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TV ads. Where you can't measure response rate directly.
Advertising is at its core a prisoner's dilemma. If every competitor in a certain space puts in $100 in advertising, they can all expect $0 in returns. However if a single company put in nothing they would be in a worse place because their competitors' returns would automatically become higher.
Your logic doesn't add up.
It should be:
> The ROI analysis shows negative ROIs at the margin for more than 80% of brands, implying over-investment in advertising by most firms.
Advertising is at its core a prisoner's dilemma. If every competitor in a certain space puts in $100 in advertising, they can all expect $0 in returns. However if a single company put in nothing they would be in a worse place because their competitors' returns would automatically become higher.
If this is true, wouldn't it show up in the study as a positive ROI?
TV ads. Where you can't measure response rate directly.
You can never measure response rate directly. There will always be people who see your ad and then respond later (possibly by some other ad on a different platform that they wouldn't have responded to in the first place otherwise). This might or might not matter to you.
The large companies who buy ads have statistical departments tracking their ad response. They know how well the ads work to close enough for their purposes. Those departments don't need the direct response rate because there are better measures.
TV ads. Where you can't measure response rate directly.
Also where "modern" "smart" platforms decide it's acceptable to chop up a video into a dozen slices and insert the same. exact. ad. in between each segment, causing half the viewers to swear off that brand for life?
Earlier quoted context omitted.
Ouch. Never thought of it this way. I know it’s borderline anti-American — but when you have such compelling incentive structures at what point should we demand government regulation? If 80% of advertising is not helping consumers discover products — arguably the primary functional purpose of advertising — then isn’t this in a way an economic sickness wasting the resources and stifling innovation?
It's bizarre to me that the government hasn't stepped in to regulate/ban medical advertising in America. Nobody wants it – not consumers, not doctors, not even the drug manufacturers themselves.
Personally I absolutely despise drug commercials, there's not much that will make me change the channel, mute, or turn off the TV faster. Is there a more blatant display of the faults of capitalism?
Title is critically incorrect. It should be: > The ROI analysis shows negative ROIs at the margin for more than 80% of brands, implying over-investment in advertising by most firms.