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What the public pays for advertising
Agency man computes cost of ads to customers Says price in 1961 was $65.40 per person Puts per family cost for tv at 2c an hour
By Fred W. Hinickle
v.p., Madison Adv. Agency
It has been once estimated and often repeated that the average American is exposed to no fewer than 1,200 advertising messages in a single day. While it is impossible to measure the number precisely, there is no doubt that advertisements are very much with us, the number and frequency increasing steadily every year.
For the purpose of this examination let's leave economic theory to the classroom and moral considera
tions to the syndicated critic. What does advertising cost the consumer, and what does he get for the money?
An authoritative year-end estimate of all advertising expenditures, quoted in sponsor,, was $12 billion in 1961 — a figure one might expect to encounter only in government circles. It is more than twice the amount spent on food and clothing in the entire metropolitan New York City area in 1961.
6 cents a carton. But the original question was how much advertising costs consumers. So the in
Advertising a bargain at $65 a year
Vice president of Madison Advertising Agency, Madison, Wis., the author believes advertising gives more than it gets, allows wide diffusion of news, entertainment
digestible $12 billion has to be made bite-size by dividing by the total population. The results — and there's a piece of it in every dollar you spend — is $65.40 per year.
Did you buy a new car last year? If you did, then between $18.97 and $161.70 of the price you paid went into advertising. The smaller figure was for a Ford, the taller one for a General Motors Tempest. The average for all cars was $31.70.
That amount covered only national expenditures in magazines, newspapers, network radio and tv, and farm publications. Your local dealer added to it.
About 1 cent of every dollar you spend on gas and oil to keep your car running pays for advertising.
Do you smoke? An average of 6.2 cents of the cost of every 10-pack carton is attributable to advertising, according to industry reports. 19 cents a case. You've heard that the wrapper on a loaf of bread costs more money than the wheat used in its manufacture. A Department of Agriculture booklet, discussing "The Farmer's Share of the Consumer's Food Dollar," says that of every dollar spent on bakery and cereal products, the farmer receives 22 cents while the "marketing system" receives 78 cents. Of this 78 cents, about 3 cents goes into advertising.
For a refreshing pause in this statistical study, consider beer. One of the leading American producers last year spent in the neighborhood of $15 million in suds promotion. Applied to his sales, this amounts to about 19 cents per case of 24 12ounce bottles.
(That's $2.60 per barrel. The Wall Street Journal of 9 January 1962 said that that raw materials take about $2.50 per barrel, while federal and state taxes average $11.73 per barrel, or 85 cents per case.)
In summary, and it has averaged this amount for the past five years, advertising expenditures are equal to 2.3% of our gross national product, the total of our output of goods
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SPONSOR/22 October 1962