ECONOMIC PARADOX

Dominion, Volume 24, Issue 239, 6 July 1931, Page 11

ECONOMIC PARADOX

How Advertising Lessens Selling Cost

Speaking at a club luncheon to business men in New York, Mr. Richard H. Waldo, president of the McClure Syndicate, told his audience that there was a serious misconception on the part of the public as to the amount of advertising expense that goes into retail prices. “The more you intelligently spend in advertising a worthy product, the cheaper you can lay the product down to the consumer,” he said. “There is no black magic about it —only a marvellous economic paradox. Advertising pays its own bill —‘by stimulating consumption and speeding up production, and thereby creating enough additional wealth in the form of additional employment and newly developed tastes to pay the bill many times over.

“The enormous increase in the volume of advertising in recent years has created the impression in many minds that it has placed an additional burden upon the shoulders of the buying public. “They would be surprised to learn that the exact opposite is more nearly the truth.

“The people who have entertained wrong impressions about the cost of advertising have left out of their calculations a most important item. And that is, that while the total advertising expense has been increasing by nearly 200 per cent., the gross sales receipts have shown an increase of over 300 per cent.”

Of the five largest vessels built during 1930, three were built in Britain: The Empress of Britain, 42,0Q0 tons; Warwick Castle, 21,000 tons; and Reina del Pacifico, 17,300 tona.