OT-600 Million Dollars

vincent p. norris wrote:

If you want to be serious, the folks who really pay for those
commercials are YOU and everyone else who buys the advertised
products.

I am deadly serious. While I recognize and respect your background, the
other obvious caveat to private industry marketing and the associated
mark up of products, is that I have a choice to buy the item or not.

I've been retired for ten years and can't cite current numbers, but
it's safe to say that commercial advertising's media expenditures
alone cost something like two thousand dollars per family per year.

I think you're close.

[snip]

I know that, but I thought we were discussing economic waste. The
number you cited as the amount spent on political ads included print
media expenditures, not just broadcast ads.

At the end of the day, *normal* advertising in theory is to increase
sales which in theory results in more production which begats more
workers to fulfill the production (I know with beer it gets muddy). In
politics, IMO, there is no long term benefit to the economy and again,
IMO, a sure sign that the system is broken given the moneys spent. But
ya gotta buy them votes somehow.

At the end of the day, *normal* advertising in theory is to increase
sales which in theory results in more production which begats more
workers to fulfill the production

Not sure what you mean by "normal." The primary purpose of "national'
advertising (which really means the advertising done by manufacturers,
as distinct from retail advertising) is to enable them to charge
higher prices than would be possible under price competition. This is
made abundantly clear by the writings of those who "invented" national
advertising at the end of the 19th century, as well as by current
statements and other evidence. E.g., advertised brands are, almost
without exception, higher in price than identical but unadvertised
private labels and generics.

Now, once that purpose has been achieved, then manufacturers strive to
increase market share, but only at the higher price. But it is a
zero-sum game, because abundant evidence indicates that advertising
does not increase the primary demand for a product--that is, the total
amount of beer, cigarets, soap, etc., sold. If one firm gains market
share, others lose it.

As nutty as this sounds to someone who hasn't studied economics, this
actually results in a lower volume of sales than would occur at the
lower prices. Consequently, employment levels are lower, not higher,
as a result of national aldvertising.

Just one example: Years ago, during a Senate investigation of the
automobile industry, the UAW presented evidence from several
published econometric analyses that showed that many more cars would
be sold at the lower prices that would exist in the absence of
advertising, resulting in significanntly higher employment in the car
factories.

But PROFITS would be lower, so obviously the car makers would not do
that. In short, national advertisers make higher profits by selling
less.

If you want details, I can dig out the data and also the Sudoc number
of the Senate report.

In politics, IMO, there is no long term benefit to the economy....

Its purpose is to benefit the polity, not the economy. Most
economists would argue there are no long term (or short term) benefits
to the economy from national advertising, either.

Retail advertising is a different matter entirely, and serves a useful
purpose.

vince