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Advertising without signal: The rise of the grifter equilibrium
- abstractspoon 1y ago[flagged]
- soared 1y agoThose formulas have to be comedy but it seems like it’s trying to be serious.
- neehao 1y agoagree. they seem hasty but didn't notice anything obviously wrong but may be i missed something ...
- neehao 1y agoappears the math was updated
- gsf_emergency_2 1y agoYes. Comedy is suboptimally optimal
- deleted 1y ago[deleted]
- esperent 1y agoRegarding the Oatly ad at the top (Another ad for our oat drink providing no reason at all why you should try it), this ad does have a signal. It's a humblebrag. It's saying, our product is so well known, and the reasons for using it so obvious, that we don't need to say anything. It's cementing Oatly brand in the minds of anyone who already thinks that they should be switching to non-dairy milk for any reason (health, environment, etc).
- neehao 1y agoagree..
- xnx 1y agoAlso that it is the drink of nonconformists and creatives. Many of their other ads cross way over into tryhard cringe for how "random" they are.
- spyckie2 1y agoI wish someone did an analysis of their marketing. I really hope it was a huge flop because it’s just awful. I despise their horrible advertising and marketing copy in general and I sometimes just have to tell myself, “it’s just oat milk no need to boycott it because some edgy marketing consultant forces you to read their nonsense”.
- mattlondon 1y agoIt's in your head. Someone did something right.
- spyckie2 1y agohmm after some research I'm inclined to believe that 1) oatly is the best tasting product on the market, 2) it's the distribution channels that was the success, not the marketing copy, and 3) spending massive amounts of capital into growth of a good product will always yield growth. So no... I stand by what I said, I think they did a lot of things wrong in the marketing department, in spite of having a really solid product.
- mrala 1y agoSince the article doesn’t mention it, CPA stands for cost per action.
- closewith 1y agoCost Per Acquisition (of a new customer).
- amelius 1y agoHow do they know if the customer is new or not?
- HEGalloway 1y agotracking via cookies (that expire after X days) or some kind of identifier in the CRM
- closewith 1y agoNormally in e-commerce, it's based on email or phone number. In physical retail, they use all sorts of tactics, from loyalty cards to facial recognition (where legal, which it shouldn't be).
- ArtTimeInvestor 1y agoCPA pricing removes the burn Not true. There is limited ad space which all advertisers compete for. No matter which model, CPC or CPA, the advertiser who pays most gets the ad placement. Its similar to SEO. Nobody says "Oh my god, advertising via SEO is free, what a blessing!". It's still a competition. It's still a zero sum game.
- ajb 1y agoHe's not saying advertisers don't compete. He's saying it changes from advertising being a massive risk as well as a cost, to just a cost. So the auction is won by the company with the biggest instantaneous profit margin on a SKU, instead of the one with the biggest war chest that can afford to risk on that massive prime time slot. This change in incentive favours shitty products.
- maartenscholl 1y agoThis has little to do with equilibrium analysis, it is just the market for lemons story but for the ad space. You need to investigate the buyers and what they believe about brand quality.
- cornholio 1y agoOne of the remedies proposed, tying product reviews to the manufacturer instead of the storefront is a very difficult thing to implement. Manufacturers are in a fundamental conflict with Amazon precisely because they desire to fully control the retail channels and set their own promotions, online discounts etc. and capture most of the surplus themselves while still segmenting the market and, for example, selling at different prices through certain local distributors. Amazon has the exact opposite incentives, they want distributors of the same brand to compete amongst themselves so they can offer the lowest global prices, and that it's Amazon and its users that capture most of the surplus. This is the root of the forgery problem Amazon can't solve, manufacturers aren't willing to vouch for their products when sold in secondary channels they do not fully control. So this means they will not collaborate on the "global rating" scheme either.
- acdha 1y ago> This is the root of the forgery problem Amazon can't solve Has chosen not to solve. They could trivially improve the situation by ending the practice of commingled inventory so a seller could be held accountable for counterfeit or stolen items but that would cost more so they don’t.
- luckylion 1y agoHow do they handle it when you get your inventory sent back? I.e. you send them 100 pieces of X and after three months you tell them to send them back to you. Do they just take 100 pieces of X out of their general inventory, or do they know which ones were yours? Because otherwise it seems like an obvious scam where you could send in trash and get real items back.
- acdha 1y agoI don’t know but based on the number of people I know who’ve gotten clearly counterfeit or repackaged items from official storefronts on Amazon, I would assume they just take 100 units out of that bin.
- 1y ago
- seydor 1y agoThat explains the success of platforms like Temu: every search generates many identical products that are all dirt cheap, which makes my search much easier. I find myself buying a lot faster because there is not a lot of variety and relatively little trickery/ads
- bravesoul2 1y agoAre we talking about the same Temu that pops up a spinning roulette wheel telling you have 100% off and to install the app to get the offer? (Catch is... it isn't 100% off and it's BS)
- phatfish 1y agoYup no idea, Temu is peak gamified shopping. The parent could just be fully on board with being conned though.
- nottorp 1y agoMaybe the parent just runs with all kinds of ad blockers / privacy options on, because I haven't seen that roulette thing on Temu. Or perhaps, if it's infrequent, I just ignored it as obvious bullshit. I only did one order off them experimentally last year.
- dazc 1y agoI have heard Temu being described as a store where no sane person would buy anything. This suggests marketing purely to sane people isn't the best route to success?
- mattlondon 1y agoThe cited research that buyers use price as an indicator of quality was from 1985. Does that hold true these days? My gut suspects not? Perhaps in the early and mid 80s you could still buy quality products, but now is seems 99% of things are just mass-produced where ever it is cheapest. People are conditioned on Amazon to find the same product from a jumble-of-letter manufacturer who is selling the exact same thing at the lowest price. I do not trust that if I buy a "known brand" for a product that it is going to be any different from a similar same no-name thing that is 20-30% of the price (...and very possibly built in the same factory). If it's all low quality crap (which a lot of the time it is) then you may as well get the cheapest one Sadly you need to rely on things like YouTube videos to actually get any kind of idea on if the item is trash or not, and even then there is the risk of paid-reviews so you need to take multiple sources into account, who they are, trust levels etc. it's sad. Either that or - and I know this is madness - go to a physical store and inspect the goods before you buy it. I would argue that the article is correct that quality is often secondary to speed of delivery and cheapness though. Amazon has totally won there.
- fragmede 1y agoIf I buy a $100 projector vs a $1,000 one, or a $20 curling iron vs a $200 one, the order of magnitude difference does make for a better product, I find.
- 9dev 1y agoMaybe. But what about the Audi vs. Volkswagen? A Ninja blender vs. a KitchenAid? A memory card from SanDisk vs. a no-name brand? A shirt from Fred Perry vs. H&M? And these were brands you probably know. What about the products in niches, where you don’t have experience, or products are sufficiently similar? Do you always know whether a product is more expensive because of the brand, or because it’s objectively better?
- ekianjo 1y agobecause car brands belong to very few auto makers, a lot of cars with different names use the same chassis across brands, the same engine, and probably the same electronics as well. so you end up with most of the difference being esthetics these days, at least for cars within roughly the same price range.
- sgt101 1y agoHow can consumers respond to get useful information and enable themselves to make better decisions when exchanging their resources for goods? - use other information channels like review media (fashion sites)? - trust secondary sites like brand retailers (IE. John Lewis in the UK?) ????
- dazc 1y agoI used to buy from John Lewis since they tended to have a curated selection of products and the reviews (where they exist) haven't been gamed. I don't recall a purchase that I have regretted. Not so sure now they are becoming just another drop-shipper but there are few alternatives in the UK.
- CommenterPerson 1y agoAs a consumer, my reaction to all this is simply to stop looking and stop buying. Unless it's something urgent, I put it on a list and wait. Many times the need goes away. Better than dealing with all this crap.
- zkmon 1y agoI'm recently seeing some ads on TV, that make me avoid ads by any means. There simply weirdness and harmfulness to eyes mixed and served. I think this is being done to attract viewer attention, which became 99% of the goal, rather than being informative or signaling. Sometimes there is hardly any indication what the actual product is, and how it is relevant to whatever weirdness that took up most of the ad time. Things like putting a mouth on the forehead of people, fast flickering scenes, and I can't even dare to speak about other weirdness. Oh god, the ad designers are a desperate bunch for attention. I'm really fearful of touching TV remote. And if these ads really liked by people, then I'm fearful of the future of the world in the hands of these people.
- sheiyei 1y agoI'm pretty quick to never-again a company which advertises in a way that makes me sick. A certain electronics store chain that operates here in the Nordics, which someone is bound to recognise, is on my ban list for psychedelic surrealist shock advertising. Not that I see much ads any more anyway, what with Ublock Origin, Blokada 5 and Youtube ReVanced.
- joules77 1y ago"media time" or the amount of time Americans consume media is not rising (6-7 hours a day). So no great new user growth + no great screen time growth. But the Ad industry revenues are growing at 15-20%. With a population of ~300 Million the US ad industry generates 400 Billion in revenue. Avg Bounty of >1000 bucks a year per person. The only way to pull that off is to keep injecting more and more ads everywhere and make everything more tempting to watch. The biggest threat to these companies is if time spent consuming media drops.
- benjiro 1y agoHere is my question. Who is paying for it all to get to a 1000 bucks bounty per person / year? The same question, who is paying for all the data collection they do on customers? You keep hearing about xxx billion dollar industries but where is that money coming from? The add and data collection industry in the US is probably a trillion dollar market or more, but ... does it really work? Sure, focused ads on some youtube channel about product that may be of interest, but all the rest is such a mess. I do not buy more stuff because some ads showed up. Sure, they can be informative that there is a new car released, or something like that. But there is no desire to buy XXX cleaning product because they spammed it on TV. Same argument with "what use is getting all my personal data, down to the things we do in bed". Sell it to specific companies? But what do they really gain from it. It does not feel like we are getting better products as a result of all that user data. O, people are not happy about Y product. You do not need invasive data collection for that, you see it in your revenue numbers. It often feels like a lot of industries are just there to self sustain themselves. Nobody ever got fired for buying advertisement or personalized data. So companies keep spending on it, people keep pouring over the data, analyzing it, but its like nobody has common sense and its all a scam that inner feed itself. I am not saying that advertisement does not work to grow a product, but especially unknow one's but the moment product reach a specific mass...
- jrm4 1y agoThere may be something interesting here to think about, but I'd argue that the following statement is literally much more useful than that entire article. "When advertising, appealing to emotion is much more important than information or logic."
- dreamcompiler 1y agoI love that this reduces to math a "special theory of enshittification" because it describes how no-name vendors can profit from the "general theory of enshittification" put forth by Doctorow that describes the platform monopolies like Amazon under which the vendors operate.
- mrkramer 1y ago>Ratings compression Star ratings on major platforms increasingly cluster between 4.3 and 4.9, leaving buyers little room to distinguish products. Last year I was skimming through IKEA furniture and majority of reviews are 4 or 5 stars. And that makes me think that people who don't like IKEA products are either so pissed that they do not want leave 1 star review or IKEA removes bad reviews.
- Tijdreiziger 1y agoI’ve definitely seen IKEA products with bad reviews.
- mrkramer 1y agoMost of them are 4 or 5 or sometimes 3 stars but tbh it would be a good idea to have a website that highlights bad products and their reviews "for fun and profit".
- somat 1y ago> "Star ratings on major platforms increasingly cluster between 4.3 and 4.9, leaving buyers little room to distinguish products." The good ol' 7 out of 10 problem. Where the entire lower half of the rating system is unused. The way I solve it is to have 0 be the middle, If the transaction exceeded expectations you can give it a +1 if it failed to meet them give it a -1 (thumbs up/down if you prefer) you can even throw in a +-2 if you want to allow for more subtlety of expression
- semitones 1y agoand now all of your reviews will cluster around 0.7-0.9. And what will you have accomplished?
- asdff 1y agoReviews are basically useless today. I'm sorry but it is true. Pick any hobby you deeply understand enough to not require handholding by a reviewer, and watch the reviews about that segment. It is a joke, pure PR. "This one is good but this one is pretty gooder" None of these sponsored reviewers want to bite the hand that feeds them and gives them free product to review for their channel. They never go very deep into anything. Classic Gell-Mann amnesia Customer reviews are also useless. 10 people go 5/5 no comment. One guy goes 3/5 "good thing." ???? Another person didn't hold it right and rated it 1/5, another person got a defective product customer service would have replaced if they had reached out and rated it 1/5. IMO the solution is doing actual due dilligence. What is the spec sheet? What is actually relevant to what I am doing? How was this thing made? What are the tradeoffs of using this technique in in this product vs other techniques? Where does this featureset stand against other offerings in this segment and pricepoint? You can do all of this yourself from the primary materials, the product pages, etc. It also doesn't take longer than you'd spend agonizing over yet another half dozen 20 minute review videos. And you'd end up better informed than most content producers, most customer reviewers, even most redditors on the relevant subreddit. You operate along these lines and all 5 friction points mentioned in the article become irrelevant. You don't give a shit about the brand, you care about the merits of the component. Prolific advertisement is no longer required as a signal for quality since you are actually evaluating the merits of the component directly and not using proxy signals. Return status also doesn't matter because you are evaluating the merits of the component directly. Ratings don't matter. Pricepoint also doesn't matter because you don't include price in your analysis save for comparing capabilities across a price point vs assuming costly product = better. And of course maybe you are bad at estimating a components merit. Maybe you are suffering from Dunning Krueger effect. For most things in life this hardly also matters because the effective difference between a most optimal product and one that is merely good enough is basically zero especially when you lack the ability to determine the differences between perfect and good enough (probably means that precision is not required for you use case).
- eviks 1y ago> You can do all of this yourself from the primary materials, the product pages, etc. Unless you can't. What exact Ethernet card is embedded in your extensive brand port extension hub? No way to know unless someone knowledgeable disassembles it. Valuable information doesn't just float around one google search array. Product pages are too often the same kind of garbage like the reviews you've described, containing very little useful info