Abstract
The normal way of analysing total advertising by measuring it as a proportion of the gross national product is inadequate because it can conceal movements, notably a very long-term tendency for advertising budgets to be depressed as a result of the operation of market forces which lie below the surface. This downward pressure is mainly (although not exclusively) important to the large category of packaged consumer goods.The two causes of this downward pressure are, first, a gradual change in the balance of power between the manufacturing sector and the retail trade, because of the growth in the strength of the latter. The second cause is connected with the behaviour of large advertisers. They are increasingly learning how to benefit from the scale economies accruing to their brands by reducing advertising expenditures on them. They are also the types of advertisers accustomed to carrying out econometric investigations, which always demonstrate the eventual onset of diminishing returns to incremental adver...
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