The Western news. [volume] (Libby, Mont.) 1933-current, 1941-07-24
Consumers Should Know
~ The Facts about Advertising Costs

This is the third of series of 81,
articles prepared by the Bureau o
Research and Education of the Ad-
vertising Federation of America, II
response to the increasing interes
of consumers in questions affecting
advertising and business.
Until q very few years ago, the
general public was no more inter
ested in the cost of advertising
than in the cost of delivering gro
ceries. or in the cost of book-keep'
ing. These are ordinary costs o.
running a business.
i But lately great many people
have come to be very much inter.
ested in lot of questions about
how businesses are run. Along
with other questions comes the
thought that the cost of advertis-
ing must be included in the prices
which we pay for the products ad.
vertised. Unless company is los
ing money, it certainly has te
charge enough for its goods to cover
all the expenses of doing business
and advertising is one of these ex-
penses.
Looking over the census figures
of the past ten years, we see thai
an average of about SIS million
dollars per year has been paid fol-
advertising in newspapers.
In periodicals. which include al
kinds of mazagines. farm papers
and business journals, the average
expenditures for advertising were
about 200 million dollars per year
during the past 10 years.
On radio we have no census fig
ures, but records furnished by
broadcasting companies indicate
that radio advertising has increased
from something like SO million dol
lars ten years ago to present vol
ume of around 200 million dollars
year.
Another medium is outdoor ad-
vertising, which includes signs, post
er boards. and painted panels. The
amount of money spent for adver-
Using in this field amounts roughly
to about so million dollars a year.
In these four mediums, newspa-
pers, periodicals, radio, and out
door advertising, the total adver-
Using adds up to a sum of approx
imately CTS million dollars, or a
little less than a round billion per
year.
Then there is another important
means of advertising which is very
hard to measure because the fig
ures on total costs are not COM
piled. This is advertising literature
sent through the mails The best
estimate Of the amount spent for
this form of advertising places the
total expenditures at between 300
to 400 million dollars per year. This
covers the costs Of circulars, post
age, advertising letters, and the
like.
Another type of advertising on
which ii is difficult to obtain fig
ures is merchandise premiums One
estimate from competent source
sets the amount spent for premium
advertising IT about $50 million
dollars year,
Then there are a number of mis-
cellaneuus kinds OF advertising for
which smaller amounts are spent
These include car cards. store dis
play material programs. directo-
ries. sky-writing. and advertising
specialties. The total q all these
miscellaneous forms Of advertising
is estimated at something over 100
million dollars year
Putting together all Of these fig
ures covering advertising in news
papers. periodicals, radio. direct
mail, premiums, and miscellaneous,
we have total of a little over ia
billion dollars per year In the
peak year 1929, this total was some
what higher, and al the bottom of
The depression it was lower Taking
the present figure and allowing
enough extra to cover advertising
services and any other items we
may have missed, we finally ar
rive at an overall cost Of about 2
billion dollars per year for all the
advertising in this country.
This is a large figure, as any
one must admit But it doesn't
mean much unless we compare it
with something else. Probably the
best way to look at it is in COM
parison with the total amount Of
goods brought during the year.
which is in the neighborhood Of 70
billion dollars. This comparison
shows that the total cost of adver-
Using is less than per cent of the
value Of all goods
This 3 per cent figure has more
meaning than the total in dollars
and cents. 1t means that all the
work that advertising does in CON
nection with selling goods is done at
a cost of less than 3 per cent Of the
value Of the goods.
What is perhaps an even more
interesting comparison is the cost Of
advertising compared with the total
Of all costs Of distribution. Adver-
Using, of course, is a part Of the
whole cost of selling and distribut-
ing goods. The price Of every arti-