Do Advertisements Encourage Spending or Saving?
When posing the question, 'Do advertisements encourage people to spend money or save money? Why?', one might initially think it's a straightforward query. However, the answer is multifaceted and depends on the intent of the advert and the context in which it appears.
The Dual Role of Advertising
Advertising can serve both to promote spending and to encourage saving, depending on the product or service in question. For example, the iconic phrase 'diamonds are a girl’s best friend' mirrors how advertising has shaped our perceptions of value over decades. Marilyn Monroe’s song from the 1950s film Gentlemen Prefer Blondes and its subsequent portrayal in the film Moulin Rouge with Nicole Kidman have embedded the idea that certain possessions, like diamonds, hold significant value. Similarly, the longstanding belief that 'a dog is man’s best friend' showcases how advertising has convinced consumers of the importance of companionship, often leading to increased spending.
From an economic perspective, advertising is seen as a valuable investment in building a business. By building an email list and establishing brand recognition, businesses aim to generate more revenue. Therefore, advertising is not just about spending; it's also about investing in the future.
Encouraging Spending or Saving?
Financial institutions like banks and credit unions often emphasize the importance of saving. Similarly, power companies may encourage conservation, which can be seen as a form of saving. However, the vast majority of advertising efforts are designed to encourage spending. This is often accomplished through the promise of savings in the long run, such as achieving better deals or more efficient usage over time.
The overarching goal of advertising is to create a desire in consumers to purchase a product or service, making the ad effective if it prompts a sale. Even advertisements for financial services often have the underlying goal of driving fees or other transactions that generate revenue for the business.
Convincing Consumers of Their Choices
Advertising is not just about creating demand but also about validating consumer decisions. According to philosopher Marshall McLuhan, advertising aims to reassure consumers that they've made the right choice. This can be particularly evident in product categories where informed decision-making is complicated, such as deciding on a car or other significant purchases.
Many consumers, whether they admit it or not, can be inherently insecure about their choices. Advertising often taps into these insecurities to create a sense of validation and reassurance. This can be seen in the way companies emphasize the quality and reliability of their products, which can help build trust and confidence among consumers.
The Pandemic’s Impact on Spending and Advertising
The current Coronavirus crisis has dramatically altered spending habits and the efficacy of advertising. During this period, essential needs like food, shelter, heat, and water have taken precedence over luxury items. When families are struggling to make ends meet, no amount of advertising can tempt them to spend their limited funds. As a result, many advertising agencies have faced significant downturns in business, as their clients are less likely to invest in expensive marketing campaigns for non-essential products or services in this challenging economic climate.
With many stores, theaters, sports venues, and personal care salons closed or operating at reduced capacity, the need for advertising has diminished for these industries. Grocery stores have seen a surge in demand, but their advertising needs are less pressing, as they can rely on customers simply needing to buy what’s available.
It's likely that post-pandemic, consumers will place a higher priority on emergency savings accounts. This shift in consumer behavior highlights how advertising can play a role in shaping long-term financial habits, reinforcing the need for prudent savings and delaying unnecessary spending until more stable economic conditions prevail.