Evening star., 1924-02-22
ADVERTISING SURE
TRADE BAROMETER
6abson Declares Reducing
Space Always Forecasts
Slump in Business.
special Dispatch to The Star.

'f''iai piStatch 10 The Star.
hAbSoN Park, Fla, February o.
"A new barometer was added tn the
iist Oh factors on which changes can
De anticipated by Roger w Babson.
VINO, in statement TODAY discussad
studies covering the relationship be-
tween newspaper advertising and
local business.
we nave long needed n reliable
! measure of business psychology"
says Mr.. Babson. My associates, hay-
ing studied and rejected several in
dlces, finally analyzed newspaper adj
vertising lineage. both as a cause, in
changing local business conditions
ana as Il barometer by which impend-
ing improvement or decline can be
anticipated. The results in this field
vi investigation are exceedingly inter-
esting and pertinent.
Business Is Advertising.
IN comparing newspaper advertis-
ins DS months with the volume OF
local business in thirty leading cities
for 81 period of ten wears. nv asso-
ciates find that there is a distinct
connection between these two factors
AN increase in newspaper advertising
is paralleled in almost every case by
nlng the same month
When the lineage of local news
paper advertising turns and begins TO
decline the momentum gained car
RES the general business in the com
inunity either from one to three
months before it definitely turns
downward
"The figures on Chicago. for in
stance, illustrate this tendency in a
larger center. Newspaper advertis-
less than that carried in December.
General business in January increased
oVcIs the December figures, the drop
forecast by this decline in newspaper
lineage, however, developed during
the first two months of 1922. Both
advertising lineage and general buSi-
Cess increased IN March 1922, and ad-
Nertising turned downward in May
General business followed that same
month.
business Slnmps loretoId.
Newspaper advertising turning
downward between June and July
forecast the decline in general bust
ness which started in the following
month. Advertising decreased be-
tween May and June. business turning
down definitely in June. Advertising
started up in September with general
business. .a
1t turned down between October
and November and was follSwed by
business activity the same month. In
the year 1925, both general business and
advertising increased in February, and
advertising again turned downward in
May, general business following in
June. Lineage increased III September
and was paralleled hy the revival Of
fan business. \ decline OF the Novern-
be- figures indicated Il drop III general
activity which materialized after the
first OF the YEAR.
he. cir nr
tlSinS increased during February Of
1872. General business Improvement
began TO be felt in March Advertising
lineage turned downward in June. and
general business worked off TO low
point in August. Advertising lineage
increased slightly in September and was
parilleled by the fall rise III general
business activity. The drop in bust
hess occurring during the first two
months of 1928 was forecast by sub
stantih decline in advertising lineage
between November and December Of
the previous year.
Present Conditions Indicated.
advertising and general business
turned for the better in February Of
1928 and the decline of advertising
lineage between April and MAY clear
ly indicated the recession Of business
which followed. beginning in the lat
ter month. Both advertising lineage
and general business again turned
upward during July. d month ahead
of the usual seasonal turn. The mark
ed decrease i'll advertising lineage
following Il high point in October of
last year, foreto1d the decline in local
activity developing. beginning in
November and developing through De
cember and January OF this Year.
For scientific study of this fac
tor. it is necessary to eliminate sea-
sonal trends both in business and in
advertising. 50 that you get the true
variation in the behavior of both
thfge factors. In this case the extent
Of the decline in general business Is
propUrtonate in most eases to the
previous decrease in advertising
lineage.
Extent Of Depression Studied.
at is hoped that extensive studies
now being made along this line will
make it possible to estimate not only
the turning points but the severity
of local business dcpressions by the
relative decrease in local advert sing
lineage.
Long swing studies along these
same lines concluded Mr.. Babson.
indicate that wherever advertising
lineage declines steadily over 4 &c
riod of months. general business also
falls off materially and that in COM
pairing several cities the locality
suffering the greatest loss in adver-
tising lineage likewise experiences
the most severe depression.