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Advertising
Advertising is one of the largest industries. In 1986, for example, American business spent over $ 100 billion to advertise its products. Since consumers are the principal targets of these sales companies, we ought to know something about the services advertisers perform, as well as some of the techniques they use.
The benefits of advertising.
Advertising benefits consumers and the economy in a number of ways:
- It provides us with information about prices, recent improvements in certain goods and services, and the availability of new ones.
- Advertising often results in lower prices. Large- scale production can reduce costs. By creating mass markets, advertising enables producers to reduce the costs of their products.
- Advertising stimulates competition, and competition benefits us all. Advertising by one firm puts pressure on others within the industry to do at least well to attract the consumer’s money.
- Advertising pays most of the cost of magazines and newspapers, and all of the cost of commercial radio and TV.
- Advertising helps the economy as a whole by stimulating consumer demand. Consumer spending has a direct effect on the health of the economy. Advertising helps to keep that spending at healthy levels.
The price we pay for advertising.
Not everyone agrees that advertising benefits the economy. Critics list the following points of its disadvantages:
- The information contained in advertising does not inform and often misleads the consumer.
- Because it costs money to advertise, this cost adds to the price consumers pay.
- Consumers are tempered to spend money for products they do not really need.
- Radio and TV are not really free because the cost of advertising on them is also passed on to the consumers.