The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1918-11-16

To Relax In Your Advertising Cam
paign Means Bitter Competition.
lBy Wan. D. coLyER.l
I'M. Federal Trade Commission.

temporary war conditions, would
seem to imperil the most valuable as
set that any business has-namely,
| its goodwill. No more faulty logic
can be found than that which would
impel manufacturer to cease build
ing for the future by means of ad-
vertising simply because the output
of his factory Is, for the time being
restricted; or because diversion of
HIS facilities 10 war work has operat-
ed to withhold his goods from accus-
toned markets. In modern business
there can be no sufficient-unto-the-
/ day policy.
In advertising the business man
has built up the intangible or spirit
ual side OF his business. If such IL
may be designated, as distinct from
the material side, 1t is the spiritual
side, as represented by goodwill, that
Is slower OF growth and that is the
moreseriously jeouardized by neg
lect-neglect which could take no
more disastrous form than an inter-
ruption to advertising.
For example, If have the requisite
capital can build alongside the
plant OF the Columbia Graphophone
company a factory equal in all res
poets to the Columbia factory AS
sumo that | can turn out an instru-
ment comparable in every way to the
Columbia product and in equal num-
bers. Yet / am not even n going
concern cannot sell that instru
ment to the public in profitable guam
titles until | build up the goodwill
that the Columbia has acquired by
years of advertising.
Goodwill, in my estimation, is far
more valuable than the physical
property with which IL is linked The
physical property is, in measure,
useless without the vitalizing spark
OF GOODWILL The Proctor e. Gamble
plant might be completely destroyed
| by fire, and yet the havoc would not
extend to the commercial identity rep
resented by the name of Ivory soap.
Far from sustaining loss. the good
will inherent in the word Ivory"
would, If anything, be enhanced by
reason of that trait of human ma
ture which makes the public the
more eager to obtain that which is
denied to It or which is obtainable
only with difficulty. -
That. at times such as the present,
there should be some hesitancy re-
garding advertising policy may be
because II has never been scientific
cally determined what proportion Of
advertising expense is an operating
charge In my estimation, only
small part, If any, OF advertising ex-
penditure is properly chargeable as
current item OF sales expense; but
Is, rather, when translated into the
terms Of goodwill. a permanent In
vestment and hence a capital charge.
Given this conviction, 1t must appear
quite as short-sighted to discontinue
advertising merely because the war
| has momentarily interrupted distrib-
ution as II would be deemed unwise
Of a manufactures 10 Junk a portion
Of his factory equipment because
there had been interruption to It's use
The manufacturer who has convert
ed his factory to war work and has
therefore interrupted the production
OF his original line. does not tear
down and discard his expensive ma
chinery to save the Insurance prem
iums or other similar expenses. II
would be just as sensible for man
ufacturer. whose commercial integ-
rity is founded upon advertising. TO
abandon his advertising campaign in
order to save the carrying charge on
his greatest goodwill.
Not the least of the considerations,
certainly, that argue for the continu-
alton without interruption of the adj
vertising of all concerns that will
come back now that peace is assured,
Is that sales are in reality made long
In advance OF the actual transaction
that we commonly refer to as the
sale" This will be especially true
in the war period.
For example, have no doubt that
even under the normal pre-war con-
ditions, thousands OF persons who did
not possess a musical instrument
were sold one, say. the Chickering
piano. They might be without means
for the time being to carry out their
determination TO own a Chickering