Advertising injects noise. Could government enrich society by limiting advertising?

One idea I thought of the other day is an observation. Advertising is a 0-sum game of one-upmanship. Consumers in a given country have a finite amount of money to spend, and usually they spend all of it. (saving for retirment just spreads the spending)

Well, if company X spends a bunch of money and creates catchy advertisement, company Y has to spend similar sums in order to compete. It becomes a game of various parties trying to out-shout each other, similar to parties trying to communicate in a crowded environment.

For instance, it might start where company X spends 5% of revenue on advertising. Company Y counters by spending 6% of revenue, and so Company X has to match it, and so on. This ratchets up until some kind of diminishing returns situation is reached (if too much is spent on advertising, product quality suffers, and complaining consumers create negative advertising that cancels out any benefit from further spending on marketing?)

Couldn’t the government break this feedback loop by saying “it is ILLEGAL to spend more than X% of your revenue on advertising”.

Since everyone would be forced to spend less on advertising, the smaller number of ads in the world would theoretically get proportional shares of consumer attention. The money not spent on advertising would go to increasing corporate profits (which spurs new investment) and product improvement (which benefits society)

Don’t threadjack me, bro. This is not a thread to debate the merits of the government interfering in business, but rather to debate whether this specific intervention would be a beneficial thing or not.

This assumes all companies have the same revenue. If Company X has more revenue it would give them an unfair advantage. Something like Wal-Mart vs Mom N Pop Shops.

No.

To see advertising as the problem is to miss the point. Which, oddly enough, is one of the points advertisers want to make.

It’s also not a zero-sum game except in some vastly encompassing way that could only make sense to an economist.

…and that businesses that take a loss can’t advertise at all.

Boogly and Czark have nailed the financial argument well, but even those answers presuppose that you are right in saying that it’s (1) some sort of endless escalation that (2) would benefit from an artificial limit of any kind. I think you’re wrong on both points. Some companies spend a vast amount of their gross profit on advertising - Bose, Dyson, Monster etc. - and others are quite successful with far smaller relative ad budgets.

Really, I think you’ve outlined a non-solution for a non-problem while missing the real issue. I mean, I don’t like advertising either, but so far government arm-twisting has either been ineffectual or made things worse. I think it’s very much a place to let the market forces find their own level.

I agree with your thesis but here’s a better idea: put a high tax on advertising and prevent businesses from deducting advertising as a business expense. Does anyone remember the days when you could watch go to the movies and not have to watch a commercial about Fanta? If you tax advertising, businesses will stop advertising so much, and if they don’t slow down, that just means more money for the government to use in order to fix our roads, build schools, pay down the debt. And, if they do slow down on the advertising, the American public would get a temporary reprieve from having to be inundated with commercials and advertising from dawn to dusk. It’s a win-win situation in my book.

  • Honesty

That’s a much better idea, and it solves many of the objections mentioned above.

Advertising is a form of pollution. It may not be as harmful as toxic smoke from cars and factories, but it competes for attention with legitimate ideas.

I believe that some companies would find a work around in some way.
I go to Spammy Sammy and tell him I can only spend $500 for 500 flyers. However if Sammy finds a new printing method to expand this to 1000 units Spammy will earn a $2000 bonus!

Well, no, it’s just a reshuffling of the idea and subject to the same flawed basic perceptions. And now you’re running into a little hurdle called the First Amendment.

You’re also piling one assertion on another, and I don’t think any of them, including your first one and foundation, are valid. It’s kinda nonsense all the way down.

You hate advertising? Me, too, and to a degree I have no effective way to communicate here. But advertising is not the problem - it’s barely a problem - and outlawing it will not result in mass financial boons for anyone, including the government.

Commercial speech is not free speech. Advertising creates a significant “negative externality” just like pollution. It seems pretty cut and dried that an unbiased, rational government would tax advertising.

Limiting or restricting advertising would be the best thing the government could do for incumbent market leaders. If you love all of the most popular brands today, and want to guarantee that they remain the most popular brands forever, immune from innovation or challenge, get behind this proposal.

Outlawing advertising is not same as taxing it. No one would say cigarettes, alcohol, tanning beds, or collecting tips are outlawed by the government. Those things are just taxed.

  • Honesty

Wouldn’t you also hurt the businesses that run on ad revenue? Prices for TV shows, movies, websites, and newspapers would all have to go up to make up for the lack of ad dollars.

Says who? Especially in these perverted times that have declared corporations to be “persons”? I suggest that *any *attempt to sweepingly limit or punitively tax advertising would be quickly demolished by First Amendment arguments supported by free trade/restraint of trade arguments… and that such arguments would be correct.

Says who? Especially in such absolute terms?

With all due respect, you haven’t posted a rational word yet, on behalf of yourself or some imaginary government. You are standing on a dislike of advertising - which I wholly share - and trying to legislate a world without it. I hate to break it to you, but a dislike of what your neighbor is doing is not justification for trying to bring government force to get him to stop it. (Although you’re hardly alone or in new territory in assuming it is.)

[ETA: ruminate on the inflection “government” brings to that last sentence.]

It really doesn’t matter whether the suggestion is to outlaw it, tax it into submission and/or oblivion, or pass a law forbidding anyone to look at it… all of the above suggestions are based on nonsensical declarations piled atop each other.

Neither one of you seems to understand anything at all about any part of the situation except that ads really, really piss you off. Okay, we’ve got that. But you haven’t even established point number one, that “advertising is bad.” (Nor do I think you can, other than by boiling it down to something you personally don’t like, which doesn’t support a bit of your proposed solutions.)

What I *do *think is that you’re mistaking the monster’s shadow for the monster, and are making a strenuous (and strained) case for banning shadows.

What, exactly, is the significant negative externality? That you don’t like it?

Second, advertising is a method of increasing consumers knowledge. The more knowledge a consumer has, the better possibility of making good (for the consumer) decisions. Note, not all consumers are going to work that way, however bad choices by stupid people should not be the guidelines we use to decide on how to deal with problems.

And last, where is a list of ‘legitimate ideas’ at? Who decides upon this list?

Honesty, why tax it? Taxation ought to be used as a method of raising needed revenue only. Using taxes to discourage behaviour (a.k.a Sin Taxes) is quite stupid.
Sin taxes, and that is what this would be basically though the only sin would be telling people you have a product to sell, only work if the tax is large. Otherwise the cost is just going to be bundled into the price of the products and is regressive in nature.

Slee

Oh… my. Let me get back to you when we’ve finished with the first topic.

[QUOTE=sleestak;17072704
Second, advertising is a method of increasing consumers knowledge. The more knowledge a consumer has, the better possibility of making good (for the consumer) decisions. Note, not all consumers are going to work that way, however bad choices by stupid people should not be the guidelines we use to decide on how to deal with problems.
[/QUOTE]

No, advertising almost by definition is a system of spreading misleading ideas about a product to increase sales.

  1. Is owning a new car likely to improve your lifestyle significantly? There is little evidence for this.
  2. Is standard breakfast cereal as sold in the USA a healthy product to eat for breakfast? Generally, no.
  3. Is syrup in carbonated water a good product to be drinking? Nope.
  4. Should you run to the doctor and demand the latest drug you saw on TV or in print? Generally, no. Antidepressants are commonly advertised in this manner, and, apparently, the best empirical evidence indicates they have little positive effect on anyone not experiencing severe depression.
  5. Is beer likely to increase your chances of sexual encounters with supermodels? Actually, this isn’t completely false advertising…but it requires a lot more than just a case of beer.

I just named 5 of the most common products being advertised. Virtually every ad campaign covering these products is misleading if not outright dishonest.

I’m not an expert on the math here, but there is a field of math called “game theory” and others on decision making. The gist, as I understand it, is that misleading and inaccurate information harms both players in most theoretical games. It is a reasonable extrapolation to say that advertising, as it consists of misleading information, is in fact detrimental to society.

In addition, as I mentioned before, it’s a rat race. Since every dollar earned is spent by consumers, advertising can only shift spending around. Yet, every dollar spent on advertising by society is a dollar that cannot be spent on more useful production.
What I am trying to say, Amateur Barbarian, is that there is a rock solid reason to come to the conclusion that the information being spread is detrimental, and that the cognitive effort required to filter out the ads reduces mental resources available for productive activities.

Legitimate criticisms include : “I’m wrong, advertising is helpful overall” and “the losses to the system caused by government inefficiencies in actually implementing a steep tax on advertising exceed the benefits”.

Habeed, you’re saying very little I disagree with except that none of it is a basis for in any way restricting advertising - even if there were a legal basis for doing so. You’re thinking along some excellent lines, but your starting point (and goal) are wrong.

Consider this: by railing so strenuously at advertising, you have fallen for the shuck - the intended shuck, I’d maintain - that it’s in any way important in itself. Back up and start again.

Are you saying that the problems in our society go a lot deeper than advertising? I would agree with you there. I have come to the conclusion that the actual problems with USAian civilization are a result of the prevalence of parasitic and faulty ideas. For example, subtly flawed ideas about the benefits of “financial innovation” led to the deregulation that led to the crash in 2008. There’s no one individual to blame - the regulators were doing what they thought was best, all the big investment firms and their employees were doing the same.

However, much of the math regarding finance depends on certain base assumptions that somewhat wrong, such as modeling a market as a pool of independent, competing decision makers.

The losses due to the Iraq war were due to a miscalculation on how strongly that culture would resist an occupation.

The colossal sums wasted on homeland security are to fight a threat that is so rare that it would be cheaper to ignore it.

The healthcare system somehow combines the worst of free market and government regulation.

We could probably develop reversible cryogenic suspension of living things within a relatively short period of time, but people believe in the afterlife so…

Well, yes, if that’s not too radical a position. :smiley:

I’m not prepared to springboard out into a Global Theory of Problems here, so let me bypass your follow-on and put things another way: advertising is a symptom, not a cause. It is a *facet *of the problem, not the problem itself. Furthermore, part of its purpose is to distract us from the real problem; the roar and razzle-dazzle occupy our attention - often to the point of rage, as with you - but are really empty smoke and mirrors.

Roaring and railing and batting at the fog - at the shadows - at the projected images will accomplish nothing except exhausting yourself to no benefit.