[holograham]

Part of advertising is brand impressions. You may not buy sometime at that time but your subconscious has been exposed to the brand enough (often with other feel-good emotional triggers) that when you do need to buy something you have a positive attraction to their particular brand.

Online advertising is clearly a viable business model. The article correctly points out that aggregate purchasing power has grown slowly so their is more fighting for the same pool of dollars. The problem is not that advertising is a bad business, it's just a smaller business than some investors and founders expected. Facebook brings in hundreds of millions of advertising dollars per year. Not bad.