[AnthonyMouse]

> For one, if you accept that advertising can sell "cheap junk" or "snake oil" then you've accepted that advertising can sell something. That could just as easily be a useful product no one has heard of so the issue isn't the advertising, it's what's being sold and advertising is effective (which invalidates (2)).

It can sell something unknown, because then the advertising makes it sound good, they don't know anything else about it, and they wouldn't have heard of it otherwise.

Which is the opposite of what's happening in case 2 when the product being advertised is well known. It's not causing you to hear about it for the first time and if the product is low quality then the advertising is less able to overcome your existing negative impression of it than for something you've never heard of.

> There are variations companies make to keep their product "fresh". Think Vanilla Coke, Cherry Coke, Coke Zero (or whatever the current form is) and so on. By virtue of them being new, potential customers won't have heard of them and advertising solves that problem

This doesn't really explain all the ads for Coke Classic, or for that matter why so much advertising even for new products emphasizes characteristics that are either meaningless or unrelated to the product. There isn't really any information content in telling the customer that a new cola is "refreshing" or showing random people dancing.

> A lot of advertising isn't about direct customer conversion but "brand lift". Now companies have dreamed of the ability to accurately measure the brand lift of advertising spend but it hasn't materialized yet.

"Brand lift" is the prisoner's dilemma thing. When everybody does it they just cancel each other out.

[coliveira]

The reality of advertisement for established products is that they need to do it to maintain good will from the media. For example, in the aftermath of the Deepwater Horizon oil spill in 2010, BP spent billions of dollars in advertisement in all kinds of media. It became very difficult for the media to be too harsh on BP, since in the midsts of the Great Recession, they were one or the largest advertisers. Similarly it is very difficult for the media to say bad things about Coke or the Big automakers when so much of their revenue comes from these big accounts.

Another example (this one not in advertisement) is the situation of Bloomberg. They have one of the largest financial journalism organizations and, AT THE SAME TIME, they sell overvalued software to the largest financial companies in the world. One can only guess what can happen to a financial company that stops paying the fees to Bloomberg. Even though there is no real threat (and most certainly this was never expressed by the company), every financial outlet wants to be on the good side of Bloomberg reporting. The conclusion is that having a journalist institution receiving money from companies that they are covering is a kind of moral hazard that very few people understand, unless you are part of the business.