[semi-extrinsic]

"We know that paid advertising works" [citation needed]

I mean, the ad business of course likes to throw various metrics around. But as far as I'm aware there are no proper randomized controlled trials that show statistically significant positive ROI of online advertising versus no online advertising.

I mean, it would be really simple to do, right? To provide conclusive proof of the efficiency of ads? Pick a populous state in the US where people enjoy Soft Drink X. Randomly divide the households in the state into two groups. For the next full year, run normal amount of targeted online ads for Soft Drink X in Group 1, no targeted online ads whatsoever in Group 2. Did the sales in Group 2 decrease by more than what the cost of advertising to that group would be, yes or no?

[auntienomen]

There are two significant complications:

1) Google is running many parallel ad campaigns, which may target the same individuals. This in some ways gives opportunities, because one can run 'natural experiments' on the effeciveness of advertising for X by simply selecting the people who never saw the ad for X. But there is also probably some legal peril; Google has to be careful about what promises it makes to people purchasing ads.

2) Google has very little incentive to release the results of any such studies, because -- whether or not advertising works -- they don't need their customers to have accurate side-info about the value of advertising.

[initplus]

They have every incentive to release the results - if they showed that the market was undervaluing advertising.

[oblio]

Advertising has been about what 2? 5? percent of US GDP for more than one hundred years. The odds of advertising naysayers are probably infinitesimal at this point.