1941: Advertising

As in the preceding year, advertising throughout 1941 was under the shadow of the war, although the full effect of this influence was only beginning to be felt in December. Much earlier than this, however, the advertising of many classes of consumers' goods was curtailed by the impossibility of obtaining supplies of raw materials essential to their production. Some manufacturers, nevertheless, continued to advertise products they were temporarily unable to supply. The usual objectives were to maintain good-will by explaining the reasons for their inability to accept orders, and to build a deferred demand which might be stirred to activity after the cessation of hostilities.

Amount of Advertising.

The actual volume of advertising did not decrease; in fact the total expenditure for 1941 was about 4 per cent greater than for 1940. Relative to the volume of business, however, the expenditure for advertising decreased. In 1941 the expenditure of $1,700,000,000 represented only about 2 per cent of national income, a lower percentage than in any recent year. In 1935 expenditures for advertising represented about 3 per cent of national income.

Changes in Proportions.

Several changes occurred in the proportions of advertising in the various classifications according to source, media, and purposes. Retail advertising was less adversely affected than manufacturers' national advertising. In most cities it was at least normal; in many it was above normal. However, advertising could hardly be credited with being the chief factor in the heavy volume of retail sales. The mere news of impending shortages in various items, such as automobiles, silk stockings and golf balls, was enough to stimulate buying, and this tendency was accelerated by fears of inflation, taxation, and other factors making for higher prices.

Because of the slowing up in the development of new products and varieties, a smaller amount of manufacturers' advertising was of the pioneering type intended to influence primary demand. Some newly-invented appliances and materials were introduced and advertised, but the quantities available for civilian consumption were too limited to permit aggressive sales promotion of any kind. In several fields where actively competitive advertising had been customary, the need of conservation and economy caused a change in the direction of the appeal. At the end of the year the adoption of rationing policies threatened the complete extinction of advertising of these products to the general public. Competitive advertising of foods and low-priced luxuries was much less affected.

Public Service Advertising.

Partially offsetting the decrease in the amount of advertising of foreign travel, home appliances, and consumer's durable goods, were increases in advertising by Government departments and by organizations for charity and relief. Advertising was used to sell Government bonds and defense stamps, to obtain recruits for the Navy and Air Corps, to secure contributions to the Red Cross and other funds. Space and time-on-the-air for patriotic and charitable purposes were donated by media and private corporations; many of the latter used their own space largely for informative and inspirational messages designed to promote the general welfare rather than their own profit.

Newspapers and Magazines.

The circulation of newspapers and periodicals showed a greater average increase than their advertising revenue. Magazine circulation was about 5.5 per cent greater than in 1940, whereas, the dollar volume of magazine advertising was only slightly greater. This condition, together with the higher costs of labor and materials in the publishing industry, led to a serious dilemma: whether to raise advertising rates or increase prices to readers. Ladies Home Journal and Woman's Home Companion announced that their price of 10 cents per copy would be increased to 15 cents, beginning with the February 1942 issue. The Saturday Evening Post announced an increase in advertising rates. This publication retained its leadership in advertising lineage for the year by only a narrow margin over Life.

The weeklies as a whole fared better than the monthlies. Weeklies gained about 7 per cent in dollar volume of advertising, whereas women's magazines gained slightly over 4 per cent and general monthlies lost over 2 per cent. This difference was partly due to the lack of flexibility of the monthlies, with their greater length of time between closing date and date of publication. Occasionally a magazine advertisement appeared some time after the adoption of restrictions that nullified its message. With further uncertainties ahead, advertisers were reluctant to schedule advertisements very far in advance.

The higher degree of flexibility of radio and newspapers operated to their advantage. Newspapers showed a gain of about 4 per cent; radio about 10 per cent; outdoor advertising about 8 per cent. Some individual periodicals in the industrial, trade, and farm fields also made good gains. Iron Age claimed the largest increase over 1940.

Printers' Ink, the advertising trade magazine, which had been published as pocket-sized weekly for over fifty years, and had a large-sized sister publication, Printers' Ink Monthly, announced the amalgamation of the two in a standard-sized 8 by 11 weekly beginning with the first issue of 1942.

Harvard Study of Economic Effects.

One of the most important contributions to the science of advertising was made at the close of the year by the completion of the Harvard Study of the Economic Effects of Advertising. This study was the result of a survey begun over four years earlier on behalf of the Advertising Research Foundation. It was financed by a generous gift from Mrs. A. W. Erickson as a memorial to her late husband. Alfred W. Erickson, formerly chairman of the board of McCann-Erickson, Inc., advertising agents, but was conducted independently by Professor Neil H. Borden, assisted by an advisory committee of the faculty of the Harvard Graduate School of Business Administration.

The study contains the most exhaustive analysis ever made of the available data regarding the costs and results of advertising, together with the author's conclusions, approved by the advisory committee. It constitutes a book of nearly 1,000 pages, or more than 350,000 words. It estimates that nearly half the expenditure for newspaper, periodical and radio advertising is 'in effect returned to consumers in the form of low-cost periodicals and free radio entertainment.' Although it reaches the conclusion that prices of advertised goods are often higher and less flexible than those of unadvertised or unbranded goods, the difference is often due to product research and market development. On the whole, advertising is viewed as a force in raising standards of living, reducing production costs, and improving quality.

The Harvard study was welcomed by advertising men, because it promised to curb the loose generalizations that have been made for or against advertising on the basis of inadequate evidence. Criticisms of advertising from men in key positions in Government departments had caused some concern in the early part of the year. Later, however, it appeared that their statements had been misinterpreted or their views had become modified. Both the Department of Justice and the Price Administrator disclaimed any animus against advertising when used for legitimate purposes. The use of advertising as a leverage in full-line forcing or in other monopolistic practices was condemned, as well as various other misuses.

Research Activities.

Progress was made in advertising research, though mainly in refinements of methods of using tests, especially recognition tests, rather than in the adoption of new methods. Market research had new problems in the shifts in geographical location of markets caused by defense industries, and the shifts in distribution of income caused by taxation and other factors. Tests were also made of consumers' reactions to products using substitute materials.

The Advertising Research Foundation published a report on consumer reaction to certain basic issues in the field of advertising. This was based on Public Opinion polls conducted under the direction of Dr. George Gallup in 1939 and 1940. From this it appeared that the majority of the general public considered that advertising gave them the information they wanted, although about 40 per cent were critical of some advertising practices. Teachers were much more critical of advertising, and only a small percentage of them considered it sufficiently informative. However a majority of both teachers and general public believe that it is more truthful than it was five years ago. The changes between 1939 and 1940 were apparently small, and on the whole tended toward a more favorable opinion of advertising.

There were many signs indicating that during 1941 progress was made toward a better mutual understanding between the advertising profession and the leaders of the Consumer Movement. A number of conferences were held with both elements fully represented and manifesting an attitude of cordiality and cooperation. Even before the declaration of war, but more conspicuously afterwards, a number of prominent advertising men left their private business activities to devote their whole time to the publicity problems of the Government. On the part of advertisers, in general, a growing sense of social consciousness gave promise of reducing still further the proportion of advertising that has been the object of just criticism.