Finance and economics: Economic focus: The money in the message

"Finance and economics: Economics focus: The money in the message" is an interesting article that is found in The Economist distrubited in London. The article discusses how advertisers doubt the fact that people are good at making decisions for themselves. In order to make a good decision people need to be informed but finding the right information is often too time consuming for the everyday consumer. As a result advertisers thrive off of creativity combined with psychology when developing a new campaign. A "signaling" theory suggests there are two methods that appeal to consumers. Presenting the consumer with "hard" information that states the product's price or it's function and "signal"information whcih appeals to emotion. Deciding which type of information will coney the more successful message is the job of the advertiser. Despite the psychological basis of advertising, adertisers understand that most comsumers are rational and will therefore ignore adversitments that "offeres nothing but an enticing image or a good laugh". However the article also discusses how making informed decisios are skwed by the idea that if a company does not have a good product, they would not spend as much money on advertising. When a consumer sees multiple ads for the one product, they simply want to purchase it because more advertisements are often associated with high quality. The article then wonders if low quality firms can be successful through the right advertising, but stresses despite advertising the decision is ultimately up to the consumer because their money is at stake.



Reference: Anonymous. “Finance and economics: Economics focus: The money in the message.” in The Economist. (Eds) London: Feb 14, 1998. Vol. 346, Iss. 8055; pg. 78, 1 pgs.