Sunday, 16 February 2014

Advertising doesn't cause riots, make people gamble or cause revolution!

****

She said she was particularly concerned about gambling advertising before the 9pm watershed and went as far as saying that "excessive marketing" had been a factor in 2011’s London riots, when looters had gone in criminal search of expensive trainer brands.

Read that very carefully. What Helen Goodman (for it is she) is saying here is that some of society's problems - in this case gambling and rioting - can be laid at the the door of advertising. This is clearly illiberal, when it comes to gambling certainly judgemental, but worst of all is utterly ignorant of advertising and marketing and what it does.

It makes me incredibly cross that people like Helen Goodman (who is a leftie but not everyone who wants bans or controls on advertising and marketing is such) simply fail to understand that commercial speech is still 'speech'. And that it is as worthy of us defending it as any other form of speech. I know that Helen probably read 'No Logo' a few years back and has signed up to the Naomi Klein school, that "brands are the work of Satan" line, but the truth is that marketing communications are a tiny proportion of all the communications we receive every day.

If someone like Helen Goodman is going to stand up and talk about advertising, to propose legislative intervention of some kind, then the least we can expect is that some effort has been made to understand the business of marketing. Let's start with whether advertising increases aggregate demand, what we might call the 'false demand' hypothesis:

“The null hypothesis that advertising does not cause consumption cannot be rejected, but some evidence that consumption may cause advertising is presented.”

Unwrapping the academic language this research says that advertising doesn't (in aggregate) cause demand and may even be caused by consumption. Funnily enough us advertising and marketing folk have known this for years - most of our advertising isn't about creating demand it's about us not losing our bit of that demand. As I wrote a while ago:

Why should I spend my client’s scarce cash on making the market bigger – promoting sausages rather than Fred’s Grand Yorkshire Sausage, The Champion on Your Plate?

This isn't to say that an advertisement has never prompted someone to buy something they haven't bought before but it is to say that there isn't a strong connection between advertising and demand growth. To illustrate this, here's a graph of US cigarette advertising against cigarette consumption:


If you can find some sort of causal link here you're a better man than I am!

If shadow ministers (or government ministers for that matter) are going to pass opinion about advertising and marketing - rather than merely court a headline - then they really should start to understand what marketing does and how advertising works. And that it's as much a part of free speech as their address to the house or my torrent of tweets.

And if Helen Goodman wants to know about the revolution - it won't be televised you know!

...

1 comment:

Nigel Sedgwick said...

I am having some difficulty with the case being made here for advertising in general, though I am at least somewhat interested in that case.

Firstly, the graph provided makes no claim for the expenditures being indexed for inflation, and there has been quite a lot of that since 1975. There has also been a substantial increase in the standard of living, such that expenditure on luxury items (such as cigarettes - yes really) might be expected to increase above inflation, with associated increase in advertising. Without suitable indexing, the graph lacks meaning; the later large movements over time are almost certainly significantly exaggerated compared to the earlier movements.

Secondly, the case of cigarettes is 'out of the ordinary' with multiple contributing and confusing factors. We can begin with the real health issue (and its 'advertising'), and the important issue of protection of minors. Then there is the issue of the changing level of taxation (and I'm not sure how this varies between the UK, which I broadly know, and the USA). Thirdly, there is the issue of public disapproval (or at least government-inspired disapproval) and the effect of various legal bans (again with different backgrounds between the USA and the UK).

From these two points, my perception is that there is negligible relevance to general advertising, from the case argued WRT cigarettes.

Lastly, gambling might well fall into a not dissimilar category as cigarettes: some social/governmental control and specific higher taxation than a normal sales tax. However, the changing status with respect to on-line gambling makes these issues significantly less mature than those applying to cigarettes. And, of course, 'consumption' of trainers etc is not associated with product-specific legal controls like those applying to cigarettes.

So I end feeling that little useful information has been provided in general support that advertising does not increase consumption, and so the case (probably valid) against Minister Goodman's view is lost in confusion.

Best regards