Impact Of Advertising On The Economy

What is exactly advertising, is it only a paid promotion that aims to persuade people to act in a certain way or does it have a broader concept with the effects on the consumption rate of a nation. Advertising plays an important role in economics especially in the economic growth of a nation. According to Kaldor (1950), the economic aspects of advertisement can be approach in two different ways; either as the different effects that advertisement has on the community or in the analysis of the factors, which determine the rate of expenditure (p.1). Both have an importance in relation to the economy with similar perspectives. However, this paper is going to focus on the first approach, in the effects that advertising has in the society and how …show more content…
One important and successful factor of approaching the public is using media. It is used as a communication system, such as television, radio and newspapers to educate and promote goods and services. In a broader concept and definition of how exactly media interacts with the economy. Author Alana B. Albarran, wrote a book called Media Economy and explains it as the “study of how media firms and industries function across different levels of activity (individuals, households) through the use of theories and principles drawn form macroeconomics and microeconomics perspective”(p. 3). Media not only plays an important role in advertisement by helping companies or firms to promote their goods and services but it also has an impact on the economy in the different levels of activity. It is used as a communication tool to entertain and inform, especially with advertisements. However, it all comes back to the decision and actions that the society makes on producing and spending on needs and wants. Media and advertisement take a huge part on those decisions; because the more we produced and spend, later it will be reflected on the economic growth and the future of a …show more content…
Media and advertisement play an important role by incentivizing the public to spend more. However, I wanted to focus on the idea of how the society makes decisions and actions that lead the economy to grow. The main foundation of media and advertising deals with the factors of understanding the human mind and behavior, so it has a better public approach like using media to understand the wants and needs of the society. Even if sometimes advertisement has a negative point of view, it has a big impact on the decisions of the society. All those effects that media and advertisement has on the economy later will be reflected back to us because of the decision and actions that the society of a nation makes. Because at the end we are the ones that make the difference and we are the ones getting the benefits from that change we