Advertising, as a form of communication, has a process which is very similar to that described in the traditional human communication model (Arens et al., 2013). In the traditional human communication model, there are a total of six components: the source/sender, the encoding process, the message, the channel, the decoding process and the receiver (Peter and Olsen, 1994). Applying this model to advertising communication, the source is equivalent to the advertisers/creatives who are involved in the creation and production of advertising and promotional messages (the encoding process). These advertisements and commercials (the message) are then carried by different advertising media (the channel) to the general audience/consumers (the receiver) who may actively and/or passively engage in the interpretation exercise (the decoding process). Therefore in analyzing the effectiveness of advertising communication, we can focus on examining three key indicators: the production, the distribution and the reception (Chan and Lee, 1992). This chapter centers the discussion around these indicators in order to reveal the big picture of advertising communication in Hong Kong.
 
Production of Advertising Messages
 
Advertising production can be measured by examining three areas. The first indicator of productivity is the investment in advertising production; this can be seen in the level of advertising expenditure in different commercial sectors. The second productivity indicator is the capability of advertising production which is reflected by the manpower engaged in the advertising industry. The quality of advertising production represents the third productivity indicator.