“THE LIFE OF TRADE.”

Hauraki Plains Gazette, Volume XXXVIII, Issue 5071, 5 January 1927, Page 4

“THE LIFE OF TRADE.”

VALUE OF ADVEBTISIING. PRESIDENT COOLIDGE’S VIEWS. "It seems to me probable that of .all our economic life the element on. which we are inclined to place too low an estimate is advertising,” said President Coolidge, speaking before the American Association of Advertising Agencies at Washington on October 27. "When we come in contact with our great manufacturing plants, our extensive systems of tramsportation, our enormous breadth of .agriculture, or the imposing structures of commerce and finance, we are 'forced to gain a certain impression by their very magnitude, even though we do not stop to consider their implications. By the very size and nature of their material form they make an appeal to the senses, even though their import does not reach the understanding. .But as we. turn through the pages of the Press and the periodicals, as we catch the flash of billboards along the railroads and the highways, all of which have become enormous vehicles oT the advertising art, 1 doubt if we realise at all the impressive part that these displays are coming more and more to play in modern life. Even the most casual observation, however, reveals to us that advertising has become a great busi-

ness. “It requires for its maintenance investments of great amounts of capital, the occupation c*f large areas of floor space, the employment of an enormous number of people, heavy shipments through the United States mail, wide service by telephone, and telegraph, broad use by the printing and paper trades, and the utmost skill in direction and management. In its turnover it runs into hundreds of millions of dollars each year. “When we stop to consider the part which advertising plays in the modern life of production and trade we see. that basically it is that di education. It informs, its readers of the . existence, and nature of commodities by explaining the advantages to be derived from their use and creates Tor them a wider demand. Tt makes new '’thoughts, new desires, and new aci tions. i “By changing the attitude of mind | it changes the material condition of the people. Somewhere. I have seen j i ascribed to Abraham Lincoln the statement that: ‘ln this and like communities public sentiment is everything. With public sentiment, nothing can fail ; without it nothing can succeed ; consequently he who moulds public sentiment goes deeper ; than 'he who enacts statutes: or proI nounces decisions. He. makes statutes i or decisions possible or impossible to j be executed.’ Advertising creates i and changes this foundation of all I popular action, public sentiment, or ! or public opinion. It is the most ! potent influence in adopting and changing the habits and modes of life, affecting what we eat, what w& > wear,, and the work and play of the ’ whole nation; Formerly it was an i axiom that competition was the life t of trade. Under the methods of the present day it; would seem to be more appropriate, to say that advertising is the life of the trade. “Two examples of this influence, have come to me in a casual way. While I cannot vouch for the details, I believe in their outline they are substantially correct. One ( relates' to an American industry that had rather phenomenal growth and prosperity in the late ‘eighties and early ‘nineties, being the foundation of one or two large fortunes. In its development it had been a most generous advertiser. A time, came when various concerns engaged in this line of manufacturing were, merged and consolidated. There being no longer any keen competition it was felt that it was n° longer necessary to explain to the public the value. of this product' or the superiority of one make over another. In order to save the large expense'that had been made for that purpose, advertising was substantially abandoned. “The. inevitable result followed, which all well-informed trade quarters now know would follow. But the value of advertising was not so we,ll understood 25 or 30 years ago. This concern soon became almost a complete failure. As I recall it had to be reorganised, entailing great losses This line of trade, was later revived under the direction and counsel of its old managers, and with the proper amount of publicity became a successful enterprise. "But let us turn from the unfortunate experience of the loss .that occurred through lack Of advertising to an example o’f gain that was made

through the shrewd application of t,his principle. In a somewhat typical American community a concern was engaged in an industrial enterprise. Its employees, were, not required to be men of great skill. Oftentimes they were; new arrivals in this country, who had been brought up to be accustomed to the. meagre scale of living abrp.ad.

“Their wants were not large:, so that under the American rate of wages they found it possible tp supply themselves and their families without working anywhere near full time; As a result production was low compared with the number employed, and was out of proportion to the; overhead expenses of management and capital costs. "Some fertile mind conceived the idea of locating a good milliner in that community. The wares of this shop were generously advertised through window display, newspaper space, and circulation. I suppose that every head of a 'family knows that a new bonnet on the head of one of the women ip the neighbourhood is contagious. The result in that community almost at once was better wearing apparel for the w°men, which necessitated more steady employment for the. men. The output of the plant was greatly increased, its cost units were reduced, its profits were enlarged, it could sell its product to its customers at a lower figure, and the whole, industry was improved. More wealth was produced. But .the reaction went even further. The whole standard Of living in that locality was raised. All the people became better clothed, better fed, and better housed. They had aspirations and the means to satisfy them for the finer things of life. All of this came from the judicious application of the principle of advertising.

“In tha former days goods were expected to sell themselves. Oftentimes they were carried about from door to door. Otherwise, they were: displayed on the shelves and counters of the merchant. The'public were supposed to know of these sources of supply, and depend on themselves 'for their knowledge of what was to be sold. Modern business could neither have been created nor can it be maintained on any such system. lit constantly, requires publicity. It is not enough that goods are made ; a demand for them must also be made. It is on this foundation of enlarging product'on through the demand created by advertising that very much of the success of the American industrial system rests. “It is to be seen that advertising is not an economic waste. It ministers to the true development o'f trade. It is no doubt possible to waste money through wrong methods of advert’sing, as it can be wasted through wrong methods in any department of industry. But rightfully applied it is the method by which the desire: is created for better things. When that once exists new ambition is developed for the creation and use of wealth. “The uncivilised make little progress because they have 'few desires, The inhabitants of our country are stimulated to new wants in all directions.

“A great power has been placed in the hands of those, who direct the advertising policies of our country, and power is always coupled with responsibilities. No occupation is charged with greater obligations than that which partakes of the nature of educaticii. Those engaged in that effort .arc changing the trend of human thought. They are moulding the human mind. Those who write upon that tablet write for all eternity. The,re can be no permanent basis for advertising, except a representation of the exact truth. Whenever deception, falsehood, and fraud ere,ep in they undermine the whole structure. They damage the whole art. The efforts o‘f the, Government to secure correct labels, fair trade practices, and equal opportunity for all our inhabitants, is fundamentally an effort to get the truth into business. The: Government can do much in this direction by setting up correct standards, but all its efforts- will fail unless it has the loyal support of the’business men o'f the nation.

“Our economic well-being depends on our integrity, our honour, our conscience-. It is through these qualities that, your profession makes it special appeal. Advertising ministers to the spiritual side of trade. It is a great power that has been entrusted to your keeping, which charges you with the high responsibility of inspiring and ennobling ’the commercial world. It is all part of the greater work of the regeneration and redemption o'f mankind.” —“The Fourth Estate.”