Game Theory

I recently read a blog from Double Glazing Blogger about "Why Advertising Does Not Work", and if it is plausible that two companies that are advertising for the same product/service cancel each other out when it comes to advertising.

I have studied advertising and the techniques it uses to gain customer attention in the past and I know there are flaws in every theory or technique you can use in an advertisement. 

When advertising for a small business, it is important to understand your target audience, clarity of what you are trying to sell and where you want your ads placing. Pretty simple stuff, yes, but is it worth understanding the rules of Game Theory so you don't fall into the trap of another business 'stealing' your customers.

The theory goes; if two companies were advertising at the same time, spending roughly the same amount of money, any advantage gained from that advertising will cancel each other's out. If that company had never advertised in the first place, the market would remain unchanged - no worse off, and that company would have saved all that extra cash, and their business would be in roughly the same place anyway. - Double Glazing Blogger, 2011

 
Having a lot of advertising is obviously a good thing because you're gaining lots of exposure to get the company name out there, but when you start having to think about the amount of money this is costing you, is it worth it?

It is possible that you can have too much advertising, especially when there are more than one company that provides a similar service/product? People get annoyed seeing the same adverts over and over again, so while having lots of exposure is a good thing, too much can have a negative effect. 

Companies should look at different ways of gaining exposure, such as a website, word of mouth, an online presence etc. Whilst this is still advertising, most of it is either cheap or free! 

Advertising is good for new customers, but I find hearing good reviews of a company from someone you know is much better and feels more reliable.

This is more relevant for small businesses that are trying to gain exposure rather than huge companies with franchises etc. Obviously there are more variables to consider why advertising does or doesn't work, but this is something to consider.

Let me know what you think! I will talk about other advertising techniques at a later date!

:D