OPTIMISM AND PUBLICITY

Nelson Evening Mail, Volume LXIV, 29 March 1930, Page 3

OPTIMISM AND PUBLICITY

SOME OVERSEA COMMENTS

REMEDY FOR COMMERCIAL DEPRESSION

The following observations by Mr Julian l\ Randolph, which wore printed in "Western Advertising and Western Business," U.S.A., will be found of particular interest to all engaged in advertising work in this country, since tho writer deals with the merits of advertising as a remedy for commercial depression:— A meaningful query that is widely asked among contemporary businessmen: "Does it pay the individual advertiser to carry on extensive advertising during depression''" The shrewd ones put it tin's way: "It's all right to talk of stabilising general business with advertising, but can my particular business afford an advertising programme when conditions are depressed, and when buying power and demand have sunk to low levels?" The answer to this question is no simple matter; advertising policies during depression are 'greatly affected by the financial capacity and stability of each individual advertiser. The publisher of a western business magazine lias dealt with this matter so clearly hi a recent statement that we quote him in part: "During a severe depression, it is manifestly necessary for any business enterprise to watch its position most carefully, and to make no commitments which will weaken it or diminish its capacity for weathering ihe storm. It becomes, under such circumstances' more than ever necessary to make sure that an investment in advertising is wise and sound, and calculated prove the proximate as ,well as the ultimate position of th c enterprise. ". . .On the other hand, it ought to be pointed out that the cessation of advertising effort during a depression is a dangerous policy, tending not only to reduce demand for the advertiser's products when such' demand is most urgently needed, but also to intensify the distress throughout all business." An objection often raised by the individual advertiser against advertising during depressions is that it costs more to get sales through advertising at such tunes. Of course it does. But it is even more expensive not to advertise. Whether or not a concern advertises, the difficulties of soiling are much greater during depression times than rn- ng ' 1 prosperity period, and these difficulties are likely to make pales harder and more costly to get This very fact that sales are harder to get in depression than in prosperity affords all the more reason for advertising extensively, to break down the heavy sales resistance which exists at such a time. llic Donmson Manufacturing Company, realising the increased sales difficulties caused by depression, has deI veloped a plan by which advertising is used as one means of actually controlling the cyclical swings of the company s business. Whether or not their policies would work in the plans of other .advertisers is of course problematical; but 1 .„ lelr experiences and policies are so different from those of the average advertiser as to merit considerable attention. In actual control of the cyclical phases of a particular company's business through advertising and other moans there is little doubt that tho iJennison Company is doing some definite pioneering. 1 Discussing this phase of the Company s advertising policies, Advertising I Manager, Mr W. H. Leahy has written': | In most business it is the common practice to spend the most money for advertising during the, boom times when advertising is the least needed and it can be tho least effective in i the long run. At such times money i comes easily and is spent freely without the care and thought which should «£1 VCII to advertising appropriation. | The general advertising policy of our Company is just the reverse. We believe that when business is needed—spend more—and that when business is coming in well—spend less. If, in a so-called boom period the sales-forc« is sailing a i on g easily—then let's cut down our expenditures all we can. We ■can't stop entirely in some classes, because we lose our contact—but we can cut down. Then when the salesmen are out scratching gravel in times of depression, when the factory needs orders to keep every department running, we want to spend more money in productive advertising." In further discussing his company's advertising policies during the depression of 1921, Mr Leahy says: "We increased our appropriations 'in 1921 over 1920, and in 1922 over 1921." As a result of such a definitely forward policy, both in advertising and sales efforts, the Dennison Company's sales were 12,800,000 dollars in 1921 (the year of depression), representing a gain of 2,325,000 dollars over the sales record of 1919, a prosperity year. When the stock market collapses, distributors generally lose confidence in the future and often want to curtail jtarchases of commodities or cancel orders previously placed with producers. Ibis tendency was recently exemplified when the California Walnut Growers' Association found distributors eager to reduce commitments as soon as the big crash occurred, last fall. _ When a condition of this kind occurs in any industry the surest relief against demoralisation of markets is in building consumer demand, and building it more consistently during depression than ever before.

The experience of the past indicates that in many cases the biggest profits go to him who breaks away from the crowd and carves out a strategic path for himself, based on sound business principles. "While many a business organisation waited for tilings to pick up during the 1921 depression, some industrial leaders were out in the field fighting for business with aggressive advertising and sales effort; such fighters were Campbell, Postum, Fleischmann, Lever Brothers, Buick, Armstrong, Palmolive, Packard, Colgate, Pond, Bon Ami, Studebaker, Lyon and Healy, Calumet, Rothschild, and Deiuiison. It is not unreasonable to assume that other advertisers might benfit from a" study of the achievements of these organisations, which broke away from the crowd and built mounting sales volumes despite depression of conditions. Mr Frank Presbrey, president of the advertising agency that bears his name, offers this suggestion to advertisers throughout the nation, particularly those who are in doubt as to the wisest course to pursue in building advertising policies during depression periods. "When the soil becomes unproductive the wise farmer fertilises it and then sows more seed. "This is what the wise advertiser does when faced by business depression. He not only increases his advertising investments, to bring immediate returns hut sows seeds for a larger harvest of goodwill in the future. "Increased advertising effort is the best shock absorber to meet 'the severity of a business depression.' When business is good—advertise in order to keep it: when business is dull—advertise a little harder to revive it." Easter Visitors to CilristcTiurch. EasT tor bookings will be heavy in Christchurch—book now at Stonehurst Private Hotel. Every comfort and convenience. Two minutes from centre of city. Tariff 15/- day. Telegrams: "Stonelea," Christchurch.