Not everyone can claim to be financially savvy. But many of us do try to sidestep chump status when it comes to consumer spending. That only makes sense. We want to keep more of our cash. But beyond that, we want to avoid being a sucker for every fast-talking pitchman coming down the pike.
I maintain there’s a simple way to keep more wampum in your jeans, while chortling at the masses tempted by gyp joints and money wasters. You can do it by simply being wise to the advertising you encounter every day.
A word about advertising: It’s an indispensable tool in many consumer and business-to-business categories, and done well it can be highly effective. But it doesn’t come cheap. Competitive marketplaces being what they are, those who sell advertising are getting top dollar for ad space and 30-second spots.
Despite that expense, some product categories seem to be advertised continually. For instance, it seems that the AM radio news and sports stations I catch are backed year after year by a comparative handful of prolific advertisers.
Let’s review. One, advertising costs a lot. Two, some industries tend to be continual hucksters. Put them together, and it makes sense that highly-advertised products are likely raking in giant profits, which in turn are partially funneled back into ad budgets to generate still more windfalls.
Is it far-fetched to suggest overly advertised products may not offer the best return on your dollar? To see, let’s examine a few industries notable for their perennially ubiquitous ads.
Odds you lose
There are, I think, eight casinos within a 90-minute drive of my home. In a typical day you can’t avoid being assaulted by ads for at least six of them, depicting beautiful people in near-orgasmic rhapsodies of joy, laughing like loons as they ecstatically shower in fountains of greenbacks.
Determined to see what I’d been missing, I stopped by one of the heavily-plugged casinos. In the parking garage elevator headed in, I chatted up a man with missing teeth who swore his luck was going to change. After strolling a casino floor whose ambience was far more funereal than depicted, I hopped a ‘vator garage-ward and heard a stooped-over gal, possibly a motel maid of 50 years, moaning she’d lost yet another chunk of life savings on this casino visit.
Where’s her lost cash gone? Likely into more casino ads.
New car smells
Media of all kinds are heavily supported by ads for new cars. The ads’ abundance suggests new car selling is a very lucrative business.
I often write stories about the auto industry, and find its experts aren’t shy in confiding that for many, a certified pre-owned rather than a new car is a wiser buy. A CPO vehicle starts as one of the best used cars available, then endures a 100-point inspection and gets a warranty. It’s past the moment where it sheds $5, 000 in value simply by being driven off a dealer lot. While it costs more than a used car, it tends to be more cost-effective than buying a new car.
How do we know CPO cars are better buys? Because they’re advertised a lot less! There’s less profit for carmakers and dealers, and less windfall for ad budgets. That new car smell? It may be your goose being cooked.
Appearing just about as often as new car ads are advertisements for vehicle maintenance and repair. Having been informed many times by pitchmen the only place to turn for service is right back to the dealer, I tried that with my 15-year-old, high-mileage, imported subcompact.
At the dealer, “technicians” looked over the car and pronounced it in need of repairs whose combined price virtually equaled the car’s total book value. I declined the repairs, and the car ran like a top for years. Along the way, I asked co-workers to name a reputable service shop, and wound up delighted with the work of a nearby, hard-working mechanical wizard. Support your local neighborhood mechanic, I say, rather than hoisting on your frail back the national ad budgets of dealers or coast-to-coast repair shop chains.
Bursting the bubble
Want one final example of relentless ad hype? Okay, here it is. Before the housing collapse, ads for mortgages were unavoidable. Hucksters assured us that low interest mortgages were a God-given right, even for those whose meager savings accounts entitled them to a home no more luxurious than a second-hand Maytag box.
Those ads have now been replaced by spots from… Many of the same people, revealing that for sizable payments, they will help extract us from the mess! The simple lesson: Under-patronize the over-hyped.