One place to start on the difficulties is an excellent paper by Lewis and Rao from the Quarterly Journal of Economics in 2015. The original title was something like: “on the impossibility of measuring the returns to advertising.” Just getting enough data to reject the hypothesis “this ad campaign did nothing” is extremely challenging. Lewis is a great producer of research on this topic and has written papers based on his experience at Yahoo.

Another great paper is by Blake, Nosko and Tadelis from Econométrica in… 2014? They turned off all of eBay’s keyword search ads in some markets as an experiment. They found that they maintained about 95%+ of their business while saving $50 eBay million dollars or so.

Beware confident assertions from people in the ad industry that ads clearly work. It is not so obvious that they do. This isn’t to say they don’t work! But it’s a challenging scientific question.

advertising creates a barrier to enter a market, not the market.

when you spend on ads, you are not creating new market for you, you are just unlocking some of the reserve market the established leaders secure via misinformation and brand brainwashing.

This is hard to follow for those of us not in academia with access to journals. Or time to figure out how to hunt these sources down.

I feel like your comments contain pointers to deep quantitative insights.

I.e., people buy stuff they wouldn't buy if they got honest information.

It works against the main argument in favor of the free market: not the best product wins, but the one with the biggest advertising budget.

Ads just try to drive up sales. This is something we don't need given current energy/climate issues.

There are better ways of bringing supply and demand together. Several decades ago we had yellow pages, and they worked fine. I'm sure in the internet age we can come up with an even better system that doesn't involve user tracking and/or distracting ads.

I have a broad-market/horizontal smb Saas and tried google ads to not much success. Was getting charged ~$3/click for quite irrelevant searches even after lots of negative filtering. Suppose I could’ve tried some more…

That being said, I tend to agree with you in the sense that I never buy the obscure products that are recommended to me on FB/Google.

On the other hand, I think paying YouTubers to promote products is super effective. People are extremely receptive to influencers recommending products, esp. when it doesn't seem like advertising.

Not sure I buy the first premise of this argument.

[1] https://www.statista.com/statistics/286526/coca-cola-adverti...

I suspect a lot of people are immune but also a lot of people are very susceptible.

While we may identify and scroll past all sponsored google results (or even use adblockers or custom host files to block certain actors, etc) most other people are not at the same level of computer sophistication and won't necessarily do the same. Ads get clicked a lot.

Online advertising is far, far better than other forms. Marketers can tie individual sales to specific ads and improve ads by making them more like successful ones. This kind of specificity isn't possible with TV or print ads.

what the ads show

A good chunk of advertising is "brand awareness" not necessarily just selling one product. The point of brand awareness is to associate your brand with its brand values in a person's mind.

But I did notice a couple I'd fallen for. I happened to see Harry's Razors and Tommy John underwear in a store. They are heavily advertised on podcasts -- go to the online shop, the host will say, put in the code, get it shipped blah blah, your face and/or balls will feel nice. Somehow as a result they'd gotten into a mental niche in my brain as "things that would otherwise require jumping through annoying hoops to get," so when I saw them in a store, I ended up grabbing them. Because getting them otherwise would have been annoying. Yes in retrospect I recognize how silly this thought process was.

The razors I've been using for a while. They are basically fine I think -- which is to say, you only really notice is a razor is really shitty, and they aren't, so I'll call that a win. Just got the underwear recently, no notes yet.

I'd assume you bought those things because you lend a higher degree of credibility to the podcasters' recommendations than TV ads or side banners.

These ads have nothing to do with the high tech $300B AI and data driven ad industry mentioned in the post, there were sponsored segments on radio talk shows more than half a century ago.

I can say that my bad ads get less sales than my good ads.

My good ads consistently work, my bad ads don't.

So, ad copy matters.

However, a good advertiser accepts that not everyone is a good ad target.

You may not be a good target for advertising.

I would say, I'm not a good target.

Some people are very moved by advertising.

Others are not.

The 80/20 rule applies here.

80% of the profit in advertising probably comes from 20% of the target population for a given product.

I've learned that it's better to think of good advertising as just a form of communication.

A great ad is factual information that answers questions customers have, and provides urgency.

An ad might contain some fluff, but to really sell it usually needs to state explicit, accurate facts, in easy to understand language.

There is a lot of bad marketing from people that think they can make an ad just because they're a hip or a cool person, or they have an eye for color.

Those ads can be egregiously bad.

Just as some marketing sites are all fluff no substance, but sold to unsuspecting business owners, the same happens with advertising.

But the key idea is that, for certain products, good ads sell "enough" to the target audience to be very lucrative.

A great book on this topic is "Ogilvy on Advertising." Specifically, the first chapter.

As an avid internet user, my mind is automatically turned off to ads on any content I see.

I also blindly ignore the YT ads and focus only on the skip ad button. Strangely, I also ignore the audio, it just doesn't register.

However, If I am researching to buy a product or service, I keep getting shown ads about it everywhere I go to, so I do click on some ads.

Also a lot of people won’t be able to make the distinction between an ad entry and an organic entry in a listing. I’ve mistakenly hit ads, and might be hitting some here and there without realizing it, and I would bet you do too.

That’s part of why legit businesses have to buy ads for their own product to avoid having a competitors eating up their result page and getting all the misplaced hits.

Same for my solo stove.

My first thought when asked if online ads work is “No. Of course not. I just ignore them.” But then I remembered these purchases.

most web pages are up to 60% ads, search results are almost all ads, tv is mostly ads

google with their "answering question" thing has thought people to just trust it and click on first results, most of which are ads

ads, cookie banners and privacy popups cover easily most of the page, especially on mobile.

During lockdown I found several fantastic butchers who decided to launch a delivery service to reach more people through ads on Facebook. I'm still a regular customer.

For things that are available in a supermarket, brand advertising is better, for smaller businesses operating online, ads do indeed work.

Amazon is trying to sell me dental office equipment, or specialized restaurant tools, and a dozen other things that few outside of a particular area of expertise would remotely consider. It’s bizarre.

Of course you have to qualify Advertising as being a persuasive Ad' shown to an audience that may purchase your product at some point!

What constitutes an Ad' is also open to some debate, but you get the general idea!

There was a promotion like 25% off on Thermomix. For a week only. I wanted one, but I naturally distrust campaigns that urges yoi to buy in a short time.

Now it is like 25% more expensive.

I was compelled to note this. I'm Sorry.