Why we need to spend more time advertising advertising

Did you enjoy the cartoon? It's always fun to chuckle at a trade held in lower esteem than advertising.

Just one problem. According to a survey that Jenny Riddell and I ran among 496 students, estate agents are held in higher esteem than advertisers. Only 23% of the respondents said advertising benefited society, compared to 28% for estate agents. This isn't a one-off. We ran the same survey last year with similar results.

Shamefully, for an industry dedicated to image building we have allowed ours to be sullied. This is a problem - how can we attract the best talent if we're held in such low regard?

Is 'brand purpose' the solution?

There seems to be growing concern within the industry at our tarnished image. Yet, many proposed solutions revolve around promoting brand purpose: publicising campaigns, like "Real Beauty" from Dove or "Like a girl" from Always, which have a higher moral purpose.

But this defence is flawed. Brand purpose is a minority tactic. You can't justify an industry by referencing a small proportion of its activity. It'd be like a publican defending his boozer to a teetotaller by reminding him they also sold pork scratchings.

What should we do instead?

In order to improve the sector's image, we need to promote the wider benefits of advertising.

First, the impact of advertising on prices. It's widely believed that advertising increases prices: 80% of those surveyed believed advertising made goods a little or lot more expensive, compared to only 6% who thought it made goods cheaper.

However, the most recent study in this area, conducted by Ferdinand Rauch, associate Professor of economics at Oxford University, shows this isn't the case. Rauch investigated the experience of Austria, which in 2000 harmonised its regional advertising taxes. This meant that some regions saw ad taxes rise, while others saw a decrease.

This is a fascinating natural experiment as the change in tax levels affected the amount spent on advertising. Rauch found that prices tended to fall as advertising spends grew.

This may seem counter-intuitive but why would brands bother to reduce prices if they're not allowed to tell new customers?

Second, advertising ensures news is available to people regardless of their income. Advertising spend is used by media owners to subsidise their cover prices.

The benefits of a well-read press can't be overstated as it helps keep the powerful in check. As Louis Brandeis, Justice of the US Supreme Court, said: "Sunlight is the best disinfectant." That disinfectant can only keep our society clean if it is widespread.

Finally, the effectiveness of products is as much to do with the expectations that advertising creates as their physical make-up. Advertising doesn't just improve the taste of Coke and Pepsi, it even makes painkillers more powerful.

Alan Branthwaite and Peter Cooper conducted a double blind test, published in the British Medical Journal, which investigated the effectiveness of branded versus unbranded pills.

The results were clear. Branded painkillers were 30% more effective in reducing pain than chemically identical but unbranded tablets. Critics may scoff at these improvements but if a user finds a product more effective surely that is the only criterion that matters?

So is all well with advertising?

Of course, there will always be instances of dubious advertising. However, rogue ads should be brought to account by the regulatory body, the ASA, if they aren't "legal, decent, honest and truthful".

But in general the impact of advertising is positive as it reduces costs, improves the experience of products and helps support a free press. Our task is to make sure these benefits are better known.

For more posts follow @rshotton on twitter

My new book, The Choice Factory, on how to apply behavioural science to advertising is available to pre-order here

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First published on Mediatel https://mediatel.co.uk/newsline/2016/08/09/changing-the-perception-of-advertising/