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Advertising is the method businesses use to communicate with consumers. Companies use it to sell products; to introduce new brands and new concepts; to remind consumers of existing brands; and to build brand reputations. In competitive markets like the UK, advertising can significantly influence brand share, build recognition and sales of innovative and new products, and materially affect the performance of businesses competing for a portion of the market.

Although the academic debate rages on, in mature markets (as in the UK) there is a widely-held view that food advertising does not drive consumption. It is primarily a tool of competition between brands and not a means to secure category growth or overall increases in market size. This is supported by figures which demonstrate both that most advertised categories are in stagnation or decline, and that advertising expenditures are unrelated to consumption. The Health Select Committee report on Obesity, published in May 2004 demonstrates this as per the table below:

Children's after-school snack products, market size and ad spend, 1998-2002

Source: taken from the Health Select Committee Report on Obesity, May 2004

	Market Size		Adspend
	1998 (£m)	1998 (£m)	2002 (£m)	2002 (£m)
Chocolate bars and countlines	3,745	3,494	68.9	91.0
Crisps and snacks	2,0782	2,385	30.5	31.4
Sweets**	1,770	1,768	38.6	39.5
Sweet Biscuits	1,484	1,462	7.2	16.3
Fresh Fruit	2,962	3,150	4.5	2.8

** Includes sugar confectionery and chewing gum. Source: Nielsen Media Research / Mintel

Summary

Advertising can help to grow new product categories, but only if research indicates there is a consumer need. Consumers use advertising to learn about new products and services and help them decide what to buy. Recent European Commission research demonstrated that the majority of European consumers regularly use advertising to make informed purchasing decisions and for information on consumer issues . Advertising can only encourage a consumer to buy a product once - if a product does not live up to the expectation of the consumer, it is unlikely to be purchased again, no matter how much it is advertised.

Advertising has an important role to play in modern society and market economy, where it reflects, and does not dictate, fundamental societal changes.

More on this topic

• What specific research projects have shown

More briefing papers

• Advertising to children
• The role of the advertising industry
• International comparison on advertising food to children
• The Regulatory Framework for children's advertising
• What parents and adults think about advertising to children

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