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Advertising: does it or doesn't it?

Does advertising really contribute something to society? Does it stimulate choice and competition and thus make life better for all of us? Or is it a mostly wasteful exercise, adding to the cost of goods and services and contributing to the clutter of materialistic items that we truthfully could get along well without?

The Association of Canadian Advertisers will tell us that "Advertising makes good things happen". And certainly it is true that when it is used properly, advertising fulfills one vital role in a free society -- it helps people to make choices.

Advertisers think of their trade as the clarion call of the free market system. By telling you what products are available and what their respective merits and benefits are, advertising helps us to make up our minds what to buy. This choice stimulates competition in the marketplace and in turn, so the logic goes, this brings down prices, increases product quality, improves customer service and generally creates excellence in manufacturing, selling and after-market support.

Advertisers respond to the criticism that their craft adds to the cost of every product by stressing that the competitive nature of the marketplace demands that all prices be driven down to the lowest possible point with all waste eliminated -- including wasteful advertising. In fact, advertisers point out that if they are contributing to the competitive process, it stands to reason that advertising is a force for excellence at an economical price, not unnecessary cost.

Advertising contributes other positive benefits to society. It creates images -- not just for products but for us, the people who buy them. Advertising helps us to define our image of ourselves by the nature of the goods and services we buy. We can see ourselves as frugal, practical, successful, ambitious, sensible, careful, risk-taking, whatever we want to be, simply on the basis of the images associated with the products we buy. When we buy a garden tool for example, we not only buy a useful implement, but also the concept that we are a gardener, an environmentalist, a grower, a nature lover, and so on.

Abraham Maslow suggested that every consumer works his or her way up a hierarchy of needs, looking after the most basic (such as food and shelter) first and then working gradually up to self actualization or "dream" needs such as the beautiful car, guilt-edged securities, the beach in Nassau and so on. Advertising enables us to position ourselves on the hierarchy, to figure out how far we still have to go to achieve our dreams. This stimulates individual effort and ambition which, in turn, is a powerful and irresistible force in the marketplace.

The question "is advertising wasteful?" is well answered in an excellent text Advertising in Canada: Its Theory and Practice by Peter Zarry and Robert Wilson (McGraw Hill Ryerson, 1981). The authors respond by asking "compared with what?"

While it is true that many dollars are required to reach a very small percentage of the population who will buy your product, it is also true that those consumers who do buy your products will respond well enough to cover all the costs of bringing the product to market (of which advertising is only one). As noted above, competitive companies try to eliminate, not create, waste in advertising as in everything else.

Zarry and Wilson suggest that the real waste in advertising comes from inept creative, the wrong message for the wrong audience at the wrong time and in the wrong medium. Advertising that is misdirected, dull or even counter-productive, turning you off the product, is everywhere and, yes, it is wasteful. A recent article in Marketing Magazine suggested that we are bombarded by hundreds of advertising stimuli a day, of which we may only not 70 and of that 70 perhaps pay attention to less than one third. Thus, a strong argument can also be made that this advertising does drive up product cost, and often floods the market with goods and services that we really do not need or want.

Regarding images, David Ogilvy in his classic "On Advertising" suggested that you can give a person two scotch whiskies. Give him whisky "A" and tell him it is whiskey "A". Then give him whisky "A" and tell him it is whisky "B". He will tell you that the two whiskies taste quite different. What advertising sells, says Ogilvy, is images. But critics say that this is precisely what is wrong with advertising. It doesn't help to sell anything of value. It manipulates and confuses the marketplace, telling it lies and half truths and making claims and statements that are often a long way from reality.

Certainly that cynic H.L. Menchken would have agreed. He suggested that "No one ever went broke underestimating the intelligence of the American people," and he might have applied this to every marketplace under the sun. Let's face it, if we want to believe something, we allow ourselves to get duped pretty easily, and advertising can do that to us if we want it to. Do we need pet rocks, computer games, designer sunglasses, trade name T-shirts and wristwatch calculators? Probably not, but we allow ourselves to be talked into them anyway in the belief that they create images for us that are important to our self esteem.

Critics say that this has dangerous social and economic consequences for many stratas of society. The economically deprived or socially disadvantaged will spend money on things they do not need, goes the argument, such as fast cars and loud "ghetto blasters" instead of on food, shelter and clothing. Creating illusions of the good life for those who can never aspire to it creates tensions, frustrations and pain that boil over into violence, looting, drugs, suicide and criminal activities.

Of even more concern, say detractors, is that greed is fed by advertising. People in all walks of life can be tempted to reach for things they cannot afford and do not need, creating credit chaos, bankruptcies, fraud in high places and other social ills.

So, which side is right? Does advertising truly stimulate competition, drive down prices, create free markets and contribute to the growth and prosperity of society? Or does it create false needs, dreams and hopes which in turn lead to wasteful spending, socio-economic unrest, crime and the general dissolution of society?

Surely the argument has more to do with the kind of society in which we wish to live, as outlined so well by Neil Borden in "The Economic Effects of Advertising" (Irwin, 1944).

"Advertising is sometimes criticized on the grounds that, as part of the capitalistic system of free enterprise it leads consumers to buy the wrong things and spend too much for them, whereas consumers would be better off if they bought different things and spent their money in different ways. When this criticism implies, as it often does, that someone in authority might better decide what things should be bought and how consumers should spend their incomes, then the essential clash is between the rival ideologies of individualism and authoritarianism; and the basic argument is not really about advertising at all."
COPYRIGHT 1993 Canadian Institute of Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Barrow, Peter
Publication:Canadian Manager
Date:Mar 22, 1993
Words:1189
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