Does advertising drive aggregate consumption?

by Jon Alexander on April 23, 2010

in The problem

This, it seems to me, is a big question for Conservation Economy.   Many of our arguments are developed on the assumption that the role of advertising in society at present has been to drive increased consumption, and that therefore – in a world where consumption levels are arguably going to have to decrease – advertising’s role is going to come under scrutiny.

But our underlying assumption that advertising drives aggregate consumption is not one that goes unquestioned, however intuitive it may seem.  Indeed, the accepted wisdom in the fields both of advertising and of macro-economics tends to be that advertising does not play this role; rather, it just redistributes consumption that would already have happened within a market.  So advertising affects choice within a market, rather than market size.

This has been argued at great length by such industry luminaries as Tim Ambler, Simon Broadbent and Paul Feldwick, as well as by rockstar economist Sir Nicholas Stern.  And the logical sequitur would be that actually advertising isn’t making that much of a difference after all, and that Conservation Economy is essentially a bunch of admen getting above their station, and hand-wringing over a social impact which is actually quite beyond their industry.

But, not to put too fine a point on it, I think it’s horse sh*t.  And I think at some level, we all know it.

The essential flaw in the redistribution argument is this: the model depends on the belief that if advertising increases aggregate consumption, then you should be able to find specific advertising campaigns which can be directly shown to increase the size of the market in question, rather than of the product within the market.  So, in order to prove advertising drives aggregate consumption, we would have to show that (for example) a Hovis campaign increases the size of the bread market, rather than taking market share from Warburtons.  As Ambler, Broadbent and Feldwick combined to show in Does Advertising Affect Market Size? (Int Journal of Advertising, 17.3, 1998), this is very rarely the case – at least not to statistical significance.

But I would argue there is a wholly different phenomenon at play, one which takes into account wider systemic notions of cause-and-effect rather than this very linear model.

What actually happens is not that individual advertising campaigns directly contribute to increased aggregate consumption; rather, advertising in aggregate contributes indirectly to aggregate consumption.  This makes the effect of an individual campaign extremely hard to see – but it is there.

So how does advertising in aggregate contribute indirectly to aggregate consumption?

Simple: by reinforcing consumerism as the dominant social mode.

Think of it like this:  the average British ‘consumer’ (sic) is exposed to somewhere between 3000 and 5000 commercial messages per day.  All of these messages carry the fundamental, underlying communication, “You are a consumer – that is your social role”.  Remember what your mother used to say?  If you tell someone often enough that they are a certain way, they’ll begin to believe it.

And we’re being told it on all sides.  Look at the rhetoric of Bush and Blair after 9/11, as we were asked to protect our way of life by… going shopping.  We are all consumers now.

When advertising in aggregate multiplies and finds ever more places to remind us of this civic duty (you can even have your brand carved into trees now, let alone the arguments over product placement and advertising to children), it plays a major part in engineering a society that believes as ideology that consumption is good: a consumerist society.  A consumerist society is always pre-disposed to consume more.  And that is how advertising indirectly drives aggregate consumption.

The unfortunate fact is that every single advertisement (or branded content, or social media campaign, or, or, or) has this underlying impact, no matter what the medium or what the brand in question.  Even an ad asking you to donate money to Oxfam tells you that your main role in society is to be a consumer: to spend money, not participate.

This is an incredibly deep-rooted issue, but we must strike to that root, because hacking at the branches is only going to make things worse.

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{ 7 comments… read them below or add one }

Dave Ansell April 23, 2010 at 10:07 am

Surely the point of advertising is to change people’s priorities, so it can change how we prioritise Hovis vs Warburtons, bread vs rice, beer vs whisky, food vs computers, all these will change what is consumed but not overall how much is consumed. The only change in priority which will change the total aggregate consumption of the planet is stuff vs free time/family/politics. As a total system, if people work harder and longer more stuff will be produced and therefore consumed somewhere.

Saying that it can change priorities like petrol vs services or gas vs jumpers, so if you are interested in physical/ environmental resources what is being advertised can make a big difference.

Not all advertising (or more general social manipulation which advertising is a subset of ) makes you spend money. Various religions push and have pushed spending more time praying and being ‘good’ and less consuming.

Jon Alexander April 23, 2010 at 10:44 am

If I work within your terms, I would say you’ve missed out a stage in your first point: people work harder and longer BECAUSE they want to consume more stuff vs free time/family/politics, as opposed (or rather, in addition) to the causal link working the other direction. And I would say that is the case in large part because of advertising, which creates the importance of stuff, reinforcing the idea that social status (among other things) is tied to material possessions. So yes, relative prioritisation of stuff vs free time/family/politics is a major issue. But advertising, by its sheer weight, is one of the main forces tipping the balance in favour of stuff. And are you seriously telling me that you think a significant proportion of net advertising spend goes on trying to influence something other than spending money?
Your second point is a slight separate one, which I think will unfold in other parts of this site. I think you’re right, but I also think that in parallel we need change on a larger scale than will be achieved by this sort of shift – I would argue we need to make space for a more positive social psychology that extends beyond the individual, not just to turn individualistic tendencies to less negative impacts.

Dave Ansell April 23, 2010 at 11:42 am

I think I am thinking in a bizzarre Physics related backwards way – in order to work out how you reduce the amount of stuff consumed in the world, rather than what to do in order to reduce it.

Consumerism has many advantages, I think it has made people a lot better off, healthier (through cheaper food and healthcare), and lets us get involved in much more interesting and complex behaviours (like posting stuff on the web).

What I think is destructive about it is when it is used to keep up or overtake the Joneses. Social competition is very hardwired into human nature, and I guess if we want to have a sustainable society we should try and aim it at something more sustainable than aquiring and then disposing of junk. So essentially it is a case of redirecting people’s competition into something which converts their time into stuff much less efficiently.

I guess that one option is political machination and corruption, which is used in many third world countries, piety, possibly being nice to your neighbours (I guess the problem with this is that cheating is a problem). Looking pretty (though this has issues with encouraging fashion), appearing more environmental than everyone else (with worrying emphasis on appearing), being harder than your neighbours etc.

I worry with many of these (a lot exist already) reduce our capability as a society to deal with physical problems that will will be faced with in the future. Eg major energy problems, rising sea level, climate change etc.

Tim Hunkin has an interesting take on our drive to make things, which I think would be a more constructive outlet than many.
http://www.timhunkin.com/a118_technology_is_human.htm
But that is probably just because I was brought up with construction toys and like making things.

The problem is how do we reduce the demand for the advertising of junk. Surely the only way to do this is to make making and selling junk less profitable.

Possibly due to my training, I like solutions to problems which are fairly simple with wide ranging consequences, so I think that if we make environmentally destructive things significantly more expensive people will find other ways of behaving and competing. I guess the trick is to try and encourage these new ways to be positive socially/environmentally.

Guy Champniss April 23, 2010 at 12:36 pm

Jon,

I’m reluctant to argue with the likes to Tim Ambler, based on a previous encounter:-)

Your post is very provocative in terms of questioning causality between consumption, consumerism and advertising, and it’s a great topic to kick around. I really do not know whether advertising shapes an acceptance of consumerism, or whether consumerism provides oxygen to advertising. And this in turn presents a tricky paradox for the industry: to claim the ability to shape consumerism brings with it horrendous levels of blame, but to claim consumerism is simply a predefined context within which the industry carves out a role as best it can, is to confirm its neutering.

If only VIctor Lebow hadn’t made that bloody speech…

G

Jon Alexander April 23, 2010 at 4:16 pm

It wasn’t a speech… it was part of a paper on retail strategy published in the Journal of Retailing in 1955, apparently as a recommended strategy rather than a reflection on what was going on. Don’t know if that makes it better or worse, but the whole paper is worth a read, and this discussion of it is interesting too (whole paper is available from this link too):
http://whatdoino-steve.blogspot.com/2007/12/victor-lebows-complete-original-1955.html

Guy Champniss April 23, 2010 at 8:25 pm

Ah yes. It’s just been used in so many other people’s speeches! Somehow I had got it in my head that the strategy was proposed as a way to soak up spare US manufacturing capacity as the war machine wound down, and the House didn’t want to lose any momentum on that mother of all fly-wheels, the US manufacturing industry.

G

Rachel Nunn April 30, 2010 at 3:18 pm

This post links with the original article, and another couple I’ve commented on.

I’m going to be boring and bring my family into this as I try to get my head around the following question: how much does advertising impact on our levels of consumption…

At home we don’t have a TV, nor do we travel or shop in a way that exposes us to advertising… This is very deliberate. I’ve two boys under ten; one is gregarious and a total hit with everyone – he LOVES to consume (yes, it’s a nightmare)…he desperately wants a thing – loves it much more than anything else (that is true for about a day) and yes mummy he will play with ALL the time (well some of the time) for ages (nope – it is forgotton after a few days)….. The other, bless, my social misfit, isn’t in the least bit interested in consumption…
I think this is pertinent and interesting in the context of ‘is advertising exacting us to buy more’. The conditioning is largely the same, yet the desire to enjoy a new experience is overwhelming for one, and non-existent to the other. One likes change and seeks it; the other shuns it.

So first questions; is over consumption aligned with a personality that seeks ‘change’ ? and, is an ever more rapidly changing world, making us deal with ‘change’ on a more frequent basis, impacting on our social ability to cope with ever increasing levels of consumption?
Next question: does my little consumer do it to keep up with the Jones? Not in the least. He’s doing it for himself…he can’t take the stuff to school and people rarely come round…
Another question: Does he ‘need’ a brand new thing that is new in itself or just new to him. Actually I think it is the latter…which means he is savouring the change.
Further, if you match my kids against their parents, there is a close correlation…which would emphasise perhaps that consumption over and above need might be linked to personality traits, and one of these being our individual openess to ‘change’.
So if consumption is related to ‘change’ and we could get our heads around that what is being looked for is opportunities to taste new experiences, then it becomes important either to communicate that constant change does not lead to longterm wellbeing – (and in a different post I mentioned Monbiot’s view on savouring consumption by planning them to happen slowly – although how this can be aligned to our current GDP model I have no idea, nor do I know for sure what the relation is between experiential consumption and wellbeing) OR it becomes important to ensure that what is being consumed is sustainable…whether that is experiences, products etc…which again is where you guys come in

so perhaps advertising offers us a really quick way to assimulate what new change experiences are out there for us, and that by speeding the choice process up, advertising thus allows us to become increasingly accustomed to ‘change’ at ever increasing pace and therefore seek it out at an ever-increasing speed….leading to escalating consumption

Of course. I am the parent who likes change. So I will probably disagree with myself on this post tomorrow.

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