The Benefits of Advertising

According to Forbes, it costs approximately $4 billion for 30 seconds on a Super Bowl commercial, but many big corporations want to run their ads just for that hot spot.  Budweiser spends about $10 million for its 73-second ad, The Clydesdales: “Brotherhood.” People argue that they have wasted too much money for those unnecessary ads, especially during big events. Many people may be surprised that U.S companies spend about $148 billion a year just for advertising, and it is roughly about 1% of the GDP, according to The Washington Post. Thus, the Post says some of the leading corporations such as General Motors spend $4.2 billion a year, followed by Ford with $3.9 billion a year. People just panic and feel pain when they see those huge amounts of money that U.S companies spend for advertising alone. However, people don’t know that money for advertising is necessary to introduce a product to the customers. It boosts up the economy instead of letting money be wasted. Therefore, although advertising costs a lot of money out of the pocket, it is economically beneficial for not only the companies’ revenue and labor forces, but also for the consumers.

            First of all, advertising isn’t economically wasteful, but it is the tool for better selling of products that increases profit of U.S companies and also boosts up the economy. In the article, “Do You Pay Enough for Advertising? One Big Corporation Spent A Jaw-Dropping $4.2 Billion Last Year,” Patricia Laya shows that Wal-Mart spends $2.5 billion on advertising and receives $418.9 billion in its revenue. Simple calculation can show that Wal-Mart spends only 0.5 percent of money of its revenue on advertising, so we can conclude that advertising indeed increased the sale of a product with just a very small percentage of money. From a business view, it is not important how much we spend for something, but how much we profit from that spending. People shouldn’t be shocked by the huge amounts of money; instead, they should acknowledge the profit that companies make. In the case of many fast food franchisees in America, Subway for example, new owners have to pay an initial fee of $15,000, an advertising fee of 4.5% gross sale, royalties to Doctor’s Associates Inc. of 8% on weekly gross sales, and combine with other fees as well for each year to open a new Subway restaurant, based on Subway Development. Many people are willing to pay hundreds of thousands of dollars to buy a Subway franchise instead of opening a new restaurant that sells the same product because Subway is already famous and they don’t have to spend much money for advertising a new product. Therefore, advertising is very important for a company to sell their products in the market. Also, it increases the revenue of the government in general because advertisers have to pay a 5% fixed tax for every commercial advertised, according to The Washington Post. In short, advertising provides money for our nation’s pocket; and in the long-term that tax money can raise government budget to increase our economy or help stabilize it.

            Furthermore, advertising contributes to the work force a great amount of jobs in many areas. Jobs are very essential for our economy; it is the key factor for an economy to survive in this industrialized era. The advertising industry provides a great amount of jobs across the U.S. Almost every company has a marketing or sales department and the number of its department is greater compare to other sectors. There are also many jobs related to advertising, such as designing, producing, and many others. For example, we watch free TV channels, listen to free radio channels, and read cheap newspapers and magazines that are also supported by commercial advertising. Therefore, advertising provides tons of necessary jobs for people to run many types of free and cheap entertainment. In recent decades, the internet has become very popular and millions of people have made their living through the internet because of commercial advertising. For example, Blogger creates blogs in hopes of attracting readers to read their article as well as support them by viewing the internet ads, more specifically, the Google Adsense. Also, there is a type of advertising that pops up for 10-30s before every single video or clip that provide jobs for millions of YouTube posters; otherwise people wouldn’t spend so much time to upload and think for interesting clip to entertain their viewers. In the Article, “How to Become the Next YouTube Star Making $100,000 Plus per Year,” William Wei claims that there are at least ten YouTube stars make more than $100,000 per years and the highest estimate was $181,000 a year. This shows that how advertising creates more possible jobs for people, YouTube other others sites accompanies with advertising become a big jobs markets. People can’t argue that advertising is wasteful when it provides them with many kinds of jobs. Advertising does indeed cost a lot of money, but it is necessary for the economy.

            Finally, advertising benefits the consumers by giving them opportunities to choose new products. People may argue that advertising attracts them to buy things they don’t need, but it’s their choice. Indeed, advertising is a great source of information for consumers to get the right product for their needs. For example, if you want to purchase a new car, where would you look? People can get some information from brands and retailers through TV, newspaper, and magazine advertising, and then they further can find more information from particular retailers or do research on certain websites for product’s details and prices. They also have opportunities to compare the quality of each car and price before they buy it. In the article, “Does Advertising Help or Harm the Economy?”Brad Plumer said, “Advertising does appear to make some products cheaper on the whole—presumably because the ads are informative” (Plumer). It’s obviously true that consumers get more information if there are tons of advertising that gives them a variety of choices. They don’t have to pay for the product in the expensive store when they know there is another one which costs only half price online for the same thing. More choices are always better than a limited number of choices when it come to price and quality. Nowadays, people complain too much about advertising that is annoying and unnecessary. However, many people shop for their products based on the information provided by those ads. If the world had no advertising, then people would not know there are products that exist and fit their needs. Advertising is not economically wasteful, but it is a great way to inform consumers with smart shopping.

            Many people may argue that advertising costs too much money for our economy because big companies pay high prices for their advertising and there is too much advertising everywhere. They believe that big companies shouldn’t pay too much for advertising because a good product will result a good sale, so it doesn’t need expensive advertising at all. Thus, people believe that only such a poor quality and new companies need to introduce their product to the market. Moreover, some say that there are too many advertisements in this world that are unnecessary. It doesn’t increase any profit, but it confuses the consumers with too many advertisements to read. Lastly, people believe that companies shouldn’t pay big amount of money for advertising in special event such as important sport’s shows because there are many other cheaper ways to introduce their product to the market.

            However, advertising is indeed a battle; it is a battle of survival because most consumers have the habit of shopping for what they just see and hear _ people buy things that appear on their mind first. Therefore, if a company doesn’t spend money for advertising, then it will slowly or quickly be forgotten regardless of how big the name of the company. For the argument of a good product doesn’t need to advertise, it is a faulty assumption that a good product will automatically become well-known. In reality, people shop first then use it later. How many people are willing to try a strange brand they know nothing about? The answer is very rare unless the product has been recommended by someone else. But this isn’t enough to make a product successful. Money for advertising isn’t wasted because it increases the profit since companies will sell more due to the effect of advertising; and advertising costs only a small percentage of money compared to the revenue. Finally, big events are always a great chance for advertising because they will attract more audiences, specific type of audiences, and audiences in the mood for spending. Sporting goods and alcoholic drinks are the number one commercial advertising for those events because those products meet the principle needs of the audiences. Therefore, companies spend a lot of money to buy the hot spots, but they also gain by increased sales. 

            In conclusion, the advertising industry is necessary for our economy because it promotes products and introduces new products to the market. It’s historically proven that since the invention of advertising, many companies have become famous with their products, and their sales have skyrocketed. It may seem economically wasteful because of the large amount of money that needs to run their commercial advertising program every day on TV or other sources. Thus, it seems like there is too much advertising everywhere that catches everyone’s attention. However, it doesn’t mean that our economy is corrupted because we spend money in advertising and gain a profit. People have to look closely to the revenue of each company to determine the success of advertising. It’s also possible failure in advertising since advertising is only a possibility of success, so don’t judge the effectiveness of advertising based on a small scale. However, advertising is only a tool, so it needs a great strategy and effort to bring great results. Advertising not only increases sales for a company, but it also provides a large number of jobs and great information for smart consumers. The economy can’t stand alone without advertising because it is the only way to make the product become popular.

Works Cited

Budweiser, . 2013 Budweiser Super Bowl Ad — The Clydesdales: "Brotherhood" . 2013. You TubeWeb. 26 Mar 2013.

Forbes. n.d. n. page. Web. 26 Mar. 2013.

Laya, Patricia. "Do You Pay Enough For Advertising? One Big Corporation Spent A Jaw-Dropping $4.2 Billion Last Year." Business Insider. . 06 07 2011: n. page. Web. 7 Apr. 2013.

Plumer, Brad. "Does advertising help or harm the economy?" Washington Post. 27 11 2012: n. page. Web. 26 Mar. 2013.

Subway Development. 2011: n. page. Web. 7 Apr. 2013.

Wei, William. "How to Become the Next YouTube Star Making $100,000 Plus per Year." Businessinsider. 10 10 2010: n. page. Web. 1 Jun. 2013.