Advertising gets a bad press. In his 2015 encyclical “Laudato si,” a blazing indictment of capitalism, Pope Francis proclaimed, “Since the market tends to promote extreme consumerism in an effort to sell its products, people can easily get caught up in a whirlwind of needless buying and spending. Compulsive consumerism is one example of how the techno-economic paradigm affects individuals.”
The anti-capitalist Noam Chomsky also criticises the ad industry, saying its goal is to trap people in consumerism in order to indoctrinate and exert control over them. Critics of advertising see marketing companies as omnipotent and malevolent. They try to create the impression that consumers are mindless victims in the industry’s clutches. According to this narrative, advertising companies use propaganda to convince people to buy meaningless products, with the resulting rampant consumption impacting the environment at an unprecedented pace.
To prove the advertising industry’s omnipotence, its detractors have been repeating the same myths for more than half a century. One is based on Vance Packard’s 1957 book The Hidden Persuaders, which generated a great deal of media coverage when it was first published. The book reported one particularly manipulative advertising method, which involved a cinema flashing split-second advertising images onto the screen during film showings. These images appeared and disappeared so quickly that audiences did not even consciously notice them. The press referred to subliminal advertising as the “most hidden, hidden persuasion,” those who used such techniques as “invisible monsters,” who engaged in “brainwashing.” Whether the method really worked as claimed, or whether the alleged success was merely the result of false measurement techniques, remains unsubstantiated. Some experiments claiming to prove the success of the method were fabricated.
Of course, advertising can work, but it is not as all-powerful and insidious as its critics make it out to be – and far more frequently, it is actually ineffective. Henry Ford is credited with once saying that “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” And David Ogilvy, the great advertising guru, repeatedly ridiculed the advertising campaigns created by other advertising professionals in his book Confessions of an Advertising Man, accusing them of being inefficient, usually doing nothing to increase sales, and serving to entertain rather than inform. He accused other advertisers of being more concerned about increasing their fees than with selling their clients products.
Twenty years ago, Howard Schultz, the founder of Starbucks, said that it was difficult even then to launch a product through consumer advertising because people don’t pay as much attention as they did in the past, or believe the message. He said he was surprised that clients still believed they were getting a good return on their investment.
In January 2021, American advertising experts Bradley Shaprio, Günter Hitsch and Anna E. Tuchmann published a study based on their meticulous, scientific analysis of TV advertising for 288 consumer goods. Their shocking finding: Not only did advertising not pay off for 80 per cent of brands, it even had a negative return on investment.
One might argue that targeted online advertising via social media is far more effective today, but there are doubts about that, too. Just a few years ago, Procter & Gamble and Unilever reduced their online advertising spend by 41 and 59 per cent, respectively – and it had no negative impact on their bottom line.
Advertising is not omnipotent, as agencies and anti-capitalists would have us believe – for a variety of reasons – and the image of the mindless consumer being seduced by ingenious advertisers into spending all day buying unnecessary items is a gross exaggeration. If anyone is being cheated, it is more often than not the companies that spend so much money on ineffective advertising and which only join in the advertising game because their competitors are doing so. Advertising agencies are most successful at convincing their customers – not their customers’ customers.
When I picture a world without advertising for products and services, I think of the dreariness of socialism, where boring posters dominate the streetscape, proclaiming the propaganda messages of the party. I much prefer advertising under capitalism, which, at its best, has achieved the status of art, as was the case with Andy Warhol, who was himself a commercial artist by profession.
Rainer Zitelmann is the author of over 20 books including The Power of Capitalism – A Journey Through Recent History Across Five Continents and The Rich in Public Opinion: What We Think When We Think About Wealth.