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Expensive Marketing Vs. Cheap Marketing
Written by Chanjin Yoon | Published. 2020.06.29 09:51 | Count : 147

Advertisements are everywhere, literally everywhere. We are exposed to advertisements while watching television, using our smartphones, and even as we walk around. While all of these marketing options require both financial and labor investments to a certain degree, some are much cheaper or more expensive compared to others. For instance, the massive screen space on the buildings of busy cities would cost significantly more compared to an advertisement on a small banner of a website. Then why do certain companies pay great amounts of money for huge spaces when they can spend less with web marketing? For further information, I researched the cases of Times Square advertising and Kakao Friends advertising to investigate why certain companies were making their respective decisions on marketing.

At Times Square, where more than 380,000 people visit daily including tourists from different countries, the costs of advertisements are beyond that of any other places around the world. According to an interview by NPR with John Connolly, the chief operating officer of Kinetic North America, the average price of Times Square billboards is approximately 4 million dollars. These electric boards are typically leased out to companies for five years to ten years, which are then able to generate a revenue of approximately 20 to 40 million dollars by advertising on them 

Among these companies, Connolly highlights that Coca-Cola, one of the world’s leading beverage companies, has been advertising its brand this way at Times Square for over 80 years. Connolly believes that companies such as Coca-Cola are able to profit from advertising at Times Square despite such exorbitant costs of advertising due to the power of their brand names, especially considering the fact that the attention span of people walking through Times Square is extremely short. To elaborate, without the red color and classic Coca-Cola bottle shape, Coca-Cola’s advertising at Times Square would not have been cost effective. In other words, without the brand power of Coca-Cola, an advertisement format that focuses on storytelling- a beautiful girl in bikini drinking soda from a cup and smiling- would be more cost effective. For those companies with pre-existing brand power, on the other hand, the Times Square billboard marketing works remarkably well considering that millions of people flock to Times Square from all corners of the world. 

At the other end of the spectrum, there are popular marketing options that cost much less. In South Korea, where the majority of the people with smartphone devices use Kakaotalk as their main messaging system, Kakao Plus Friends marketing is becoming increasingly popular. According to the ‘Kakao for Business’ website, Kakao Plus Friends allow licensed businesses to create their own channel on the system and expose these channels to the users of Kakaotalk. With approximately 100 million users on Kakaotalk, businesses are given the opportunity to appeal to an extremely large pool of potential customers and connect with them once the customers join the individual channels for free. Browsing over the Kakao Plus Friend section on KakaoTalk, I could find many businesses such as online shopping malls and others. For small companies or digital-based businesses, digital marketing such as Kakao Plus Friends could serve as a cost-effective and beneficial solution.

[Photo of the writer interviewing Khai Lee, Founder/CEO of FNF Network]
[Photo of the writer interviewing Khai Lee, Founder/CEO of FNF Network]
[Photo of Khai Lee’s name card]

For a deeper understanding of the different marketing strategies, I interviewed Khai Lee, the CEO of ‘FNF Network’ which specializes in online marketing for prominent brands such as the Samsung SDS and Pyeong-Chang Olympics. According to Lee, the price of marketing is not an absolute marker of its success; he believes that marketing should rather focus on its efficiency within the company’s budget. Today, many companies no longer depend on flyers to advertise but focus on using different data analysis tools to target specific audiences on digital platforms such as smartphones or tablets. However, he warns that companies should evaluate their compatibility with digital marketing as it is easy to waste budgets with the modern marketing trends. He stresses that the ability to analyze data and apply them within a set budget is fundamental to being successful in modern marketing. 

As economies grow, marketing becomes an increasingly crucial factor in competing in the marketplace. While the classic methods of marketing such as the billboards at Times Square offer extensive exposure of the brand to the public, its cost is beyond the budget of small companies. The relatively newer method of marketing through smart devices does cost significantly less compared to the classic methods of advertising, yet it does not guarantee the exposure offered by classic methods. There is no ultimate answer to which method of marketing is better. Each company must create the right marketing plans for its budget based on careful marketing analysis. Marketing today is not all about putting the biggest cow on the table but rather communicating with the tailored market.

 

 

 

 




Chanjin Yoon
Grade 11
Yale Secondary

Chanjin Yoon  student_reporter@dherald.com

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