2. seems likely. There are parallels in the real world. Put up a billboard and maybe 25% of the people seeing it will never need your service. Is that 25% waste

2. seems likely. There are parallels in the real world. Put up a billboard and maybe 25% of the people seeing it will never need your service. Is that 25% wasted? Yes. But you just build that into the price. Its not quite the same as fraud, since offline you can always argue about brand-building even among non-customers, but the end result is the same, money spent on ads that won't result in spend.