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The thing about the "advertising doesn't matter" argument is that there are situations where advertising absolutely matters - when a company is just starting ou

The thing about the "advertising doesn't matter" argument is that there are situations where advertising absolutely matters - when a company is just starting out and there's no way they can get organic referrals, when the public is unaware of their existence, etc. Moreover, most companies started small at some point so advertising and maintaining advertising made sense up to a point. And if we look at those companies where maybe advertising actually doesn't help, companies that have reached a level of success where organic referrals and public awareness drive most of their business. And they're ongoing businesses that probably reached that level through advertising and have money now to use for that. But not only are they already advertising but they don't if their word-of-mouth/public-knowledge presence will last indefinitely, they don't know if just word-of-mouth would let them control their image, would stand-up against future competitors ads and so-forth. So, even supposing you could show advertising didn't offer any immediate increase in customers, continuing to spend on it doesn't seem to me as irrational as it sounds.

ghaff 6y ago
Furthermore, many of the people who say they hate advertising also hate PR and other sort of marketing campaigns. So presumably their theory is that people should build something and just hope people will discover them somehow.
- shadowgovt 6y ago
  It's a subset of the misunderstanding of "meritocracy" that defines it as "how well you can do at a narrowly-defined task" as opposed to the practical definition of "How many people know how well you do at a narrowly-defined task." Our industry is shot-through with idealists who believe meritocracy should be the former, when in reality it's always been the latter (and always will be, unless someone can invent omniscient humans).
  - ghaff 6y ago
    Well, and arguably, "How many people know how well you do at a set of tasks that are broadly relevant to them."
- Nextgrid 6y ago
  > Furthermore, many of the people who say they hate advertising also hate PR and other sort of marketing campaigns. So presumably their theory is that people should build something and just hope people will discover them somehow. Could it be that people simply don't like being interrupted and having their time wasted, whether it's by ads, marketing or PR? Just because you have a business to grow shouldn't give you the right to waste my time.
polyomino 6y ago
Also Uber would benefit from a higher price of advertising for upstart taxi companies.
andrewjl 6y ago
That still doesn't address the GP point, advertising doesn't matter if you can get customers coming to you organically. Business size changes the odds of that, irrespective of that if the customers would have come to you anyway (and there are ways to know this!) then the ad spending was largely a waste.
- secondcoming 6y ago
  You misunderstand what advertisers are trying to achieve. It's about Brand Awareness. They just want their brand out there and seen. Even click-throughs aren't as important as they once were. Coca-Cola still advertise when they probably don't need to.
  - andrewjl 6y ago
    I understand the distinction between advertising and building brand awareness. It doesn't sound like Uber was doing the latter. It also doesn't take away that if you're advertising to an audience who'd have come to you anyway, you're wasting your money.
    - secondcoming 6y ago
      Brand awareness must also be maintained, just like human relationships! How often do you tell a loved-one that you love them? Is once enough, because going by your stance, since you've told them already once before you shouldn't need to do it again!
raverbashing 6y ago
This is the point that a lot of people are missing Uber shows up in the news and in conversation every day. Most people have heard about it by now. Very few people are going to install it because they saw an ad. Not the case for your neighborhood "Bob's Burgers" or "Uber Competitor" or some other new company. Or for specific marketing actions of known companies (promotions, new services, etc)
mikeryan 6y ago
I don't think there's a large "advertising doesn't matter" camp. For most the real question is around the efficacy of certain types of ad buys, ad targeting, SEO efficacy and the amount of fraud in the system. The real problem is that for large companies with brand awareness they're starting to find a lot of their spend may not be generating revenue. Ebay in the Freakonomics podcast turned of about $100M in ad spend with no loss of revenue. But smaller, companies usually don't have the staff/knowledge necessary to know how and where to use their ad dollars.
Barrin92 6y ago
>when a company is just starting out and there's no way they can get organic referrals, when the public is unaware of their existence, etc. I don't think I ever saw a Whatsapp or Telegram advertisement in the first few years of their existence. There's a lot of software in particular that gets around by word of mouth alone. Necessity for advertisement seems correlated to how unclear it is what advantage your product has for the consumer. If you make something that's like X but twice as fast or twice as cheap you don't need advertisement.
hnick 6y ago
Ad spend by incumbents will also drive up the price of advertising in general since it's a limited resource, making an uphill battle for the smaller competitors where it matters. It's another moat.
PaulDavisThe1st 6y ago
Depends on the timeline. If for financial (or other) reasons, they need to "reach the audience ASAP", then sure, advertising is likely to be a good or even required move. But if they want to exploit a more organic growth curve, and are in a financial position to do so, then advertising isn't so useful. Ardour is a cross-platform DAW that has been around for 21 years. Every 2 minutes somewhere in the world, someone starts a version they got from us. We've never advertised.

ghaff 6y ago

Furthermore, many of the people who say they hate advertising also hate PR and other sort of marketing campaigns. So presumably their theory is that people should build something and just hope people will discover them somehow.

shadowgovt 6y ago
It's a subset of the misunderstanding of "meritocracy" that defines it as "how well you can do at a narrowly-defined task" as opposed to the practical definition of "How many people know how well you do at a narrowly-defined task." Our industry is shot-through with idealists who believe meritocracy should be the former, when in reality it's always been the latter (and always will be, unless someone can invent omniscient humans).
- ghaff 6y ago
  Well, and arguably, "How many people know how well you do at a set of tasks that are broadly relevant to them."
Nextgrid 6y ago
> Furthermore, many of the people who say they hate advertising also hate PR and other sort of marketing campaigns. So presumably their theory is that people should build something and just hope people will discover them somehow. Could it be that people simply don't like being interrupted and having their time wasted, whether it's by ads, marketing or PR? Just because you have a business to grow shouldn't give you the right to waste my time.

polyomino 6y ago

Also Uber would benefit from a higher price of advertising for upstart taxi companies.

andrewjl 6y ago

That still doesn't address the GP point, advertising doesn't matter if you can get customers coming to you organically. Business size changes the odds of that, irrespective of that if the customers would have come to you anyway (and there are ways to know this!) then the ad spending was largely a waste.

secondcoming 6y ago
You misunderstand what advertisers are trying to achieve. It's about Brand Awareness. They just want their brand out there and seen. Even click-throughs aren't as important as they once were. Coca-Cola still advertise when they probably don't need to.
- andrewjl 6y ago
  I understand the distinction between advertising and building brand awareness. It doesn't sound like Uber was doing the latter. It also doesn't take away that if you're advertising to an audience who'd have come to you anyway, you're wasting your money.
  - secondcoming 6y ago
    Brand awareness must also be maintained, just like human relationships! How often do you tell a loved-one that you love them? Is once enough, because going by your stance, since you've told them already once before you shouldn't need to do it again!

raverbashing 6y ago

This is the point that a lot of people are missing Uber shows up in the news and in conversation every day. Most people have heard about it by now. Very few people are going to install it because they saw an ad. Not the case for your neighborhood "Bob's Burgers" or "Uber Competitor" or some other new company. Or for specific marketing actions of known companies (promotions, new services, etc)

mikeryan 6y ago

I don't think there's a large "advertising doesn't matter" camp. For most the real question is around the efficacy of certain types of ad buys, ad targeting, SEO efficacy and the amount of fraud in the system. The real problem is that for large companies with brand awareness they're starting to find a lot of their spend may not be generating revenue. Ebay in the Freakonomics podcast turned of about $100M in ad spend with no loss of revenue. But smaller, companies usually don't have the staff/knowledge necessary to know how and where to use their ad dollars.

Barrin92 6y ago

>when a company is just starting out and there's no way they can get organic referrals, when the public is unaware of their existence, etc. I don't think I ever saw a Whatsapp or Telegram advertisement in the first few years of their existence. There's a lot of software in particular that gets around by word of mouth alone. Necessity for advertisement seems correlated to how unclear it is what advantage your product has for the consumer. If you make something that's like X but twice as fast or twice as cheap you don't need advertisement.

hnick 6y ago

Ad spend by incumbents will also drive up the price of advertising in general since it's a limited resource, making an uphill battle for the smaller competitors where it matters. It's another moat.

PaulDavisThe1st 6y ago

Depends on the timeline. If for financial (or other) reasons, they need to "reach the audience ASAP", then sure, advertising is likely to be a good or even required move. But if they want to exploit a more organic growth curve, and are in a financial position to do so, then advertising isn't so useful. Ardour is a cross-platform DAW that has been around for 21 years. Every 2 minutes somewhere in the world, someone starts a version they got from us. We've never advertised.