The Power to Persuade

As Washington continues to allocate funds to financial sectors and select corporations, and as it supposedly puts money back into consumers’ wallets through the stimulus package, I can’t help but observe the greatest oversight of all when it comes to stimulating the economy.

And that is advertising.

There is not a penny put in any package to stimulate advertising.

Yet advertising is the single most important industry that needs to survive if the economy is to ever recover. If you think that statement is far-fetched, please read on.

News that isn’t making front-page headlines or lead-in sound bites is that ad revenues continue to drop.

Too often companies are run by people lacking a background and understanding of the critical value of advertising and marketing. Because of that, ad budgets get slashed and cut in an effort to save money until revenues pick up.

What is going to drive revenues to pick up if there isn’t any advertising and marketing being done?

Advertising is the fuel that makes a business run.

Advertising stimulates competition, which is good for consumers and industry.

Advertising creates demand for products and that accelerates the economy.

Advertising harnesses the power of persuasion and gets people to purchase.

Advertising is as essential to the recovery and health of our economy as any stimulus package.

Advertising is the most powerful means available to persuade consumers to do business with you. By getting information to consumers about what you sell, how it will be a benefit to them and why it is different than your competitors, you create opportunities to sell.

There is a much more serious side to the slashing and cutting of ad budgets, however, than lost opportunities for sales. Consider the trickle-down effect of a decline in advertising.

How much would your newspaper cost if there was no advertising? Or what would that magazine subscription price be without ads inside? Think cable bills are high now? Wait till you have to support commercial-free television with your monthly fee. The reality is, without advertising dollars, information and entertainment media as we know it today, could disappear. It is already happening.

Of course with the demise of those businesses will be the demise of others in the industries that support them, from printing companies to design firms, to video production companies, to, yes, advertising agencies.

Of course all that “junk mail” will disappear too as ad budgets shrink. That’s a good thing, right?

I wonder how many paper mills will close when that happens. And if 42¢ is a lot to pay for a first class stamp, just wait to see what happens to that price when the post office loses the billions of dollars it makes each year from processing and delivering advertising mail. And I wonder how many people would be out of jobs without the volume of magazines and advertising mail to deliver.

Perhaps it doesn’t matter because, after all, we’re in the Web age now. People search for the products and information they want on the Web. So, no problem. Except how long can Google operate if their $20 billion in annual ad revenue suddenly dries up? It’s hard to search without a search engine. And how many people does Google employ? Would there be a government bail out for Google?

For that matter, all companies that rely on Web advertising would have to log out and shut themselves down without the revenue that keeps them running.

There is also a detriment to the consumer. If companies continue to cut and slash their advertising, before long the consumer will be deprived of information about a world of products and services.

If that sounds like a good thing, because advertising makes people buy things they don’t really need and can’t really afford, then consider this: Advertising is the single most effective source of consumer information.

Want to buy a new computer? Where do you look for the information that makes you an informed consumer? Probably to the manufacturer’s advertising. The Web sites, brochures, and ads produced and distributed by the manufacturers let you know what’s new, what’s on sale, and what choices you have.

If advertising continues to decline, more businesses will fail due to the effects of slashed ad budgets. The number of choices a consumer has declines when businesses fail. The consumer can expect higher prices, not due to inflation, but due to lack of competition.

There’s another important sector of our economy and society that will be affected — non-profit organizations. Without ad dollars, which is what sponsorship and underwriting is really about, how many charities and worthwhile causes will continue to be viable? How many community theatres get financial support from the media companies, printing companies, and industries that rely on advertising for their livelihood? How many health organizations and social services depend on under-writing from those same industries? The list goes on and on.

But the biggest losers of all are businesses that think they can improve their bottom lines by cutting the most essential expense of all — advertising and marketing. That action is the fulfillment of the very thing they want to avoid.

People read and listen to advertising about things that interest them. People are still reading and listening to advertising. Nothing in the economy has changed that.

Create advertising that is so informative, so interesting, so compelling and so persuasive that people will want your product.

But if you aren’t getting your information to them, you have pretty much closed the door on your opportunity. The power of advertising is the power to persuade. That’s a power you need now, more than ever.

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