Propaganda

by Edward L Bernays

  Furthermore, no matter how favorably disposed the public may be toward big business in general, the utilities are always fair game for public discontent and need to maintain good will with the greatest care and watchfulness. These and other corporations of a semi-​public character will always have to face a demand for government or municipal ownership if such attacks as those of Professor Ripley are continued and are, in the public’s opinion, justified, unless conditions are changed and care is taken to maintain the contact with the public at all points of their corporate existence.

  The public relations counsel should anticipate such trends of public opinion and advise on how to avert them, either by convincing the public that its fears or prejudices are unjustified, or in certain cases by modifying the action of the client to the extent necessary to remove the cause of complaint. In such a case public opinion might be surveyed and the points of irreducible opposition discovered. The aspects of the situation which are susceptible of logical explanation; to what extent the criticism or prejudice is a habitual emotional reaction and what factors are dominated by accepted cliches, might be disclosed. In each instance he would advise some action or modification of policy calculated to make the readjustment.

  While government ownership is in most instances only varyingly a remote possibility, public ownership of big business through the increasing popular investment in stocks and bonds, is becoming more and more a fact. The importance of public relations from this standpoint is to be judged by the fact that practically all prosperous corporations expect at some time to enlarge operations, and will need to float new stock or bond issues. The success of such issues depends upon the general record of the concern in the business world, and also upon the good will which it has been able to create in the general public. When the Victor Talking Machine Company was recently offered to the public, millions of dollars’ worth of stock were sold overnight. On the other hand, there are certain companies which, although they are financially sound and commercially prosperous, would be unable to float a large stock issue, because public opinion is not conscious of them, or has some unanalyzed prejudice against them.

  To such an extent is the successful floating of stocks and bonds dependent upon the public favor that the success of a new merger may stand or fall upon the public acceptance which is created for it. A merger may bring into existence huge new resources, and these resources, perhaps amounting to millions of dollars in a single operation, can often fairly be said to have been created by the expert manipulation of public opinion. It must be repeated that I am not speaking of artificial value given to a stock by dishonest propaganda or stock manipulation, but of the real economic values which are created when genuine public acceptance is gained for an industrial enterprise and becomes a real partner in it.

  The growth of big business is so rapid that in some lines ownership is more international than national. It is necessary to reach ever larger groups of people if modern industry and commerce are to be financed. Americans have purchased billions of dollars of foreign industrial securities since the war, and Europeans own, it is estimated, between one and two billion dollars’ worth of ours. In each case public acceptance must be obtained for the issue and the enterprise behind it.

  Public loans, state or municipal, to foreign countries depend upon the good will which those countries have been able to create for themselves here. An attempted issue by an east European country is now faring badly largely because of unfavorable public reaction to the behavior of members of its ruling family. But other countries have no difficulty in placing any issue because the public is already convinced of the prosperity of these nations and the stability of their governments.

  The new technique of public relations counsel is serving a very useful purpose in business by acting as a complement to legitimate advertisers and advertising in helping to break down unfair competitive exaggerated and overemphatic advertising by reaching the public with the truth through other channels than advertising. Where two competitors in a field are fighting each other with this type of advertising, they are undermining that particular industry to a point where the public may lose confidence in the whole industry. The only way to combat such unethical methods, is for ethical members of the industry to use the weapon of propaganda in order to bring out the basic truths of the situation.

  Take the case of tooth paste, for instance. Here is a highly competitive field in which the preponderance of public acceptance of one product over another can very legitimately rest in inherent values. However, what has happened in this field?

  One or two of the large manufacturers have asserted advantages for their tooth pastes which no single tooth paste discovered up to the present time can possibly have. The competing manufacturer is put in the position either of overemphasizing an already exaggerated emphasis or of letting the overemphasis of his competitor take away his markets. He turns to the weapon of propaganda which can effectively, through various channels of approach to the public-the dental clinics, the schools, the women’s clubs, the medical colleges, the dental press and even the daily press-bring to the public the truth of what a tooth paste can do. This will, of course, have its effect in making the honestly advertised tooth paste get to its real public.

  Propaganda is potent in meeting unethical or unfair advertising. Effective advertising has become more costly than ever before. Years ago, when the country was smaller and there was no tremendous advertising machinery, it was comparatively easy to get country-​wide recognition for a product. A corps of traveling salesmen might persuade the retailers, with a few cigars and a repertory of funny stories, to display and recommend their article on a nationwide scale. To-​day, a small industry is swamped unless it can find appropriate and relatively inexpensive means of making known the special virtues of its product, while larger industries have sought to overcome the difficulty by cooperative advertising, in which associations of industries compete with other associations.

  Mass advertising has produced new kinds of competition. Competition between rival products in the same line is, of course, as old as economic life itself. In recent years much has been said of the new competition, we have discussed it in a previous chapter, between one group of products and another. Stone competes against wood for building; linoleum against carpets; oranges against apples; tin against asbestos for roofing.

  This type of competition has been humorously illustrated by Mr. O. H. Cheney, Vice-​President of the American Exchange and Irving Trust Company of New York, in a speech before the Chicago Business Secretaries Forum.

  “Do you represent the millinery trades?” said Mr. Cheney. “The man at your side may serve the fur industry, and by promoting the style of big fur collars on women’s coats he is ruining the hat business by forcing women to wear small and inexpensive hats. You may be interested in the ankles of the fair sex-I mean, you may represent the silk hosiery industry. You have two brave rivals who are ready to fight to the death-to spend millions in the fight -for the glory of those ankles-the leather industry, which has suffered from the low-​shoe vogue, and the fabrics manufacturers, who yearn for the good old days when skirts were skirts.

  “If you represent the plumbing and heating business, you are the mortal enemy of the textile industry, because warmer homes mean lighter clothes. If you represent the printers, how can you shake hands with the radio equipment man? …

  “These are really only obvious forms of what I have called the new competition. The old competition was that between the members of each trade organization. One phase of the new competition is that between the trade associations themselves-between you gentlemen who represent those industries. Inter-​commodity competition is the new competition between products used alternatively for the same purpose. Inter-​industrial competition is the new competition between apparently unrelated industries which affect each other or between such industries as compete for the consumer’s dollar-and that means practically all industries.…

  “Inter-​commodity c
ompetition is, of course, the most spectacular of all. It is the one which seems most of all to have caught the business imagination of the country. More and more business men are beginning to appreciate what inter-​commodity competition means to them. More and more they are calling upon their trade associations to help them- because inter-​commodity competition cannot be fought single-​handed.

  “Take the great war on the dining-​room table, for instance. Three times a day practically every diningroom table in the country is the scene of a fierce battle in the new competition. Shall we have prunes for breakfast? No, cry the embattled orange-​growers and the massed legions of pineapple canners. Shall we eat sauerkraut? Why not eat green olives? is the answer of the Spaniards. Eat macaroni as a change from potatoes, says one advertiser-and will the potato growers take this challenge lying down?

  “The doctors and dietitians tell us that a normal hard-​working man needs only about two or three thousand calories of food a day. A banker, I suppose, needs a little less. But what am I to do? The fruit growers, the wheat raisers, the meat packers, the milk producers, the fishermen-all want me to eat more of their products-and are spending millions of dollars a year to convince me. Am I to eat to the point of exhaustion, or am I to obey the doctor and let the farmer and the food packer and the retailer go broke! Am I to balance my diet in proportion to the advertising appropriations of the various producers? Or am I to balance my diet scientifically and let those who overproduce go bankrupt? The new competition is probably keenest in the food industries because there we have a very real limitation on what we can consume-in spite of higher incomes and higher living standards, we cannot eat more than we can eat.”

  I believe that competition in the future will not be only an advertising competition between individual products or between big associations, but that it will in addition be a competition of propaganda. The business man and advertising man is realizing that he must not discard entirely the methods of Barnum in reaching the public. An example in the annals of George Harrison Phelps, of the successful utilization of this type of appeal was the nation-​wide hook-​up which announced the launching of the Dodge Victory Six car.

  Millions of people, it is estimated, listened in to this program broadcast over 47 stations. The expense was more than $60,000. The arrangements involved an additional telephonic hook-​up of 20,000 miles of wire, and included transmission from Los Angeles, Chicago, Detroit, New Orleans, and New York. Al Jolson did his bit from New Orleans, Will Rogers from Beverly Hills, Fred and Dorothy Stone from Chicago, and Paul Whiteman from New York, at an aggregate artists’ fee of $25,000. And there was included a four-​minute address by the president of Dodge Brothers announcing the new car, which gave him access in four minutes to an estimated audience of thirty million Americans, the largest number, unquestionably, ever to concentrate their attention on a given commercial product at a given moment. It was a sugar-​coated sales message.

  Modern sales technicians will object: “What you say of this method of appeal is true. But it increases the cost of getting the manufacturer’s message across. The modern tendency has been to reduce this cost (for example, the elimination of premiums) and concentrate on getting full efficiency from the advertising expenditure. If you hire a Galli-​Curci to sing for bacon you increase the cost of the bacon by the amount of her very large fee. Her voice adds nothing to the product but it adds to its cost.”

  Undoubtedly. But all modes of sales appeal require the spending of money to make the appeal attractive. The advertiser in print adds to the cost of his message by the use of pictures or by the cost of getting distinguished endorsements.

  There is another kind of difficulty, created in the process of big business getting bigger, which calls for new modes of establishing contact with the public. Quantity production offers a standardized product the cost of which tends to diminish with the quantity sold. If low price is the only basis of competition with rival products, similarly produced, there ensues a cut-​throat competition which can end only by taking all the profit and incentive out of the industry.

  The logical way out of this dilemma is for the manufacturer to develop some sales appeal other than mere cheapness, to give the product, in the public mind, some other attraction, some idea that will modify the product slightly, some element of originality that will distinguish it from products in the same line. Thus, a manufacturer of typewriters paints his machines in cheerful hues. These special types of appeal can be popularized by the manipulation of the principles familiar to the propagandist- the principles of gregariousness, obedience to authority, emulation, and the like. A minor element can be made to assume economic importance by being established in the public mind as a matter of style. Mass production can be split up. Big business will still leave room for small business. Next to a huge department store there may be located a tiny specialty shop which makes a very good living.

  The problem of bringing large hats back into fashion was undertaken by a propagandist. The millinery industry two years ago was menaced by the prevalence of the simple felt hat which was crowding out the manufacture of all other kinds of hats and hat ornaments. It was found that hats could roughly be classified in six types. It was found too that four groups might help to change hat fashions: the society leader, the style expert, the fashion editor and writer, the artist who might give artistic approval to the styles, and beautiful mannequins. The problem, then, was to bring these groups together before an audience of hat buyers.

  A committee of prominent artists was organized to choose the most beautiful girls in New York to wear, in a series of tableaux, the most beautiful hats in the style classifications, at a fashion fête at a leading hotel.

  A committee was formed of distinguished American women who, on the basis of their interest in the development of an American industry, were willing to add the authority of their names to the idea. A style committee was formed of editors of fashion magazines and other prominent fashion authorities who were willing to support the idea. The girls in their lovely hats and costumes paraded on the running-​board before an audience of the entire trade.

  The news of the event affected the buying habits not only of the onlookers, but also of the women throughout the country. The story of the event was flashed to the consumer by her newspaper as well as by the advertisements of her favorite store. Broadsides went to the millinery buyer from the manufacturer. One manufacturer stated that whereas before the show he had not sold any large trimmed hats, after it he had sold thousands.

  Often the public relations counsel is called in to handle an emergency situation. A false rumor, for instance, may occasion an enormous loss in prestige and money if not handled promptly and effectively. An incident such as the one described in the New York American of Friday, May 21, 1926, shows what the lack of proper technical handling of public relations might result in.

  $1,000,000 LOST BY FALSE RUMOR ON

  HUDSON STOCK

  Hudson Motor Company stock fluctuated widely around noon yesterday and losses estimated at $500,000 to $1,000,000 were suffered as a result of the widespread flotation of false news regarding dividend action.

  The directors met in Detroit at 12:30, New York time, to act on a dividend. Almost immediately a false report that only the regular dividend had been declared was circulated.

  At 12:46 the Dow, Jones amp; Co. ticker service received the report from the Stock Exchange firm and its publication resulted in further drop in the stock.

  Shortly after 1 o’clock the ticker services received official news that the dividend had been increased and a 20 per cent stock distribution authorized. They rushed the correct news out on their tickers and Hudson stock immediately jumped more than 6 points.

  A clipping from the Journal of Commerce of April 4, 1925, is reproduced here as an interesting example of a method to counteract a false rumor:

  BEECH-​NUT HEAD HOME TOWN GUEST

  Bartlett Arkell Signally Honored by

  Communities of Mo
hawk Valley

  {Special to The Journal of Commerce)

  CANAJOHARIE, N. Y., April 3.-To-day was ‘Beech-​Nut Day’ in this town; in fact, for the whole Mohawk Valley. Business men and practically the whole community of this region joined in a personal testimonial to Bartlett Arkell of New York City, president of the Beech-​Nut Packing Company of this city, in honor of his firm refusal to consider selling his company to other financial interests to move elsewhere.

  When Mr. Arkell publicly denied recent rumors that he was to sell his company to the Postum Cereal Company for $17,000,000, which would have resulted in taking the industry from its birthplace, he did so in terms conspicuously loyal to his boyhood home, which he has built up into a prosperous industrial community through thirty years’ management of his Beech-​Nut Company.

  He absolutely controls the business and flatly, stated that he would never sell it during his lifetime ‘to any one at any price,’ since it would be disloyal to his friends and fellow workers. And the whole Mohawk Valley spontaneously decided that such spirit deserved public recognition. Hence, to-day’s festivities.