Advertising’s Help in Making the Automobile.
The extent to which economic methods of purchase of raw materials—getting the price down—economic standardization of manufacture, inventing short cuts as it were—affects production cost, is shown in the fact that the automobile industry ranks almost at the top in the manufactures of the United States in the per cent of value added by manufacture to the cost of material.
The per cent of value added by manufacture to cost of material in automobile production is 71 per cent, against 66 per cent in cotton goods, 55 per cent in iron and steel products, 51 per cent in boots and shoes, 16 per cent in flour and grist mill products, and 12 per cent in slaughtering and meat packing.
Strange as it may sound when first stated, advertising is primarily the base of this result. We know that the first principle of lowered cost is buying in quantities; that if we buy for 100, the cost for each is lower than the cost for one; if for 1,000 it is lower than the cost for each of 100, and so on.
So, when Ford buys the materials for 533,921 cars, which was the number he sold in 1916, he gets the price of the cost of each of these more than a half million cars down to a less price than if he bought material for 1,708 cars, the number he made in 1904, or even 168,220, the number he made in 1913.
This is patent to any one who ever heard of wholesale and retail prices.
But how did Ford find a sale for 533,921 cars in 1916?
By advertising.
The first thing a manufacturer must do to lower the cost of production of the single unit is to make in quantities.
How to insure the disposal of that quantity has been the big problem that American automobile manufacturers have had to solve. The solution was at hand. It was advertising. The commercializing of automobiles with the speed and to the extent to which it was done between 1900 and 1917 could not have been successfully accomplished before this period, because the recognition of the value of advertising had not become widespread up to that time.
Advertising had gone through a process of development that was as slow as that of the automobile business. Both arts emerged from darkness into light at about the same time. Here is evidence that a very bright and smart set of men engaged in automobile production at the very outset.
They were mechanical, they were versed in business methods, and they were conscious of the value of advertising.
This combination of knowledge by the men engaged in it has made the automobile industry a record breaker in point of the time consumed in its development. It has made it stand out as unparalleled by any other industry in this country in the speed with which it progressed from final experimentation to an established recognized enterprise, involving mammoth investment of capital and huge profits.
That the automobile business has been the most extensively advertised business of any in which we are engaged, almost anyone will concede from knowledge gained from his own observation.
Advertising is like the rainbow—many hued. It may be one form, or it may be another. It may whisper, or it may shout. We must concede that the advertising the automobile promoters have done was more largely of the shouting than the whispering kind. That is not to their discredit—rather otherwise. The distinct injunction to advertise is contained in the Bible. It was: “To so let your good work shine that,” etc., and the people of scriptural days were admonished not to hide their light under a bushel.
Newspapers are said, somewhat carelessly, to have made the automobile business. It is not exactly fair to make this statement so sweepingly. They did for it a good deal more than they did for any other line of industry, and are still doing it.
They never devoted the space that they gave to the automobile to railroads, steamboats, the telephone, street railways, oil, lumber, mining, meat packing, or any other commercial industry. It was not, necessarily, that the automobile manufacturers, in all cases, asked for this liberal treatment by the newspapers.
It was that newspapers volunteered it. One started it, and others followed. The spell which the idea contained in the automobile weaves over men and women was cast equally over the editors and publishers in the United States. In recognition of the novelty of the automobile, they laid liberal offerings of free space on the altar of motordom. Its peculiar exhilaration penetrated the editorial sanctum, and in this distinctive exhilaration the automobile has had no parallel except in golf.
It has been quite generally accepted as an axiom that if you give, you receive. We see this statement proved in a hundred ways. A pleasant smile begets a smile. A good deed is matched in kind. No better reason for this exists, probably, than that it is ingrained in us to hate to be under obligations to anybody. So when we get a smile we promptly pay it back and are square, just as we invite to lunch a man who invited us to lunch. We are very particular about this.
The automobile manufacturers were not lacking in this trait, common to human nature. When publishers put their stamp of approval on the motor car and unreservedly threw open their columns to the progress made in its improvements and production, manufacturers appreciated and reciprocated.
The result has been that more money has been spent in advertising in the automobile business in the United States than has been spent in any other single line of enterprise. Possibly the nearest approach to it has been patent medicine, or the promotion of various enterprises.
And it has paid—every automobile maker, and every salesman will admit this as a matter of course. They will admit it because they know it to be so—a knowledge derived in their own experience.
The psychology of advertising shows that there are two principal things involved in making advertising profitably productive. One is that it informs, the other that it persuades. If the mind is informed of what an automobile is, what it does, and all the advantages and benefits it confers, it has a basis to work on, and from this working basis it will evolve conclusions.
The state of the mind in the conclusive stage is fallow field for persuasive effort.
In the advertising given in this country to the automobile which has placed millions of motor cars in the ownership of people in the United States, not counting those exported, the publishers of our journals have supplied the information, and the manufacturer the persuasion.
It is this double teamwork which, supplementing the business ability of our manufacturers, has put us in the front rank as automobile producers. But baldly to say that the newspapers made the automobile is not giving full credit to the other causes which contribute to our success in this line of enterprise. It has been a combination of causes working together which has made the automobile.