Is Advertising Trashing the Planet?

Are marketers to blame for creating artificial needs to goose sales?

Posted Feb 24, 2021

We are consuming too much and thereby precipitating potentially irreversible climate change. What responsibility does advertising play for our excessive shopping activities that are trashing the planet literally and figuratively?

Ecological Damage

Humans used to be an inoffensive part of the biosphere whose activities were no more destructive than those of other primates. This changed with the development of weapons that killed prey animals from a distance.

Beginning some 40,000 years ago, human arrival in a region was associated with the disappearance of large prey animals—an event known as the Pleistocene Overkill.

Mass extinctions have occurred many times before, the most conspicuous being the loss of dinosaurs in association with a giant asteroid striking the earth. In general, the planet is good at absorbing such calamities and the disappearance of dinosaurs opened up many opportunities for mammals who became the dominant grazers and predators.

Our most serious assault on the planet began some 20,000 years ago with the advent of opportunistic plant cultivation.

Settled agriculture remains the most serious cause of carbon pollution because it has been going on for so long but the Industrial Revolution brought a major escalation in human-caused ecological damage.

Human-Induced Costs

While contemporary agriculture in the U.S. is responsible for only about a tenth of the carbon load, agriculture produced major ecological damage throughout its long history.

The most basic problem is that plants grown on agricultural land are not as effective at fixing carbon as wild vegetation including trees.

Already, humans have modified close to two-thirds of the planet's land surface. This has produced a devastating loss of biodiversity. This gigantic impact is illustrated by the fact that humans and their domestic animals constitute 95 percent of the mammalian biomass on Earth whereas wild mammals make up only around 5 percent.

This problem has been aggravated by industrialization and is accelerating. In North America, for example, close to a third of bird species have been lost in the past three decades.

Whether it is the appropriation of wildlands, or loss of biodiversity, all such effects are attributable to the outsize impact of our species due to an economy that continues to grow.

Basic Causes of Over-Consumption

The global economy could not continue to grow if people did not buy ever more products and services. We see a quadrupling of human population over the past century and individuals upped their consumption with steadily rising incomes for much of this period.

Despite rising income for much of the century, Americans spent far more than they earned, gaining the dubious distinction as the developed country with the largest debt load. By 1960, American consumer debt amounted to 70.9 percent of gross domestic product (or the value of all goods and services produced, GDP) according to the World Bank. By 2016, consumer debt had ballooned to 192.7 percent of GDP.

All other developed countries experienced a substantial increase in spending with Japan's consumer debt soaring from 56.3 percent of GDP to 185.0 percent in the same period.

As countries develop, and as their economies grow, consumption by individuals rises. This is an unfortunate trend given the population explosion and the fact that tens of millions of people join the high-consumption middle class every year.

What role does advertising play in stimulating our excessive spending that far exceeds earnings?

The Culpability of Advertising

There is surprisingly little hard evidence about the effectiveness of advertising in boosting product sales. What little evidence there is suggests that advertising is not a major factor in the level of consumer buying, whether for print ads, TV, or other media (1,2).

The Freakonomics show on PBS recently described an accidental cessation of internet advertising for a month that had no significant effect on sales. This suggests that the half-trillion dollars spent annually on internet ads could be a waste of money.

Yet, there are several other reasons that advertising budgets are so large. Chief of these is the fact that advertising helps to form positive associations with leading brands. So, even if the advertising does not increase the number of units sold, it can allow top brands to be profitable by charging more for their goods that absorbs the high cost of marketing.

Advertising resembles low-level warfare among rival brands where the brand that eases up on its ad budget may lose market share to rivals. They would all be better off if they reduced their marketing budget but competition forces them to continue.

Advertising is not the primary reason for over-consumption. On the contrary, it exists mainly because we are obsessed with appearing cool and successful, the planet be damned.

References

1. Kim, P. (1992). Does advertising work: A review of the evidence. Journal of Consumer Marketing, 9, 5-21.

2. Weijia, D., and Luca, M. (2017). Do search ads really work? Harvard Business Review, March-April, 26-27.