Is commerce possible without advertising?

Great Debates
21

Posted by Kimstu:

I guess I would agree with both of those statements, but I was asking about neither of them. I was asking for speculation on whether we can reduce the presence of advertising in our daily lives without sacrificing all the good things about our consumer society. Does prosperity depend on advertising? Is there any other way?

It doesn’t have to be an all-or-nothing choice, of course. We could, for instance, decide to outlaw or restrict only certain kinds of advertising – starting, perhaps, with telemarketing and junk mail. I’ve never met anybody who had a kindly view of telemarketers, and that includes people involved in the industry themselves. Junk mail uses up countless tons of paper every year to print ad flyers that go straight from the mailbox to the dumpster without being opened or read. Can’t we do something about that? The postal system being a strictly federal business, it (probably) would not be unconstitutional to forbid anyone to use it to send unsolicited commercial advertising.

Let’s use that as a starting point. If we were to outlaw just one form of advertising – junk mail – what would be the economic impact? How many companies would go out of business, how many people would be thrown out of work, before the economy readjusted itself to getting along without that kind of advertising? And would all that be counterbalanced by the cost savings to the postal system and to municipal waste-management services?

22

BG: I was asking for speculation on whether we can reduce the presence of advertising in our daily lives without sacrificing all the good things about our consumer society.

Well, personally, I can—I don’t own a TV. Presence of advertising in my daily life significantly reduced without sacrificing any benefits of the consumer society! IMHO.

Okay, that’s a flippant response—I know you mean, can we as a society collectively reduce the pressure of advertising in some way? But actually, I think that the individual approaches are more powerful than we might assume.

As for top-down approaches, sure you can restrict or prohibit certain forms of advertising without killing commerce. The state of Hawaii, for example, doesn’t allow any billboards, and their commerce is doing just fine. Some states have already implemented “no call” list legislation to prohibit telemarketers from calling those who have registered for the list, and a federal version is supposed to go into effect this summer.

No, I don’t think genuine prosperity necessarily depends on advertising, although high-growth, high-obsolescence, resource-intensive consumerism probably does. If that economic structure is equated with “prosperity”, then yes, “prosperity” probably requires ever-more-intense and unrestricted advertising. But I think there’s probably a very livable middle ground somewhere between the nearly-nil advertising of the old farm days and the futuristic dystopia of ads constantly bombarding every neuron.

23

See, the thing is, we have a wider range of products available to us than ever before (what Kimstu refers to as ‘consumerism’). But the amount of time is still 24 hours. Producers have to squeeze messages in wherever they can.

But I don’t see the need to legislate away advertising. Most of the messages we receive we do so electively. And more people are excercising their option to change the channel, not buy the paper, trash the junkmail, and screen their calls. Look at the furor TV networks are in over TIVO. You can already see that they are combatting that by putting ads on the screen during the program. At that point I excercise my option and turn it off.

Again, I’m for letting the market finish this debate. There’s a car dealer in the area who I refuse to patronize due to the ubiquity of his TV advertising. Why not let businesses realize their tactics ultimately don’t work, rather than legislating further restricions on expression?

Kalt: no, I don’t think I’ll take that advice. But I’ll excercise my option and DNFTT.

24

Well, here’s hoping that once people’s heads expode (or was it just strokes?), they’ll cut the blipverts from half a second to a full second.

Sigh.

-Joe

25

Tygr: But I don’t see the need to legislate away advertising.

I certainly don’t think it’s necessary or advisable to “legislate away” all advertising. However, when people feel that the burden of dealing with ads they don’t want outweighs the benefits of receiving the ads they do want, they’re going to turn to legislation to control it—as we see with the anti-telemarketing laws.

Most of the messages we receive we do so electively. And more people are excercising their option to change the channel, not buy the paper, trashthe junkmail, and screen their calls.

However, those “options” usually require at least some time and effort, and sometimes money, to exercise. Why should we have to spend extra time sorting through our mail and turning away telemarketers, or miss getting the news, or spend money on call screening, just to minimize the growing intrusion of ever more unwanted ads?

What we like about having lots of consumer options is that they generally enrich our lives. However, when we feel that instead they’re impoverishing our lives, we look for ways to restrict them.

Look at the furor TV networks are in over TIVO. You can already see that they are combatting that by putting ads on the screen during the program. At that point I excercise my option and turn it off.

Great, but wouldn’t you rather have the option to watch the program without on-screen ads? I think it’s not unreasonable to say that having no choice except (1) to be annoyed by on-screen ads or (2) to miss the program you wanted to watch counts as impoverishing your life as a consumer, not enriching it.

Why not let businesses realize their tactics ultimately don’t work, rather than legislating further restricions on expression?

Well, your own example of the TV ads just illustrated a less-than-satisfactory business response to “realizing that their tactics don’t work”. That is, networks learned that people didn’t want to watch their commercials and were managing to avoid doing so. Did they say “oh well, the customer is always right” and remove the commercials? On the contrary, they responded by introducing a more intrusive form of advertising that consumers are even less happy with.

26

People interested in anti commercial movements might have a look at the adbusters website or the french movement Résistance à l’agression publicitaire.

I am against all forms of commercials. US television is a nightmare for me.

27

Honestly, what kind of “information” do you need?

Depending on the type of products:

  • Food commercials are useless since they do not influence my choice. They do not give hard facts.
  • Shopping for clothes is more fun by exploring the stores yourself. There aren’t many commercials anyway.
  • Information about cars, computers and technology stuff is better sought in journals or on web sites.
  • Vacations: web, agencies, documentaries on discovery channel are the better choice.
28

Kalt is right about word-of-mouth advertising. In fact, some friends and I were recently musing about how many recommendations we had given each other. Three of us got new floors put in our kitchen, all from the same place, based on a chain of recommendations. I recalled that I had never seen an ad from the place we bought the flooring from. I asked our sales guy about that. He said they really didn’t do much, because word-of-mouth was adequate to keep a stream of customers coming through. Incidentally, all three of us are using the same interior painter and the same color consultant, too. Same deal–word of mouth, and people I’d never heard about via advertising.

There is also a steakhouse here in town that doesn’t even really have a sign. It’s packed every single night of the week. They never advertise. They don’t even have their name on the building. It’s all word-of-mouth.

I know that might not be true of all places or all businesses, but it’s remarkable how well it can work.

29

I suspect the effect would be more in the number & character of what’s published or broadcasted. Since the marginal cost of publishing a magazine is in paper, distribution, and that sort of thing, I tend to suspect that the advertising therein really hasn’t affected my price too much; otherwise, the firm would not be a profit maximizer. :wink: I think a real effect may be in the NPV of a magazine, from the perspective of one deciding to start (or continue operating) one. If the act of publishing a magazine for the going magazine price is not profitable, then I might be able to make it so by selling advertising space; however, if advertising isn’t an option, I can’t just arbitrarily increase the news-stand price and suddenly become profitable. I’d have to go into another business instead.

So, from an econ standpoint, advertising may actual increase the number of magazines and papers published, and the number of radio and television stations broadcasting. Ironically, advertising may actually increase the number of voices in the various media, which one often considers to be a good thing.

30

I’m not sure whether you stumbled on this long-buried thread from another link, or what, but its body has been a moulderin’ for a while and several participants are no longer here to defend their views.

If you’d like to discuss this further, feel free to open a new thread with a link to this one; this one is closed .

[ /Moderating ]