ECONOMIC PARADOX

Wanganui Chronicle, Volume 74, Issue 114, 16 May 1931, Page 9

ECONOMIC PARADOX

HOW ADVERTISING LESSENS SELLING COST. Speaking at a club luncheon to business men in New York, Air 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. “3’llo more you intelligently spend in I advertising a worthy product, the cheaper you can lay the product down to the consumer,” ho said. ‘There is no black magic about it—only a marvellous economic paradox. Advertising pays its own bill—by stimulating consumption and speeding up productionand thereby creating enough additional wealth in the form of additional employment and newly developed tastes to pay the bill many times over. “Tho enormous increase in the volume of advertising in recent years has created the impression in manv 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 th? 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 ove r 300 per cent. ’ ’