TV commercials/advertisements cause Inflation

Discussion in 'Economics' started by bearice, Apr 17, 2011.

  1. Consumers ultimately pay for TV commercials/advertisements because the advertisement cost is added to final selling price of the product.

    Example, if the cost of the product is $5 and the advertisement cost is $1 the the product is sold for $6. So ultimately consumer pay $1 additonal charge.

    Few people watch TV advertisements because they change channels when Ads appear. I switch off the TV when Ads appear. So TV Advertisements is one of the biggest waste of money.

    TV advertisements are expensive and in some cases they are highly expensive when the TV program has high viewership.

    Channel companies can charge viewers/customers certain subcription money per month and get rid of TV advertisements. Also it would be non-stop TV program only. No looking at stupid ads people face.
  2. I love you man. U so crazy!
  3. Example, if Coca Cola advertisement expenses is $100 million per year then Coca Cola should distribute free samples worth $100 million to its potential customers instead of buying TV advertisments and Giant outdoor advertisements worth $100 million.

    This way customers will get to taste Coca cola instead of seeing some human face drinking Cola in Ads and customers having no idea what the taste is like.

    When people receive free products they feel happy, privilaged and royal. Even rich people like free products.
  4. My main point is that TV commercial/advertisements are expensive and many are highly expensive so the final product price increases by 20% to 30% resulting in inflation. Nobody watches TV advertisements because people change channels when ads appear. So TV advertisements are one of the biggest waste of money.
  5. Poster:

    Some corporations make sooooo much money that advertising is only a Tax Write Off. Some of these products, at the SALE price level, have a GP of 100% up to 400%. This, again, is the SALE price GP. Not the RETAIL price GP which is more. Think of it this way, they buy an item for $25.00 with a retail of $200.00 and then put a sale price of $100.00. Wow, that's 50% OFF...what a bargain!

    Add some propaganda and yes, people will buy crap they certainly do not need.

    I get upset thinking about all the crap that comes to market with virtually no use what-so-ever and these ads telling me I NEED it

    I will be a better man if I wear a certain after-shave...I will get more women if I drink a certain beer...I am not a real man if I don't own a certain model car...I mean WTF

    I bought TIVO and have avoided the propaganda machine for many years and I have not looked back since.
  6. maxpi


    Unintended consequences though: I bought TIVO and I have not exercised in years...
  7. Visaria


    Quite a few adverts are better and more enjoyable to view than the programmes, bearice.
  8. Pffffttt.....

    Industry norms = Advertising is 0 to 3% of the product.

    Zero if you choose not to advertise. expenditures could be higher for an ad campaign but most corps average out over the year less than 3%.

    Advertising costs sometimes can be shared between manu's to keep ad costs down.
  9. Some 7 years back I was member of paid to click advertisement programs where members would receive paid advertisement links daily. When members clicked on the link they would earn 2 cent or 5 cent and sometimes $1 per ad link they clicked.

    Here members were paid to read advertisement so members were happy to read advertisement whereas in TV advertisement viewers earn nothing to see ads.

    My first income for paid to click ads was $3 and I was very happy. Today I have $ 1 Trillion but I am not happy.

    Paid to click advertisements will takeover TV advertisements in future.
  10. Note:

    Easily you might find this ratio in transportation costs, packaging cost (some packages cost way more than the product). You might find this ratio in liability costs or environmental compliance.
    #10     Apr 17, 2011