The idea that the internet and a large portion of the economy is built on something with such tenuous evidence for being effective is pretty baffling. And the fact that on top of that it has such a huge negative influence on our quality of life as a whole is even more insane. I hope more research is done and we eventually get a clear picture of how advertising influences our behaviour and exactly when it's worth it for companies to make the investment. It would be a win-win for us and the companies. Great video as always!
@brandonacree4605
Жыл бұрын
I do everything I can to not see/hear ads. I genuinely don't recall that last time I saw an ad and thought, I'm glad I saw that, this was a good use of my time. It's just such a colossal waste of everyone's time. (ok, there is your engagement lol)
@THUNKShow
Жыл бұрын
I agree - a waste of time. (Thank you for engaging! I feel engaged! 😆)
@TheGemsbok
Жыл бұрын
I pay attention to the efforts of a lot of independent game developers---usually unknown people creating new intellectual properties by themselves or with a small team, and then either self-publishing or pitching to a publisher. And I must say, It's hard to imagine how that kind of brand new creative work from unknown creators could ever reach the attention of a broad audience without some form of intentional marketing. Note that I say this as a person who definitely, strongly, certainly shares your personal aversion to almost all forms of advertising.
@THUNKShow
Жыл бұрын
I don't think I've ever purchased a video game based on ads - reviews & word of mouth might *seem* like they must originate in ads of some kind, but it seems entirely possible that they could happen organically thru other vehicles of discovery & popularization.
@TheGemsbok
Жыл бұрын
@@THUNKShow I think that takes a very narrow view of what counts as advertising. When someone personally shares their work in a public forum or on social media, that's an ad. When they distribute copies of the game to streamers and youtubers in the hopes they'll play the game and provide exposure, that's advertising work. It's not organic, natural, or community-driven. You haven't purchased a game based exclusively on ads because almost no one does that; but you have likely become unknowingly aware that a game exists either directly or indirectly because of ads. The notion of relying on 'discovery' puts a huge amount of unearned trust in the algorithms governing online storefronts and social media sites, as well as in the efforts of large publications and 'influencer' types to actually dig into unknown new releases with relative impartiality. In the absence of dedicated marketing efforts, many projects can end up (and have ended up) languishing in total obscurity. To take just one random example, the PC platform is a secondary consideration for the developer Nitrome---who are a well-established indie dev team who used to be known primarily for their browser games, but are mostly focused on mobile gaming at this point. With desktop being a low priority, they do practically zero advertising for their games on PC. Their PC release of their game Gunbrick Reloaded has just 19 reviews on Steam, 18 of which are positive. 19 is an excruciatingly low number for over two years of sales. And we're talking about a game from April 2020 by a (though small) established, popular dev team with a long track record of success---and (though it's a terrible sample size) 95% positive reviews. They trusted discovery and word of mouth to carry a high-quality game, and were not rewarded for that trust.
@pokpok97642
9 ай бұрын
@@TheGemsbok does ROI drop off once a company can form a healthy costumer base which grows through word of mouth and more organic exposure?
@benmusgrove7490
Жыл бұрын
A thought about the selection of companies there that didn't seem to be affected by significant changes in advertising expenditure: They were all established and large brands, it could stand to reason that if your brand has become a household name already then the purpose of advertising moves from primarily getting people to realise you're an option on the market to informing them of sales events, etc. It might be interesting to see if small or startup businesses reducing their advertising costs would have the same effect, I suspect it wouldn't be as rosy for them since the primary focus of advertising for them is still to widen their install base by letting people know they're an option on the market.
@keokawasaki7833
Жыл бұрын
Exactly my thought and well put
@Koroistro
Жыл бұрын
And to that point, big companies mostly advertise a lot to *keep* their foothold on the market, not to increase it. CocaCola blasts us with endless advertisement to keep itself on the public consciousness, not to increase its already big customer base. If they were to cease all advertising, then there would be more "mental real estate" in customers that might lead to a slow switch to other soft drinks.
@jonathananonymouse7685
Жыл бұрын
I think the only ads I click on during a youtube session are probably those on Kickstarter projects that really, REALLY catch my eye.
@sweatygenius
Жыл бұрын
Great video. I used to think that ads can't possibly affect my behavior, but I've realized (after I started having some disposable income) that they do end up bringing the names of companies to the front of my mind. The ad can be for a company I hadn't heard of, in which case it does make me more likely to think favorably of them when I come across their product in the wild. However, it can also be a company know very well, in which case my next purchase might just go to them since they were on my mind. It's probably some manifestation of the mere exposure effect, I think.
@TaliaOutwrong
Жыл бұрын
With the effectiveness of ads I’ve often felt it comes down to mere exposure effect. I remember travelling abroad when I was in my early teens and getting my period (we were travelling from Ireland to India), and myself and my mum went to the pharmacist together to get sanitary items for it. The two of us stood in front of a wall of foreign products for minutes, and finally we both saw a logo we recognised. It’s absolutely absurd how much relief seeing a logo I recognised was, but I remember it clearly. Even at the time I was astounded by the relief, my parents were both pretty advertising critical and often talked down loyalty to brands etc, but like, I very profoundly understood how effective brand recognition was from then on. It wasn’t loyalty to the logo or brand, it was only that I recognised that product was for that purpose, and I was freaked out. I do think drawing the majority of data from almost monopolies is kinda going to skew the situation. Like almost nothing else on the planet has the brand recognition of coke, it’s a 1 of 1 data set to my mind. But you’re so right I would not miss seeing the ads.
@d.lawrencemiller5755
Жыл бұрын
I have never, not even once in my life, bought something because a KZitemr read an ad for it. But I have grown to harbor an anti-KZitemr-ad-product bias. I instantly hate whatever it is they want to sell.
@THUNKShow
Жыл бұрын
...brb, gotta call Burma-Shave, I might have miscalculated...
@BiggieChungulus
Жыл бұрын
You've probably heard this too many times already but you're gonna hear it again; this channel is DISGUSTINGLY underrated.
@THUNKShow
Жыл бұрын
😁 Thanks, I appreciate it every time.
@Autists-Guide
Жыл бұрын
To answer your question, no, I don't read the little KZitem ads. With one exception... the bold red ad that asks me if I want Adblocker. Oh! the irony. Moreover, any ad that interrupts my favourite music mentally gets a "never buy from this company" tag.
@THUNKShow
Жыл бұрын
That'd be those bars that show an ROI < -100% - the more you advertise, the more I hate you. 😠
@ToriKo_
Жыл бұрын
Wow I’m so glad you made this video. I was thinking to myself how weird it is that on the one hand ads seem to have such a nonexistent, or at best such a contrived relationship with me actually buying stuff. While on the other hand having so much shear effort and sector-building money dumped into it that it wouldn’t make sense for it not to unambiguously work. I appreciate that you shared that the consensus data matches with my personal notions. But I’m left feeling like the central question is still unanswered, it seems like there should be big concrete ideas that explain the big concrete mismatch
@sebo68
Жыл бұрын
I think I agree with that last statement: If you're an unknown company, it might be absolutely essential to get known, therefore you need to advertise. But for companies like Google, Uber or Hoover, whose name became a verb for the services they're selling, it might not be worth the while. Case in point, "Beats by Dr.Dre", a company that spent nearly half (I think) of the revenue on marketing. That's why their stuff was so expensive.
@AnthonyDominello
Жыл бұрын
I've always thought that at the level of the huge national and multi-national companies, ads and ad campaigns were more for their investors and stockholders. It gives the investors that warm fuzzy feeling to see how hard the company they've invested in is working to make the investors more money, even if the thing they're looking at isn't really effective. Like the company is saying to their investors, "We're here! look how busy we've been doing stuff for you to make money!"
@carpo719
Жыл бұрын
I'm right there with you. I've had a problem with advertisements since I was young, back in the 80s I was one of those who hoped that in the future we could find a better way. How ignorant was i? There's something to be said about crowdfunding, a lot of creators use advertising because they don't make any money otherwise. And yes, people want free stuff on the internet. So therefore ads. But some people are over the top with it. I've been making KZitem videos for 12 years and I've never had a sponsorship. I can't stand by a product that I don't stand by, and that's what bothers me is when people sponsor products that are total crap or products they don't know. ( also word of mouth is the best advertising one can get.... but a lot of people don't like it because they know the product is crap)
@THUNKShow
Жыл бұрын
🤜🤛 No sponsorships crew. Respect. It'd be nice if we could find a way to get money from companies to artists without needing them to shill some crap they don't care about! 🤔
@angussmith5505
Жыл бұрын
Incremental up or downs may not be affected by ads - but what of entering the market? Maintaining dominance in consumer's perceived choices? Basically, ads don't seem to affect the bottom line for established companies, but I think it's a leap to then say that "ads don't work". What effect do ads have, at what time scale, with what circumstances? What is an ad doing when it's "working"? Remember, though most ad campaigns are temporary, some Diamonds are Forever.
@me000
Жыл бұрын
It's interesting to learn that ads might be nearly ineffective. A lot of times, I feel a temptation to go "ok, they're smart, surely they crunched the numbers and this is actually effective" when I see a big corporation do something that seems irrational.
@Fiddling_while_Rome_burns
Жыл бұрын
I think there is a problem with lumping all advertising together. Some ad areas may be very effective, while others not so. With Google Chrome what is an ad doing, its not telling me of something I don't already know. However a new company with a new product I have never heard of is possibly generating a sale with its ad. While on the other hand the big Google ads while not creating sales, create brand awareness. For example last week I bought a new phone. As my entire life is on the phone and my number one concern is mechanical reliabilty. I bought a Samsung as oppose to a smaller brand which would have been cheaper and had more features. I think averaging out the effectiveness of advertising is flawed. A an individual analyses would more likely show some ads being effective but most not, so a gamble for companies, that can yield huge gains if it works.
@ReaperStarcraft
Жыл бұрын
The most genius ad campaign I've ever seen had to be Head-On, which as far as I know is a substance you put on your forehead to help with headaches that maybe doesn't even work. Years ago they ran ads where somebody just kept saying "Head-On, apply directly to the forehead" over and over for the full commercial duration with no context. I don't even remember if the commercial said what the product did. Then, several months later after everyone was annoyed as hell at these ads, they ran an ad that repeated the line, but in a mocking, sarcastic tone, before concluding "Head-On, I hate your commercial, but your product works." If the point of advertising is to make your product visible and memorable without generating ill-will, those two ads working together did an incredible job. I never bought any, but if there had actually been any reason to buy it instead of Tylenol or whatever those ads would've worked wonders.
@CaraiseLink
Жыл бұрын
[Bumps algorithm] Thanks for another great video!
@THUNKShow
Жыл бұрын
Thanks for the bump! *wipes nose*
@LeonardGreenpaw
Жыл бұрын
Ads are most beneficial in two situations. Firstly when more people dont know of the product, secondly with impulse buys.
@TheBlueMuzzy
Жыл бұрын
regarding advertising as an entity: Space Merchants by Frederick Pohl - a MUST read
@thenameipicked
Жыл бұрын
I think the logarithmic curve to advertising you described at the start is dead on. For small companies with tiny advertising budgets, the value of those first set of ads can definitely be large. But the value of the 10 millionth ad? Not nearly as effective (and no longer profitable).
@examinatorant4522
Жыл бұрын
On one level your logarithmic numbers are math- a- magics, an attempt to (over) simplify what is a complex PROCESS. Two of my favorite sayings are; a. their is no such a thing as simple problem/ answer . b. if an answer to a question is simple the one or more of the following it invariably true. 1. the answer is wrong ( or incomplete) 2. The question is wrong (or incomplete) 3 . A little of 1 AND a little of 2 PS I have a degree and 30 years in business and sales and marketing. Advertising is based on a series of false assumptions consumerism and Feral Capitalism ( as per the American ethos. ) i.e. a. consumption for it own sake and that our society must consume to survive . b. and the point of Feral Capitalism is to charge the most you can get away with and deliver the least, by what ever means you can get away with .... see Cartels, predatory practices and gouging lack of corporate Accountability, abuse of $ power . Where people serve Capital rather than the other way around et al. From a moral perspective ..... Why? From a practical all the above false assumptions and reasons. There is a long list of questions one needs to answer BEFORE you consider if to advertise. e.g. I ran a large security storage facility ( documents, computer media and back up hot site) We delivered stored and delivered the media and document boxes to businesses and institutions .... we did not advertise in the sense of retail . Our Operatives wore unlabeled uniforms and the pick up and delivery vehicles were unmarked our building was plain white brick with a number on the wall. My reasoning was that any advertising would have signaled to to malcontents that we were handling sensitive ( valuable) material. i.e. a target. Granted in side the building we had multiple external monitoring companies alarms / fire suppression , class 1 communications, uninterruptible power, and sealed atmospheric vaults . Now we had 3 sales people who worked from a different site to canvass business. As it happened both our opposition who advertised et al had their vehicles burgled and their premise violated. One a few times they actually suspected us at one time. Advertise that you are in business by all means but I would point out that I haven't bought anything on a whim ( except ice creams for our children etc) in twenty years . In fact I don't buy anything I didn't instigate and researched in that time either . Which goes back to the purpose of a sale .... to fulfill a need. When you go to home depot to buy a drill bit it is because you have a need for a hole in something of the diameter of that bit. A drill bit on it's own is worthless without that need. Ergo I trained our sales staff to go out and solve a CUSTOMER's needs not your figures. By and large the figures solved them selves AND WE had less customer complaints and they were loyal to us. The same went for complaints solve their problems FIRST then solve our internal issue that caused the complaint in the first place. Having also a wife who ran our 3 pet shops ... I found that the customers wanted their emotions satisfied. One amusing story was a bigoted old man refused to deal with my wife 'cos she wasn't the boss" ( sic) she wouldn't offer him a discount. So he came in on Saturday when I was in store . She was offended by his attitude and she wondered why I smiled when he came in. For reasons not relevant here our prices were in codes. Well, I added up his purchases and gave him 20% off.....what he didn't know that I had added 27% to the price first which meant he paid 7% ( arrogance tax) 😉 I dealt with his emotions.
@MrFram
Жыл бұрын
It is profitable for large companies to push ads precisely because it is valuable for small companies. Large companies raise the price of ads, keeping competitors out. The point isn’t to get you to buy more, but to completely surround you, make you hopeless and miserable. Look how much control advertisers have over youtubers with their demands for "ad-friendliness". The ads are not the product here, the power over people is.
@undercoverduck
Жыл бұрын
It seems counterintuitive to me how targeted advertising is nowadays, even beyond ebay's case of buying ad space to appear on search results for 'ebay'. If the goal of advertising is to create awareness where there was none, then targeted ads are the exact opposite of what a company would want. A smartphone ad before a smartphone review is like promoting a freezer on Antarctica.
@threethrushes
Жыл бұрын
I run two small businesses. I refuse to advertise. All new business comes from personal recommendations, word-of-mouth, and referrals.
@TheBoboMaker
Жыл бұрын
One thing that wasn't mentioned in the video is the effect of saturation. Suppose you have an industry giant like Coke, and you want to control the market. It would be a long term strategy to saturate the media with your presence. It would affect new start up companies by changing the cost of ads on a given platform, even to the point of pulling ads away from that platform if it lets other similar companies advertise on it. There is also the war of attrition, something that did happen and almost succeeded with Pepsi, if I recall correctly. In other words that massive costs may not give yearly dividends, but affect the future of the markets. As for the examples of Ebay and Über, neither really have competitors of the same stature. Had they, maybe there would have been more of a difference in their numbers, especially if their competitors had the same deal with Google.
@johnhershberg5915
Жыл бұрын
I've been saying this for like 20 years. Not exactly the same thing, but I work in the video-games industry and I've been in meetings where it was getting clear we're making a shit game that won't sell very well. So someone from the production side, meaning NOT a developer who knows anything about the game, decides that "piracy is a serious threat" so they push for us to add DRM. We'd explain that DRM just annoy our good customers and don't stop the pirates. Doesn't matter, they want their ass covered in the case the game doesn't sell well. That way they can blame it on piracy and at least claim they did everything they could so they get to keep their corporate job. It's wasting resources to make a worse product that sells less units. Makes zero sense. But some corporate suit wants to make his superiors feel useful. I always felt advertising was the exact same thing. Zero proof it actually accomplishes anything. And when you show them products who got where they are without advertising they hand wave it off as a fluke
@sound0ftruth
Жыл бұрын
No mention of ad lockers and video ad skippers?
@THUNKShow
Жыл бұрын
It's certainly an interesting tangent, but I wanted to focus on the more fundamental question of "Do ads work *at all?*"
@bthomson
Жыл бұрын
Dr. Grande advertises a few services (ex. Hello Fresh) on his channel and all his viewers (fans) love those commercials! We all still sing the Alca Selzer song and know the Wednesday is Prince Spaghetti day!
@orterves
Жыл бұрын
The history books of the future will note the dominant religion of our age as Capitalism, worshiping the Invisible Hand, and the gospel as spread through the enchanting power of Ad Vertising. Seriously though, I think viewing these confusing behaviours through the lens of religious belief can probably shed some light on why they exist. After all, a personal relationship with God takes only a single person, a quite room and introspection - yet no one questions the need for pastors, churches, congregations and proselytizing
@THUNKShow
Жыл бұрын
There's certainly a religious zeal to a lot of marketing advocacy! 🛐
@tadpole9264
Жыл бұрын
I do think ads can be decently successful in prompting me at least to change my buying behavior. Since I started using an adblocker a few years ago Ive pretty much fallen out of the loop on whatever the latest gadgets are that companies are selling and so without the knowledge that "better" devices and such exist I don't feel obligated to go buy a new one. I haven't upgraded my phone is ages now because it still works fine and I've never made an active effort to see if theres better ones out there, something an ad would do for me. Its also worth noting that Im rather anti consumerism and the whole shabang so the ads might not have done anything anyways.
@adversary22
Жыл бұрын
To be honest ads often make me feel hostile towards the product being advertised.
@jamesmcneice7825
Жыл бұрын
Not even once.
@AmaranthOriginal
Жыл бұрын
KZitem is an interesting case with ads because their current model is REALLY trying to push the ad-free paid service. I don't know if this particularly means anything, but it seems to a layman like ads aren't paying the bills
@MartinLichtblau
Жыл бұрын
Especially with todays Adblockers I doubt that online ads are a good investment. But ads sure are annoying and make our world uglier. Beautiful product and corporate design is great though.
@PetersonSilva
Жыл бұрын
That's a great video, but I mean, I do think it's pretty context dependent. It might be that "ads" is deceptive because they are so different. A message telling you that there's a new product I the market - which I might not know about otherwise and thus not want to buy - is different from a coca cola feel good ad that is all about brand awareness, which is different from a link that directs you to a store that has the product you just googled for, which is different from pr campaigns or political propaganda, etc etc etc. I think you stumbled into something when you commented that there might be a general effect of driving sales from advertising in general. there's a systemic effect in terms of getting bombarded with these messages insofar as they're shaping our notions of powerful people's expectations of us, as well as conditioning us to narrow the field of possibilities for problem solving - we tend to rely less on community outreach and effort and turn straight to "we just need to buy the right product/service". Because that's the worldview of ads: the market serves our every need. At the same time as it defines what these needs are from the point of view of people who control production
@LeeCarlson
Жыл бұрын
Advertising is seen as the way to generate more sales without having to lower prices or improve products and is the reason that I say that the United States is no longer a "capitalist" culture, but has become a "consumerist" culture.
@examinatorant4522
Жыл бұрын
Thunk, As I alluded to in the below posting I'm not a fan of advertising per se for the reasons you give. And that to advertise or not is a far more complex process. It all depends on WHAT your product is ; WHERE your business is ; How you intend to market it; WHO your clientele is. As I said in the security storage business which is to businesses ( corporations, lawyers, accountants, banks, insurance companies et al) their purchasing motivation is base on a rational need and to some degree service and price. Where as my wife's pet shops the sales were more emotional bases as in whim. Clearly in the security storage business evidence suggested that low profile to the public was prudent. No signage, on the Building vehicles or logos on uniforms... we might have attracted unwanted attention ... our 2 main competitors had to deal with van break ins and even burglaries to the premise . In the shops we had the obligatory neon but that was it we sold to passing trade I'd like a $ for every approach that was made for us to buy advertising. The nature of the products we sold didn't suggest that we would get any substantial new clients out of the mall's catchment . I use a VPN and the computer has several ad blockers and the browser and email are non following . I don't have a cell phone despite 300 employees, I don't have twitter, tic tok, or FB despite 1 pre teen and two teenage children, and neither do they. The children were harassed and bullied and moving regularly international corporate postings Now we have emigrated from America to a calmer country I have a beeper and the children have no interest in cell phones but that may be temporary.
@examinatorant4522
Жыл бұрын
PS I do search products I want to buy but I tend to be more swayed by benefits to me, technical details that generalized ads glossy brochures ....My garden welcomes them ... after the garden shredder has finished with old fowl manure into the compost cage. To me Ads just indicate that they are in the business .
@tim..indeed
Жыл бұрын
Sadly it's true that ads generally lead to more economic activity, otherwise we surely would've gotten rid of them long ago.
@THUNKShow
Жыл бұрын
That's exactly Graeber's point - it's entirely possible that they don't, & it's sheer force of habit that we keep them around!
@Xob_Driesestig
Жыл бұрын
Tinfoil time: When this video came out I posted a comment that google chrome will almost certainly delete ad-blockers next year, so you should probably switch to firefox. When I later came back to the video, the comment was deleted. So I posted a similar comment again, but now that I come back to the video a third time, that comment is also deleted. Maybe it's a coincidence, but the fact that Google owns this platform makes me reach for my tinfoil.
@bthomson
Жыл бұрын
Have you visited Qiskit channel yet? WAY over my head but you might like it! 🤔🤗
@BiggieChungulus
Жыл бұрын
Ad more like bad ha
@ferulebezel
Жыл бұрын
Several points. 1) I read about an instance years ago where some marketing company suggested to a supermarket chain that was in enough states to where they were in demographically similar cities. The marketing company suggested ceasing the Sunday newspaper inserts or weekly mailers (I forgot which) in half their market for one week to see if it made any difference in sales. The supermarket executives refused, firmly believing that they would lose a bunch of money where they cut back the advertising. 2) Even mature businesses need advertising when they have a new product or line that is significantly different than what the competition offers. 3) A certain amount of advertising in necessary, just to ensure that people don't forget that your product exists. 4) Another thing I read long ago was research that showed that the ROI of political advertising was a super shallow logarithmic curve. I think your video could be summed up as once everyone who might be in the market for your product knows your product exists and your claims about it, any advertising money spent after that is wasted. The book Busshit jobs is by some Social Justice antifa type so it doesn't promise any insight, just an anti market screed. This is too bad, because the phenomenon is real, but many of the factors contributing to it are things he would likely support.
@xOGNOGx
Жыл бұрын
Love your videos. Hey, been wondering, are you Jewish?
@enrichingexchanges
Жыл бұрын
This is some of the best most cogent bullshit I have come across. You clearly have no idea how markets work. Anyone who thinks or thunks, advertising or marketing is superficial, you have to ask only one question. Why do you call your channel "Thunk" not "Think". You may not have realized it, but with your millions of subscribers, you have a channel name that is formidable. It is called "branding" and it is a part of "marketing". Why do you think you have subscribers in the first place? If your content is so attractive (which I think it is, but ridiculously wrong in this case), why not let people find you every time rather than be "reminded" when you upload new content. You don't think that is marketing? Well, the "subscribe" button is a way to easily keep selling content back to people who liked it. That phenomenon is called "retention", and it is a part of marketing, and this is engineered in by KZitem so that people like you continue to use your product. What is that? That piece of engineering is a feature of the product, called KZitem. Which, ahem, is also part of marketing. The bottom-line is this. Whenever you create/engineer products of value, you not only need a vehicle to take it to the marketplace (advertising), but also need mechanisms that help sort out what features a product should have (marketing) and who it should be targeted to. It does not magically go by itself and find the consumer. The more well-known a brand is, the longer it can go without, "advertising" (which you seem to confuse with marketing; a common enough confusion though), but that does not mean, it will not start feeling the effects in the long run. You are poorly processing a snippet from one paper that reviews others, and draw a massive and profoundly silly conclusion that advertising does not work and marketing is a "goon" job, using a channel that relies on the power of Google, whose core function is to produce advertisement worthy marketplace contacts. Who would have thunk? This is a flunk.
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