Advertising - Spend Money To Make Money
( Originally Published 1902 )
"Mr. Allen told of a conversation that he had with Mr. Duke, in which Mr. Duke complained of the large amount that his firm, Duke, Sons & Co., had to expend for advertising.
`Mr. Duke told me,' said the witness, `that in 1888 he spent $508,000 for advertising.'
Mr. Allen went on to say that other cigarette manufacturers to whom he talked had correspondingly large expenses, and that he urged upon them the advisability of combination. Mr. Duke, he said, said to him that a consolidation would be a good thing, as doing away with competition in advertising.
` What was the purpose of the formation of the American Tobacco Company?' asked Mr. Fuller, on cross-examination.
It was to save the large expenses of individual advertising,' replied Mr. Allen; ` to save expenses on salesmen, to save office expenses, in general to promote economy in the manufacturing and distribution of the products of the companies combining.''" From report of Tobacco Trust Trial, New York Sun.
One thing is certain. If James B. Duke, President of the American Tobacco Company, did not spend $508,000 in 1888 for advertising, Duke's Cameo Cigarettes would not be so well known to the cigarette world and lots of chappies would be puffing to-day in place of Duke's Cameo Cigarettes the Sweet Caporal, High Admiral, Vanity Fair, or some other brand.
The above clipping gives a little bit of light on the sums spent by well-known concerns in advertising.
Advertising is vital to nearly every business today. When a man or firm wishes to push a specialty a liberal appropriation is usually made for advertising purposes. When this liberal appropriation is not made the enterprise dies an early death.
Perry Davis began his great Pain Killer business by peddling bottles of Pain Killer from door to door. When he got a little ahead he began advertising—his sales then began to increase with the better knowledge of his Pain Killer and in proportion to the increase of business Mr. Davis enlarged his advertising appropriation.
I believe Dr. J. C. Ayer started in about the same way. Even in their early days these men appreciated the power of advertising.
But Davis and Ayer started their business many years ago. Conditions have changed since then. Modern times demand modern methods. And advertising plays a mighty part in modern business methods. Fortunes are annually spent by big con corns in publicity. Enormous salaries are paid trained specialists to direct the expenditure of these fortunes. This is meet, logical and just.
One of the first axioms that the business fledgling learns is
To make money you must spend money." The day has gone by when one can conjure up dollars with little exertion and expenditure. There are too many aspirants in every field. The aspirant with the cleverest brain and the bank account to match" gets there "first. His clever brain will tell him how much to spend in advertising-in management—in salesmanship—in manufacturing-in each detail. He buys brains to help his. He knows that hard cash will buy everything—men, papers, machinery-whatever may be necessary for his business.
If I cared to mention some of the amounts that passed through my hands to pay my client's advertising bills the quo-Cations would startle you. Very few people outside of those actually engaged in advertising have anywhere near an approximate idea of the fortunes spent in advertising. It is safe to say that over $500,000,000 are annually spent by American advertisers.
If Mr. Duke started in this modern age to advertise his cigarettes as did Messrs. Davis and Ayer fifty or sixty years ago with their patent medicines where would he be today?
James B. Duke appreciated the truth of the adage "To make money you must spend money." He was not afraid to spend it in whatever direction he thought necessary to the benefit of his business and in this connection gave advertising its due credit. When he arrived at that point where he was spending half a million dollars a year on advertising alone he thought of a scheme to reduce the advertising and other expenses. Hence the trust.
When the trust was formed there was no occasion for such extensive advertising because the field was swept clear of rivals.
With greater competition comes a greater demand for advertising.
When you enter a field that is already well filled you should do a tall lot of advertising to put your business in the front. When you enter a field in which you stand alone you should advertise too, so as to let people know that you are ready to serve their wants in a particular line, but it stands to reason that the advertising need not be so fierce and aggressive as when the field is already well occupied.
It is all very well to give a few platitudes on thrift and say, " A fool and his money are soon parted," but more failures in business can be attributed to niggardliness and greed than is generally supposed. A reputation for being stingy is about the worst reputation a man can have. It hurts in business and in social life. Success does not love the stingy. She flutters about the liberal—the generous hearted—the people who have good red blood in their veins.
Intelligent thrift is all right. But stupid thrift—the thrift the fool uses when he " saves dimes and loses dollars "—the thrift that "saves at the spigot and wastes at the bunghole " is idiocy. And yet how many practice it and pat themselves on the back for being economical!
When you start in to do some advertising, do it right. Do not go at it in a half-hearted way and grow frightened and stop before the battle is half fought.
If you are satisfied you are right, go ahead!
And to advertise right means the expenditure of good money. It means cash paid to mediums in which to place your ads, to writers to write your ads and to artists to illustrate your ads. Each of these needs, if worth anything, demands a fair payment.