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How do you define "Something useful" though? The advertisement money eventually makes it to Google, broadcasters, sites, TV-channels, sports events and people r

How do you define "Something useful" though? The advertisement money eventually makes it to Google, broadcasters, sites, TV-channels, sports events and people running those organization in term gets more money to spend on [Potentially useful stuff]. It's not like the money magically vanishes to never be seen again, and business to business transaction like this make the money flow faster instead of slower. Economy is basically production vs consumption, money is just the grease to keep the cycle flowing, to follow the money isn't getting to the base cause of our problems.

Zarath 7y ago
The money itself doesn't vanish obviously, but the work does magically vanish, in the form of human consumption. The sheer amount of useful energy and resources required to feed those people, power their computers, etc. is being "burned" in the same sense that bitcoin mining "burns" something. It's millions of hours of work for simply redistribution of demand. Bill Gates could pay 10000 people $10/hour to dig a hole and 10000 people $10/hour to fill the hole back with dirt. Obviously this money doesn't "vanish", but millions of hours are wasted (and the food and resources needed to power this work).
wpietri 7y ago
This is basically the broken window fallacy: https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window If I go around smashing windows, I will make money move faster. The people who install replacement windows will have more money to spend. It's not like the money magically vanishes! But it's still a terrible idea, because all this economic activity is based on systemic waste. It's the same for most advertising.
tsimionescu 7y ago
A lot of advertising money is actually lost from the economy to profit for advertisers, stock buybacks, bonuses for the ultra-rich etc.
zentiggr 7y ago
> It's not like the money magically vanishes to never be seen again No, it remains in corporate budgets, which, without all the marketing spend, can be shifted to better wages, charity work, capital investments, better wages, safety and health initiatives, better wages...
- jtx22 7y ago
  You should start a company and pay better wages.
- organsnyder 7y ago
  More likely it would go to stock buybacks and shareholder dividends.
- velp 7y ago
  ....and without some of that marketing spend, revenue would decrease (or be co-opted by competition) and then we're back at the same problem. Companies probably over-index on advertising spend, but it's not as simple as "look no ads, now we can raise everyone's salary 2x"
- buttheyare 7y ago
  But it doesn't really work like that, does it? After all, it's up to an individual to create something meaningful. The money will always be there in one form or the other. Without google or facebook relaying on advertisements as their business model, coca cola would go for other channels. They'd pick billboards instead of instagram ads, or local newspapers ads instead of native ads. Now I may be a bit biased, however can you really argue that local newspapers and billboard owners will make better use of that capital? And it's not facebook/google restricted either; big companies like that have a very wide range of things they do and ways in which they promote the brand. And come to think of it, facebook, google, and all the other advertising giants we here seem to hate are in a much better position to use that money in a meaningful way. Definitely better then a random wannabe instagram influencer.
- krumpet 7y ago
  At the expense of all those marketers who just lost their jobs. Oh, and all those Google employees because nobody is buying ads anymore. I think Aperocky observation that following the money doesn't get at the root of the problem is spot on.
acomjean 7y ago
I find advertising useful mainly when it’s an event I didn’t know was happening and aren’t always checking for. Usually for consumer products I find it not so useful.
- wpietri 7y ago
  A problem we could pretty easily solve with event listings and maybe some subscription-based notifications. That would be both more fair and more effective than depending on the luck of seeing something that somebody with money wants to promote.
logfromblammo 7y ago
If Coke does not buy the large ad campaign, the available advertising resources can be used by the next-highest bidder, and that bidder might potentially be selling something with a higher social utility function value. Since the ad infrastructure does not get as much money from that transaction, less is then reinvested into ad infrastructure. If McDonald's stopped advertising on billboards, billboard advertising would be cheaper in the short run, and then there would be fewer billboards in the long run.
- aeternus 7y ago
  And how do you measure social utility? Price is currently the best measure of 'social utility' that we have. People choose to spend their hard-earned dollars on the products that provide the most utility. Companies spend their hard-earned dollars on the vehicles that allow them to sell the most product.
  - logfromblammo 7y ago
    That's the problem with saying Coke shouldn't buy so many ads. Coke got all their ad spend from people who gave them money in exchange for Coke's products. Coke is rich because society likes drinking Coca-Cola and pals.
  - tsimionescu 7y ago
    But advertising is explicitly designed to skew that measure - the purpose of essentially all advertising, and certainly all of Coke/Pepsi's advertising, is to convince people that they need something that they don't need; and to make them appeal to their feelings instead of their rationality when doing purchasing decisions (e.g. by inspiring brand loyalty).

Zarath 7y ago

The money itself doesn't vanish obviously, but the work does magically vanish, in the form of human consumption. The sheer amount of useful energy and resources required to feed those people, power their computers, etc. is being "burned" in the same sense that bitcoin mining "burns" something. It's millions of hours of work for simply redistribution of demand. Bill Gates could pay 10000 people $10/hour to dig a hole and 10000 people $10/hour to fill the hole back with dirt. Obviously this money doesn't "vanish", but millions of hours are wasted (and the food and resources needed to power this work).

wpietri 7y ago

This is basically the broken window fallacy: https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window If I go around smashing windows, I will make money move faster. The people who install replacement windows will have more money to spend. It's not like the money magically vanishes! But it's still a terrible idea, because all this economic activity is based on systemic waste. It's the same for most advertising.

tsimionescu 7y ago

A lot of advertising money is actually lost from the economy to profit for advertisers, stock buybacks, bonuses for the ultra-rich etc.

zentiggr 7y ago

> It's not like the money magically vanishes to never be seen again No, it remains in corporate budgets, which, without all the marketing spend, can be shifted to better wages, charity work, capital investments, better wages, safety and health initiatives, better wages...

jtx22 7y ago
You should start a company and pay better wages.
organsnyder 7y ago
More likely it would go to stock buybacks and shareholder dividends.
velp 7y ago
....and without some of that marketing spend, revenue would decrease (or be co-opted by competition) and then we're back at the same problem. Companies probably over-index on advertising spend, but it's not as simple as "look no ads, now we can raise everyone's salary 2x"
buttheyare 7y ago
But it doesn't really work like that, does it? After all, it's up to an individual to create something meaningful. The money will always be there in one form or the other. Without google or facebook relaying on advertisements as their business model, coca cola would go for other channels. They'd pick billboards instead of instagram ads, or local newspapers ads instead of native ads. Now I may be a bit biased, however can you really argue that local newspapers and billboard owners will make better use of that capital? And it's not facebook/google restricted either; big companies like that have a very wide range of things they do and ways in which they promote the brand. And come to think of it, facebook, google, and all the other advertising giants we here seem to hate are in a much better position to use that money in a meaningful way. Definitely better then a random wannabe instagram influencer.
krumpet 7y ago
At the expense of all those marketers who just lost their jobs. Oh, and all those Google employees because nobody is buying ads anymore. I think Aperocky observation that following the money doesn't get at the root of the problem is spot on.

acomjean 7y ago

I find advertising useful mainly when it’s an event I didn’t know was happening and aren’t always checking for. Usually for consumer products I find it not so useful.

wpietri 7y ago
A problem we could pretty easily solve with event listings and maybe some subscription-based notifications. That would be both more fair and more effective than depending on the luck of seeing something that somebody with money wants to promote.

logfromblammo 7y ago

If Coke does not buy the large ad campaign, the available advertising resources can be used by the next-highest bidder, and that bidder might potentially be selling something with a higher social utility function value. Since the ad infrastructure does not get as much money from that transaction, less is then reinvested into ad infrastructure. If McDonald's stopped advertising on billboards, billboard advertising would be cheaper in the short run, and then there would be fewer billboards in the long run.

aeternus 7y ago
And how do you measure social utility? Price is currently the best measure of 'social utility' that we have. People choose to spend their hard-earned dollars on the products that provide the most utility. Companies spend their hard-earned dollars on the vehicles that allow them to sell the most product.
- logfromblammo 7y ago
  That's the problem with saying Coke shouldn't buy so many ads. Coke got all their ad spend from people who gave them money in exchange for Coke's products. Coke is rich because society likes drinking Coca-Cola and pals.
- tsimionescu 7y ago
  But advertising is explicitly designed to skew that measure - the purpose of essentially all advertising, and certainly all of Coke/Pepsi's advertising, is to convince people that they need something that they don't need; and to make them appeal to their feelings instead of their rationality when doing purchasing decisions (e.g. by inspiring brand loyalty).