There is the television man, who knows how to produce a show or a commercial; and the copywriter, who knows how to describe the product well and make people want to buy it; and the “account executive,” whose job is to plan the advertising of a particular product or “account.” These are only a few examples. There are literally dozens of other specialized jobs in an advertising agency. The advertising agency’s customer is called a client. The client is the company that has the product for sale. The agency prepares the advertising, but the client does not pay more than he would have paid if he had gone to the trouble and expense of preparing the advertising himself. Whatever the advertising costs, the agency gets 15% of it-but this is paid by the magazine, newspaper, broadcasting company or any of the other media that carries the advertising.
The money the client spends for this kind of advertising is called “commissionable” because the agency receives a commission on it. There are some kinds of advertising that are not commissionable; for example, when the agency prepares letters and circulars to go out by mail. In such cases the client pays a fee to the agency for its work, and this is called a “service charge.” Advertising agency business is big business, because so much money is spent on advertising. There are over 200 companies in the United States with a “budget”-for advertising-of more than a million dollars a year. On every million dollars, the advertising agency gets commissions of $150,000. who really pays for advertising Many people have grumbled about the billions of dollars that are spent for advertising. “It comes right out of the cus tomers’ pockets,” they complain. “If the manufacturers didn’t spend all that money for advertising, they could sell us the goods that much cheaper.” But could they? It is no accident that people in the United States, where most of the advertising of the world is done, also have most of the desirable goods in the world-automobiles, electric refrigerators and washing machines, good clothes and good food, and all kinds of conveniences in their homes.
The United States is a country of mass production. When products are made in great quantities, they cost less and more people can afford to buy them. Manufacturers could not count on selling so many if they could not advertise and let the public know about the product they have for sale. Therefore they would not make so many, and the price of everything would have to go up. You also hear people complain of the advertisements themselves, especially the commercials on television and radio. “They spoil the show,” these people will