With the holiday season in full swing, our magazines, televisions, and radios are being taken over.  No, the Grinch has not struck again, rather, I speak of advertisements.  Waiting for Elf to come back on television, JC Penny shows their latest sales to the sound of Stevie Wonder’s “What Christmas Means to Me”, promising “all these things and more”.  You may also learn that mistletoe sales are down because people are kissing after receiving gifts from Kay Jewelers, and no longer need mistletoe (after all, every kiss begins with KAY). But while the ubiquitous nature of advertisements may be especially noticeable during the holiday season, ads have a year-round presence.

The U.S spent $144 billion on commercials and other forms of advertising, last year alone.  With a struggling economy, the push for consumers to buy at good deals is stronger than ever.  While it is clear that the time and cost is being put into advertisements, the effectiveness of this incredible effort is not.

For some time, economists have debated the question of what kind of effect advertisements have on the economy.  While some believe advertisements inform the public more, boosting competition and therefore positively effecting the economy, others see them as a psychological ploy.

Some places have considered taxing advertisements in order to curb the sheer number of them.  The University of Oxford even conducted an experiment in Australia, taxing advertisements in eight regions in Australia. Each region had a different tax rate, which effectively managed the amount of advertisements that each region saw. Some product’s prices seemed to lower with more advertisements, while products in other areas became more expensive.  In general, however, this experiment found that an increase in advertisements seemed to lower costs more often than not.

There may not be a definitive answer to whether advertisements are really effective, but one can be assured that for now, they aren’t going anywhere.

What do you think- are advertisements effective? Do you find advertisements helpful?  Have you ever bought something because of a commercial or magazine ad?