Advertising: The Mammoth Mirror

(7 of 10)

So far, all this has yet to produce any surefire way to reduce human impulses to statistics. But Madison Avenue continues the quest out of painful awareness that U.S. businessmen are growing increasingly disinclined to approve their ad budgets without searching questions. The problem that bothers the businessmen was summed up long ago by Department-Store Tycoon John Wanamaker, who was reckoned in his day to be an advertising genius. Said Wanamaker: "Half of my investment in advertising is wasted. The trouble is, I don't know which half."

Time for the Pros. As in Wanamaker's day, advertising is still an inexact speculation. The thing that most concerns businessmen is that it is also an increasingly expensive" one. Little more than a decade ago, $1,000,000 was a respectable year's advertising budget for anyone but a major consumer-goods manufacturer; today a single TV spectacular may cost that much.

Despite corporate efforts to trim advertising expenditures, however, the trend to bigger ad budgets seems likely to continue. Contributing to that trend, along with the flow of consumer advertising, are the industrial and institutional campaigns. This year U.S. business, mostly in the fields of construction and heavy manufacturing, will invest close to $600 million in fact-crammed industrial ads intended to attract the eyes of purchasing agents and establish a company's reputation so that it will be invited to supply talent and material and to bid on jobs. In addition, there are ''institutional" ads—such as the Container Corp. of America's series on "Great Ideas of Western Man''—by which companies aim to create an aura of progressiveness in order to recruit customers, stockholders or employees.

Among institutional and industrial advertisers—and even in consumer-oriented industries where products are distinctively different and personal salesmanship is still a vital element—advertising is considered a "controllable'' expense to be cut in lean times. Thus General Motors, the world's biggest advertiser (1961 budget: $142 million), pegs its advertising budget for the coming year directly to what it thinks its sales will be. But for manufacturers of low-priced packaged goods such as beer, proprietary drugs and processed foods, advertising is the one thing that can notably increase sales—which is one reason why the nation's four smaller cigarette companies spend almost twice as high a percentage of their gross on advertising as front-running R. J. Reynolds and American Tobacco.

In the fast-turning world of packaged goods, where advertising budgets often run higher than the costs of production and a blindfolded customer can scarcely distinguish between competing brands, it is the adman's task to find and exploit any slight difference, real or imagined, in his client's product. Says one top packaged-goods executive: "If we've got a real product difference, we could let any kid from the Harvard Business School write the ads. When we've got parity of product, though, that's when we need the pros."