>Why is there so much money in advertising if media doesn't condition people? Advertising can have no direct persuasive effects whatsoever and still be cost-ef

>Why is there so much money in advertising if media doesn't condition people? Advertising can have no direct persuasive effects whatsoever and still be cost-effective. Imagine that a new bank opens, promising exceptionally high interest rates on savings accounts because of their much lower operating costs. Their branches are converted shipping containers on vacant lots, furnished with cheap patio furniture. Their staff are dressed in jeans and t-shirts. They don't have a website, just a Facebook page. No sane person would deposit their money with such a bank. Why? Because this bank has made no long-term commitment. You have no reason to believe that they won't just run off with your money. Until relatively recently, bank branches were usually lavishly furnished stone buildings with marble flooring, exotic wood panelling and opulent chandeliers. The immense cost of their furnishing acted as a costly signal that's difficult to fake - we spent all of this money on our bank branch, so you can believe that we're not a fly-by-night operation. Even to a perfectly rational customer, it's a strong Bayesian signal. Engagement rings serve a similar purpose - they're pointless and expensive, which is exactly why they're a meaningful symbol. Expensive advertising has the same signalling value as opulent bank branches and engagement rings. If a company has saturated the TV with their commercials and sponsored a football stadium, they have a lot to lose if their reputation is damaged by scandal. They've spent a huge amount of money to make themselves a household name, so they have a strong incentive to ensure that they deliver a quality product. When you're in the supermarket, it's perfectly logical to buy the brands that you recognise. General advertising works because it's a total waste of money.