The Hidden Values of Advertising | Hacker News Reader

The Hidden Values of Advertising

immadsnewworld.com

37 pointsimmad22 comments

> "The factory that makes a product in China extracts the least margin even though it could be argued that they do the "real" work, but that’s not how the world works. The closer you are to the money the more you can extract both as a percentage of value and as a total profit."

I only realized this a few years ago and I think young people should be explained this before they go to college (that is, before they choose a major).

Had I known this then I would have chosen a different career path. The first two paragraphs of TFA should be enlightening to those about to make this choice.

Aren't there plenty of exceptions to this though? Microsoft's margins on Windows is higher than what the OEMs can get for their PCs.

(assuming "closer to the money" is a synonym for closer to the end user)

If I tried to generalize this, I'd say "closer to the customer's understanding" (which I would argue is often deeply tied into marketing), not necessarily "closer to the customer's money": to most users, they have a "Windows PC of some sort" and not "a Dell Inspiron"; even those in the latter camp don't go "the latest and best production of FoxConn, my favorite producer of consumer electronics".

what might be interesting in that case is to compare Intel's margins pre and post their "Intel Inside" campaign.

I don't think "closer to the money" means "closer to the user", otherwise cashiers would be paid handsomely.

I'm sure I don't know this well enough to try to explain it, but as a throw-away attempt at it, I'd say it means "having more decision-making power" or "being able to effect more change".

IMO, “closer to the money” means “closer to the purchasing decision”. At the cashier’s desk, the purchasing decision is already made – cashiers are here to process the transaction.

You can build the best product ever, if nobody wants to buy it you are not going to make anything out of it. That’s why companies try to influence people’s behaviors by spending (investing?) money in advertising and hire sales teams.

I would argue that manufacturing isn't real work. The "closer you are to the money", the more decisions you are making. That's where the value is.

I would argue that manufacturing is real work. No matter how brilliant your advertising strategy is, or how well you sell the sizzle, someone has to make the steak.

Anyone can make the steak. All they are doing is following directions. They are as interchangeable as the parts they are assembling. That's why they don't get paid well.

Yes, but a steak has intrinsic value; you can't eat advertising.

This is a bit of a strawman. The fact is that the people (on the assembly line) following instructions are less valuable (and thus will get paid less) to a firm than the people "at the top of the money funnel" who are the decision makers.

Whether or not advertising has intrinsic value doesn't affect this.

I would also argue against the idea that a steak (or anything else) has intrinsic value. I think all of it's value is extrinsic - it comes from people wanting it and being willing to pay a certain amount for it.

But... after the advertising does its work and brings people in, the customer's experience with the product supplants their experience with the advertising. Try to keep people coming back after you've fired your chefs and decided to only employ part-time cooks, because you believe any idiot can cook a steak.

I think the attitude that labor is qualitatively unskillful or that even unskilled labor isn't critical to the value of a company (where that labor produces the product the company sells) is misguided. Quality often matters in surprising areas throughout the process, as does experience. If people come in expecting a great steak and they get something the busboy tossed into a microwave, they're just going to feel lied to. And rightly so.

I agree with you.

I'm surprised that you replied to my comment with this comment, as I fail to see the thread that links the two.

I was saying that the value of the steak comes from people, and not from the steak.

Sorry, I was replying to dfxm and to you collectively and now I see I probably should have split it up into separate comments or something. I don't think the steak's extrinsic value (which definitely exists, and is generated by advertising and the 'decision makers') is greater than its intrinsic value, which I do believe is real and comes from labor... but quibbling over that might be splitting hairs.

Perhaps that's the mindset I'm trying to get into.

It still feels weird to think about the process making the product as not the most important, and not where the "real work" is. I've been slowly coming to terms with myself and accepting/discovering how the world actually works, and accordingly trying to change fields from IT to business.

The author does mention the "anti-advertising talk in the hacker world", but unfortunately he doesn't seem to be interested in addressing any of the arguments commonly made. The "values" in the title just means "money" in context.

This is an article about "extracting value" using advertising, and why advertising (as a business model) can be quite effective at this.

It takes for granted that "extracting" the maximum "value" from "consumers" is intrinsically good for everyone involved. (I know, I'm overdoing the scare quotes, but I dislike this entire vocabulary).

Obviously not all hackers have any problem with modern advertising; the top post on this discussion suggests that yes, this is where the money is, so you should consider directing your career path towards advertising if you're about to make the choice.

This is a kind of hacking; look for the shortest distance between two points (self <-> money), and bridge that gap, however unconventional the jump may be. No need to create anything; just master the ways to influence the purchase decision process. Control the tipping point where people decide, yeah, maybe I should be buying some mousetraps just in case, and the mousetrap makers (good and bad) will beat a path to your door.

I really hope anyone actually choosing between a career in advertising vs basically anything else reads a lot more than just this article, though.

This seems to be about value to the advertiser. There is no value in advertising for most of its victims, or for the world in general.

"Victims"? Really? Come on, now - there's no need for that sort of hyperbole here, is there?

Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need. -- From the movie "Fight Club", based on the novel by Chuck Palahniuk

Advertising is a valuable economic factor because it is the cheapest way of selling goods, particularly if the goods are worthless. -- Sinclair Lewis

Advertising is the rattling of a stick in a swill bucket. -- George Orwell

Advertising may be described as the science of arresting the human intelligence long enough to get money from it.

Let advertisers spend the same amount of money improving their product that they do on advertising and they wouldn't have to advertise it. -- Will Rogers

There is one thing you absolutely must know about modern advertising. No matter how true any single advertisement is, modern advertising itself, taken as a whole, tells a lie - that you need the thing being advertised. It is a lie because consumer goods of real value do not need to be advertised - such goods are part of a natural market that flows "beneath" the [consumerist] marketplace, although as time passes these basic necessities represent a shrinking percentage of the total flow of goods. -- "Consumer Angst", http://www.arachnoid.com/lutusp/consumerangst.html*

Virtually all consumer products, above a rudimentary level of complexity, have accessories and "enhancements." One can easily imagine a graph of products with the simplest (fewest accessories) on the left and the most complex (most accessories) at the right. At the very left of our imaginary graph is a screwdriver. Not a Phillips screwdriver, just a plain old-fashioned straight-slot screwdriver. If you buy one of these carefully, you will have it decades from now. Your children will inherit it from you. From the standpoint of marketing, this is a nightmare - any number of advertising executives start up from their pillows in terror, having just imagined that screwdriver in reliable service over years and years, its original brand name slowly wearing off. -- "Consumer Angst", http://www.arachnoid.com/lutusp/consumerangst.html*

By the way if anyone here is in advertising or marketing . . . kill yourself. No, no, no it's just a little thought. I'm just trying to plant seeds. Maybe one day, they'll take root - I don't know. You try, you do what you can. Kill yourself. Seriously though, if you are, do. Aaah, no really, there's no rationalisation for what you do and you are satan's little helpers, Okay - kill yourself - seriously. You are the ruiner of all things good, seriously. No this is not a joke, you're going, "there's going to be a joke coming," there's no fucking joke coming. You are satan's spawn filling the world with bile and garbage. You are fucked and you are fucking us. Kill yourself. It's the only way to save your fucking soul, kill yourself. Planting seeds. I know all the marketing people are going, "he's doing a joke . . . " there's no joke here whatsoever. Suck a tail-pipe, fucking hang yourself, borrow a gun from a friend - I don't care how you do it. Rid the world of your evil fucking machinations. I know what all the marketing people are thinking right now too, "Oh, you know what Bill's doing, he's going for that anti-marketing dollar. That's a good market, he's very smart." Oh man, I am not doing that. You fucking evil scumbags! "Ooh, you know what Bill's doing now, he's going for the righteous indignation dollar. That's a big dollar. A lot of people are feeling that indignation. We've done research - huge market. He's doing a good thing." Godammit, I'm not doing that, you scum-bags! Quit putting a godamm dollar sign on every fucking thing on this planet! "Ooh, the anger dollar. Huge. Huge in times of recession. Giant market, Bill's very bright to do that." God, I'm just caught in a fucking web! "Ooh the trapped dollar, big dollar, huge dollar. Good market - look at our research. We see that many people feel trapped. If we play to that and then separate them into the trapped dollar . . . " How do you live like that? And I bet you sleep like fucking babies at night, don't you? -- Bill Hicks

"Bill's Shoe Store on Main Street. We sell shoes!" -- not a lie. The very definition of advertising, to me, entails dishonesty and lying. Otherwise it's like the sign for Bill's Shoes, plain old information.

Can you point me towards any advertising -- besides the strictly informative kind exemplified by Bill's Shoes above -- that does not lie, mislead or manipulate viewers, readers, children and unsuspecting passersby?

When you are lied to and manipulated everyday on a massive scale, you are a victim.

When will there be a support group for the people who believe that the exposure to banner ads, TV commercials and billboards entitles them to the mantle of victimhood?

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