I often say "lol" in real life to denote "I appreciate your attempt at being funny and agree that it was indeed humorous, but it wasn't funny enough to laugh laugh"

Because, like, what do you do when someone puts effort into a joke and you want to give them positive reinforcement, but you're just not in a laughing mood? Or it was funny in the abstract, but you're the wrong audience?

Another approach I've seen was "Heh, that's funny." ... but I'm not sure if that's better or worse than "lol"