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Intern
Joined: 18 Jul 2016
Posts: 16

Kudos [?]: 6 [0], given: 1

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18 Jul 2016, 04:25
Q. Pay-per-click web advertising is the best investment an advertiser can make. In the eighteen months since MacDowell's halved its television advertising and doubled its web advertising, its sales have grown by nearly 30% and it has opened forty more stores to keep up with demand. This is just one example of the fact that television advertising is on its way out, and smart businesses will continue to up their investment in pay-per-click ads.

Essay
The above mentioned argument claims that pay-per-click web advertising is the best investment for smart businesses than television advertising by citing the example of MacDowell's strategy of advertisement over a period of 18 months. However, this argument is flawed as it fails to mention several key factors, on the basis of which this argument can be evaluated.
Firstly, the author has mentioned only two types of advertising methods, Pay-per-click and television advertisement. Hence, by doing this the author has ignored many other advertising methods which can prove to be much more efficient than the above mention two methods. Furthermore, it is possible that MacDowell's had also invested in advertising methods other than television and pay-per-click. If this is the case then the author's reasoning that the sales of MacDowell's have gone up due to increase in investment in pay-per-click advertising becomes skeptical. Therefore, statistics showing the investments by the company in different methods of advertising would be helpful in evaluating the argument.
Secondly, the author fails to consider many other factors that could have led to the rise in sales of the company. He jumps to the conclusion that increase in investments in the pay per click method of advertisement has caused this increase. It could be argued that the growth of the company was a result of increase in population in the region which resulted the increase in consumption of its products. Although investment in television advertisements was halved it is possible that the number of people watching television in that region increased by multifold and this resulted in the companies success.
Thirdly, just by giving the example of MacDowells, one cannot generalize the situation and conclude that it will be successful for all the other businesses. It may very well be possible that the pay per click advertising could harm some businesses by increasing their marketing costs beyond what is projected. This usually happens when click fraud is on the rise.
In conclusion, this argument that pay per click advertisement is the future of advertising has several loop holes and makes a number of questionable assumptions. Not only does the argument assume that pay per click advertisement has increased the company's sales but also fails to account for various other advertising methods which the company might have been using. The argument could have been better supported with more evidence such as, statistics showing investments in different methods of advertising, television sales and demographic statistics.
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Engineer, Quant score 53 First attempt.

Kudos [?]: 6 [0], given: 1

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