As usual, a bunch of nonsense by people who have no idea about this.
The fundamental problem is that digital advertising is a 12-figure global industry with practically 0 oversight and regulation. This is an industry that sells influence at scale. Anyone with a credit card can start changing how people think and act but there are absolutely no real consequences for bad actors.
Even the most minimal laws around who can advertise and how would radically change everything. Google has even more data than Facebook. Amazon has just as much. Your ISP has just as much. These silly little projects to chase the latest scandal will do nothing in the long run. The only way to fix anything is to regulate the core, not try and fix every little symptom that occurs.
* Before the inevitable comments, yes advertising works, yes it works on you no matter how much you think otherwise, and no adblockers dont magically solve everything.
> This is an industry that sells influence at scale. Anyone with a credit card can start changing how people think and act but there are absolutely no real consequences for bad actors.
Isn't this true of almost any industry which lets you put out information? E.g. news publishing? Book publishing? Blogs?
I mean, what exactly would you do, ban all communications? Maybe I missed something, but it seems like everyone just assumes that advertising is the #1 biggest influence on most people, and was used to completely change the tide of democracy, when in reality it seems to me that it's a small part of the problem, at most.
I'm serious about the question btw - what would you do? You say regulate at the core. I'm not saying necessarily don't regulate (though that is where I lean) - I'm asking, what exactly do you propose?
1. Break up Facebook under anti-trust law. Social network share is as dangerous as, if not more dangerous than, market share.
2. Pass an American GDPR. Consumers get an absolute right to audit and delete their data. Explicit consent is required for each instance of third-party sharing. Companies are liable to their users for breaches, with a minimum amount claimable through an easily-accessibly regulator.
What would breaking up Facebook look like? Most features of Facebook couldn't operate as standalone businesses without creating their own massive ad networks.
Crack it along its social graph(s) or separate the platform (which would become a regulated utility) from the advertising business.
Mergers offer four broad categories of synergies [1]: demand-side, supply-side, political and administrative. Airline mergers are usually about demand-side synergies. Having more market share gives you better data about future trends. It also gives you pricing power. Media/telecom mergers tend to rely on supply-side synergies: prices won't be raised, but content suppliers can be squeezed for distribution. When Lockheed Martin bought Sikorsky it acquired lots of employees in Connecticut [2]; that bought them some bulldogs in the Congress. (Administrative synergies are mostly B.S.; they fall into the "you have an accounting department, we have an accounting department, combined we can have just one" category and were mostly disproven in the post-WWII conglomerate boom.)
Facebook is a super aggregator [3]; it has both demand-side and supply-side monopolistic synergies. Cracking the demand side means users go to sleep with a Facebook account and wake up with a Facebook No. 3 account. (Or to sleep with an Instagram account and wake up with an Instagram account.) This worked for AT&T and could be done today (at significant expense to Facebook's shareholders as it was to Standard Oil's, AT&T's and Microsoft's). Cleaving social graphs is complicated. But we understand graph theory better today than we did in AT&T's days. Bonus: require an open inter-operability standard if these networks want to interconnect.
Cracking the supply side would involve taking related advertisers and hiving them off into a separate advertising company. The Facebook platform left would be a natural monopoly, regulated like a utility, serving dual profit and public roles. (Messenger, Instagram, M, and other relatively-discrete products would similarly be spun off.)
TL; DR The novelty of breaking up a Facebook is superficial and finds precedent in antitrust enforcement history.
Sure, but neither of those have anything to do with what this thread is talking about. Data ownership and privacy are important, but this thread is about GP's claim that (paraphrased) the fundamental problem is that advertising is the ability to buy influence at scale, and that "bad actors" aren't prevented from doing so.
I'm still not so sure it's true though. Is it materially different to go buy from 5 ad brokers instead of 1? Or from ad exchanges that automate it for your? It's hard for me to see how this would have much of an effect, beyond mildly increasing the cost.
> 1. Break up Facebook under anti-trust law. Social network share is as dangerous as, if not more dangerous than, market share.
You should better ask why the mass of people registered on it to let this happen. It is not that privacy activists have not been warning all the time...
To give a little background: In Germany (where there is a lot more concern for privacy) Facebook never got that deeply ingrained into the daily habits of most people. It is also not uncommon that at a social gathering people explicitly tell you that they don't desire that any photos that were taken here to be put on Facebook.
> You should better ask why the mass of people registered on it to let this happen.
Social networks gravitate towards oligopolies(+), because people go wherever everybody else is. Even in Germany, there is a social price to pay for not having a Facebook account.
(+) Oligopolies, because there seems to be a age generation effect: children don't use the network where their parents are.
This is one of the areas where self-regulation simply doesn't work.
> Even in Germany, there is a social price to pay for not having a Facebook account.
I often write here at HN that there is no "objective" status in society, but rather status in various, often vaguely defined groups in the society, where the individual status symbols can even contradict each other.
It is not my impression that all in all I had to pay a social price for not having a Facebook account at any time (quite the opposite). Rather in some groups this lead to a social malus, but in other groups it gave a large social bonus.
I fully agree that this highly depends on the groups to which you belong. Personally, I have not experienced a malus for not having a Facebook account, but I know of occurrences (e.g., a student learning group organizing their communication via Facebook). For myself, I have faced a potential social price for not having a WhatsApp account that was large enough to let me create an account.
Well, 1 could also be taken care of by Congress passing a new law. But I think the more interesting alternative is Zuck deciding to do it on his own. There's no reason he couldn't create a nonprofit and give it the "natural monopoly" pieces. That would certainly include identity and the social graph, and maybe a publishing interchange.
Then Facebook could step back and compete on the non-monopoly pieces. The client, of course. But all the add-ons. Groups and events and marketplace and whatever else. Google, Twitter, Amazon, and probably Apple would probably quickly create their own social clients. And would also join some nonprofit advisory board, which would help to set protocols and standards.
People keep seeing "regulate" and reading it as "ban".
The UK regulates what you can advertise (no prescription pharma, for example) and extremely limits political advertising and spending. This results in a culture where local volunteers are important and you don't get weird lie-based adverts smearing candidates all the time. (The smearing is done for free by the press instead)
The only point at which I would say this was overreach was the period when Gerry Adams MP was banned from speaking on televion and had to have his words read by an actor.
WRT Facebook, a good start would be to guarantee traceability of ads, plus the ability to see all ads run by a particular entity even if they're not targeted at you.
Well, technically we do things like ban outright lying in advertising already, but it's called regulation. Usually when people talk about "bans" they mean blanket bans for an entire industry, like, banning guns, banning fast food, banning drones, etc.
The part about ad campaign transparency was good though. Corporate facebook page data doesn't seem accessible at all. Is there an API for this data that I don't know about??
It is definitely not true for news and book publishing.
For news, consider things like the Chinese wall [1] between news and ad sales, the formal ad standards that news organizations will have, and the fact that at least traditionally, humans manually sell those ads, resulting in oversight.
For books, I'm not even sure what you mean. Book publishers sell books that they think will do well and, mostly, that reflect well on them. You can't just walk into Random House with a credit card and say, "Here's my manuscript, please put it in book stores nationwide."
Personally, I'd just ban all advertising. The economic-theory reason we need it, purchasers discovering better ways to solve their needs, has been made mostly unnecessary by the Internet. Now if you want to buy a foo you just search for "foo reviews" and you're off to the races. We'd figure out other ways to fund things.
As an aside, that justification was always a little... generous. Coca Cola doesn't spend billions per year on ads because they're just trying to reach people who've never heard of their products. They do it because they want to manipulate people into buying Coke. I say we can trust people to find unhealthy addictions all on their own.
> For news, consider things like the Chinese wall [1] between news and ad sales
Literally the second line of the two lines of the linked section talks about the (increasingly common) cases of it being breached, a natural consequence of increasing ad-blocker usage. Also, everything in the example you're giving relies on old distribution methods, not "news". There's no longer a line between news and "random website who publishes information about events", and I'm not sure how anyone who hasn't been living under a rock for the last 15 years could be naive enough to think otherwise. For God's sake, Buzzfeed was a Pulitzer Prize finalist a year or two ago!
> For books, I'm not even sure what you mean. Book publishers sell books that they think will do well and, mostly, that reflect well on them. You can't just walk into Random House with a credit card and say, "Here's my manuscript, please put it in book stores nationwide."
Amazon is the largest bookseller in the country IINM, and you can very much give them a credit card and start selling your books nationwide. Again, you're confusing increasingly-unpopular (for market reasons) distribution methods with types of media.
The very existence of advertorials is a refutation of the notion that there's any principled way to legally distinguish between advertising and other forms of information, even less so one that wouldn't be riven with loopholes (cf limits on campaign spending and Super PACs' technically-not-for-the-candidates' spending).
> Personally, I'd just ban all advertising.
You seem to be confident that you have a definition of the word advertising that would be robust enough to implement this without enough collateral damage that it wouldn't be trivially unconstitutional. What is your rough proposal for what that definition would be?
FWIW, I generally agree with you that advertising is a collective-action/net-loss problem, but I think you may be falling into the classic trap of "this thing is bad, we should just wish for it to disappear and hold all else equal".
> What is your rough proposal for what [the definition of advertising] would be?
I like the definition of "getting a material benefit from someone for singing their praise". I'm fairly confident this could work with German law (where I live). In the US, it will be more difficult given Citizens United vs. FEC and other such absurdities.
That the Chinese wall has been sometimes breached is not proof that it doesn't generally still operate. There is definitely a line between real news and random-ass websites. That Buzzfeed is producing some real journalism is definitely not proof that real journalism has stopped existing.
If you think I'm wrong about this, please do go buy an article in one of the top news sites with content of your choosing. And if you can't, then that's a pretty clear sign that it's different than advertising.
That Amazon sells self-published books is definitely not proof that real book publishers just print any old thing. If you think otherwise, again, please demonstrate it. (And that you'd suggest it as equivalent strikes me as either not understanding the point or a desire to be contrary.)
Regarding your constitutional whataboutism, it may be that we would need a constitutional change to fully ban advertising, but I don't think that changes my view that were I king for a day I'd ban all advertising.
> Here's my manuscript, please put it in book stores nationwide.
I suppose you heard about a company named Amazon. This is basically one of the services they offer for years, if you're OK with selling an e-book.
If your audience prefers dead trees, print-on-demand offers are also numerous.
The problem, as usual, is to make the existence of your book known to potential readers, and this is done by... advertising. And you want it to be targeted unless you enjoy burning money on spamming innocent disinterested people.
Yes, that is called "self-publishing" because it is distinct from what a real publisher does. Vanity presses have existed for decades at least before Amazon, but they too are irrelevant to the point here.
What a real publisher does is to market and promote your book in addition to just running the presses. Aka advertising. You're just making the GP's point for them.
A real publisher handles editing, fact-checking, copyediting, layout, cover design, and distribution. As well as marketing, which is distinct from advertising.
Yes, they do also sometimes advertise books, but I don't see how that proves that "anyone with a credit card" can "put out information" of their choosing through a real publisher.
That's not as clear as you suggest. Some advertising restrictions are clearly constitutional (note the lack of cigarette ads, for example), and in the past courts have found that no commercial speech is protected under the constitution. Notably, that includes even the Supreme Court in Valentine v. Chrestensen.
All of which is beside the point, in that my aside was clearly meant as a "if I were in charge" hypothetical. And since it's my hypothetical, I can posit that your puny mortal constitution would not stand up to my hypnobeam powers. So there.
The FCC can regulate or ban certain kinds of advertising on the public airwaves, but a dwindling number of people watch terrestrial OTA television exclusively or predominantly. Private networks (cable, satellite, internet) can set their own rules.
I think the same way. In the end, advertising creates harm to people. Put aside the numbers, and vacuous phrases like "creating value to the shareholders". The net impact on advertising is harm to people. It's about using tricks, potentially with very harmful side effects, to manipulate people into buying your stuff.
Sometimes I imagine how a world without any type of commercial advertising would be...
>It's about using tricks, potentially with very harmful side effects, to manipulate people into buying your stuff.
There is a lot of this, but that is not the whole of advertising. Ads can be informational and useful.
Take the previews at a theater before the feature. Those are ads, they are paid for, and a lot of people like them. If you like movies you'd probably like to know what movies are coming, it's useful for you and useful for the studios. It's a positive sum game.
>Sometimes I imagine how a world without any type of commercial advertising would be...
There would be more of a concentration on other ways to get messaging out. If companies couldn't buy search engine advertisements they would concentrate more on SEO. It's not "advertising" but it has the same effects. There are plenty of side ways into achieving the same propaganda goals.
People could also watch trailers on the Internet without being forced to. In fact, people already do.
If your theory is correct that people want to watch trailers in theaters, then if we ban advertising (that is, the paid placement of content), then they will go on watching them because theaters will show them without being paid to do so. Although they'll likely see fewer misleading trailers for low-quality films, because theaters will no longer have a conflict of interest when deciding what to show.
It's true that companies would spend more on SEO, but that's in effect a fight between search engine companies (who want to find what users want) and other companies (who want to be found whether or not it's what users want). That seems like a fair fight to me.
It would be very very very very boring. There would be very little entertainment, at least no professional entertainment. It write all be small amateurish stuff. But you wouldn't know about it, because it couldn't be advertised.
That's just ridiculous. I hear about plenty of professional entertainment even though I very rarely see ads. How? Reviews, bookstore clerks, word of mouth, online recommendations, social media discussion, and event listings.
Entertainment is a big industry because people want to be entertained, not because somebody told them what to watch. They would seek out entertainment in a world without ads. How do I know? Because they already do.
You can't just expect to search for review of a product and get an unbiased review. Companies caught up on that ages ago and pay bloggers money for good reviews. This is how bloggers make money so they can live on their blog after all.
No, this isn't about banning all communications. Publishing requires you to earn an audience. You can start a blog today but you won't have millions of readers. In fact, audience size is often used as a proxy signal for authority and quality.
Spend a few thousands on Facebook though (or other ad networks), and you can easily get in front of millions of people with whatever message you want, completely subverting all the usual signals. Many people can't discern authority very well, and that's if they even recognize that it is a paid ad.
There must be more regulation. TV, radio, print involved considering time and effort which was a natural barrier, but digital is much too granular and fast for the same rules to apply, and we actually have even less governance.
Competition keeps organizations honest. It forces them to conform their beliefs to reality and discard whatever is incorrect or counterproductive. It's the only mechanism we've found in thousands of years of institutions that preserves the valuable correspondence between belief and truth.
When an organization becomes big enough that its survival ceases to depend on the correspondence of belief with reality, other concerns take over: usually, primate-hierarchy status games. And these games escalate until the organization fails or people die, depending on the organization.
>Isn't this true of almost any industry which lets you put out information? E.g. news publishing? Book publishing? Blogs?
Advertising is not information. If it were merely data being exchanged, we wouldn't call it advertising. Advertising is the part that changes one's mind. See: https://www.etymonline.com/word/advert
>I mean, what exactly would you do, ban all communications?
Start by acknowledging the problem. Dodging it hasn't worked. Then we can learn more about it, how it works, the complications of it's side effects (like directly incentivizing privacy abuse) and come up with hopefully a sufficient and efficient solution. In short, we would do Problem Solving, very different from the other option of Not Trying.
Because I'm familiar with HN's penchant for being black-and-white about things, I'll preface this with: I think advertising is very much a net loss for the world and would be pretty happy if it all disappeared tomorrow, magically ceterus paribus. I just don't think that it makes any sense to redefine a word instead of actually addressing a point you disagree with.
Come on man, there's no way that you don't know how dumb it is to pretend that the etymology of a word is more relevant than its modern definition. '
> Advertising is the part that changes one's mind.
You can't just assert something insane like this without any attempt at backing it up. Advertising is 100% information being exchanged; it may be subjective, but the dirty secret that everyone ignores about epistemology is that all "knowledge" is socially-constructed. Thank God we've (generally) agreed on a few high-quality sources like the scientific establishment, but it's hopelessly naive to pretend that you can find the line where something ceases to be "real" information. And clear lines are incredibly important in legislation, particularly when there's a trillion dollars of incentive to find loopholes.
I never redefined anything. I’m just trying to help you with the nuance in the language that you must be just willfully avoiding. Otherwise, you have found a rhetorical loophole. Doesn’t mean you are right.
“Information” is a poor term for this discussion. “Data” draws the more useful distinction. I should have said “Advertising is not only information”. It would just be stubborn to insist that advertising is merely data sharing. I’ve been working in advertising most of my life and we do more data distortion than data sharing. We make a living on dishonesty and manipulation.
It's funny how your line of argument can seem so obviously accurate to one person (like myself) but so obviously wrong to another (like whoever has downvoted you here). FWIW, I think your distinction between advertising and dissemination of information is a good one.
Those who disagree might nevertheless be surprised to learn that recognized protection of commercial speech (i.e. advertising) by the 1st amendment is only a fairly recent legal development. I would suggest to anyone interested in the topic to revisit the arguments in Virginia State Pharmacy Board v. Virginia Citizens Consumer Council. This case, from the 1976, was a key stepping stone that paved the way for the rampant drug advertising that we have in the U.S. today. In fact, the lone dissenter, the late Justice Rehnquist, foresees precisely this outcome in his opinion, predicting almost the exact "talk to your doctor" phrasing that we have become so accustomed to decades later. By contrast, the majority justices sound like nothing other than hapless and naive dupes of an astroturfing campaign, speaking guilelessly about issuing their decision on behalf of "consumers of prescription drugs" and their right to receive "information". I doubt that they anticipated anything remotely approaching the ravages that, for example, the opioid epidemic would bring.
It's easily on my own personal "top ten" list of bad Supreme Court decisions.
> As usual, a bunch of nonsense by people who have no idea about this
This attitude is startling similar to what I heard on Wall Street during the crisis. “Of course we bet against our counterparties! They’re counterparties, not clients. If they didn’t read the prospectus they’re morons who deserved to lose their money.”
When you’re providing the public with a good, arguing that non-experts can’t comment is an argument for regulation, if only to force a common language.
I'm not sure how you interpreted that, especially since I'm arguing for regulation.
It's not that others can't comment but that their ideas (in this linked article) are poor and betray the lack of experience of the advertising industry that underlies it all. Facebook is not a new threat and focusing on it as a special instance completely hides the other major actors in the world that are doing and allowing the same thing.
That's what makes good advertising good. The medium also matters tremendously.
Internet advertising only really works when you don't know what you're looking for to begin with, which is rarely the case as most human behavior when it comes to the internet is intentional (i.e. I search on Google for "plates", that's why Google AdWords shows me sponsored links for plates)
I'm not sure what you're disagreeing with. I never made a claim on effectiveness (which depends on very many factors) but only that it works on everyone and needs more regulation. Are you claiming that it doesn't work at all?
What exactly do you think "internet advertising" is? Ads also don't need to be "good" or leave a lasting memory, they just need to work. Were you really going to buy "plates"? The ads might have made you buy them sooner. Or buy a different brand. Or buy something else along with them. And why did you even start looking for plates in the first place? Why go to google at all?
Regardless you don't need to take it from me. Go ahead and buy some ads and pickup on the power yourself. It's especially interesting seeing results when you're trying to prove it doesn't work.
There's different types of advertising though. And it's not necessarily blatant advertising that's the issue.
A lot of ads are designed differently. Article form. Informative video content. A promoted Facebook post that ends up in your feed. Really any type of content that's pretending not to be an ad.
That's advertising too. And that too, influences people. About tonnes of things. Not necessarily products.
And think about it inversely too. If there's 2 groups of people posting ads: if group 1 has more money, they can effectively push group 2 out.
The same principle used when TV lineups are advertised on the TV network channels themselves, is what advertising capitalizes on best. Brand awareness has plenty of psychological evidence behind it. The number don't lie when you get put on the premium channels (or the Google Play recommended top 10).
Ads aren't usually effective at doing what advertisers want (more than brand awareness or opportunity hurdles), which isn't a shocker. Advertisers get sold services by other people in advertising.
> This is an industry that sells influence at scale.
---
>* Before the inevitable comments, yes advertising works, yes it works on you no matter how much you think otherwise
---
Show me the lift (in other words, prove it).
I'm extremely dubious about any claim related to digital advertising having direct effects over a baseline.
It is easy to make a claim that it changes the millieu, to appeal to second order effects. So, prove it. Show me the academic papers. Show me how those papers generalize outside of the specific economic/operation structure they studied.
I mean, look at Google Search. When searching, the top link is generally an ad. My (admittedly biased "no it doesn't work on me no matter how much you claim it does") experience is that I _always_ skip the ads. Even if it is for the company I am looking to purchase from. Because I am averse to digital ads. I can't trust what the ad is selling isn't skeasy. I am not the only one who does it. So is digital advertising being supported only by people who are easy to 419/Nigerian Prince scam or something?
On a tangential note note, this is Amazon's burgeoning issue with its Marketplace and third-party ripoff sellers, now that eBay isn't on top.
Your alternate hypothesis is that the companies collectively spending hundreds of billions of dollars per year on advertising are not getting anything for it? Why don't you take a swing at proving that?
Folks already have, at Microsoft, Yahoo, and Google.[0] The issue isn't showing lift, it's having sufficient power to know the test you ran isn't cherry-picked or BS.
Also, the onus to prove the claim that digital marketing has an effect is not logically on the interlocutor, but on the claimant.
Knowing many marketing folks across many industries, their incentives aren't usually tied to incremental lift but rather gross channel volume. So if they can cannibalize from more effective sales or advertising channels they do so, without qualms.
I've heard the claim like grandparent comment has made before for years. Yet, when pushed, it is suddenly a golden cow. This is concerning, precisely due to the figure you cite of billions of dollars.
No, I'm asking for proof that it works over alternative baselines. If people already decided to purchase a product offered, the ad sets up a costly, unnecessary channel.
As was stated by another in this thread, prisoner's dilemma leads to unintuitive economic outcomes.
If you're saying it's an arms race, sure, nobody's denying that. But that doesn't mean that it doesn't work, it just means that in general and over time particular markets are mostly at equilibrium.
What he is saying is, the fact that hundreds of billions of dollars get spent on advertising IS the proof.
That's the evidence. Companies don't waste money for no reason. And so the only reason that they could be spending this amount of money is because it works.
So yes I'd say that this type of argument counts as a "proof".
I agree entirely that it's a total waste from the societal perspective (which is why I say we should ban it). But it can be very effective from the individual advertiser's point of view. That's true of any arms race.
I believe that tomrod is claiming the latter is also false.
Advertising is a classic case of the prisoners dilemma.
In short: Advertising is very effective and worthwhile if you're the only one with a product in that space. As soon as others enter it just becomes an arms race backed by mountains of money with questionable results.
Why spend all the money on questionable results? At risk of coming off as glib, perks. I worked in a field tangential to advertising and all of the money is very useful for throwing parties, signaling success and status, being able to invite clients to large events thatyour advertising is involved with (think superbowl), etc.
For some reason HN at large prefers a more conspiracy leaning attitude toward advertising which you can see in the top comment right now: "Anyone with a credit card can start changing how people think and act." This perspective believes that advertising is like a brain ray that persuades people to do whatever they say - that targets have limited agency over their own thoughts. It's very appealing to assume everyone is a gullible sheep (except yourself, naturally) but that's not the reality behind advertising spending.
You already have the insight. "Signaling" is just as much advertising as anything else. It's well-studied and the money spent in maintaining status-quo is just as important as growing a new product.
Thank you, this is a fantastic encapsulation of my point.
The proof that digital advertising does anything but set up a costly lead channel is still a bit lacking, and your plausible assertion shows why that may be the case.
That doesn't seem like a sufficient story to explain most kinds of advertising. What perks do all the local grocery stores get from mailing me leaflets about what's on sale?
That just falls into the standard example with the prisoner's dilemma. My perks example was just explaining what the billions are buying instead of influence/persuasion.
What's the "baseline" you claim? You can prove it yourself by buying some ads. 24 hours and a few thousand dollars and you can sell pretty much anything (which is a much greater signal than just views or clicks).
The obvious explanation to that is that it works, unless you want to call it magic. Also you probably do not realize how much advertising you are exposed to everyday, far beyond some banners or search results. It's never that simple.
Baseline: sale of product sans _digital_ advertising.
I'm not saying digital advertising never works. I'm simply asking for what it incrementally offers over other channels generally.
By digital advertising I'm being very specific: purchased ad space, be it real time advertising networks, sponsored content, and similar. Not "influencers" or other branding efforts for which proving effect is unlikely to be possible.
Further, I can see a difference from launching a new product using digital means versus the (much larger) established companies migrating or updating their marketing portfolio to include digital advertising. But a new launch may be choosing a sub-quality channel. Knife company sales aren't going to be great on digital versus going to a trade show, say, so the margin is what rules the day.
My request is not unreasonable. Show me the proof, the diff-in-diff, the actual assessment of incrementality generalizable to the channel for established companies. Otherwise there are competing theories which equally explain the effectiveness or lack thereof of the digital advertising channel, such as FOMO/prisoner's dilemma.
It either works or it doesn't, I didn't speak about efficacy which varies greatly depending on 1000s of factors. If you accept that it does work then I'm not sure what you're disagreeing about.
Does it improve over the baseline? Yes. It's very easy to see with modern analytics pipelines that report sales in real-time. Ask any growing venture-funded company selling a product or service. Stop the digital ad spend, see what happens. Start it again and see what happens. This has been done by channel, format, campaign and more to do media trials for the largest companies. These tests may not tell you exactly which ad was best but you can derive that this campaign works, or this format works, and can definitely see that the entire medium works. That's before getting into advanced referral tracking and econometric attribution modeling, or even simply asking customers where they last saw the ad.
All these media buying companies might waste money but they aren't in the business of losing it. FOMO/prisoner's dilemma from the other poster is just an interesting perspective regarding signaling, but it is not new. Advertising works but that's completely different from "it works for opposing sides or competing companies to create a net zero influence" which is just a cost of playing the game and a perfectly acceptable strategy. Maintaining market share is just as important as growing a new product and brands spend to signal that they can spend, thereby showing quality and success. Here's more on that: https://en.wikipedia.org/wiki/Signalling_(economics)
I'm not sure what you would like as proof but the Nielsen company has been doing this for decades and is accepted by the industry. Digital advertising isn't a new concept, it's just exposure like it was in TV, radio, print and signage since the beginning. It's just much faster, more personalized and much more pervasive in today's media and devices, and also much cheaper to run.
>> Show me the proof, the diff-in-diff, the actual assessment of incrementality generalizable to the channel for established companies. Otherwise there are competing theories which equally explain the effectiveness or lack thereof of the digital advertising channel, such as FOMO/prisoner's dilemma.
From your comment, you agree with FOMO/prisoner's dilemma even if you don't agree with the context of the jargon. As you mention, signaling theory is a more proper term for what we are describing, but signaling is efficient if we get to a separating equilibrium (e.g. quality differentiation of product) which clearly we don't see. Ergo FOMO/prisoner's dilemma is likely a better fitting model (though with some admittedly post hoc bias).
So the proof I am asking for is not existence of digital marketing spend, because that isn't proof of effectiveness of digital impact at all and has competing theories sufficient to cast shade on it as full explanation, but incremental improvement over other existing channels (and for established companies, doing nothing at all).
It either works or it doesn't, and you seem to agree that it does, so you're asking how it's better than existing channels? That's completely up to implementation and 1000s of factors as mentioned, and it doesn't need to be better than any other model to be useful for the bottomline, only that it returns a positive ROAS (return on ad spend).
A company selling to younger people might only advertise online while another only sells well through TV commercials. I don't see how that tells you anything useful other than to use the right media mix for your marketing needs.
That being said, whether a medium works is very easily proven by changing spend in isolation and seeing the impact on sales, and it's done by every major company. If spend exists, then campaigns exist, and so a outcome on sales can be measured as compared to the lack of spend (and thus campaigns). I'm unsure sure why that isn't evidence for you.
> yes advertising works, yes it works on you no matter how much you think otherwise
And even if you think it doesn’t, it works on enough other people to make it a worthwhile spend if you want to win an election or get regulation passed.
I'm sure some advertising "works" on some people, but I've met some of the people who buy the advertising on behalf of big companies that produce consumer goods, the people who decide which advertisers get the big contracts and which campaigns get approved, and those people were not exactly of a scientific bent. I think it would be very easy to con them, and probably they get conned a lot of the time.
Also, I can think of a couple of cases in which I was planning to buy a product, but changed my mind because of an advertisement for the product. In one case the advertisement made me consider a particular aspect of the product, which lead to me reevaluating and choosing an alternative product. In the other case the product was an alcoholic beverage, which I liked the taste of, but the advertisement made me embarrassed to be in any way associated with the product. In a way that proves that advertising works, but I would guess it's a lot easier to influence people against something rather than for it, even accidentally. And this is perhaps very relevant to political advertising, which often is "against" something.
There are a lot of details about Facebook that scare me, but the line between good and bad aspects is very thin. Usually it is a little easier to tease out my complaints.
Influencing opinions isn't in itself a bad thing. Even being influenced to spend money isn't necessarily a bad thing. Being influenced with political ideas is on face first impressions a good idea and I might call it the first step towards understanding.
The combination of scale and selectivity of the Silicon Valley majors seems like it is creeping into a difficult place though. I've always been quite interested in American politics and it is curiously hard now to identify what the message directly to voters is on Facebook. Advertising on Facebook et al is relatively private and personalised vs a newspaper where everyone gets the same ad.
Also an issue here, once politicians get involved in identifying 'bad actors', there is a real risk that their political opponents get identified. Any regulation should proceed very slowly and thoughtfully.
Advertising is a strange beast. An emphasis on taking media theory seriously would do us a lot of good. I actually think the internet has led to more awareness of the issue but the decades prior gave us a dismal trajectory. Whether advertising itself is inherently bad for us is one thing. It's abstract side effects as a are another, and that is what we are concerned with here, but we have to first accept the the realities of the course we have been on in order to correct it.
Media, interface of advertising, is often thought of as frivolous. This is the same interface through which religion has enraptured it's audience for all the centuries. We can approach the issues in a rational way. Branding and advertising uses the same concepts in a different context and form. How branding and advertising affect us is a messier discussion than whether it does or not. We have accepted a life experience (emotions, desires, meanings) overwhelmingly defined by advertising. As such, our livelihoods are entangled with it and almost all of us depend on advertising to make a living. Maybe we should consider whether we are incentivized to be complacent about this core problem in the same way an individual living in an extremist religious society is incentivized to conform. I'm not sure.
They don't solve much at all, other than blocking annoyances and improving the browsing experience.
The ads blocked by most adblockers is a tiny part of the advertising you are exposed to. It's also a great signal that shows that you are an "adblock user". Everything bit of data is used and you are not special or hard to reach.
Those inevitable comments about advertising not working come up every time for a reason.
Advertising is a classic example of the prisoner's dilemma. All that money being spent is an arms race, not an indicator of the power of advertising. The idea that money controls how people think is appealing when you remove all agency from the population and just assume they're naive sheep but that's a self-serving perspective.
As your other comment showed, "status" and "status-quo" are just as important.
A brand will spend money to signal that they have the success to be able to spend that money, something that has had close to a century of study. You can also see this in how Silicon Valley companies "signal" through fundraising, which is just another form of advertising.
You have an interesting perspective but I assure you that it is not new. Please don't take my word for it, instead here's a good article since you're referring to economics: https://en.wikipedia.org/wiki/Signalling_(economics)
Yeah we just need to regulate who can tell people about their products, services, issues, etc. Then the world will be perfect just like it is in China where nobody says anything without th governments approval. What could go wrong?
You're jumping to conclusions. We already regulate advertising by the FTC to ensure you cant outright lie in a TV commercial.
The point is that digital advertising is much newer, faster and far more vast in scale. The fact that you can run ads for scams and not get caught, or just create a new account when you do, shows the issue. Facebook and every major ad network already "audit" every single creative that passes by, with rules on what you can and cant do. Clearly even they don't let things go by unchecked.
>yes it works on you no matter how much you think otherwise,
There's no need to add such preposterously inflammatory self-righteousness to your comment, it worked fine without this, but I think you just want people to call you out on it because you believe it but know many people (quite rightly) do not.
And then when you (as you say, inevitably) get called out you can act like you're right because you predicted someone might point out that you're wrong. But that's not really how this works.
What do you mean by "that's not really how this works"...?
Whether advertising works or not has already been well proven through scientific methods and trillions in market cap so it's not about whether you believe in it, which is precisely why I added that comment.
Since you seem to think it doesn't work though, I'll ask you for what your evidence is?
There's a difference between carefully earning an audience versus forcing your message upon billions of people within seconds.
Advertising is commercial speech and already regulated by the FTC (in the US) which is why you can't say false things for an ad. The problem is that it has not been updated to deal with modern digital advertising's speed and scale.
yes, it’s important to look at the invisible actors as well. Facebook and google are front line brands in your face. We have to remember the invisible trackers and ISPs as well, sometimes much worse because they are not scrutinized and cooperate more with government.
> Before the inevitable comments, yes advertising works, yes it works on you no matter how much you think otherwise, and no adblockers dont magically solve everything.
So in other words, the results of pretty much every future election, even those won by Democrats, will always be in doubt, because there’s always going to be advertising and shitposting, right?
The fundamental problem is that digital advertising is a 12-figure global industry with practically 0 oversight and regulation. This is an industry that sells influence at scale. Anyone with a credit card can start changing how people think and act but there are absolutely no real consequences for bad actors.
Even the most minimal laws around who can advertise and how would radically change everything. Google has even more data than Facebook. Amazon has just as much. Your ISP has just as much. These silly little projects to chase the latest scandal will do nothing in the long run. The only way to fix anything is to regulate the core, not try and fix every little symptom that occurs.
* Before the inevitable comments, yes advertising works, yes it works on you no matter how much you think otherwise, and no adblockers dont magically solve everything.