# Why in the world does BASF advertise on TV? **URL:** \ **Category:** Factual Questions\ **Created:** [December 30, 2003, 3:39pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779 "2003-12-30T15:39:02Z")\ **Posts on this page:** 12\ **Page:** 2
**Author:** ![An\_Arky](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@An\_Arky](https://boards.straightdope.com/u/An_Arky)\ **Post date:** [December 30, 2003, 10:44pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/21 "2003-12-30T22:44:31Z")
Excuse me for not bowing to the Temple of The Market, but while of course companies rely on investors to finance them, they often throw the baby out with the bathwater just to impress those investors. When putting people out of work is a “good” thing, perhaps we’ve got to reexamine priorities a bit. Of course, I question whether investors actually demand that companies lay people off. I think basically they do it knowing that the jackals of finance will bark their approval by bumping up the stock a couple of points, further enriching the rich. ---
**Author:** ![Flash-57](https://avatars.discourse-cdn.com/v4/letter/f/839c29/32.png) [@Flash-57](https://boards.straightdope.com/u/Flash-57)\ **Post date:** [December 30, 2003, 11:05pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/22 "2003-12-30T23:05:44Z")
Still, are new BASF investors THAT important to bother spending tens of millions of dollars on advertising “nothing”? As I recall from my economics classes, once the stock has been sold, the company gains very little from new investors buying that stock from old investors. Sure, the price of the stock goes up slightly and the other investors make money–on paper. But, the company itself doesn’t really get anything out of it. Is it really just a scheme to inflate stock prices? ---
**Author:** ![YWalker](https://avatars.discourse-cdn.com/v4/letter/y/6f9a4e/32.png) [@YWalker](https://boards.straightdope.com/u/YWalker)\ **Post date:** [December 30, 2003, 11:48pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/23 "2003-12-30T23:48:09Z")
BASF advertising is what is called “pull marketing” - the idea is to try and “pull” product through the market to consumers. For example if I buy a jacket from company X they might have a label on there that says the insulation is from BASF - and that makes me feel good (in theory) because I have heard of BASF from TV. Same thing for ads for Andersen Windows - if I go to buy a new house it probably already has windows installed. But when the builder tells me they are Andersen, I know the name from TV and that makes me more likely to buy his house (again, in theory). ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [December 31, 2003, 1:05am UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/24 "2003-12-31T01:05:11Z")
We’ve been around this one before: [http://boards.straightdope.com/sdmb/showthread.php?s=&threadid=46879](http://boards.straightdope.com/sdmb/showthread.php?s=&threadid=46879) ADM is another example, as I mentioned in that thread Then we have AFLAC, and other sellers of corporate benefits or HR outsourcing - I don’t believe that large a proportion of the audience is in a position to decide on such things, and hoping to get employees to request AFLAC insurance seems rather roundabout. And for some of them (not AFLAC), the main thrust of the ads is that they save the corporation money, not that they provide particularly wonderful benefits. I would guess that the average employee would rather HR services NOT be outsourced, as a rule. Tyvek stucco wrap has been advertising on the radio lately. The stock exchanges have been advertising. Why NASDAQ and the NYSE feel a need to do this, I don’t know. > [@](#): > > Still, are new BASF investors THAT important to bother spending tens of millions of dollars on advertising “nothing”? As I recall from my economics classes, once the stock has been sold, the company gains very little from new investors buying that stock from old investors. > > Sure, the price of the stock goes up slightly and the other investors make money–on paper. But, the company itself doesn’t really get anything out of it. We’ve been around this before, too, but it’s a different topic. Yes, corporations have quite legitimate reasons to be concerned about their stock prices, and will sometimes make detrimental decisions for the sole purpose of boosting them. Advertising in order to bolster their stock price isn’t very hard to imagine. ---
**Author:** ![spingears](https://avatars.discourse-cdn.com/v4/letter/s/ebca7d/32.png) [@spingears](https://boards.straightdope.com/u/spingears)\ **Post date:** [December 31, 2003, 3:14am UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/25 "2003-12-31T03:14:04Z")
There is a lotta crapola advertised on TV for the potential future buyers who are now juveniles. How many dopers are going to buy a HumVee for instance? Just trying to create future demand and buyers. Approx 50% of TV viewers aren’t going to buy ‘womens’ stuff and v/v. To answer the OP, if they didn’t have reason to believe it was a good investment they wouldn’t ‘wste’ mney on advertising. * * * “Beware of the Cog” ---
**Author:** ![Flash-57](https://avatars.discourse-cdn.com/v4/letter/f/839c29/32.png) [@Flash-57](https://boards.straightdope.com/u/Flash-57)\ **Post date:** [December 31, 2003, 8:36am UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/26 "2003-12-31T08:36:34Z")
> [@](#): > > \*Originally posted by yabob \*\*\* > Advertising in order to bolster their stock price isn’t very hard to imagine. \*\* Couldn’t that end up being a drain on the company? If they spend X million dollars to inflate the stock price through advertising, aren’t they forcing themselves to spend X million next year, just to keep the price from dropping back? And, if they want it to go up more, they have to spend 2X million the next year. ---
**Author:** ![Rattlehead02](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rattlehead02/32/3944_2.png) [@Rattlehead02](https://boards.straightdope.com/u/Rattlehead02)\ **Post date:** [December 31, 2003, 9:21am UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/27 "2003-12-31T09:21:52Z")
> [@](#): > > \*Originally posted by An Arky \* > \*\*I think basically they do it knowing that the jackals of finance will bark their approval by bumping up the stock a couple of points, further enriching the rich. \*\* You do know that it’s not only the rich who invest, right? ---
**Author:** ![duffer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duffer/32/1026_2.png) [@duffer](https://boards.straightdope.com/u/duffer)\ **Post date:** [December 31, 2003, 10:48am UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/28 "2003-12-31T10:48:37Z")
If you live in America, yes, you have dealt with Con-Agra and ADM. Not directly, but your cash has gone to them at some point. Where I live, the biggest buyers of wheat is the State Mill. The Mill proceses the wheat and waits for ADM and Con-Agra trucks to show up to ship it to bread/bagel/pasta/ etc, makers. Granted, you don’t deal direct with these companies, but you do business with them. And wheat isn’t the only commodity they deal in. Outside the US, it’s a lower chance, but still likley. ---
**Author:** ![An\_Arky](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@An\_Arky](https://boards.straightdope.com/u/An_Arky)\ **Post date:** [December 31, 2003, 10:58am UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/29 "2003-12-31T10:58:42Z")
> [@](#): > > \*Originally posted by GildedLily \* > \*\*You do know that it’s not only the rich who invest, right? \*\* Absolutely. But stock going up a couple of points does little for the small investor, but for a large investor, it means much more. That’s why I pointed out that it mainly enriched the rich.🙂 ---
**Author:** ![Kiger](https://avatars.discourse-cdn.com/v4/letter/k/b9e5f3/32.png) [@Kiger](https://boards.straightdope.com/u/Kiger)\ **Post date:** [December 31, 2003, 1:36pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/30 "2003-12-31T13:36:16Z")
> [@](#): > > The stock exchanges have been advertising. Why NASDAQ and the NYSE feel a need to do this, I don’t know. I can tell you why NASDAQ does since I used to work for them. It’s all about name recognition. You should see how many logo shirts they gave us so we could advertise for them all the time. Remember the NFL NASDAQ Half-time Report? All that money for name recognition. Same deal with their $45,000,000 Times Square video wall. It seems to have backfired though, and I won’t be surprised to hear in a few years, “NASDAQ? What’s that?” ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [December 31, 2003, 4:39pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/31 "2003-12-31T16:39:27Z")
> [@](#): > > \*Originally posted by Flash-57 \* > \*\*Couldn’t that end up being a drain on the company? If they spend X million dollars to inflate the stock price through advertising, aren’t they forcing themselves to spend X million next year, just to keep the price from dropping back? And, if they want it to go up more, they have to spend 2X million the next year. \*\* Well, they write it off just like any other expense, and the relationship isn’t that simple. BASF seems rather profitable; $34 B revenues for the last 12 months, earnings before tax of $6 B, according to the yahoo financial pages. If their spending however many millions on “name recognition” ads has something to do with the multiple they trade at, they probably figure it’s worth it, not that their multiple looks THAT high (current P/E is 26, a bit high given that their projected growth isn’t that great - PEG ratio given as 1.88 - at a glance, they look a bit overpriced to me following a recent runup, though they are paying a decent dividend). ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 31, 2003, 5:09pm UTC](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779/32 "2003-12-31T17:09:38Z")
I recall Thales advertising widely on British radio shortly before the carrier contract was announced. They got part of the contract so it was evidently money well spent. [Previous page](https://boards.straightdope.com/t/why-in-the-world-does-basf-advertise-on-tv/221779.md?page=1)