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Consumer Advertising During the Great Depression: A Resource Guide

This guide explores primary and secondary sources that examine the advertising industry from 1929 to 1933, including advertising agencies, consumer protection groups, and topical sources on gender, race, and radio in advertising.

Introduction

[Thrifty wives help! In these days of depression our incomes are less and it is absolutely necessary that each member of the household work together in getting as much for their money as possible.] September 03, 1931, Home Edition, Page 9, Image 9. The Indianapolis Times. Chronicling America: Historic American Newspapers.

At the height of the 1920s, average Americans spent more and more of their disposable income on major durable consumer goods.1 The U.S. consumer economy and stock market was booming throughout the 'Roaring Twenties,' with stocks reaching their highest point in September 1929.2 The advertising industry grew to match. By the end of the 1920s, an increasingly sophisticated advertising industry had integrated new techniques in retail, credit, sales management, and consumer research into the marketing process. Marketing efforts accelerated to match businesses' rapid introduction of new products and services to satisfy consumer markets.3

Many associate the Great Depression with the stock market crash in October 1929, but the economy started contracting in August of that year, beginning an economic downturn that lasted 43 months until March 1933.4 By the end of 1933, production had decreased dramatically and real GDP fell 29%.5 Consumer expenditures decreased from $77.5 billion in 1929 to $45.9 billion in 1933.6 Buying on credit or using installment plans had been normalized in the 1920s, but the market crash in October 1929 resulted in a sharp drop in the number of consumers purchasing on credit by 1930, while households focused on paying off their existing debts.7

Advertising spending, which had reached a high of $2.8 billion in 1929, plummeted to $1.3 billion.8 Automotive, department store, dime store, and mail order sales declined drastically by January of 1930 as America entered the Great Depression.9 Despite the overall reduced spending in the advertising industry, circulation of newspapers and periodicals were higher than ever and the annual amount spent on radio advertising in 1930 was seven times more than it had been in 1927.10 Advertisers pivoted messaging to focus on themes of thrift, patriotism, and fear of humiliation. They used testimonials, the "hard sell," product placement, and sponsorships to convince buyers to spend.

This guide provides primary and secondary sources that examine marketing efforts, focusing heavily on the advertising industry, from 1929 to 1933. The Great Depression is comprised of two economic downturns, from August 1929 to March 1933, and May 1937 to June 1938.11 This guide focuses on the first downturn, which was longer and more severe, and took place during Herbert Hoover's presidency, ending with Franklin D. Roosevelt's inauguration. Examples of advertising campaigns, government regulations, and marketing agencies are included, along with resources for further research. Topical pages of the guide highlight resources related to more specific areas of interest, such as race and gender in advertising, radio advertising, and consumer protection groups.

Notes

  1. Martha L. Olney, Buy Now, Pay Later: Advertising, Credit, and Consumer Durables in the 1920s, (University of North Carolina Press, 1991).Back to text
  2. Liaquat Ahamed, Lords of Finance (New York: Penguin, 2009). Back to text
  3. Robert Bartels, The History of Marketing Thought, 3rd edition, (Columbus, OH: Publishing Horizons, 1988). Back to text
  4. Christina D. Romer, "The Great Crash and the Onset of the Great Depression," The Quarterly Journal of Economics 105, no. 3 (1990): 597-624. Accessed via National Bureau of Economic Research NBER Working Paper No. 2639 (1988), https://www.nber.org/papers/w2639 External Back to text
  5. U.S. Bureau of Economic Analysis, Gross Domestic Product [GDPA], retrieved from FRED, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/GDPA External; U.S. Bureau of Economic Analysis, Gross domestic product per capita [A939RC0A052NBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/A939RC0A052NBEA External (U.S. Census average household for 1930). Back to text
  6. United States, Bureau of the Census, "Consumer Expenditure Patterns," in United States, Bureau of the Census, "Volume 1" in Historical Statistics of the United States : Colonial Times to 1970(1975): 323-348, https://fraser.stlouisfed.org/title/237/item/5809/toc/363621 External. Back to text
  7. Christopher Brown, "Consumer Credit and the Propensity to Consume: Evidence from 1930," Journal of Post Keynesian Economics 1997. Back to text
  8. Daniel M.G. Raff, “Advertising expenditures, by medium: 1867–1998.” Table De482-515 in Historical Statistics of the United States, Earliest Times to the Present: Millennial Edition, edited by Susan B. Carter, Scott Sigmund Gartner, Michael R. Haines, Alan L. Olmstead, Richard Sutch, and Gavin Wright (New York: Cambridge University Press, 2006), http://dx.doi.org/10.1017/ISBN-9780511132971.De482-537 External. Back to text
  9. Christina D. Romer, "The Great Crash and the Onset of the Great Depression," The Quarterly Journal of Economics 105, no. 3 (1990): 597-624. Accessed via National Bureau of Economic Research NBER Working Paper No. 2639 (1988), https://www.nber.org/papers/w2639 External Back to text
  10. Alexander J. Field, “Newspapers – number and circulation, by type: 1920–1999,” Table Dg267-274 in Historical Statistics of the United States, Earliest Times to the Present: Millennial Edition, edited by Susan B. Carter, Scott Sigmund Gartner, Michael R. Haines, Alan L. Olmstead, Richard Sutch, and Gavin Wright (New York: Cambridge University Press, 2006), http://dx.doi.org/10.1017/ISBN-9780511132971.Dg225-292 External; National Advertising Records, as cited in Hugh Agnew Advertising Media (New York: D. Van Nostrand Company, 1932), p. 370. Back to text
  11. "US Business Cycle Expansions and Contractions," National Bureau of Economic Research, accessed July 28, 2020,https://www.nber.org/cycles.html External Back to text