Does effective advertising require a higher budget expense than

Question

Does effective advertising require a higher budget expense than ineffective advertising?

(1) Companies that allocate higher budgets to advertising tend to experience increased sales revenue.

(2) Effective advertising can drive higher consumer demand.

ID: 700328

MartyMurray · Accepted Answer

Does effective advertising require a higher budget expense than ineffective advertising?

Notice that the question stem uses the word "require."

"Require" is an indicator that something is necessary.

So, the question stem is asking whether a higher budget is necessary for effective advertising.

(1) Companies that allocate higher budgets to advertising tend to experience increased sales revenue.

This statement indicates that a higher advertising budget can make advertising more effective.

At the same time, the question we need to answer isn't that of whether increasing the budget can make advertising more effective. The question is whether a higher budget is necessary for advertising to be effective at all.

So, what we need to notice here is that something helpful may not be necessary. For example, while increasing the budget may make advertising more effective, it could be that advertising could be made effective in alternative ways, without a higher budget. For instance, it could that low budget but very creative advertising is very effective.

So, this statement is not sufficient for confirming whether effective advertising requires a higher budget expense than ineffective advertising.

Insufficient.

(2) Effective advertising can drive higher consumer demand.

This choice presents a result of effective advertising, "high consumer demand."'

However, we are seeking to determine what is necessary for effective advertising. So, this choice does not help with answering the question at all.

Insufficient.

Statements (1) and (2) combined.

Since neither choice clearly indicates what size budget is necessary for effective advertising, the choices combined are not sufficient to answer the question.

Insuffcient.

Correct answer:  E

pierjoejoe · Answer

the question is basically asking if a higher budget is NECESSARY for effective advertisement. in a set like situation the "higher budget" is a set that completely surrounds the "effective advertisement" set, there might be a high budget that leads to non effective adv, but if you don't invest a lot of money --> you will not gain an effective advertisement.

(1) this statement tells us that company that allocate high budget TEND to increase REVENUES. the question does not talk about revenues, but EFFECTIVE ADVERTISMENT. we might say (at the extreme case) that higher revenues are necessary for higher revenues, but in that case too, we don't know if "higher revenues" coincides perfectly with successful advertisement. There might be companies that invested a lot of money, got higher revenues with a NON successful advertisement, and there might be a company that invested a lot of money that did not increase revenues but got a incredible advertisement. NOT SUFFICIENT.

(2) completely out of scope. not sufficient.

Blackcrow1972 · Answer

OFFICIAL EXPLANATION
(1) Even if companies that allocate higher budgets to advertising tend to also have increased sales revenue, that might mean only that their increased sales revenue has given them more money to spend on their ineffective advertising. Furthermore, even those companies allocating high budgets to effective advertising might be doing so inefficiently; they might be able to cut their advertising expenses drastically without reducing their advertising effectiveness. Thus, whether effective advertising requires a higher budget expense than ineffective advertising cannot be determined from (1) alone; NOT sufficient.

(2) Even if effective advertising can drive higher consumer demand, it might not need to cost much. Thus, whether effective advertising requires a higher budget expense than ineffective advertising cannot be determined from (2) alone; NOT sufficient.

Taking (1) and (2) together, even if companies that allocate higher budgets to advertising also tend to have increased sales revenue, and even if effective advertising can drive higher consumer demand, many companies with higher budgets and increased sales revenue may nonetheless be advertising inefficiently; they might be able to cut their advertising expenses drastically without reducing advertising effectiveness. If so, effective advertising may not require a higher budget expense than ineffective advertising.

The correct answer is E; both statements together are still not sufficient.

Pikachuu · Answer

Question: budget (effective) > budget (ineffective).....Yes/No???

We need some information like:
Effective advertising → budget = ?
Ineffective advertising → budget = ?

Statement 1 talks about Higher budget → higher sales (correlation) 
It doesn't say anything about whether the advertising is "effective or ineffective". So, insufficient.

Statement 2 states a possibility that Effective advertising "can drive" higher demand 
However, it does not talk about "budget". So, insufficient.

Statement 1+2:  
Higher budget → higher sales
Effective advertising → higher demand
We don't have sufficient information to concretely say which of the two advertising has higher budget expense. So, insufficient.

Answer E

MerryCherry · Answer

MartyMurray

But can't statement 1 also mean higher budget ---> effective advertising, as it is increasing the revenue?
Increase in revenue is directly linked to effectiveness, no?

MartyMurray · Answer

Yes, statement (1) indicates that a higher budget can make advertising more effective.

At the same time, the question asked is not whether a higher budget is helpful. It's whether a higher budget is required.

So, statement (1) is not sufficient to answer the question because it doesn't indicate that a higher budget is required.

After all, even if a higher budget can be a factor in the effectiveness of advertising, there may be ways to make advertising effective without a higher budget.

Does effective advertising require a higher budget expense than

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Does effective advertising require a higher budget expense than

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