Re: Financing media/effectiveness of advertising "6155GUASTELL@vmsa.csd.mu.edu" at Jul 29, 94 03:28:30 am

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

>Have the goodies on the effectiveness of advertising:
>
>In short it works: The persuasiveness of repeated advertising,
>e.g., buying the product, doing the recommended action, increases
>with greater numbers of exposure to the ad. Here I mean radio or
>TV type ads. The catch is, however, that the persuasive ability
>of the ad asymptotes at 6 exposures; after that more advertising
>does little for the same audience [1]

	This is interesting, but does not address my point, which I
will repeat for clarity (for the fourth time!): advertizing affects
people's brand choices, but not underlying consumer behavior.

Herb gintis@xxxxxxxxxxxxxxx

>The foregoing assumes there is no competition to sell the same
>product to undermine the impact of one company's ads. If Company A
>does their 6, then Company B does theirs, B would probably get
>A's business. So A has to launch a new ad campaign. A Red Queen
>situation could develop pretty fast in some types of markets
>(saturated) where brand switching is the only way to get business.[4]

	Thank you, Steve. This is my point.

>There is some truth to saying that all those capitalists do flush
>considerable money down the toilet on lousy ads and Red Queen games.

	I don't believe this. Red Queen games are not 'money down the
toilet;' they are Nash responses in a prisoner's dilemma, or perhaps
part of a more complex game (Red Queen games are also not somehow
stupid and irrational, of course). They may make mistakes, but I doubt
that the expected return to advertizing is that much different from
other investments.

	BTW, I find it strange and disconcerting that so many
progressive economists have such faith in the old left-asceticist
notion that people like to consume because they are brainwashed by the
capitalist.  I think the whole idea is not worth much, and certainly
should not be taken seriously without evidence.

	BTW again, much advertizing is INFORMATIONAL, showing
consumers that products exist, or have desirable properties, or low cost,
etc. This is even true of children, who are more receptive to advertizing
because they are more likely to be ignorant of the existence of consumer
goods of relevance to them.

Herb gintis@xxxxxxxxxxxxxxx