Wednesday, March 26

Advertising

A titan of the advertising industry died recently, and of course metafilter has a comment thread about it. The comments, predictably, fall into two rough categories: "holy crap ads suck" and "I'm in advertising, ripping on me is lame and boring, you're the one with the problem if you can't make rational decisions in the face of advertising".

I'm in the first camp.

But I'd like to think that my position is a bit more nuanced than "I don't like watching ads"; in my opinion, modern advertising is immoral because (1) it manufactures demand, thereby distorting the market and (2) it does so by exploiting human irrationality.

Advertising is a necessary part of a market economy, because without information about what products are available consumers can't send price signals to manufacturers effectively. The problem starts when advertising stops being about adding information to the market ("this product is available, here are its features, this is its price") and starts being about distorting the demand curve ("here's my stuuuuuuffff, you know you waaaaaant it"). I'm not a libertarian free-markets-solve-everything kind of guy who'd tell you that all market distortions are bad, but I do think that markets are a very good way to distribute goods effectively and that distortions to them should be examined carefully and allowed to happen only if doing so improves society as a whole. Demand-manufacturing advertising doesn't improve society. The money spent on bottled water and meaningless tchotchkes and $40 T-shirts would be better spent elsewhere, on products for which demand doesn't have to be manufactured. The economic activity generated by the business model of "create a product, then create demand for that product" only rarely advances society.

The advertising industry, to the extent that it displays any conscience at all, tends to think that those two business models (create product, manufacture demand & analyze demand, create product) are equivalent; they make arguments like "If you the consumer have some sort of psychological problem where you can't stop yourself from buying Acme Co's Air In A Tube (New, improved, fresher!) because you saw an ad for it, that's your problem". But it isn't your problem if Acme Co's ad agency has enough understanding of psychology to use sex and fear and other subconscious mechanisms to sell you air in a tube. Or, even worse, to aim the ad at your kids, who are not capable of rational thought (that's why we don't let them vote or decide what to have for dinner, right?).

As long as ads are aimed at children, as long as luxury SUVs are presented as necessary, as long as the difference between "want" and "need" is blurred on purpose, I'll think of advertising as immoral.

2 comments:

Atlas said...

The word "demand" has a very specific meaning in business language, and in that context certain parts of your argument may not have the meaning you intend.

Your core thesis however, that actions by companies that cause consumers to act against their rational self interest are unethical, is absolutely right. I use the term "actions" rather than "advertisements" because unfortunately, such actions have not been limited to advertisements. (Mini-Tender offers, for example.)

Fortunately democratic countries do have a degree of intersection between what is legal and what is ethical. It's far from perfect, there's a lot that isn't in that intersection that maybe should be, and it struggles to keep pace with changes in the market. Fortunately it, like the business practices it regulates, is constantly improving.

In the meantime, the strongest action a consumer can take is to vote with his or her expenditures, and encourage others to do the same. Even though it's hard for large numbers of people to organize and act in their own self-interest, in the end (at least under a democracy) the majority just about always gets what it wants.

oz said...

very good post fraxas. your concluding sentence puts it beautifully.