THE
14
COIN M A C H I N E
May-June, 1Q32
JOURNAL
W h o P a ys
F or
By ROBERT K. GIBBS
/ O l LITTLE over a billion dol-
j L 1 lars was spent last year
in tlie United States for
advertising. What return if any
did the public receive for this ex
penditure, or was this staggering
sum simply levied as an indirect
tax concealed in the higher prices
of the advertised goods purchased ?
In other words, if this advertising
should be stopped, would it not be
possible for us to buy the same ag
gregate of goods for a billion dol
lars less?
This question has raised itself in
the mind of everythoughtful person
as he ponders over the “wicked
waste” of the electric signs so
prominent in the big cities, or
thumbed through the pages of a
magazine containing many thou
sands of dollars worth of advertis
ing.
It must be admitted by any hon
est-minded person that a part, at
least, of this stupendous sum is
wasted through inefficient methods.
The same is true of any other great
class of expenditure, as money paid
out for wages, for power in produc
tion and for services of professional
men. The purpose of this article is
to suggest some of the benefits
which accrue from advertising—
benefits, not to the advertiser him
self but to the general public.
These benefits are of two kinds:
economic and social. Taking up the
economic aspect first, we see that:
1. Advertising lowers selling cost.
The cost of selling a product is
an important part of tin? expenses
of the average manufacturer,
whether he makes coin machines or
a food product. It sometimes hap
pens that the cost of manufacturing
the product is less than the cost of
getting it into the hands of the next
purchase!*, while it is frequently
less than the cost of placing it into
Paid Publicity has Both Economic and Social Benefits. By Demand
Creation it Actually Reduces Selling Prices
on All Types of Goods
the hands of the final purchaser. In
other words, it cost a manufacturer
less to sell operators than it does to
sell direct to locations. Advertising
is merely one way of selling or cre
ating demand, the other way being
by way o f personal salesmanship.
How does advertising lower the
cost of selling? By supplementing
the salesman. This may occur at
any stage of the marketing process
from manufacturer to operator.
The salesman supplanted may be
one of the middlemen himself, as
in those cases where large advertis
ers have made themselves indepen
dent of the jobber. When adver
tising supplants a salesman in this
way it is usually because machines
can be more cheaply marketed by
the latter method so that the buyer
gains.
T SAVES the salesman’s time.
He finds that his prospective
customers are at least partially sold
already and he may obtain an order
with far less expenditure of time
than when the prospect has never
heard of his proposition. Advertis
ing renders unnecessary many calls
which the traveling salesman
would otherwise be compelled to
make. The adevrtising sent out by
the manufacturer holds his regular
operator customers in line and se
cures many direct orders between
his visits.
2. Advertising lowers manufactur
ing costs.
I
By increasing the demand for a
particular machine, advertising
makes possible the familiar econo
mies of large scale production. It
Enhanced Scans © The International Arcade Museum
enables the manufacturer to buy his
materials in large quantities there
by making a substantial saving in
his costs. There is also a great
saving in the efficiency of labor that
could not otherwise be effected.
And as every amateur economist
knows, this increased efficiency in
production means, through the ac
tion of competition, lowered prices
to the consumer.
As far as the social benefits are
concerned advertising confers posi
tive comforts as far as all indus
tries are concerned. Without the
stimulus of advertising few of the
modern inventions that have so
generously added to the richness of
life would have been generally re
ceived.
Picture conditions in isolated
communities unreached by the ad
vertiser’s message. Have they good
heating systems, sanitary plumbing,
refrigerators, washing machines,
vacuum cleaners, etc.? Have they
sound teeth, good digestion and a
low death rate?
Advertising has raised the gen
eral level of intelligence and the
plane of living. Advertising per
forms the double service of awaken
ing new ambitions and of showing
a man how he may obtain his de
sires. This is particularly true of
coin machine advertising.
Advertising > iells an operator
what he ought to buy, when he
should purchase it, where he can
find it at the best price. It saves
him many days of blind shopping.
In addition advertising improves
the quality of the goods. The eon-
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