I remember one radio ad from years ago (but I don’t remember the business or the product - ha!) where this was obviously the case. The business owner did his own spot. He sounded like he had a mouth full of marbles and phlegm in his throat. When he recited his phone number at the end, he just about hawked up a loogie between the last four digits so you almost couldn’t understand the numbers. I bet the chat between the radio station ad guys was something like this:
ad guy1: Man, this is unacceptable, we can’t run it.
ad guy2: Dude, we have to. He paid for it and said to run it.
ad guy1: Can we ask him to have it re-recorded?
ad guy2: I tried, he won’t budge.
And later, I’m sure the business owner complained bitterly about how much waste of money radio advertising is or how the station “stole his money”! :smack:
I appreciate advertising when there is something new in the market that people may not yet know much about. It can fulfill an announcement function and an exposition function, if they show a bit about what the product does in the ad. But other than using it to pass along new information, I’m oblivious to it. I sometimes can remember an ad if it’s clever, but I’ll remember the ad and not the product, so that seems a bit pointless for the advertiser.
Note that’s for all marketing, which includes stuff like sales promotion, stocking allowances, rebates, giveaway calendars from insurance agents and a whole bunch of things that aren’t even directed at consumers, but just getting the product on the shelf.
Also, the bigger a product or company is, the less it spends, relatively speaking, on marketing efforts. So that $2 million Super Bowl ad will cost Budweiser (parent company’s gross revenue >$36 billion) a fraction of the revenue of Pabst (roughly $1 billion.)
If you are one of the (very few) consumers who solely buys the cheapest item you find on the shelf, and never plans ahead of time as to what / where you buy, maybe advertising doesn’t have an impact on you. What I can tell you is that there are very, very few consumers who truly are like this.
But, even highly price-sensitive consumers will often be influenced by advertising that features price (i.e., “there’s a sale on Cheerios at Kroger, I’m going to Kroger instead of Safeway”).
— I remember reading a story that Millennials (the ones most likely to buy stuff online) are actually generally ok with advertising and understand its importance but it must be targeted a certain way to appeal to them.
— Also when you consider the size and scope of the internet and the vast number of products and websites available is it any wonder that advertising is important. Shopping on Amazon isn’t like going to the super market and if you had to individually look at each item sold and decide if it is something you wish to buy you would be there till the sun turns cold. Let alone if your company wants to sell something on your own website.
Let’s say you can produce a thousand items at $1.00 each, and a million at $0.50 each.
If you want to be the cheapest guy on the shelf, you have to sell a million or more items. If you want to sell a million items, you pay for advertising. In this case, $500,000 of advertising pays for itself through economy of scale alone, regardless of the increased profits from higher sales overall.
Honestly, the OP’s question smacks to me of “Is your car’s engine just a drain on the gas tank?” Well… yes, I suppose it is. Of course, there’s a side effect of actually going places that makes it worthwhile to most people.
Also the thing that makes capitalism so effective/efficient is that when a company acts in a wasteful way they earn less money and their competitors take their market share. As inefficiency increases companies must either change or go out of business. So if advertising made the company no money companies would stop paying for it.
Just like how companies that discouraged shoppers from browsing their store had to give way to stores like Selfridges which encouraged shoppers to browse and see what was available even if they didn’t buy anything.
“Also, without advertising, where would all those creative types find work? Definite economic benefit!”
As a society, we could employ these creative people to design and paint murals, write great fiction, and create great plays and movies. In other words, their talents would be making a real contribution towards an advanced culture instead of the mindless consumerism which exists in the country today.
How could they possibly do so? No one would know to buy their fiction, go to their plays and movies or other outputs. I might see their mural on the way to work, assuming my company still existed without marketing.
Also societies don’t employ people, people do.
Because it represents an unnecessary cost. Holes are being dug and filled in. It would be much better if the hole diggers were digging and filling the holes we actually need dug and filled. The fact that all the unnecessary digging and filling contributes to GDP is merely evidence that GDP is not a good measurement of a healthy economy.
How can we be sure that your personal idea of what is or isn’t necessary isn’t stupid? After all, big companies pay me a lot of money to work in the advertising industry and nobody is paying me to paint a wall. They’re willing to put their money where their mouth is. All we have is your word that some stupid wall would advance society.
Most of my clients are non-profits, doing things like healing the sick and caring for the elderly or providing services to young children. All I get to do is their advertising and marketing, but that’s a much more useful hole than some stupid mural or movie.
As I’m friends with a lot of advertising creatives, I can tell you: they are already doing that.
The vast majority of ad agency creatives participate in the creative arts as well. Just off the top of my head, creatives with whom I’m friends are:
An award-winning stage magician and playwright
A film screenwriter with several award-winning films to his credit
A poet with several published books of his poetry
A writer who has authored a number of indie comic books
A painter whose paintings and murals have been featured in several shows here in Chicago
An artist whose tile mosaics now grace a Chicago L station
A cartoonist whose strip ran in one of the ad industry’s leading publications for several years
At least a half-dozen musicians who play in bands as their “side gigs”
Almost all of them work in advertising to pay the bills, because pursuing their creative muses doesn’t often pay worth a damn. Yes, it’d be awesome for them to be able to be creative purely for the sake of their art, but that’s not likely to happen in Western culture any time soon (and the fact that we have advertising and marketing of consumer products is not the cause of this).
In the meantime, working in advertising gives them the opportunity to both pursue their creative dreams (admittedly, usually on the side), while also using their creative gifts to provide for their families.
We can start on that after we start the marketing campaign to convince the common consumer that artists have value and deserve to get paid for their work. Which they don’t believe right now.
Anyway, you do realize that famous artists like Norman Rockwell and Alphonse Mucha made a lot of their money off paintings made for advertisements, right? (I mean, what else is a magazine cover but a method by which to sell the contents?) What makes advertisements have less cultural value than other art forms? We couldn’t have the I Love Lucy Vitameatavegamin skit without the concept of an advertisement to make fun of. It all plays off each other. They’re not worthless even in a cultural sense.
I don’t buy the making-work argument. In my opinion an economic activity is a drain if everyone would be just as wealthy if we just paid the workers the same amount of money to stay home. In this sense, some advertising is a drain because we are left with unsightly or annoying ads that don’t move any product, resulting in lowering the standard of living for those who are forced to watch the ads to either consume entertainment or simply to drive on a public road. ETA: not to mention that if we simply paid ad producers to stay home then they would have the wealth of more leisure hours and could possibly start a productive business.
However, some advertising is not a drain because it makes people aware of a product, and both producers of the product and the consumers are left a bit wealthier by the transaction (the consumers spend money, it’s true, but then are in possession of a good which presumably was worth the money they spent.)
The question isn’t “Do I believe that artists should be paid for their work” rather its one of “Do I want to pay for an artist’s services”. People aren’t paid by society they’re paid by people. Companies employ artists because they believe those artists will improve their products/services/marketing in order to sell more stuff. Their value to those companies is exactly how much they improve their sales.
This idea that artists should be paid to create whatever art the artist fancies to create has never existed in history. Even artists in the old days who had to find a patron to pay them were still constrained by what the patron wanted the artist to create.
To my mind the worst aspect of the whole thing is the arms race.
Pepsi has to advertise because Coke is. And vice versa. Both could sell *almost *the same amount of product with vastly less advertising. But only if the other team was willing to cut back as well. So instead of the rest of us being an unwilling audience for 3 Coke & 3 Pepsi ads per week, we sit through 3 of each per hour.
Essentially it’s like pollution. As long as there’s no effective way to make the polluter pay, it’s in their economic interest to pollute as much as they can as fast as they can in the course of producing as much as they can as fast as they can.