Kallen

We’ve all heard the term ‘purchasing power’ used in the context of the economy for consumers, but what does it mean for the local advertiser? 

For me, this question brings to mind a fond memory. It took place about two years ago in the country of Bolivia, where I spent a few months learning a new language and embracing a lifestyle unlike anything I’d experienced in the United States. I was resting in my room one afternoon a few days after my arrival when I heard a loud and clamorous voice reverberate throughout the residential community in which I was staying. The words were indiscernible to me, partly because my ears were not yet trained to the Spanish language, but also because the sound echoed through my room like an eerie chant, resembling a tornado alarm more than a human voice. You can imagine my surprise a few days later when I learned the noise was merely a local fruit vendor, pushing his cart through the house-lined street shouting through his megaphone the various citruses he had for sale.



This daily routine for the Bolivian street vendors struck me as a stark contrast to the local advertising strategies employed by small business owners here in the United States (spare the ice cream truck). Media opportunities often taken for granted by our local marketers are entirely out of reach for their counterparts in developing countries. This is a consequence of a high Consumer Price Index (CPI), an economic condition where the cost of daily goods and services is relatively high compared to the average income of individuals. To local business owners in poor countries, a high CPI presents a number of challenges, from the limited disposable income of their consumers, to the restricted availability of affordable local advertising venues.

Sure, the fruit vendor’s use of a megaphone represents the poorest end of the spectrum, but it serves to demonstrate how important advertising is, regardless of your business model or annual profits. Small business owners in a country like Bolivia are forced to use the limited and highly inefficient resources available to them to reach their customer base. Here in the United States, in contrast, our local marketers enjoy the benefit of the dollar’s strong purchasing power and access to a wide variety of inexpensive advertising outlets. The average cost per point, click, inch or thousand for everything from radio spots, newspaper ads, bus stop signs, or direct mailings is extremely competitive. Not to mention the free price of online social networking. The efficiency of these channels can be further optimized through the use of brand-developed advertising campaigns and subsidy programs.