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Source link: http://archive.mises.org/10166/is-advertising-a-sham/

Is Advertising a Sham?

June 19, 2009 by

The consumer is not omniscient. He does not know where he can obtain at the cheapest price what he is looking for. Very often he does not even know what kind of commodity or service is suitable to remove most efficaciously the particular uneasiness he wants to remove. At best he is familiar with the market conditions of the immediate past and arranges his plans on the basis of this information. FULL ARTICLE

{ 19 comments }

ShameWow June 19, 2009 at 7:46 am

The consumer is not omniscient, but without knowing everything he can have a critical thinking and know when something does not look right.

When the ShamWow guy shows that his towels can hold a lot and a lot of liquid, that seems plausible.

But when he shows a piece of carpet soaked with cola and then he takes off all the cola by just letting the towel on top without putting any pressure, this seems fishy.

And finally, when he punches the towel on top of the carpet and we can now see that everything is dry beneath the carpet and the carpet looks completely dry, this is where I know they are lying and taking me for a fool.

Yeah, advertisement is a sham, but still consumers must do their homework and inform themselves.

ShamWow is great to wash your car and clean that juice spill on your floor, but NO it will not save your carpet.

ShameWow June 19, 2009 at 7:47 am

“He does not know where he can obtain at the cheapest price what he is looking for.”

The cheapest price might be to stop looking and scaling back his needs and wants.

anonon June 19, 2009 at 8:15 am

well, advertising is information but manipulated information, featuring claims of dubious veracity. but the last thing to be instituted is regulation or bans on advertising.

Brad June 19, 2009 at 8:35 am

Typically media based advertising has little affect on me. Packaging as presented on store shelves has much more impact on me as far as testing new products.

To me media advertising comes in two basic forms – products that must have already some loyal adherents which allows for enough profit to roll into advertising, so the product must already have some legs to it, and products that are more “fly by night” -products that are sold for “$19.99″ and have about $.50 worth of production costs to get a big push of the stock and run.

Either way, advertising, as the article says, is usually insulting to the intellect. But it isn’t any more insulting than political propaganda or religious catechisms. It’s unfortunate that so many people in the masses are taken in by shiny tinsel and a light hearted tune but it is what it is. The question is what are the stakes? Freedom of choice to place your money where you choose, or select a method where Force is used and decisions made for you? Advertising products still requires a choice and human action. Falling for some Statist propaganda will eventually lead a portion of people into a box they can’t get out of except by violence.

Matthew June 19, 2009 at 8:48 am

I bet Mises would’ve been a spokesperson for shamwow if he could’ve.

Michael A. Clem June 19, 2009 at 9:45 am

Advertising is not a sham–false advertising, though, is fraud, and should be actionable as such. I cringe when Mises talks about advertising being “obtrusive and blatant”, or that it is “repellent to people of delicate feeling.” There are different types of advertising, and other advertising techniques that do not rely upon being blatant and annoying, but quite the opposite.
At its most basic, advertising provides information to consumers, the existence of a product or brand. People complain that advertising creates envy and a feeling of “false desire” for the advertised products. But think about it: even the most useful and beneficial product would go unpurchased and unused if people were unaware of its existence. And as products are modified and/or improved, advertising makes people aware of these changes, too.
Complaints about advertising may as well be complaints about free speech. There is no valid reason for distinguishing commercial speech as separate and distinct from other types of speech, at least not legally.

Ben Ranson June 19, 2009 at 10:07 am

I doubt that anyone is “immune to advertising.” Products and advertising are carefully tailored for all demographic groups, including nay-sayers, misers and curmudgeons. These groups have special desires and consume special products.

A friend of mine who used to sell cars at a Ford dealership expressed this sentiment in the following earthy manner, “There’s a seat for every —.”

I agree with Mr. Clem that Mises exaggerates the coarse nature of advertising. There are also forms of advertising that are highly decorative and artistic. Album covers (from the vinyl era) are a good example.

Joe June 19, 2009 at 11:01 am

“At its most basic, advertising provides information to consumers, the existence of a product or brand. ”

If advertising were to be outlawed or heavily regulated, we would have to rely on word-of-mouth to hear about new products/services. The only people easily manipulated by advertising are weak-willed and don’t use proper judgment. Advertising or not, they would still be susceptible to being fooled or lied to.

Where would one draw the line? Isn’t packaging itself a form of advertisement? Is having something on a shelf with a price tag a form of advertising? Is printing off a price list of products in stock a form of advertising?

I’m much more worried about the stupid in people that allows advertising to manipulate them more than I am the advertisements themselves.

greg June 19, 2009 at 11:19 am

Advertising is just a part of doing business, a very expensive part of doing business! When people see the ads, they think they are directed towards them. But the truth is adds are directed to the retail outlets. The more exposure you give your product, the more shelf space is made available to you. And that is where the sales are made.

You can run all the ads you want, but if you can’t get shelf space, you are not going to pay for cost by providing a 1-800 number. That is why very few of all the products shown on infomercials make it to the mainstream retail.

Walt D. June 19, 2009 at 12:52 pm

There is a whole industry devoted to the Psychology of Human Behavior, of which advertising of consumer products is only one. The key things I remember from my 101 course in marketing are that the success of the marketing is independent of the quality of the product being marketed – perception is the important factor. Also, the marketing is more successful if the person who is doing the marketing actually believes the marketing pitch. (This is why sponsors try and use celebrities who actually use and like the product.)
I found an interesting on-line book here called “Taking ADvantage here.
http://www.wsu.edu/~taflinge/advant.html
The same psychology applies to politics. This is why Richard Nixon was elected twice (three times if not for election fraud in Kennedy-Nixon), George Bush was elected twice, and why Barack Obama was elected.
Psychological research of taboos in other cultures explains the particular nature of the prisoner abuse at Abu Ghraib.
The work of psychologist Kurt Lewin in Nazi Germany explains the popularity of Hitler, and also the rise of the political correctness movement in the US.
The elements of psychological manipulation also stand out in the marketing of “Global Warming” er.. I mean “Global Climate Change”.
What I get from reading Robert Murphy’s chapter is a sense of incredulity as to why so many people are taken in by phony ads. I would quote Adlai Stevenson (I think?) who replied, when he was told that he would get the vote of every thinking man in America, “But I need a majority!”.

2nd June 19, 2009 at 1:22 pm

Walt D.

So basically, the reason marketing and politics work is because people are stupid and happy to be stupid and make great efforts to stay that way.

2nd June 19, 2009 at 1:28 pm

Ben Ranson,

“”There’s a seat for every —.”"

There’s a seat for every sucker,
But there is not enough suckers for every seat, LOL !

The Rev June 19, 2009 at 6:39 pm

Advertising is a good deal more sophisticated than it was in Mises’ time, especially in its use of psychology. It is true that people have uneasiness, and that this motivates them. And advertising has become quite adept at playing on this uneasiness. Just a cursory look at common TV ads will confirm this (why else would you associate beer with sex, cars with fulfillment, and credit cards with freedom?).

We have a culture in the US with two huge problems, obesity and debt, and I can’t help but think that advertising has played a role in this. We are spending and eating more compulsively than purposefully, with an unprecedented desperation to quell the timeless uneasiness. Because now, we have advertisers constantly preying on that uneasiness, as if it were a wound into which they constantly pour salt.

The Rev

RWW June 19, 2009 at 8:10 pm

Who is “we”?

Jam June 19, 2009 at 9:14 pm

To say that advertising has changed significantly since Mises’ day is quite wrong. The only thing that has changed is the medium.

A couple of weeks back I attended an estate auction where I acquired a large part of an old, deceased man’s library. After sorting through the various treasures I had bought I found a magazine from 1899 called The Munsey. It was pretty much a 19th century neo-con rag. After reading articles extolling the virtues of the American occupation of Cuba (we brought democracy to the filthy savages and so forth), and how we should all forget about that failure called the Panama Canal and look forward to the to the new Nicaraguan Canal project I decided to get the part that was actually interesting. THE ADVERTISEMENTS!

The ads were all quite spectacular. They offered everything under the sun. Devices to improve your posture, pills to make you not fat, non-surgical cures for cancer, cures for deafness, and lots of other flim-flammery. If it had been proper to talk about increasing the size of your wang in 1899 I’m sure that would have been in there too.

The point is, advertising has not changed one bit in the US in at LEAST 110 years. Many of the ads appeared to be quite genuine (offers to sell books, or furniture), but many were also quite blatantly designed to separate fools from their money. No different from today.

Caveat Emptor.

ran June 20, 2009 at 9:47 am

Jam, I own quite a few 19th cent. english magazines… completely agree with you, nothing much has changed.

CAVEAT EMPTOR

Robert June 20, 2009 at 10:06 am

Advertising?
Whats that?
I have not seen a commercial on the tube since the early 70s, thanks to that great invention, the remote.

When my parents got their first remote tv in 74, they said we would never watch commercials again.

They were right.

Same with the radio for the same reason.

Advertising, who needs it?

Robert June 20, 2009 at 10:23 am

Should have added this to my previous post as an example of SHAM advertising. Boy did a lot of suckers fall for this one! And were going to pay for it heavily for the next four years.

http://i268.photobucket.com/albums/jj25/cbxer55/Various%20Photos/obamashamwowwf.jpg

Ed Smith June 21, 2009 at 6:31 am

Individuals pay for hope. Individuals also pay for things that make them “feel” healthy. Anything that says “organic” or looks like a medicine bottle tends to attract peoples attention. I’ve been noticing this with cereal boxes lately. When I buy cereal with pictures of grain on the front it make me feel healthy.

Vitamin Water is another good example, but I do not buy it because it is deceptively packaged to look like medicine. It is just water with vitamins and coloring added. The packaging, however, makes you think a perscription might be necessary.

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