Our faith in marketing.

Of all the products advertisers and marketers have pitched over the years, the one most vital to their survival, and the one they have been most successful at convincing people the utility of, is marketing. Without selling advertising and marketing, there is no industry at all. We have great faith in advertising, and this, I think, is to the detriment of our thinking.

This is a blindingly obvious point, but one that is strangely obscured. There is no shortage of people in the world who have a firm belief that advertising can convince consumers of their need for products that are useless or superfluous, that marketing has the ability to create demand out of nothing and that adverts, beyond informing, can persuade through skilled deception and psychology. They rarely reflect on that this vindicates every claim that advertisers would make in their core pitch for their main product. Are they being deceptive in their claims about the utility of the products they sell for others, but truthful about the utility of their own product?

xkcd

The idea that “advertisers can make people buy anything” is common, although I suspect it is tacitly phrased “advertisers can make people (other than me) buy anything”. I’m a bit wary of any idea that professes an insight or self awareness in the speaker that is absent in the great unwashed. On one hand, if you are skeptical, why assume that the average person is a credulous sheep? What makes you special? On the other hand, if you accept that you are still susceptible to the charms of advertisers regarding other products, should not you question your acceptance of their claims about their own?

It also raises another question. If advertising can sell anything, why doesn’t it? Why do so many (in fact a majority) of products fail, whether in food lines or film,music and literature or electronics? There’s a conversation at the moment (here, and here for instance) pointing out the lack of genuinely new products from the past 50 years in any normal kitchen. They’re discussing why the new technologies (electric can openers etc.) have only been disappointing. But if we were to believe that advertising had great power, surely they could convince us of the need for the electric can opener or the Breville Tea Makers that are currently advertised endlessly on SBS. Were they simply not trying? Are all the brands and products in the dust bin simply the result of off days?

We have a consistent bias to study success, when the study of counterfactuals is essential. A case study may lead you to identify features that may have played a part in the success you want to explain, but counterfactuals all too often show that these features were also present in failures. Both successful and failed products used advertising. Marketers always find reasons afterwards to decry the tactics of the latter and laud the former, but if they still can’t work out this before hand, what use are they? Postdictions don’t help anyone and they may as well be astrologers.

It’s entertaining to attach the misanthropic Affluenza thesis, reliant on the assumption of everyone else’s stupidity. It’s fun to point out that those who decry advertising and consumerism for igniting an unquenchable desire for frivolous big screen tvs merely echo Möser’s earlier lamentation that peddlers were igniting desire for luxuries like buttons or metal cutlery. It’s also entertaining to point out that when controlled for inflation, a 55″ Toshiba behemoth costs no more that a modest 19″ CRT Toshiba a quarter century ago – we spend the same amount, only the product is better. It’s entertaining, but that’s not what I’m interested in. The virtues or otherwise or consumerism can be discussed elsewhere. I’m concerned with how our faith in marketing affects the way we approach the explanation of other social issues.

Why are we so prepared to accept claims and explanations that are so difficult to verify? They neither provide predictions that would satisfy Popperian notions of knowledge (otherwise there’d be far less failed advertising), nor do they provide much to assess Bayesian probabilities with handwaving references to changing preferences.

This came up on my post on Filipino restaurants where I stated my resistance to preference based explanations. It was not because I believed that preferences played no part, but that they should only be used as a last resort, when all other possible explanations have proved fruitless. The reason being preferences are so difficult to observe. In fact the main way of revealing preferences is through behaviour. If we use preferences to explain a phenomena, we are  explaining in terms of something we only observe in terms of the phenomena we seek to explain. We can as easily explain changed food consumption as a sudden propensity to hit oneself over the head with a sausage – in short, we explain nothing.

But the advertising and marketing industry is reliant on its presumed ability to identify and manipulate preferences. As expected, they’re not very good at it. If they could identify preferences a priori (rather than stumbling on them through trial and error), there’d be far less dud products and brands, whereas now they are a majority. We’d have far less stories about best selling authors rejected by a dozen publishers and far smaller remainder shelves. And if we could manipulate preferences, there’d be far grand advertising campaigns that fail to work. We find reasons to explain why these campaigns were bad after the fact, but if we could do this without hindsight, why would any fail at all?

One part of the wide acceptance of the power of marketing (apart from the misanthropic urge) comes from the fact that so much of our public sphere is ad supported. It’s not so much that this discussion reflects a vested interest in selling advertising than it creates a world where the assumptions of advertising are ever present, if unspoken – astrologers believe in their product as well. When confronted by an issue, it’s not just easier to reach for an unverifiable explanation, it’s just the way things are done.

I think this feeds into, or at least is reflected in, the race calling tendency in political reporting. Both marketers are adept at ex post facto explanations for phenomena they failed to predict, and both are enamoured of imagined demographics defined by their wants. Marketers talk of DINKS and Metrosexuals and and Cashed up Bogans and Gen XYZ. Pundits talk of Latte Sippers, and Howard’s Battlers and Aspirational Voters and Doctors’ Wives. Mark Latham made much of how he intended to appeal to Aspirationals, and afterwards many have made much of why he didn’t appeal to them. It’s probably because all of the ink spilt on these imagined political demographics have never produced predictors one 10th as powerful as macroeconomic conditions. Astonishingly, a government that loses appeal is usually accused by pundits of being obsessed with “spin”, that is the application of these same principals of political marketing. Failure is explained by adherence to the principals we use to explain success!

This is why I cannot watch the Gruen Transfer. It promises that we can become more skeptical and truth seeking by exposing the slights of hand that advertisers do, but it only inoculates us with an illusory sense of the power of their product and of how  clever they are.

And it feeds into a a way of trying to explain social phenomena by vague speculations about the unobservable rather than inquiry into objective reality. Pontification takes the place of speculation and we neglect to explore the wonderful social intricacies of our world.

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Predicting preferences is hard

About Richard Tsukamasa Green

Richard Tsukamasa Green is an economist. Public employment means he can't post on policy much anymore. Also found at @RHTGreen on twitter.
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kymbos
kymbos
10 years ago

Fascinating piece. Are there a large number of product successes that have eschewed the use of marketing that we could draw on to debunk the marketing myth? Or is it the case that all success stories have used it, but so have the failures?

I think Mythbusters have debunked the myth that ‘you can’t polish a turd’. Althought,I always thought the saying went ‘there’s no point polishing a turd’…

Ken Parish
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Ken Parish(@ken-parish)
10 years ago

“a sudden propensity to hit oneself over the head with a sausage …”

Richard

I can’t help wondering whether you’re s secret masochistic devotee of the ancient Lancastrian martial art of Ecky-Thump?

Paul Bamford
Paul Bamford
10 years ago

This is why I cannot watch the Gruen Transfer. It promises that we can become more skeptical and truth seeking by exposing the slights of hand that advertisers do, but it only inoculates us with an illusory sense of the power of their product and of how clever they are.

There’s a coincidence – I don’t watch it either, for much the same reason. it’s like watching a bunch of ticks and fleas congratulating themselves on being so much smarter than the dog.

Andrew Norton
10 years ago

While nobody (or at least nobody in the normal range of psychological functioning) is controlled by advertising in they way affluenza like critiques imply, like most people I am influenced by advertising. It alerts me to better or cheaper ways of satisfying my existing preferences, and promotes new things that I might like. Particularly when I am interested in buying something I purchase infrequently I look at a lot of advertising. Given I will go with only one product in the end, most of the advertising I look at is a failure in purely commercial terms. But advertising as a part of the process of buying was successful.

And The Gruen Transfer is one of the best things on the ABC.

Patrick
Patrick
10 years ago

I’ve never watched the Gruen Transfer.

Like AN I appreciate companies sending me/publishing information in products and services I am interested in, which is of course advertising. I am certain that I am influenced by advertising however I believe that I am more likely to be turned off a product/service than turned on to it by advertising.

I also appreciate that advertising subsidises many of my favourite products, including rugby, cricket and football.

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[…] than I. After all, they report an opinion of media ethics that is very low.  I also think the idea that everyone is is credulous is misanthropic. But it turns out that it doesn’t matter. Skepticism of a source is no use […]