How do Ads Work?

How do advertisements work, asks Kevin Simler. The conventional theory says that ads create a positive association with the product in hand (love, happiness, attractiveness), and that association eventually nudges us into buying it.

 

But is that true? If it were, Simler says:

“All an advertiser needs to do is show a pretty face next to Product X, and suddenly we're filled with desire for it.”

Obviously, things aren’t that simple. While we aren’t perfectly rational:

“Neither are we puppets at the mercy of every Tom, Dick, and Harry with a billboard.”

 

How then do ads work? His theories make for interesting reading. Some ads work by just creating awareness (FYI) that a certain product exists e.g. Fevicol. If that info can be provided in a memorable way, all the better. This approach works for products which are needed infrequently – the aim of the ad is to try and ensure you recall the brand when you do need such a product. Other ads work by trying to give you “evidence” of being good e.g. 85% dentists recommend XYZ toothpaste. Some ads work by making promises – implicit or explicit. Disney is one such example that, by his definition, promises “family-friendly entertainment” (You wouldn’t expect to see too much violence or any sex in a Disney movie). The common theme to all these approaches? They provide relevant “information” to the buyer about the product/brand in question.

 

Most ads, however, don’t seem to fall anywhere in the “information” bucket, do they? It turns out if a product you buy/own/use is knowable to others, then the ads are very different. He calls these as products having “social or cultural signalling”. Cold drinks, alcohol, cars, fast food joints, phones, shoes - in fact the majority of products fall in this category:

“For each of these products, an ad campaign seeds everyone with a basic image or message. Then it simply steps back and waits — …for your social instincts to take over, and for you to decide to use the product (or not) based on whether you're comfortable with the kind of cultural signals its brand image allows you to send.”

 

Such ads, by definition, must then be made visible to the maximum number of people, i.e., next to popular TV shows, movies, and sporting events. That is not possible with certain kinds of Internet ads:

“Everyone lives in his or her own little online bubble. When I see a Google search ad, I have no idea whether the rest of my peers have seen that ad or not.”

It is the opposite of the above that is right medium for such products:

“(The ad) needs to be placed in a conspicuous location, where viewers will see it and know that others are seeing it too.”

 

Right or wrong, Simler’s theories do make for interesting reading.