The Difference between Marketing and Advertising

The simplest definition for these two misunderstood terms is that marketing involves customer interaction i.e. human contact, whereas advertising is a non-contact form of information transfer. You can read a multitude of professional definitions, academia literature and talk to just about any marketing graduate and you’ll get a lot of different definitions of these two terms. I believe it is simply the difference between having physical contact with the customer or no contact at all explains the two forms of conveying information about the product or service your business provides.

By the book the best definitions I researched were as follows:

The American Marketing Association defines marketing as:

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

The Business Dictionary defines advertising as:

Paid, non-personal, public communication about causes, goods and services, ideas, organizations, people, and places, through means such as direct mail, telephone, print, radio, television, and internet.  An integral part of marketing, advertisements are public notices designed to inform and motivate.

I think it best to keep it simple. Contact or no contact separates these two forms of conveying information. I do not believe advertising is a subset of marketing as defined in the Business Dictionary, but I whole heartily agree to the non-personal trait as a part of the definition. However, it is never that simple so I’ll provide three examples of marketing from the strongest correlation of the definition to the weakest and then advertising from the weakest possibly marketing interpretation to the outright pure form of advertising.

Marketing pure and simple – the best way to really drive home the point is the best form of marketing in my mind and that is the simple handshake. The customer not only sees you, but feels you at the same time. It is the best opportunity for anyone to convey information via interaction with the customer about your product or service.

Marketing, yet not pure – one of my clients is involved in the marine industry and about 4 times a year participates in those boat shows. He has a table there, meets and greets potential customers and of course has his trinkets with his logo on them. Not to mention the information pamphlet is handed out. It is a great opportunity to drum up business and the potential customers walk away with a key chain with one of those floating buoys. It is one of those key chains designed to keep your boat keys afloat in case you drop them in the water. It is human interaction with some form of documentation to take home.

Marketing, customer understands you – I live in one of those small towns and at Christmas time the annual parade is sponsored by the local Ford Dealership. It is pretty neat; the dealership brings out all the new trucks to pull the floats. The salesmen drive the trucks, the staff walks alongside the route and throw candy. Each truck has the company’s logo on the windshield and of course the magnetic signs on the doors. They are there handing out the local high school’s basketball schedule and supporting the community. They work the event really well.  Notice the human contact here, not pure, but it does exist.

Advertising looks like Marketing – at one of those community events sponsored by the local hospital system, we don’t meet any staff or see demonstrations of life saving; but we do see all the logos, free first aid kits, and lots of information advertising their new equipment to treat everything from boils to cancer. In exchange the local function is helped out and the sponsor advertises their service. Notice here, no human interaction is going on, just pure information provided plus some helpful trinkets to drive home the point.

Almost Pure Advertising – the best example of this is one of those info commercials. Everybody has seen one or two. They try to teach and convince you that their product or service is the best. Notice here that there is no human contact or interaction. No call us and ask questions; or eye to eye meeting.

Pure Advertising – from the ad in the newspaper to the radio commercials; we are all aware of the traditional definition of advertising. Review the Business Dictionary definition above.

From the above, I illustrate that the fundamental difference between marketing and advertising is the human contact component. If no human contact, it is advertising. Act on Knowledge.

Value Investing

Do you want to learn how to get returns like this?

Then learn about Value Investing. Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.

There are four key principles used with value investing. Each is required. They are:

  1. Risk Reduction – Buy only high quality stocks;
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  3. Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
  4. Patience – Allow time to work for the investor.

If you are interested in learning more, go to the Membership Program page under Value Investing section in the header above. 

Join the value investing club and learn about value investing and how you can easily acquire similar results with your investment fund. Upon joining, you’ll receive the book Value Investing with Business Ratios, a reference guide used with all the decision models you build. Each member goes through three distinct phases:

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Each week, you receive an e-mail with a full update on the pools. Follow along as the Investment Fund grows. Start investing with confidence from what you learn. Create your own fund and over time, accumulate wealth. Joining entitles you to the following:

  • Lessons about value investing and the principles involved;
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Value Investment Club

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