Clear Signal
Campaign Middle East|March 11, 2018

Advertising and brand-building can save us from economic collapse, writes Leo Burnett’s Ahmad Abu Zannad

Leo Burnett's Ahmad Abu Zannad

Advertising and brand-building can play an essential role in salvaging economies and protecting entire markets from collapsing. I will demonstrate this by showcasing how creative advertising and brand-building are also part of evolutions in economics.

Our economic systems and free markets are all based in part on Adam Smith’s ‘invisible hand’ theory. The theory states that if governments leave buyers and sellers to freely make their own decisions, buyers will only pay the price they see fit for products or services, while, in turn, sellers will only sell for the prices they see fit. With free trade and open competition, and the push and pull of the invisible hand, the market will, theoretically, reach its optimal price.

However, there are abnormalities and exceptions that, in practice, have proven the theory to be less than 100 percent accurate. In some circumstances, this could be addressed by falling back on government interventions, such as in the case of a specific seller having a monopoly over a market, or when a third party is being affected. For instance, the government may need to intervene if a transaction has a negative environmental consequence, or, in simpler terms, if a neighbour is unable to sleep as the result of a transaction between a loud DJ and a late-night partier next door.

Another exception to the invisible hand theory is what economists refer to as asymmetry of information. This is when either the seller or the buyer possesses information about the product or service being sold that the other party does not. Such an exception has the potential to push markets to fail.

Nobel Memorial Prize in Economic Sciences recipient George Akerlof was the first to discuss the negative consequences of information asymmetry in his 1970 paper, “The Market for Lemons: Quality Uncertainty and the Market Mechanism”. Using the example of the used car market, the premise of Akerlof’s paper was based on a situation where only the seller has the information necessary to tell the difference between a lemon (slang for a defective used car) and a peach (a good quality car). The hypothesis was that buyers who cannot tell the difference between a lemon and a peach will be unwilling to pay the full price of a peach, as they are unsure of its value. As a result, sellers would come to the conclusion that selling a peach would no longer be in their best interest, as there would be no buyers willing to pay its full price. Accordingly, the used car market would only offer defective cars, leading to its eventual collapse.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM CAMPAIGN MIDDLE EASTView All

WPP Merges Its Burson-Marsteller And Cohn & Wolfe PR Agencies

Communications company holding group WPP is to merge two of its PR agencies, Burson-Marsteller and Cohn & Wolfe. The new firm will be called Burson Cohn & Wolfe.

1 min read
Campaign Middle East
March 11, 2018

Fame Through Consistency

The Dubai Lynx Advertising Person of the Year is no stranger to awards, but BBDO boss Dani Richa tells Austyn Allison why everything stems from the best talent creating work that works for the right clients.

6 mins read
Campaign Middle East
March 11, 2018

Big Data Is Blind Faith

In 1952, the Boston Symphony Orchestra was worried about falling standards due to nepotism. They thought conductors were choosing their own students over the best musicians.

2 mins read
Campaign Middle East
March 11, 2018

Seven Media And Brazen Lead PRCA Winners List

The PRCA MENA Awards 2018 celebrated the best individuals, teams, and campaigns from the PR and communications industry from across the region.

1 min read
Campaign Middle East
March 11, 2018

How The UK Is Leading In Advertising Technologies Of The Future

British creatives are re-engaging audiences through technology innovation in advertising

3 mins read
Campaign Middle East
March 11, 2018

Clear Signal

Advertising and brand-building can save us from economic collapse, writes Leo Burnett’s Ahmad Abu Zannad

6 mins read
Campaign Middle East
March 11, 2018

Follow The Money

The best way to tackle fake news is to hit the people circulating it in their wallets, writes Starcom’s Joubran Abdulkhalek

2 mins read
Campaign Middle East
March 11, 2018

Chadi Farhat Becomes OMG's New Chief Investment Officer

The regional executive director of investments at the media services division of Omnicom Media Group MENA, Chadi Farhat, has been promoted to the position of chief investment officer.

1 min read
Campaign Middle East
March 11, 2018

Banham Completes Saeidi's JWT EXCO

The agency’s new ECD has followed its CEO from FP7 and promises to use passion to raise standards.

4 mins read
Campaign Middle East
March 11, 2018

A Taste Of Caviar

Local Insights To World Class Creative

3 mins read
Campaign Middle East
March 11, 2018
RELATED STORIES

LIFE IS A RIDE. LIVE IT!

Hello again, everybody. Welcome to another edition of Nefarious James. No politics this month, no government talk, just plain old reflection. Had a really good time at the Thunder by the Bay event and its inclusion of Choppertown Live. Choppertown Live brought back a lot of personal memories for me. Seeing the old bikes and cars really sent me back to when I was growing up.

4 mins read
Born To Ride Florida
March 2021

THE ICONIC AMAZING ARTIST

THUNDER BY THE BAY’S CHOPPEREOWN LIVE - CREATIVITY CENTRAL

2 mins read
Born To Ride Florida
March 2021

SPYKE AND MIKE

SPYKE & MIKE GO TO THE PET STORE

4 mins read
Born To Ride Florida
March 2021

CHOPPERTOWN LIVE AT THUNDER BY THE BAY

WHAT DO YOU GET WHEN YOU COMBINE A GOOD HEALTHY MIX, OF OUTRAGEOUS CHOPPERS, VANS, HOTRODS, SKATEBOARDS, GREAT BUILDERS, BEAUTIFUL WOMEN AND PERFECT FLORIDA WEATHER?

2 mins read
Born To Ride Florida
March 2021

Triple Layer Coconut Cake

This epic layer cake with a thick, buttery coconut icing will be the centerpiece of your Easter table this year.

2 mins read
Clean Eating
Spring 2021

GETTING TO KNOW CHEF FRANCISCO ALEJANDRI VAZQUEZ

He left behind the kitchens of some of the best hotels in Mexico and journeyed to Canada. Founder of acclaimed Toronto restaurant Agave y Aguacate (now closed, as he recently moved back to Mexico), he sat down with us to talk about his journey.

2 mins read
Clean Eating
Spring 2021

Gear Up Your Green Thumb

Whether you have acres of abundant backyard or a small apartment windowsill sitting in sunshine, these beautiful gardening tools and accessories will help you get growing.

1 min read
Clean Eating
Spring 2021

bits & bites - 3 WAYS WITH CHICKPEAS

This superstar ingredient is a favorite among vegans, vegetarians and meat-eaters alike for its affordability, versatility and delicious, nutty flavor. The mighty chickpea takes center stage in these simple and nutritious Mediterranean recipes, each accompanied by a healthful dip or drizzle.

5 mins read
Clean Eating
Spring 2021

TAKE A TRIP TO FROM YOUR KITCHEN

Add some Latin flair to your cooking with these Mexican dishes in honor of Cinco de Mayo. We’ve got some favorites on the menu, plus new dishes that are so worthy of going outside the comfort zone, they’ll have you cheering, ¡Qué sabroso! (translation: how tasty!). Our acclaimed Mexican chef also shares his key ingredients and cooking hacks for the full authentic experience.

10+ mins read
Clean Eating
Spring 2021

The Dutch Art of Doing Nothing & the Norwegian Love for Nature

First, there was hygge, the Danish concept of mindful, comfortable conviviality – think warm fires, fuzzy slippers and overall contentment. Now, two similar concepts, from the Dutch and the Norwegians, respectively, are gaining traction: niksen and friluftsliv.

2 mins read
Clean Eating
Spring 2021