cats at 4:49 PM on March 21, 2015
posted by Chaussette and the Pussy Cats at 4:49 PM on March 21, 2015
Boeing also does a ton of lobbying. In addition to the subsidies that Chaussette mentions, $20 billion a year of Boeing's revenue is from sales to the federal government, and their private-sector business is very sensitive to the regulatory environment. People having a positive image of them makes it politically easier to give them what they want when they're pushing Congress towards a particular decision about, say, what the budget for a particular defense program should be.
posted by strangely stunted trees at 5:16 PM on March 21, 2015
posted by strangely stunted trees at 5:16 PM on March 21, 2015
Also, people who travel a lot on business know which airline has which fleet. Boeing planes are chosen (or avoided) by high frequency travelers.
So if you have a choice between a Boeing aircraft and something else, the more times you've seen one name, and have a higher positive outlook on the brand....it might sway your subconscious.
See also, the Intel Inside campaign mentioned earlier.
posted by bilabial at 5:54 PM on March 21, 2015 [1 favorite]
So if you have a choice between a Boeing aircraft and something else, the more times you've seen one name, and have a higher positive outlook on the brand....it might sway your subconscious.
See also, the Intel Inside campaign mentioned earlier.
posted by bilabial at 5:54 PM on March 21, 2015 [1 favorite]
In addition to the reasons listed above, there is probably a B2B angle to it as well. There may be only several dozen people with the final say on buying planes, but thousands of people involved in the RFP's and decision process leading to those dozen. There isn't a "People Who Buy Planes" TV network or show, so there's not many other mediums they can use to get a slick 30 second commercial in front of them.
On the more cynical side... Boeing has a marketing team with millions to spend. Putting commercials on TV that their friends and cohorts will see gives them something the brag about and makes them feel special. Maybe not the best allocation of dollars, but feeds the ego.
posted by dripdripdrop at 6:58 PM on March 21, 2015 [1 favorite]
On the more cynical side... Boeing has a marketing team with millions to spend. Putting commercials on TV that their friends and cohorts will see gives them something the brag about and makes them feel special. Maybe not the best allocation of dollars, but feeds the ego.
posted by dripdripdrop at 6:58 PM on March 21, 2015 [1 favorite]
Public image as stated above, but putting the ads on during NCAA basketball surely hits a better set of demographics (potential college hires, wealthy white guys, business people) for a better price than, say, the Super Bowl or Oscars.
posted by JoeZydeco at 7:54 PM on March 21, 2015 [2 favorites]
posted by JoeZydeco at 7:54 PM on March 21, 2015 [2 favorites]
Boeing's a public company; anyone with mutual funds may have investments there, nevermind individual stockholders. They want you to feel good about Boeing so you don't (at worst) divest.
posted by chesty_a_arthur at 8:00 PM on March 21, 2015 [2 favorites]
posted by chesty_a_arthur at 8:00 PM on March 21, 2015 [2 favorites]
A person who worked in advertising once explained to me that, broadly speaking, there are two kinds of advertising:
1. Product: the "normal" kind of advertising that urges you to buy that cool new Apple watch thing.
2. Brand: keeping the company's name "out there" is very important for a lot of reasons, many of which have already been covered in this question.
(Actually, she used different (and probably more rigorous) names for the two types, but I don't remember them).
posted by doctor tough love at 9:55 PM on March 21, 2015 [2 favorites]
1. Product: the "normal" kind of advertising that urges you to buy that cool new Apple watch thing.
2. Brand: keeping the company's name "out there" is very important for a lot of reasons, many of which have already been covered in this question.
(Actually, she used different (and probably more rigorous) names for the two types, but I don't remember them).
posted by doctor tough love at 9:55 PM on March 21, 2015 [2 favorites]
There are three reasons that come to mind:
1) an attempt to address an extremely small market (business jets? comm systems? people who can influence defense contracts?)
2) maintaining a positive public image, as a defense against regulation or other possible problems.
3) outreach to potential employees.
posted by grudgebgon at 10:03 PM on March 21, 2015
1) an attempt to address an extremely small market (business jets? comm systems? people who can influence defense contracts?)
2) maintaining a positive public image, as a defense against regulation or other possible problems.
3) outreach to potential employees.
posted by grudgebgon at 10:03 PM on March 21, 2015
Pharmaceutical companies advertise only-by-prescription drugs so patients will ask their doctors for them.
posted by Carol Anne at 6:12 AM on March 22, 2015
posted by Carol Anne at 6:12 AM on March 22, 2015
I agree that marketing to voters, to investors, and to potential employees all makes sense.
One other angle though is that the cost of this ad is completely trivial for them. Boeing has $100bn in revenue. As a fraction of revenue, spending $2 million on a TV ad is like a $1m company spending $200 on a new window sign. For them, it's just not worth thinking about all that much. It could be as simple as one junior manager in the marketing department happened to have some extra money in his budget for the quarter.
posted by miyabo at 10:04 AM on March 23, 2015
One other angle though is that the cost of this ad is completely trivial for them. Boeing has $100bn in revenue. As a fraction of revenue, spending $2 million on a TV ad is like a $1m company spending $200 on a new window sign. For them, it's just not worth thinking about all that much. It could be as simple as one junior manager in the marketing department happened to have some extra money in his budget for the quarter.
posted by miyabo at 10:04 AM on March 23, 2015
Things don't buy products. Ideas don't buy products. Plants, non-human animals, and minerals don't buy products.
People do.
If you make money by hoping someone buys your thing (that is, if you are not self-reliant recluse or a burglar), you need people to buy your thing.
Advertisements help do that. Whether the "thing" you are trying to sell is shares in ABC Corporation, the Machine That Goes 'Ping!', or a loaf of bread, advertising can help.
posted by IAmBroom at 8:53 PM on March 23, 2015
People do.
If you make money by hoping someone buys your thing (that is, if you are not self-reliant recluse or a burglar), you need people to buy your thing.
Advertisements help do that. Whether the "thing" you are trying to sell is shares in ABC Corporation, the Machine That Goes 'Ping!', or a loaf of bread, advertising can help.
posted by IAmBroom at 8:53 PM on March 23, 2015
This thread is closed to new comments.
There's more to it than that, but that is one very very good reason.
posted by phunniemee at 4:44 PM on March 21, 2015 [9 favorites]