Does Advertising Create Wealth?

Discussion in 'Business & Economics' started by Carcano, Apr 16, 2011.

  1. Carcano Valued Senior Member

    No I dont mean 'create wealth' for the advertising agency or their clients.

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    I mean, does advertising create wealth for the OVERALL economy?

    Most people seem to think that its wasted capital...adding to the cost of a product the price of convincing consumers to buy it.

    Do the benefits of getting free services with advertising out weigh the cons?
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  3. Michael 歌舞伎 Valued Senior Member

    I suppose you would have to add up all the time people spent looking for information about products they want versus randomly receiving advertising and factor in the time spent receiving unneeded advertising.

    Does productivity go up or down?

    Also, sometimes people may find they want to buy something they didn't know they wanted to buy. How does that factor in?

    Lastly, could you imagine a world with ZERO advertising? As in you walk into the store and everything is labeled by name and ingredients ala generic style? How boring would that be?

    Disclaimer; The following words: factor, productivity, information and advertising were probably used incorrectly

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  5. cosmictraveler Be kind to yourself always. Valued Senior Member

    A well done and well placed advertisement would be very beneficial to many people, those who make the product, those who distribute it , those that inspect it, those that sell it and those that buy it. Without a product being known , no one would ever be looking for it to buy. If the product is similar to another product like tires then the better advertiser will gain more customers and a better overall production rate as well. The more the product sells the more people will be needed to make it at the plant and if it sells really well a newer bigger plant would be needed with more workers to be employed.
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  7. Me-Ki-Gal Banned Banned

    It don't create wealth any more than administration costs do . They are a drain on wealth . Advertisement is a tool to get people to buy product . It does not make product . The product you make is what makes wealth . Everything else is an illusion . That is why the economy is crashing . To many bottom feeders at the troth . Administration costs are eating up the world . Advertising might bring personal wealth but it is ultimately taking wealth from one person and giving it to another instead of creating wealth. Money is suppose to represent the goods and services that backs the money . Bankers make money a commodity and this strips more wealth from the actual goods . Yeah Way that is what bankers do. They sell money for a price and depending on your ability to pay the price the cost of the money goes up or down . So if I think you are poor I would charge you 5 bucks for milk and if you are rich I will charge you 3 bucks for milk . Thoughts from the inside of a banker . Want to buy some money . I will sell you a 20 for a 50
  8. wynn ˙ Valued Senior Member

    Advertising has always existed, the difference is only in how much resources are put into it.
  9. dixonmassey Valued Senior Member

    Sure it does, "Wealth" is an abstract human concept, it's all in your head (other than life essentials which are rather relatively cheap for time being over here). Advertisement industry messes with your head, it links consumption of products X with your social status, insecurities, longings and fears, it affects what you consider to be "wealth" at this point in time, you buy more junk you consider be "wealth" & status symbol.

    Manufacturers of X get a loan from bankers to produce more of X, you get a "loan" to buy more of X, bankers pull required sum of $ (through convoluted mechanics I don't really understand) from their arse, amount of money in the system increases to cover spike in consumption of X. Voila, society got wealthier, so economists say.

    So yes, in economics terms advertisement creates "wealth", in hard to define "absolute terms" it destroys it, since it takes enormous amount of resources, pollution and overall misery to cure our status cravings, insecurities and fears through consumption of more junk.
  10. cosmictraveler Be kind to yourself always. Valued Senior Member

    But without the product being known , how does it get sold? Lets say you need a TV. Which one would you buy? Wouldn't you already have an idea about which one you are thinking about by the advertising that you have already seen? Then if the right TV is on sale, which is also advertised, wouldn't you think more anout buying that one instead of a competitors model? But if no advertising was done how would you know what was on sale or which model to buy?
  11. Carcano Valued Senior Member

    I dont have a TV, but I dont need ads to buy a monitor.

    I go to review sites...and then to Ebay where I compare prices, shipping fees and customer feedback...done!
  12. Carcano Valued Senior Member

    Good comments could also ask if Wall Street investment banks create wealth for the OVERALL economy, instead of merely shifting wealth into more concentrated states.

    If the answer is NO...why does the government need to bail them out?
  13. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    I think there quite strong parallel between ad men and lawyers.

    Both basically work to transfer money from A to B and take part of the money passing for them selves.

    I.e. try to get the money you were going to give maker of cornflakes to go to the maker of puffed wheat.

    Or in the lawyer case trying to get money from defendant to go to the plaintiff.

    Neither is making anything - just shifting money from A to B after they take their cut.

    Both may be needed, but surely the US would be better off if 90+ percent of them found productive jobs.
  14. nietzschefan Thread Killer Valued Senior Member

    I work for an AD company and I don't get it. at all.

    I watched the facebook movie and I don't get it. at all.

    It just is, I guess.

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