THREAD: Advertising as signaling.
And when it goes wrong...
π
And when it goes wrong...
π
2) Advertising is a sunk-cost demonstration of faith in what you're selling. It's sincere precisely because there's a cost attached to it.
β’ Ad campaigns
β’ Marketing events
β’ Expensive, impressive offices
All publicly signal commitment and confidence in an offer.
β’ Ad campaigns
β’ Marketing events
β’ Expensive, impressive offices
All publicly signal commitment and confidence in an offer.
3) It's the same principle for personal demonstrations.
An engagement ring is an honest token of commitment to a future spouse.
An ad campaign is an honest token of a company's commitment to its product line β particularly so, the more *obviously* expensive the campaign.
An engagement ring is an honest token of commitment to a future spouse.
An ad campaign is an honest token of a company's commitment to its product line β particularly so, the more *obviously* expensive the campaign.
4) To quote @rorysutherland:
β’ The conventional view of advertising is that when you say something is good, perceived value rises. Through that lens, most advertising is a *costly* signal because you wouldn't do it if you had a bad product.
β’ The conventional view of advertising is that when you say something is good, perceived value rises. Through that lens, most advertising is a *costly* signal because you wouldn't do it if you had a bad product.
5) Expense, or proof of investment, is proof of commitment.
As in the engagement example, it goes way beyond advertising expenses. Humans openly signal daily.
For more on person-person signalling, @JulianLehr brilliantly explores this in "Proof of X"
julian.digital/2020/08/06/proβ¦
As in the engagement example, it goes way beyond advertising expenses. Humans openly signal daily.
For more on person-person signalling, @JulianLehr brilliantly explores this in "Proof of X"
julian.digital/2020/08/06/proβ¦
6) All advertising/public announcement, esp. in the case of paid media, reflects relative commitment.
A co. pre-warning of a competitive move in a small, little seen update is a much weaker signal of commitment to the move than an announcement in a large pub. or trade journal.
A co. pre-warning of a competitive move in a small, little seen update is a much weaker signal of commitment to the move than an announcement in a large pub. or trade journal.
7) This, again, translates to the scale of independent creators
It shows instinctively more confidence to make a promise in public than it does to make it one person at a time.
On a smaller scale, the massive rise in the "Building in public" movement is a reflection of this.
It shows instinctively more confidence to make a promise in public than it does to make it one person at a time.
On a smaller scale, the massive rise in the "Building in public" movement is a reflection of this.
Brilliant creators like @thisiskp_ are passionately leading Building in Public charge.
@dickiebush has quickly built a following sharing the once-hidden gritty details of building a business.
The massive social media efforts of @MorningBrew show true commitment to the product.
@dickiebush has quickly built a following sharing the once-hidden gritty details of building a business.
The massive social media efforts of @MorningBrew show true commitment to the product.
9) In bringing accountability to a public space and maximising the amount of people aware of your promise, you're implicitly communicating true belief in what you're offering.
10) There's a fascinating exception, though.
Our interpretation of the announcement can actually work as a reverse signal...
In communist states, if you advertised a product, demand often went *down*.
This is a perfect example of reverse-signaling. But why? π
Our interpretation of the announcement can actually work as a reverse signal...
In communist states, if you advertised a product, demand often went *down*.
This is a perfect example of reverse-signaling. But why? π
Under communism, any product worth buying was almost always in short supply.
Only the govt could advertise. Consumers inferred that they'd only promote something if they'd produced so much of it, at such low quality, that nobody wanted to buy it.
Ads told you what *not* to buy.
Only the govt could advertise. Consumers inferred that they'd only promote something if they'd produced so much of it, at such low quality, that nobody wanted to buy it.
Ads told you what *not* to buy.
12) A (sorta) similar example is online "guru" expert courses.
When you're bombarded by IG ads for a forex trader's masterclass, this should be a red flag.
If demand is low enough to warrant paid ads for an "exclusive group", maybe the material isn't all that valuable.
When you're bombarded by IG ads for a forex trader's masterclass, this should be a red flag.
If demand is low enough to warrant paid ads for an "exclusive group", maybe the material isn't all that valuable.
13) Just as advertising can be a public assertion of commitment to quality, it can be a subtle signal of lack of it.
14) No ad campaign makes up for true value.
Understanding how we implicitly infer received signals helps us structure our offer, build brands, and build trust.
Just as the medium shapes the perception of the message, the signal shapes the perception of the substance.
Understanding how we implicitly infer received signals helps us structure our offer, build brands, and build trust.
Just as the medium shapes the perception of the message, the signal shapes the perception of the substance.
β’ β’ β’
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