Generic advertising for agriculture: how it works and why it pays

Periodically, farmers question whether generic advertising, which is paid for with statutory levies, is worth the expense. But international evidence shows that its benefits exceed its cost, says Dr Koos Coetzee.

- Dr Koos Coetzee.

In economic terms, advertising tries to shift the demand curve so that consumers are willing to buy more of a product at the same price or to pay more for the same quantity of product.

Manufacturers spend their money largely on brand advertising which, as its name indicates, encourages consumers to buy a specific brand. This is done by trying to convince consumers that buying Brand A will increase their well-being by making them smarter, healthier, richer or ‘cooler’. Brand advertising thus largely tries to convince consumers to switch from Brand A to Brand B; it does not set out to increase demand for a specific product.

Generic advertising, by contrast, tries to increase total demand for a specific type of product rather than punt a specific brand. Farmers came to realise that they could only increase demand for certain agricultural products if consumers were informed about them and, through advertising, encouraged to buy them. Farmers’ groups attempted and failed to fund these campaigns with voluntary payments. Globally, generic advertising campaigns are funded with statutory levies.

 GENERIC ADVERTISING IN SA