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Advertising is a classic case of the prisoners dilemma. In short: Advertising is very effective and worthwhile if you're the only one with a product in that sp

Advertising is a classic case of the prisoners dilemma. In short: Advertising is very effective and worthwhile if you're the only one with a product in that space. As soon as others enter it just becomes an arms race backed by mountains of money with questionable results. https://en.wikipedia.org/wiki/Prisoner%27s_dilemma#In_economics https://en.wikipedia.org/wiki/Prisoner%27s_dilemma#In_econom... Why spend all the money on questionable results? At risk of coming off as glib, perks. I worked in a field tangential to advertising and all of the money is very useful for throwing parties, signaling success and status, being able to invite clients to large events thatyour advertising is involved with (think superbowl), etc. For some reason HN at large prefers a more conspiracy leaning attitude toward advertising which you can see in the top comment right now: "Anyone with a credit card can start changing how people think and act." This perspective believes that advertising is like a brain ray that persuades people to do whatever they say - that targets have limited agency over their own thoughts. It's very appealing to assume everyone is a gullible sheep (except yourself, naturally) but that's not the reality behind advertising spending.

amarkov 9y ago
That doesn't seem like a sufficient story to explain most kinds of advertising. What perks do all the local grocery stores get from mailing me leaflets about what's on sale?
- verylittlemeat 9y ago
  That just falls into the standard example with the prisoner's dilemma. My perks example was just explaining what the billions are buying instead of influence/persuasion.
manigandham 9y ago
> signaling success and status You already have the insight. "Signaling" is just as much advertising as anything else. It's well-studied and the money spent in maintaining status-quo is just as important as growing a new product.
tomrod 9y ago
Thank you, this is a fantastic encapsulation of my point. The proof that digital advertising does anything but set up a costly lead channel is still a bit lacking, and your plausible assertion shows why that may be the case.

amarkov 9y ago

That doesn't seem like a sufficient story to explain most kinds of advertising. What perks do all the local grocery stores get from mailing me leaflets about what's on sale?

verylittlemeat 9y ago
That just falls into the standard example with the prisoner's dilemma. My perks example was just explaining what the billions are buying instead of influence/persuasion.

manigandham 9y ago

> signaling success and status You already have the insight. "Signaling" is just as much advertising as anything else. It's well-studied and the money spent in maintaining status-quo is just as important as growing a new product.

tomrod 9y ago

Thank you, this is a fantastic encapsulation of my point. The proof that digital advertising does anything but set up a costly lead channel is still a bit lacking, and your plausible assertion shows why that may be the case.