What to Do About Advertising
Although by nature as visible as can be, and God knows, audible enough, advertising remains shrouded in the mists of myth and controversy. Not even the amount expended is certain: it depends on which promotion and sales maneuvers one chooses to call advertising. There is little doubt, though, that currently we are made to pay (we don’t exactly volunteer) more than $12 billion a year for efforts to persuade us to buy the products of our industry. (If “point of sale” and other promotions not using media are included, the expense is nearer $24 billion.) What does this vast manufacture of commercial influences accomplish?
The agencies profess that it is advertising that keeps the wheels of American industry turning by creating the demand for its products. Many critics, though openly doubting that nature spelled backwards will keep them regular, meekly accept this advertising claim. Such submissiveness is not just produced by tired blood: it helps the critics to wax indignant and accuse industry of “contriving” the demand for products—at least for the products which they dislike. Consumers, in turn, delight in blaming their mistakes on advertisements: “I never touched the stuff before I saw those liquor ads”—wherefore they seldom ask why advertising did not make them prefer Tom Dewey to Harry Truman or the Edsel to the Volkswagen, let alone “good” records and books. There is much more fun (not to mention bestsellers) than sense in blaming Madison Avenue for silly purchases. For, great as advertising’s persuasive power is, it is limited: advertising informs, persuades, and reminds consumers; it does not hypnotize or compel them. Consumers make their own decisions and there is nothing to indicate that without advertising they would drive better cars, or drink less whiskey, or share Professor Galbraith’s views (or Mr. Vance Packard’s) on how to spend their money.
Nor does Madison Avenue, all claims notwithstanding, seriously increase demand for goods in general. Although there was no advertising industry in the past, people managed to spend their money. The rich actually spent more on luxuries than is usual today: advertising doesn’t seem to stimulate a Rockefeller’s desire for luxury as much as whatever else it was (non-advertising?) that stirred the appetites of millionaires before. Of course, most people had less money than they have now; but not less inclination to spend it. The powdered wigs and elaborate dresses, the fountains, palaces, paintings, and carriages of the past testify with mute eloquence that it does not take advertising to instigate art, elegance, extravagance, frivolity, vulgarity, conformity, conspicuous consumption, or consumption in general. The widespread belief that it does rests on the fallacy of composition. Advertising can quicken demand for any particular product—which is why producers advertise. But it does not follow that advertising increases demand for all products together; what is true for the parts is not necessarily true for the whole. Though each brand must advertise to get, or keep, a share of the market, if the whole cigarette industry stopped advertising, it would not go up in smoke—any more or less than now. And demand for the products of all industries together is certainly not dependent on advertising—even though the demand for each product may be (in part). I readily grant that her cosmetics or dress may make one girl more attractive than another. But the aggregate demand of men for girls would not dangerously decline without cosmetics. (Of course, it’s never been tried.)
Advertising, then, is likely to influence relative shares only—not the total; possibly its strongest general effect is on the public’s fantasy life. After they are done with their shopping, people often feel vaguely disappointed: they have been had, their purchases did not bring them what they sought—romance, love, fulfillment. Advertisements certainly cater to wishful fantasies and suggest that their realization is for sale. Unconsciously, at least, the suggestions have some influence—else they would hardly be the major advertising theme they are. But would the fantasies be less frequent or more often fulfilled without advertising? I’d rather blame the outcome—where it is not inherent in the human predicament—on our whole way of life, of which advertising is possibly the most visible but hardly the decisive part. Still, by leading people to pin more hopes on their purchases than these can possibly fulfill, advertisers contribute to diversion from truer possibilities and cumulatively intensify the endlessly barren pursuit of pseudo-happiness.
It is sometimes argued that fantasies induced by advertising add enough psychological value to the goods linked to them to justify the added cost to consumers. I find no merit in this argument. Advertising does not produce fantasies. Fantasies can be stimulated by goods without advertising. Certainly silk hats or stockings, sumptuous vehicles, furs, jewels, perfumes, caviar, etc., have included prestige and glamour value, and have induced fantasies in the past without advertising. Advertising only refashions, averages, and re-links fantasies to particular goods. What consumers are compelled to pay for is the commercial exploitation, not the production, of their wishful fantasies, which are then expensively disappointed. In exploiting them advertisers smooth the fantasies into tawdry stereotypes; this de-individualization reduces their psychological value and certainly does not justify exacting a payment.
Yet, censorship would be as odious as it would be futile. And producers certainly are entitled to advertise their products. The right to persuade is part of freedom. Just as political candidates compete for votes by persuading citizens, so sellers compete for sales by persuading buyers. In turn, voters and consumers are entitled to decide among those who try to persuade them. Freedom may mean more, but never less than this. And it would be odd if Americans were too incompetent to choose their brand of soap, yet competent enough to choose their President.
But if there is a right to persuade, there also is a right to be left alone. And if there is a right to choose, there also is a right not to be deceived, misled, or befuddled. Freedom of speech, apart from being valuable per se, is meant to help form considered and sound judgments, not to hinder them. Unbridled, the right to persuade devours other no less precious rights and degenerates into a license to bedazzle and confound, thus defeating its very purpose.
On a weekday, a man and his wife, engaged in an average number of normal activities—reading the newspaper, traveling to the office and back, reading a magazine, listening to the radio, viewing TV—are exposed to between 1,500—2,000 general advertisements, not counting those in business and professional magazines, or direct mail. (Physicians, for example, are bombarded every year with more than 4,000 pieces of mail from drug firms alone.) Now, to be “exposed” may mean anything from ignoring to carefully perusing the stuff. If they were altogether ignored, ads would be a wasteful and useless nuisance. If they were all carefully studied, the day would barely suffice. Obviously ads are scanned selectively. However, the selection would be far easier for the consumer, and much more fruitful for the advertiser, if there were fewer ads. It is hard to follow anything, or to make a reasonable decision, in a roomful of people trying to outshout each other. Freedom of speech is better served if speakers can speak so that listeners can listen—even if it means fewer speeches. Too many pearls, even if they don’t make us into swine, will not elicit much more than irritated grunts. Too much even of the best thing—and advertising isn’t quite—merely desensitizes us and makes the thing ineffective. Exposure to 2,000 ads a day is too much.
Yet, though economic life with advertisements is uncomfortable, without them it is nearly impossible. A competitive market requires the information advertisers provide: buyers must be able to locate sellers—particularly new ones—and to get information on the prices and characteristics of the goods available—particularly new ones. And consumers are probably quite willing to pay for getting the information they need and for getting it in palatable form. Thus, advertisers not only have a right to persuade—they also perform an indispensable service in using it. I can think of no better way of providing this service.
But excessive and repetitive information becomes harassment. Moreover, many advertisements are barren alike of information and amusement. Others mislead. And, sometimes, advertising hinders competition. (When it suggests that there is a difference between identical products; or when the overblown advertising budgets of firms already in the industry make the entry of new competitors costlier and riskier than it need be.) Nor are these evils self-correcting. Although each firm might be better off if all were to advertise less, it cannot do so. What is true for the whole is not necessarily true for the parts, as the fallacy of division tells us. Disarmament might help all nations; but any one nation that disarms by itself would merely invite conquest. Similarly, if a firm were to reduce its advertising while the others kept theirs up, it might well lose ground. Business enterprises can no more afford to disregard their competitors than nations can. Unfortunately there is no authority to make all nations do together what they cannot do each for itself. However, present government authority is quite sufficient to lighten the burden of advertising—without impairing its freedom or usefulness.
Advertisements may be more or less hard to avoid seeing, or hearing. All other things being equal, the more avoidable—the less coercive—advertisements are, the less undesirable they are. Billboards are more coercive than newspaper advertisements; driving or even walking, often we can avoid seeing them only by endangering life and limb. Further, billboards obstruct the view. Newspaper advertisements do not. And one can easily avoid them. Similarly, broadcasts to captive audiences are more coercive than those received over one’s own set.1 Still, even advertisements broadcast over private sets are harder to avoid than printed ones: switching the set off and on again is almost as tiresome as bearing with the “commercial”; even if one does, the unheard, or unseen, commercial interrupts the performance—whereas reading is not interrupted by passing over advertisements.
Avoidability is one rough index to the comparative desirability of advertisements. Informativeness is another. Some advertisements give information about prices and qualities. Many department store and food-chain ads, and ads for new products and models do so. A second kind of advertisement tries to persuade or exhort without providing specific and relevant information.2 The ad may simply say “buy X,” or “the sociables drink X,” or “X belongs,” or “Mrs. Merryweather uses X,” or “X brings you romance,” or “X is more reliable.” (The declaratives, and pseudo-comparatives, inform as little as the imperative.) Of late, these non-informative advertisements prevail. Consumers seem less persuaded by specific, factual information than by images catering to their fantasies. For to suggest that a brand of cigarettes is virile, or of beer old-fashioned, or of cars status—conferring, has not much to do with tobacco, beer, or cars; it fastens fantasies to them.
All other things being equal, the less informative advertisements are, the more dispensable they are. However, if the informative content of each advertisement must be studied, this general rule would be hard to apply. Fortunately, the coerciveness and informativeness indices roughly coincide: on the whole, the more coercive advertisements are also the less informative ones. Billboards and skywriting usually contain less information than broadcast “commercials,” which in turn usually are less informative than printed advertisements. (Refinements are conceivable: singing “commercials” are usually less informative than spoken ones; in print, roughly, the fewer words per unit of space, the less information; analogous sub-classifications can be imagined for TV.) Certainly, this does not do full justice to all cases: some printed ads are less informative than radio commercials, some pictures more informative than words (e.g. in fashion ads), etc. Still, this scheme does justice no more roughly than the fiscal classification of movies and plays as entertainment (some certainly are more and many less) or of some items as “luxuries” and others as “necessities.” And it has the indispensable advantage of yielding clearly denned, easily applied objective criteria.3
If desirability be roughly proportionate to informativeness and avoidability, and these, by and large, are associated with the media used, we can moderate advertising, and particularly the least desirable kinds, without censoring or restricting freedom. Taxes could reduce the total volume of advertising; if they were heaviest on the least avoidable and informative forms, these would be reduced most.
Skywriting might be prohibited outright if only as a matter of principle, and billboards taxed prohibitively. I think our freedom to see the sky without having to read about chewing gum has priority over the interest of buyers and sellers of anything. After all, they have many other ways of communicating. Mutatis mutandis, this goes for billboards, too. But they are not always easy to distinguish from signs—which obviously are needed. Signs differ from billboards mainly by being near to the establishment to which they point. By exempting from taxation a sign not exceeding a certain size and distance from the place it points to, and increasing the tax progressively with size, number, and distance (as well as luminosity and sound volume) until the prohibitive billboard tax bracket is reached, we would restrain signs without having to decide what is a sign and what is a billboard.
A tax on advertising needs less justification than taxes on transportation, telephone conversations, theater tickets, or soap. However, four special advantages might be mentioned. (1) The effectiveness of advertisements is likely to be heightened since each will draw more attention as the total number is lowered. Quite possibly firms will achieve as much with fewer advertisements as they do now with more. Thus the total cost per customer need not be higher, though each ad will cost more. In effect, the government’s revenue may not cost the taxpayers anything. (2) Big advertising budgets make entry into some industries hard and add to the risk of introducing new products since they make it unduly costly to secure consumer acceptance. An advertising tax may reduce total costs and risks for new firms and products. (3) For consumers, the reduction of total advertising volume and particularly of uninformative and obtrusive advertisements will lessen harassing and desensitizing effects and aid the absorption of informative contents. (Effects on media are considered below.) (4) The tax may benefit consumers also by making advertising competition less and price competition more attractive to industry.
To achieve these purposes, two taxes may be levied. One may be imposed simply by treating advertising costs—beyond certain exemptions—not as a business expense but as part of taxable net profit. At present, each advertising dollar may cost a profitable firm not much more than fifty cents—the remainder would be taxed away if it became profit. If it were not treated as a business expense, each advertising dollar would cost an unprofitable firm what it costs now ($1.00), and a profitable firm up to $1.50. Advertising expense up to, say $50,000 per year, or up to 3 per cent of sales, should be exempted. (The figures are illustrative only.) This would favor new products and new and small firms without requiring administrative decisions on size and newness. New firms are favored also inasmuch as only the advertising expenses of profitable firms are taxed. Yet the benefit is not such as to favor reorganization to get it.
A second tax might be levied not on the purchaser, but on the price of advertising space, or time, sold. This excise tax should be a higher percentage of the sales price of TV or radio time than of space in print media. Thus, we would discriminate in favor of the less coercive advertisements which are likely also to be the more informative ones. Here, too, some exemptions might be in order to favor both smaller media and the smaller advertisers. One might exempt from the tax the first $20.00 of the cost of all advertisements. And a tax rebate may be given to, say, a broadcasting station or a magazine whose advertising revenue is below a minimum figure per year.4
Both taxes are best levied by the federal government—though cities might want to impose additional taxes on signs. The resulting revenue could be earmarked for increases in depreciation allowances or reduction of corporate and personal income taxes.
The exemption mentioned may lead firms to have more small ads, if they could be dispersed through the paper or within the broadcast. But advertisements are best confined to specific sections of papers and magazines (employment and classified ads already are) and to specific spans of time on broadcasting stations. They would be easier to find or avoid. This can be accomplished by regulation and by not exempting from the tax low-price ads that do not appear on the advertising pages, or in set time spans. Another danger is a shift to the already excessive direct mail advertising (although the tax on advertising costs is likely to reduce it in the first place). This could certainly be remedied by making postal rates for printed matter, except periodicals and books, equal to the letter mail rate. At present, taxpayers actually subsidize direct mail advertising through below-cost postal rates. There is no reason in the world to do so. (An exception could be made for nonprofit institutions; but I’m not convinced of its usefulness.) Finally, the tax may lead some firms to make greater sales efforts, other than advertising. I see little harm in that (and salesmen will remain quite expensive relative to advertisements, even when these are taxed). All taxes, of course, have undesired, and sometimes unforeseen, effects, as well as desired ones. But I believe that taxes on advertising will yield a major net advantage to producers and consumers.
Now to the media. If advertising is taxed, newspapers and magazines will get less income from it. To make ends meet, they will have to charge readers more. But though readers would pay higher prices for their magazines and papers, their costs would not be higher: they would pay as readers what they now pay as consumers. Advertisers, who now make up the difference between the cost of getting out the paper and the price to the reader, charge it to consumers. Every time he (or she) buys cigarettes, brassieres, or beer, the consumer pays for the advertising cost that supports Playboy or Parents’ Magazine or the Chicago Tribune. As the beer brewer eases his advertising, the price of beer will include less of the cost of the newspaper, and the price of newspapers more. Whether the price of beer actually goes down depends on how much will be saved on advertising and on how this affects the total cost of beer.5 Nor need lower costs lead to lower prices: brewers may increase wages, or dividends, or non-advertising promotion instead; they may even improve the quality of their beer. However, there is bound to be a social benefit if fewer resources go into advertising, though one cannot determine in advance how it will be shared.
It is sometimes said that advertising pays for itself: less advertising would reduce sales and the size of firms and thereby increase production costs. This argument rests either on the fallacy of composition—as noted above, advertising does not increase aggregate sales—or (with respect to individual firms) on an unjustifiable factual assumption: that anything less than the present amount of advertising would cause firms to shrink below their optimum size. There is no evidence for this. Why is the present amount of advertising just the amount needed to bring about optimum size? As well say that optimum firm size requires more advertising and propose a subsidy for Madison Avenue.
The effects of no advertising, of course, would differ from those of less advertising; only the latter are relevant here. Nonetheless, we may note that the size of most firms does not depend on advertising at all. Steel mills, airlines, textile mills, or wheat farms reach optimal size owing to the inherent cost economies and price advantages. In the long run this seems true for all industries. (Incidentally, such consumer services as medicine and law have not suffered, however unadvertised.) A firm’s own advertising may shorten the period of growth to optimal size; however, the advertising of other firms may prolong it. There is no evidence to indicate that, on the average, the span is more often shortened than prolonged.
Some firms have long gone beyond the size required for most efficient operation. They would become inefficient if they did not organize into separate, semi-autonomous units. Such concentration is at best economically harmless. Since, to some extent, it depends on advertising, less advertising might reduce it without sacrifice of efficiency. I wonder whether we might want to go beyond: the advantages of less concentration and less standardization of products might well be worth a sacrifice of efficiency at least in the consumer industries; the higher cost might be more than offset by the advantages of diversity and autonomy.
At any rate I can see no virtue in shifting part of the cost of Time magazine to consumers who never touch it, but are made to pay when they buy a car or a coke. It would be simple justice to ask the reader who wants Time to pay for it, rather than the coke drinker who doesn’t. And, whereas consumers are required to subsidize magazines and newspapers, books are not so subsidized: as book buyers, we pay the full cost; as periodical buyers, only a small part of it. This has widened the price difference between books and periodicals out of all proportion. But certainly reading books is educationally and culturally no less important than reading newspapers and magazines. Narrowing the price gap will be helpful.
The higher price may cause the circulation of some periodicals to shrink—if people don’t feel they are worth as much as they will cost. Whether that is good or bad depends, of course, on what people do with the money and time no longer spent on these newspapers and magazines. Perhaps they will read more books; perhaps drink more whiskey; and there are many other possibilities. The high-circulation magazines and papers will be hit hardest. Since the tax favors them, we might get more smaller magazines and papers. This makes for more diversity and I’m for it.
Regardless of what they ought to be, newspapers and mass-circulation periodicals are in the main entertainment media. Much of their space is devoted to undisguised entertainment: sports, society, “human interest,” comics, oddities, etc. And the news stories proper often are not much else—though less openly so. “News” mostly is selected for entertainment value, not for importance as historians, economists, political scientists, or plain people might define it. “News” is what people want to read about—not what is important. There are, of course, some papers that nobody would accuse of being entertaining—e.g. the New York Times. But they are few. And even the news coverage of the Times is guided by reader interest as much as by importance: the space given to Israel clearly bears this out, when measured against the coverage of nations of comparable world importance, in which the Times readers are less interested. And the newspapers are largely read as an undemanding kind of fiction, as a way to kill time. It would be no calamity if circulation were to shrink somewhat as those unwilling to pay what it takes to publish papers and big-circulation magazines buy fewer of them. Certainly people are entitled to buy whatever papers they want; but not to a subsidy from the non-buyers.
I have no space to forecast how prices of individual newspapers and magazines will be affected by an advertising tax. It seems likely, however, that tabloids and mass magazines will lose a fair amount of advertising; they will have to charge more to readers and will suffer a loss in circulation.6 Smaller newspapers and magazines stand to gain some advertising, or at least are unlikely to lose any. Their number and their circulation probably will increase also, since the gap between their price and that of the mass-circulation magazines will have been diminished.
Even a cursory look at the New York Times may be instructive. About half the ads now appearing in it would be exempt from one or both taxes. (Employment, real estate, and other ads cost less than $20.00 each, which exempts them from the sales tax. And, usually, they are inserted by firms or persons whose advertising budget is not high enough to be taxed as part of their income.) There may be fewer big ads for cigarettes or beer. Even this is not entirely certain since the tax would discriminate in favor of newspapers and against billboards, TV, and radio. The Times might actually end up with more ads. It is questionable then whether it would have to charge more to readers. But if it did, I doubt that it would lose many, since other newspapers and magazines are likely to have to increase their prices no less and possibly more.
If the circulation of tabloids should drop, the public would hardly be less informed or instructed. Tabloids specialize in factualized fiction, not information. Readers are of course entitled to the entertainment provided but they must be allowed to pay for its cost.
Advertising in “news magazines” would probably be reduced and their price increased. They are likely to be read instead of, rather than in addition to, newspapers. There may be a decline in circulation. Mutatis mutandis, this will be true probably also for the mass magazines.
Small and even medium-small magazines such as the Atlantic Monthly are more apt to benefit than to suffer. It will become comparatively advantageous to advertise in them. Many of their advertisers, such as publishers, are likely not to be taxed on their advertising budgets (anyway I should favor an exemption for book ads). The magazines themselves might qualify for a rebate of the sales tax. And they will be less expensive relative to the mass magazines.
Unlike newspapers and magazines, almost all TV and radio stations get their income exclusively from advertising. Since the tax on that advertising would be heavy, particularly for the bigger stations, most TV stations would need money from other sources; for costs would remain high even if the stations found ways of saving as they certainly could. Pay TV will have to be the solution. Once more, this would not increase the cost to the public, but would shift it from general consumers to TV viewers—which seems no less than just.
Most people probably like TV more or less as it is—else advertisers would sponsor different shows. And people are entitled to as many Westerns, soap operas, etc. as they want—as long as they pay for them. However, sizable minorities would prefer to pay for different programs—and cannot get them as long as each TV station must cater exclusively to an average of tastes to make ends meet through advertising revenue. Pay TV will permit stations to serve these minorities—and perhaps, in time, increase their number. Since the tax favors smaller stations with smaller audiences, each station will try to serve a specific audience instead of all stations serving an average of tastes. TV could not but get better.
As stations become less dependent on advertisers and jumbo audiences, they will be able to determine the details of programming altogether independently, as do magazines. Viewers, by subscribing to the stations or programs they favor, will have the influence they now have over magazines. And they probably will have a greater range of choice. In addition to dividing the viewers into a number of smaller individual groups, pay TV may also shrink the total size of the audience—those who think a program is not worth paying for will drop out. I cannot persuade myself that this would be disastrous. (One could exempt from payment hospitals, old age homes, and social security pensioners.) On the other hand, in the new situation we might drop the present attempts at federal regulation of programs in the public interest. They are more likely to harm than to help.
Our ability to relate spontaneously to each other, to truly experience, is numbed by over-communication which cannot communicate since it reduces contents to clichés: messages whose emotional impact has been used up. Excessive and indiscriminate repetition and quantity does that, as well as tailoring to an average of tastes. Whatever substance there is to complaints about people being uninformed, conforming, unspontaneous, bored, blasé, and tense cannot be associated with lack of access to information or aesthetic experience. It is more likely to be a response to unselective, even involuntary overexposure to advertising and mass communication. Blinkers seem a natural reaction to the glare of advertising which, whether cozily pink or lurid, does not help to gauge the world’s true proportions. The ceaseless shouts of commercial enthusiasm make it hard to cultivate genuine feeling and expression. In the end, the synthetic life and language they propagate impoverish and diminish actuality and flatten our experience of it. Not the least effect of less, and more confined, advertising, and of less mass-communication addressed to smaller, less homogenized audiences, may be a resurgence, or anyway some encouragement, of a more spontaneous and less cliché-ridden life.
1 This, incidentally, seems reason enough to require users of radios in public places to have licenses. Getting such a license should be less cheap and easy than obtaining a pistol permit or a dog license. After all, if a dog assaults me, I can sue; but not if a radio does. And radios need no airing, and are useless for self-defense, except against other radios.
2 We neglect fraudulent ads which are illegitimate—though the law could stand clarification.
3 I should vehemently oppose entrusting to any administrative agency power to judge the informativeness, relevance, coerciveness, etc. of ads. Even the quasi-judicial power to determine deceptiveness—which is not after all a matter of opinion—has been misused by the omissions and commissions of the FTC, as former Commissioner Lowell Mason shows vividly in The Language of Dissent.
4 If technical difficulties can be overcome, it might be better to make the rebate depend on the proportion of time or space used for advertising.
5 Even if the industry's advertising cost is not reduced, more of it will go to the government in taxes. This will lower the tax burden elsewhere. And less advertising per dollar spent means less nuisance and waste of resources.
6 The success of magazines without advertising when cheap (e.g. the old Reader's Digest) or expensive (e.g. Horizon, American Heritage) suggests that there are many ways of skinning the cat even without any advertising.