There is an alternate explanation that doesn't rely on advertiser stupidity. Most advertisers are statistically unable to estimate the profitability of their ca

There is an alternate explanation that doesn't rely on advertiser stupidity. Most advertisers are statistically unable to estimate the profitability of their campaigns, because ads generally exert weak effects in very noisy environments. There is some high quality evidence supporting that, e.g. https://academic.oup.com/qje/article/130/4/1941/1914592 https://academic.oup.com/qje/article/130/4/1941/1914592 Nota bene, weak effects does not mean ads are necessarily profitable. Profitability depends on many factors including margin, retention, ad cost, etc.