A MODERN MAGIC CRYSTAL.

Auckland Star, Volume LIX, Issue 174, 25 July 1928, Page 6

A MODERN MAGIC CRYSTAL.

ADVERTISING AND THE PUBLIC.

Advertising to-day has become one of the marvels of the twentieth century, writes George B. Hotchkiss, chairman of the Department of Marketing in New York University. It is evident in the increased volume of advertising of all sorts that greets our eyes at every turn. It is evident in the list of the Stock Exchange, where we find dozens of companies whose most valuable assets are the goodwill of their names and trademarks, built largely by advertising. Indeed, if their tangible assets were destroyed they could still dispose of their businesses for huge sums. A branded article that the public knows and likes is strongly entrenched against financial adversity. The true story of some of these advertising successes is as fascinating as a romance. A mild antiseptic liquid had been doing a modest business for years prior to 1921, with annual net profits somewhere around £20,000. And then the owners began to advertise more extensively and effectively. The volume of business doubled and quadrupled, until last year the net j>rofits were forty times greater than seven years ago. Then there is the vegetable shortening that has grown from the infant of a great corporation to its most valuable product. And the safety razor that has built a mammoth business. And the canned soup and the mint candies—the list of great industries that advertising has helped to build could be extended indefinitely. Among retailers also great institutions have been built up with the aid of advertising—department stores, mail-order houses and chains of stores. Inspired by these successes, more manufacturers and more retailers are using advertising in constantly increasing volume. As a result the total cost of advertising in the United States annually is estimated to be well above £200,000,000. The business man no longer questions whether or not to advertise, but where and how to advertise most effectively. The general conclusion reached by those who are best competent to judge is that the most effective means is to use newspapers which reach the home and whose audited circulations are proof that their message reaches the bulk of the community served by the advertiser. Advertising is the magic crystal of knowledge. Although less spectacular than the magic carpet of transportation, it is equally essential in the process of bringing together demands and supplies. Producers need to know where their goods are wanted; consumers need to know where their wants can be supplied. Someone, somehow, must transmit the information. If the seller does not do it—as ordinarily he does—the buyer must. Columns in our daily newspapers filled with the want ads. of would-be buyers testify to the fact that advertising is a double-ended service. As a good servant of the public, advertising performs the following duties: (1) It saves time and effort in buying; (2) it establishes known standards of price and quality, and makes these a matter of public knowledge; (3) it gives information that leads to a more intelligent choice of competing products; (4) it gives information regarding new products (and new uses for old products) that contribute to comfort and happiness; (5) it gives assurance of satisfactory performance in advance of actual trial; (6) it increases the consumer's mental satisfaction by his pride in owning a product that has prestige in the eyes of his neighbours; (7) it helps to subsidise education and wholesome entertainment in the editorial contents of publications and in other media (such as the radio). Business men would gladly find a cheaper substitute for advertising if they could. The only reason why they continue to use advertising in ever-increasing volume is the fact that they have been unable to find a less costly and wasteful method of distributing information about themselves and their products. Many a company can show in actual figures that thej total selling cost on a can of their soup or baked beans is less when advertising is used than it was when they depended on personal salesmanship alone. In such cases, advertising pays its own way; it costs the consumer nothing. Advertising sometimes saves a part of its cost, also, by permitting mass production of a standardised product in enormous quantities, and hence at a lower production cost than would otherwise be possible. The consumer reaps the benefit of these savings, directly or indirectly. Thus it is evident that although the consumer pays the cost of advertising it is not altogether a tax. Without advertising he might have to pay more for less quality. Moreover, he receives added services which are worth something. Probably they are worth all they cost, for he continues to pay for them in preference to a different expenditure of the same money.