[bo1024]

I think this a good perspective. Advertising only has societal value when it helps connect people who want to buy something with services that want to sell it.

I can think of a couple other ways to get some sort of value from advertising. The first is using an ad to get someone to purchase something they otherwise wouldn't have. I suppose this creates societal value too, but in my opinion it mainly just benefits the advertisers. The second is to make "impressions" so that people remember your brand when they later choose (impulsively) to purchase something.

Since I don't participate in those two, I consider them pretty worthless. Showing someone like me an ad on a blog is worthless, because we have a zero percent click-through rate and a zero percent conversion rate. Showing ads on a search might actually be helpful if I'm searching for a product to buy.

Anyway, this leads me to two possible conclusions. Either we are in an advertising bubble where way more effort is put into ads than they're worth, or I just have no understanding/conception of the average Internet user's browsing and buying habits. After all, I guess enough people click on these things to make them profitable for the site, and enough of those actually buy something to make it profitable for the advertiser. So as a non-clicker, what do I know?

[awakeasleep]

I think you are right in your conclusion that you have no understanding/conception of how the average internet browser reacts to advertisements.

I was shocked to realize this about myself after talking to my ex's sister. She teaches kids in the BD class of a Chicago public school. She shared a story of her frustration trying to teach them about healthy eating. It went something like this:

"Can anyone give me an example of good or healthy food" Class Chorus: "Mcdonalds!" Carrie, taken aback: "Oh! and what makes McDonald's healthy" Class: "McDonalds makes you big and strong! You could play in the olympics"

That anecdote hit me at the same time I had been researching literacy, and it really struck me that different classes of people exist in our society who interpret symbolic content at different levels. You or I probably see a picture of an athlete on an McDonald's bag and our lip curls in contempt at the transparency of the lie. But to a different type of person with a different background, that representation is taken at face value.

It's really apparent when you see people make a living off other transparent advertising, "Teen Mom discovers weird old trick to remove belly fat." Ok, bullshit. You can't target lose weight etc, but that isn't a multinational with inefficient marketing, that's an individual identifying basic desires and exploiting certain segments of their market. And it works.

[IsaacL]

Google 2011 revenues: $37.9 billion. 96% from AdWords.

So I'm guessing someone is clicking on online adverts.

Outside of a certain segment of the startup scene, where actually spending money on marketing is uncool and you have to get customers by being viral/freemium/whatever, there's a ton of businesses that drive traffic through non-sexy means like PPC.

Re: does "branding" add value? I think it does. Keep in mind the original brands, which involved adding a name to commodity products to show customers they were trustworthy. The value of branding is it lets consumers feel trust in what they're buying. You can go in any McDonalds in the world and know that the food will taste OK and won't give you food poisoning. The food is not awesome, either, but it goes to show that often people do value trustworthiness and consistency (ie, branding) over super high-quality.

(Admittedly there is less value in situations where, say, the branded cheese is exactly the same as the supermarket cheese, just in a different packet and twice the price.)