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  • Ofer Setty

The cost of living in Israel has a silent partner – advertisements

I’m on an academic sabbatical in Denmark. In the first few weeks of my stay here, something seemingly esoteric caught my attention.

I moved to Denmark with my family for an academic sabbatical at Copenhagen Business School. I work with two research collaborators here, but my time here is also an opportunity to experience a progressive and well-functioning policy from up-close. We rented an apartment, the department provided me with an office, and the weather is fantastic. Even the heat wave that swept across Europe a few weeks ago, which raised the temperature in Copenhagen from eighteen to twenty-seven degrees Celsius, was welcomed (warmly).

A new place and the start of a new chapter invite unexplored and novel experiences and perspectives, and I’ll share more about that in my life here at Denmark in a bit. However, my attention initially in Copenhagen was the absence (or more accurately, the paucity) of advertisements in public spaces. This is one of many features of my new environment, but I think it’s an important one, so I’d like to share some thoughts on the subject.

Let’s start with the cost of living. Before ads can influence our consumption habits, they must first be paid for — by us. Sure, I know that’s not the typical way to think about it, but alongside the money that we set aside for upgrading our cars, going on vacations and buying fruits and vegetables, we also set money aside for advertisements through the price we pay for products and services. What do I mean by that? Well, firms incorporate their advertising costs into the price of what they’re selling us and, in their eyes, those costs are no different than the cost of paying employees or purchasing raw materials.

How much money are we talking about here? According to the Israeli Marketing Association, the advertising market size in Israel was valued at 4.4 billion NIS (approximately 1.4 billion USD) in 2019. If we calculate the annual cost per family, the money spent on advertising is close to 2,000 NIS (or about 600 USD) for a family of four. In all fairness, it seems that Israel is not unique in this matter, although there are significant differences across countries.

Advertising costs do not end there. A fundamental goal of advertising is to make us buy more things, some of which we don’t need and some of which actually make us feel bad. Now the question is, to what extent do ads affect consumption in reality? The answer depends on several factors, including the type of product and the form of media used. In any case, though, from the perspective of companies that utilize advertising, the costs are offset not by the additional revenue that results from advertising, but rather by the additional profit (i.e., financial gains after accounting for the cost of expenses). Making a profit demands an increase in consumption that is much higher than 2,000 NIS per family, and this is just to cover advertising costs. Firms can increase their revenue by increasing the price of their products or services or increasing the quantity sold, but increasing their profits happens on our dime – including the time we spend working to earn the money needed to consume.

Beyond my concern about advertising costs and our financing of them, I am concerned by the sheer number of ads (especially in public spaces, but not only) because of their effect on our state of mind. I’m not talking about changing consciousness or anything like that, but more simply about influencing what we attend to when we walk down the street. Blaise Pascal, a French mathematician, said that all of humanity’s problems stem from people’s inability to sit quietly in a room by themselves. Now, even when walking down the street, it’s not always easy to be alone with our thoughts, certainly not when it’s crowded and hot and you’re rushing somewhere.

In this type of multilayered environment, the things that surround us are what steer us. In totalitarian countries, the environment will include many statues of the ruler which serve as a reminder of who’s running the show. In Mea She’arim (an ultra-Orthodox Jewish neighborhood in Jerusalem), the posters placed on public walls (Pashkevilim) remind its residents of what proper behavior is. And for the rest of us, we have advertisements to fill that role. When we walk down the street, and out of the variety of roles that we can take on, we are gently, but persistently, guided to be consumers. We are guided to think about what we need to buy, what more we can afford, and what’s new in the stores. Of course, the ads aren’t forcing anyone to buy anything. You don’t want to be a consumer? Don’t be. But the ads do have an impact, otherwise, they wouldn’t exist. And this evaluation of the state of advertising doesn’t even consider the environmental and health costs that result from overconsumption.

I focus on street advertising for a moment, specifically because Israel is a congested country. It’s dense and crowded, it’s hot, and it’s only getting warmer. In this “pressure cooker,” billboard ads create unnecessary visual overload. In contrast, spending just a few weeks in Copenhagen is enough to realize that it’s possible to have a strong and prosperous economy even without the constant push to continuously consume.

Clearly, there are profound differences between Israel and Denmark. Some of them are difficult or even impossible to change, some of them we wouldn’t even want to change, but reducing advertising in public spaces can actually happen relatively easily. If there are enough people who prefer to live in the here and now, and who would like to walk around outside looking at buildings, tress, and people rather than consumer fantasies – then all we need to do is recognize that there’s another way, and implement advertising restrictions through regulations, ones that will be easy to enforce.



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