Some Aspects of the Economics of Advertising

Abstract

H IGH on the list of controversial economic topics stands advertising. The critics of advertising claim it abuses consumer confidence, shapes and sometimes vulgarizes taste, and creates abnormal, unjustified profits. To these critics advertising is the leading symbol of materialistic Western civilization and of capitalism in particular. There is once more talk of a tax on advertising and of limitations on the advertising of some products, particularly medicines and cigarettes. Nowadays there are few defenders of advertisers, and even these speak humbly and possibly without conviction. In intellectual circles it is risky to one's reputation of intelligence and/or honesty to defend advertising. This onesided view of the subject is by itself a phenomenon deserving of serious study, but it lies outside the scope of my present task. What seems most lacking in the debate is an attempt to understand the functions of advertising, its uses, and its prevalence. Indeed, some aspects of advertising pose problems of considerable intellectual challenge, whose study will aid protagonists on all sides of the debate on advertising.