Skip to main content

Reading Raj Patel’s “The Value of Nothing” in an advertising context.

The more I read about the theory of advertising (which is plenty, thanks to my upcoming IPA Eff Test), the more it seems just inextricably linked to other disciplines.


Psychology and sociology are pretty much a given – the better we understand how people’s minds and social structures work, the better we can sell to them. But there’s also a huge economic dimension to advertising.


Specifically, so much of advertising relates to the process of value creation. Though my Comparative Literature course included ample Marx, Engels, Veblen, and Benjamin, it’s a concept that I’m still working to fully understand.


That’s why I was very happy to come across Raj Patel’s The Value of Nothing. At its core, it’s a fundamental examination of why things cost what they do – though it also goes far beyond that as the subtitle, “How to reshape market society and redefine democracy,” suggests.


One of the best parts is where Patel explains why “a burger grown from beef raised on clear-cut forest should really cost about two hundred dollars” (p.44) – and why the actual product retails for only about 2% of that.




  • “For profits to be high, corporations organize workers, raw materials, capital equipment, and rents so their costs are as low as possible”

  • Creating a single burger results in a slew of “externalities” including carbon footprint, water and soil degradation, health costs of diet-related diseases

  • “While none of these costs are reflected [in the final price], they still have to be paid for by someone” – for example, “Consumers in the US are directly paying for cheap hamburgers directly through their tax dollars” since the cows are fed on government-subsidized corn;  fast food workers’ low wages need to be subsidized through government programs such as Medicare and food stamps


The burger example is just the tip of the proverbial iceberg (and using money as a benchmark is slightly arbitrary since money is such an abstraction anyway). “The hidden price of US agriculture lies between $5.7 to $16.1 billion per year” (p.46), and “ecological debt“ is spreading and rising.


Overall, it shows that there’s a fundamental problem in how we interact with the world. The Good Place really honed in on this in the third season – it’s hard to live without negatively impacting (or even harming) others when every action and choice we make has a slew of negative consequences because of the systems we’ve created.


So what’s the role of advertisers, agencies, and brands here? We’re gauged on profitability – it’s literally how we measure the effectiveness of our campaigns, whether they “worked” or not. So how can we change the system?


I can think of two main ways…


1) Reform it from agency side


Calculate what the products we market and advertise “should” cost and ensure that brands only charge this price. Agencies can refuse to work with brands that don’t adhere to this model and hero those who do. With the growing interest in environmentally conscious movements (viz climate change protests), this might just be the time to do it…


But this will be a painstaking process, and brands will likely be able to find other agencies who are willing to let them charge whatever they want. (Or they’ll take it in-house.)


2) Lobby the government to ensure that prices have to take all costs into account


I don’t want to sound too cynical here, but a key challenge here seems that government and business are so closely linked in so many countries...


This is where I’ll leave it for now – but will hopefully revisit this soon with more solutions.

Comments

Popular posts from this blog

Digested Read: How (Not) To Plan, Section 2.

Product, Price, Place!
Introduction
Marketers tend to focus overly much on Promotion, ignoring other three Ps.
2.1 Brands Can(not) Live Forever
"Brands don't have life cycles," a theory which the longevity of Heinz, Kellogg's, and Hovis apparently support.

"If there is any 'life cycle,' it's a brand management cycle."

Phase 1: Brand launch with strong marketing support and ROI.

Phase 2: Sales plateau – marketing needs to maintain and depend the brand and gets less management attention; budgets are cut.

Phase 3: The cuts lead to declining sales; brand owners retaliate with price promotions which deliver short-term sales but damage the brand image (further affecting sales).

The Boston Matrix of Cash Cows and Stars should be applied to categories, not brands.
Checklist

"Aim for brand immortality"
Always invest in continuous advertising [Comment: A recurrent theme]
Share and Voice and Share of Market can help you estimate how much you need to spend to …

Digested Read: How (Not) To Plan, Section 1.

New year = new ventures – in my case, this includes a series of digested reads, with a focus on ad strategy books. I'm kicking it off with the APG's How (Not) To Plan.

Firstly: the book is already a digested read, so this will be the super-distilled version. I'll tackle it section by section.

Section 1 is all about Setting Objectives.
Introduction
"Effective communication starts with agreeing with your clients what it's supposed to do. [O]ften, this stage is rushed, fudged, based on flawed thinking or skipped altogether."
1.1 How (Not) To Make a Plan
The authors talk about how "marketing objectives [...] have lost their grip on reality." However, "there is evidence from the IPA Databank that better objective setting leads to more effective campaigns. Best practice is to identify exactly what business results you want. And exactly what you need people to think, feel, and do to deliver those results." Also? "A campaign can't deliver unles…