Advertising Overload
Do we really need advertising? Put more pointedly, do we really need the portion of our industry that connives to convince us to buy things? These questions came to mind while listening to the CBC radio news story today decrying that for each dollar of income, Canadians spent $1.63 and that this figure was perilously close to the figure for the US just before the most recent mortgage crisis.
Advertising: The View From Here
Let’s start by backing up a bit. From a purely informational perspective advertising is useful to the public where it disseminates information on the products that are available. Nothing is more annoying that researching where to buy a rare industrial part for a project or repair to find in multiple cases that it is not clear who makes or sells the item. The internet has improved this somewhat by making it simple for manufacturers to list items that can be directly and easily viewed by people who are searching for them.
Similarly, product knowledge experts in stores (which is the ideal, but not the reality) serve a valuable function: to answer questions and inform consumers of the attributes of their products. Of all the retailers I frequent, I think the parts stores have figured this out best. They staff with people who have varying knowledge of car repairs, and their staff are all familiar with the systems that control the ordering and delivery of parts. The best stores have subject matter experts and knowledge of other local services that people repairing cars require.
Advertising: Enough Blame to Go Around
Much is made in the media of people’s finances. This largely convinces the public that other people are spending their money and incurring debt unwisely. Debt itself is neither evil nor good. It is neither wise or foolish. Our ability to purchase products and our access to financial instruments that make purchases possible simply boggles.
People generally know that they spend too much money. They even make light of it. Why, then?
Simply put, everywhere you look there are things (signs, videos, ads, salesmen, product placements) urging us to buy stuff. These “things” are specifically tailored using psychological factors to encourage us to buy more stuff more often. We use the illusion of scarcity to sell plentiful items. We use the illusion of exclusivity and appeal to sell common items. We exploit the brain’s tribalism with brands to sell inferior items.
In general, each of these attributes has nothing to do with the quality, desirability or appropriateness of the product. In this world, we are beyond a cobbler making you a shoe and a butcher supplying your meat. To reduce costs and provide ever more to the consumer, we must sell a certain volume of our product to be viable. To be viable or to be more profitable, we need to entice consumers to buy our product who might otherwise not.
Advertising: … Is The Trick…
In a simpler system, our cobbler would sum the costs of his materials, account for his time and overhead and charge for each pair of shoes some appropriate amount. Similarly, our butcher would buy his meat, account for time spent processing it for his clients and price his product to cover his costs plus some amount of profit. In this way, each businessman makes a small profit on each sale. If by hanging his shingle he attracts sufficient business to stay busy, everything is good.
If, however, to make sufficient profit (where no amount of profit is enough) he needs to resort to trickery, where are we as a society?
This is my argument: that psychology used in advertising to entice the consumer to purchase goods and services that they otherwise do not want is at the core of the current crisis of debt. Debt is the enabler, but advertising is the problem.