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> Marketing is by and large about gaming the way people select goods and services, so that you can sell more regardless of the quality of your offerings, or of

> Marketing is by and large about gaming the way people select goods and services, so that you can sell more regardless of the quality of your offerings, or of whether the client actually needs it. That may be the objective function of the marketer or salesperson, but it doesn't follow that marketing itself is a simple net transfer of wealth from consumers to producers. > I think bringing up marketing-as-information-dissemination is a red herring, because it's only a small fraction of the whole thing. The marketer is not paying to move bits to a consumer, the marketer is paying for the consumer's attention, which is much more limited than our ability to move bits around. Do you have an alternative fair and equitable way of allocating that scarce resource? For example, if we went with your suggestion and restricted marketing to only classifieds and other forms of print advertising, then we would expect the cost of placing ads there to skyrocket as everyone competes for scarce space. Also, the same risks of manipulation and dishonesty apply just as well there: https://www.google.com/search?q=snake+oil+ad&espv=2&biw=1440&bih=776&tbm=isch&imgil=cs5GzwK1uMiPfM%253A%253B65Wvj1AGRDBRLM%253Bhttp%25253A%25252F%25252Fjoshuaspodek.com%25252Fcognitive-behavioral-therapy-problems-2%25252Fsnake-oil-ad&source=iu&pf=m&fir=cs5GzwK1uMiPfM%253A%252C65Wvj1AGRDBRLM%252C_&usg=__xO5TOMKIJt1tQpw_QQu0nkNEVS8%3D&ved=0ahUKEwiTt_q69v3OAhUBR2MKHTUoDFAQyjcIKQ&ei=vWHQV9PkAYGOjQO10LCABQ#imgrc=cs5GzwK1uMiPfM%3A https://www.google.com/search?q=snake+oil+ad&espv=2&biw=1440...

TeMPOraL 10y ago
> Do you have an alternative fair and equitable way of allocating that scarce resource? Yes. Not allocating it. What you call trying to "allocate" consumer's attention is, from the point of view of a consumer, people purposefully attempting to distract you from living your life in order to extract money from you. In all other contexts of life we would call such people "assholes". Classifieds have the benefit of consumers paying attention only when they want to pay attention. Time is the most precious thing we have in life. Attempts to take it away from other people should be treated more seriously, IMO. It's never just one marketer - they're competing for attention just as they would compete for classified space.
- smallnamespace 10y ago
  > Not allocating it. I'm not sure what you mean by not allocating it. Even if we restricted all advertising to classifieds, we still need to decide whose ads get shown, how many pages they get, etc.. That's what I mean by allocation. And that would still be subject to the problems you identified: the advertiser might be dishonest, they might not have the consumer's best interests at heart, etc. As for how to achieve this objective--have the government rigorously define advertising and ban it in all forms? That just shifts power from advertisers to bureaucrats then, with all the risks of regulatory capture that implies. Let me pose the question in a different way: let's say there are a hundred different kinds of toothpaste. There is a cost to figuring out which kind is the best kind(s), and then letting everyone know the ordering. Who does the work of figuring that out, and then how do they get compensated for that work? Advertising and marketing is one possible answer by creating a signalling equilibrium (https://en.wikipedia.org/wiki/Signalling_(economics)#Introductory_questions https://en.wikipedia.org/wiki/Signalling_(economics)#Introdu...): all else being equal, the better toothpaste should have access to a larger marketing budget. If consumers know this, then seeing someone's ad is actually a (perhaps weak) signal of quality. There are also other models, like Amazon reviews; but there are plenty of ways to game that system, and you're really depending on Amazon to police it effectively. Or you can actually pay someone to review products, like the Consumer Reports model, where you only get access if you pay up. But each of these models has a tradeoff; Consumer Reports works best when everyone subscribes, but then as it becomes more popular, producers will be tempted to buy them off; Amazon reviews are subject to bandwagoning and cheating; classic marketing is expensive (in time and cost) and unreliable.
  - TeMPOraL 10y ago
    Isn't the market itself supposed to sort this problem out? To take your toothpaste example - customers will pick different types, perhaps randomly, and slowly gravitate towards best quality/price option. The word of mouth is pretty effective locally. Now obviously, humans being humans, there's no way to prevent companies from trying to influence that word of mouth mechanism. But there seems to be a benefit from keeping it a shady (or perhaps illegal) practice - the society in general will shun corporate shills and attempts at influencing people's opinions. Which seems to be a better option than what we have now, where marketing is actually a respectable occupation, and people get assaulted with advertisements. > all else being equal, the better toothpaste should have access to a larger marketing budget This doesn't work because the definition of "better" for the market is different than "better" for the consumer. A market!better product is the one that sells more than alternatives, while the consumer!better product is the one of greater quality/usefulness. Market!better gives you profits which increases your marketing budget which increases market!better - you have a positive feedback loop here that bypasses the consumer!better variable entirely - hence the observation that investing in marketing has better ROI today than making something that's actually useful for the consumer.

TeMPOraL 10y ago

> Do you have an alternative fair and equitable way of allocating that scarce resource? Yes. Not allocating it. What you call trying to "allocate" consumer's attention is, from the point of view of a consumer, people purposefully attempting to distract you from living your life in order to extract money from you. In all other contexts of life we would call such people "assholes". Classifieds have the benefit of consumers paying attention only when they want to pay attention. Time is the most precious thing we have in life. Attempts to take it away from other people should be treated more seriously, IMO. It's never just one marketer - they're competing for attention just as they would compete for classified space.

smallnamespace 10y ago
> Not allocating it. I'm not sure what you mean by not allocating it. Even if we restricted all advertising to classifieds, we still need to decide whose ads get shown, how many pages they get, etc.. That's what I mean by allocation. And that would still be subject to the problems you identified: the advertiser might be dishonest, they might not have the consumer's best interests at heart, etc. As for how to achieve this objective--have the government rigorously define advertising and ban it in all forms? That just shifts power from advertisers to bureaucrats then, with all the risks of regulatory capture that implies. Let me pose the question in a different way: let's say there are a hundred different kinds of toothpaste. There is a cost to figuring out which kind is the best kind(s), and then letting everyone know the ordering. Who does the work of figuring that out, and then how do they get compensated for that work? Advertising and marketing is one possible answer by creating a signalling equilibrium (https://en.wikipedia.org/wiki/Signalling_(economics)#Introductory_questions https://en.wikipedia.org/wiki/Signalling_(economics)#Introdu...): all else being equal, the better toothpaste should have access to a larger marketing budget. If consumers know this, then seeing someone's ad is actually a (perhaps weak) signal of quality. There are also other models, like Amazon reviews; but there are plenty of ways to game that system, and you're really depending on Amazon to police it effectively. Or you can actually pay someone to review products, like the Consumer Reports model, where you only get access if you pay up. But each of these models has a tradeoff; Consumer Reports works best when everyone subscribes, but then as it becomes more popular, producers will be tempted to buy them off; Amazon reviews are subject to bandwagoning and cheating; classic marketing is expensive (in time and cost) and unreliable.
- TeMPOraL 10y ago
  Isn't the market itself supposed to sort this problem out? To take your toothpaste example - customers will pick different types, perhaps randomly, and slowly gravitate towards best quality/price option. The word of mouth is pretty effective locally. Now obviously, humans being humans, there's no way to prevent companies from trying to influence that word of mouth mechanism. But there seems to be a benefit from keeping it a shady (or perhaps illegal) practice - the society in general will shun corporate shills and attempts at influencing people's opinions. Which seems to be a better option than what we have now, where marketing is actually a respectable occupation, and people get assaulted with advertisements. > all else being equal, the better toothpaste should have access to a larger marketing budget This doesn't work because the definition of "better" for the market is different than "better" for the consumer. A market!better product is the one that sells more than alternatives, while the consumer!better product is the one of greater quality/usefulness. Market!better gives you profits which increases your marketing budget which increases market!better - you have a positive feedback loop here that bypasses the consumer!better variable entirely - hence the observation that investing in marketing has better ROI today than making something that's actually useful for the consumer.