Is advertising just a drain on the economy?

In the age of the Internet, if someone wants to buy a product, they can find any information they want about it. Most people hate seeing ads, and have no use for them. Most business owners even say that word of mouth does them more good than their ad campaigns. If i want a car, or a sandwich, or a phone, I know where to get them. Without advertising, prices would be much lower for most products.

Studies still show that people buy from among the first names in their consideration set, and that getting there takes a high unaided awareness. So advertising still works.

Also, without advertising, where would all those creative types find work? Definite economic benefit!

How does any of that equate to a drain on the economy?

Yeah, it’s the opposite of a drain. It creates thousands of unnecessary jobs, centered around promoting tons of unnecessary crap that nobody needs in the first place. Cycle of life, and all that.

As someone who actually works in the advertising industry: yes, this. It is very, very common for consumers to say “I hate ads / I never pay attention to ads / ads do not influence me in any way, shape, or form”. For the vast majority of consumers, this belief is, in fact, incorrect.

The industry has literally hundreds, if not thousands, of case studies which show that good advertising, placed in media that reaches the right target audience, still works exceptionally well.

And, honestly, advertisers (the companies that make the products, own the restaurants, etc.) are, by and large, pretty smart in how they spend their money. They look at the results when they advertise, and when they don’t. And, if advertising did not, in fact, work any longer, they would no longer spend that money.

Does this mean that there isn’t a lot of crappy advertising, placed against the wrong target, out there? Hell, no. But, trust me, when it’s done intelligently, it really can, and does, work.

I’ve always been convinced that advertisers intentionally make truly awful, terrible, wtf ads simply because people remembered them. Come product selection time, their’s would be the product that gets chosen.

Sometimes, that’s true. More often, especially in the case of local ads (particularly for auto dealers), the owner of the business has taken charge of the writing and casting, and it’s more that it’s unintentionally bad (but the guy’s writing the check, so he gets to run the show).

I think there may be a natural bias toward that due to a couple of the key performance indicators used in the advertising industry, ad recall and brand recall. I’ve joked before that getting that elusive Hitler endorsement would be a huge boost to achieving high metrics in advertising.

I can’t imagine how free media - whether TV, radio, or an awful lot of Internet - would exist without someone paying to promote tons of unnecessary crap that no one needs in the first place.

I notice you aren’t paying to be a SDMB member. Interesting.

Shhhhh!!! Don’t tell anyone!!! Sounds like you just discovered a great business plan. Let us know how it works out for you when you start your unadvertised business.

Is it useful to distinguish between advertising that says, “hey, this is our product, maybe you’ll like it,” and advertising that says “buy our product or you will never have sex with another human, all of whom are having tons more fun than you are because they clean with/drink/chew/drive/smoke/rub on their feet our product”?

Some pluses of advertising.

Consumer spending drives the economy. When people spend, the economy grows. When they don’t, it shrinks. If someone has some money, the sooner they spend it, the better. Idle money is a wasted resource. Advertising speeds things up.

Economy of scale. The more you make of a product, the cheaper per unit it is to produce it. Advertising creates more sales, bringing unit costs down. If done right.

Helping the growth of the media it appears in. E.g., ads supported broadcast TV for a long time. (Now, fees from cable companies contribute a lot.) Would TV have taken off so fast if people had to pay for it directly? (It took a while for pay-cable to grow. For a good while it was for people in areas with terrible reception and the numbers were tiny compared to OTA.) Ditto a lot of the Internet is supported via ads (and ad-related stuff like user tracking).

Many broad market magazines, for example, are folding up because the ads aren’t there anymore and there’s no way they can survive on much higher subscription fees.

OTOH, so little is known about advertising (especially what makes an ad effective, it’s not always the memorable ones) that you can be sure that most ad money is wasted. But you have to think of it in terms of throwing a lot of darts and hoping that one hits the bullseye. If your success ratio is decent, it more than pays for the misses.

When’s the last time you saw any of the former?

Advertising is all about showmanship. You probably don’t want nachos right now, but when you do you’ll either go for the brand you’ve always gotten when you got nachos (most likely), you’ll go for the brand that you heard of most recently (the “advertising works” case), or you’ll do a great deal of consumer research weighing the pros and cons of various types of nachos as they relate to your current snacking needs and select the optimal chip based on those criteria (least likely).

The funny thing about advertising is that everyone thinks ads are stupid, and are insulted by the very idea that someone thinks they are so weak-willed as to be influenced by them, and then they go ahead and obey them.

Dollar Shave Club. Our blades are f***ing great. (OK, a little bit of showmanship, but a whole lot of the former too.)

Advertising is the rattling of the stick in the swill bucket, according to George Orwell (I think).

I thought it was a commonplace observation that half the money spent on advertising is wasted, but the trouble is that no-one knows which half.

I have never, to my recollection, gone out to buy something after seeing it in an ad. However, I have gone out to buy something, recognised the brand, and chosen it due to the assumption that a recognised brand is likely a better choice.

More fool me, as that’s hardly a reliable rule.

Most of my decisions on big products is based on reviews, these days, but brand awareness still plays a part even in that, so I am very confident advertising works.

I can’t begrudge a company or individual, big or small, promoting themselves to find customers. We all need that, no matter where we work.

They had advertising in communist countries to. To convince the people whatever crappy product available was a good one.

Spam is a form of advertising that works. The trouble is that the definition of “works” varies from advertiser to recipient. Sending out a million e-mails is not much more expensive than sending out one, and therefore even a very, very small reponse is enough to make it worthwhile.

I send out a million spam e-mails. It generates a thousand clicks on my spam website, and one sale. If I make ten bucks on the sale, and it cost me five bucks to send the spam, I make money. Yes, I piss off 999,000 people. That doesn’t cost me anything.

“Any publicity is good publicity.”

Regards,
Shodan

Not really. It depends on the industry and such, but for the most part it would only be relatively small savings. Car manufactures typically only speed a few percent of revenue, for example.

I worked for a medium sized company breaking into the Japanese and without advertising and marketing, it would have been extremely difficult to have gained market share.