Advertising's Heisenberg Problem

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A short but interesting post by Tyler Cowen takes the occasion of J. K. Galbraith's death to note the familiar point that advertising need not be "informative" (in the sense of providing consumers with new information about the characteristics of a particular product) to be welfare enhancing, if they can provide "cultural linkages" that don't so much reveal a product's appealing qualities so much as they do make the product more appealing. In other words, if the reason to spend more for a shoe emblazoned with a Nike Swoosh isn't so much that the shoe itself is much better than cheaper alternatives, but because it allows the wearer to signal his association with a certain Nike image ("I'm a Just Do It! sort of person," or what have you), then the advertising onslaught that creates and maintains that image may, in a very real and literal sense, be not so much a promotion for the product, but a crucial part of the product itself. (Brad DeLong offers what I can only hope is the facetious suggestion that the government "take Nike's TV advertising slots by eminent domain, and play commercials that link all shoes–not just Nikes–to the "cool image" of Michael Jordan." On the off chance he's quasi-serious, it should be obvious that this is, first, a bad idea even beyond the usual objections to government economic control, insofar as people may want products with very different semiotic patinas, and because to some extent the effectiveness of the signalling relies on this being something distinct about Nikes. A signal that's ubiquitous becomes background noise.)

Now, the interesting thing about this is that it makes one very common sense question impossible to answer in one sense: "Does advertising succeed at changing people's preferences?" You can, of course, measure whether more people buy Nikes in the wake of a new ad campaign. But if the theory articulated above is right, then the Nikes people are consuming in the wake of that campaign are, quite literally, a different product: no longer just shoe, but shoe-plus-semiotic-aura.

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  1. I’ve looked at a number of definitions so far and I’m no closer to grasping “semiotic patinas”. Could you throw us a bone?

  2. Uh oh, I detect the biggest expansion of trademark law coming since that Professor (Schecter?) discovered anti-dilution.

  3. What do Doc Martens say about me?

  4. I do think advertising can change people’s preferences. I know it has for me, mostly in a negative way. Sometimes a company will come out with an add campaign so horrid that even though I had no real positive or negative associations with the product before, now I wouldn’t take it if you paid me to use it.
    Case in point, although I’m not a huge beer drinker, I will now never touch a Heineken again. Because of the Heineken Light beer commercial that uses all the lasers and that stupid “Don’t you wish your girlfriend…” song. That song has gotten stuck in my head, and now every time I see a bottle of Heineken it creeps back…and makes me want to run screaming. Not the reaction they were hoping for, I’d guess.

  5. “semiotic aura”? Sounds like a college indie band.

    Isn’t that just a bit antidisestablishmentarianistic of you?

  6. This is news? I could have told you that.

  7. This is news? I could have told you that

    Yes, but you have no semiotic patina to lend versimilitude. It’s the aura, dude. Swoosh!

  8. What I find interesting is that it’s actually cmpletely possible to sell an image of footwear superiority without offering a remarkable shoe, even after it has become a popular clich? that this is what you are doing. What does “I’m a Just Do It kind of person” mean if a Nike shoe isn’t particularly special? It means … itself. It means “I paid $75 more on a shoe than I needed to because I wanted to buy the shoe that cost more to advertise.”

    This kind of grosses me out. Not that I think there ought to be laws about throwing away your money and knowing full well that you’re doing so. It just disappoints me that people do.

  9. Left unmentioned is this analysis are the following assumptions:

    “Semiotic aura” is welfare-enhancing.

    There is no distinction between “desired” and “welfare enhancing.”

    The degree of welfare-enhancement from “semiotic aura” (you know, rocking Adidas) is reflected in the dollar value required to purchase said aura.

  10. Well, I’d guess that if you are a believer in Say’s Law, you pretty much have to believe that marketing can change preferences. Otherwise, what would the mechanism be for supply creating its own demand?

    Semiotic aura is pretty powerful. The marketing and influence literature tells us that Pepsi only wins the Pepsi challenge when the Coke label is invisible. That is, the mere presence of a red can, even if its position does not correspond to the Coke in the sample, will influence the outcome of the blind taste test by a large margin. Drinking a plastic cup of soda is one consumer experience, but it is not comparable to drinking a can of coke.

    If you don’t pay attention to the semiotics, you will wind up making New Coke.

    joe:

    Q: What’s worse than branding that creates strong associations in consumers?

    A: Some sort of third party arbiter of semiotic fairness.

    Besides, sticky marketing doesn’t just spring out of free space, it requires a fairly sincere effort to understand your consumer base and often a considerable investment in making your brand associated with things they like. The alternative would seem to be brands that no understand what you want.

  11. I, for one, am totally immune to this effect.

  12. Aha! So that’s why the magazine is called Reason!

  13. I’m sure I’m not the only one who is appalled at yet another inappropriate invocation of the Heisenberg Uncertainty Principal (undoubtedly the result of an overly simplified and generally flawed understanding to begin with).

    What? I AM the only one?
    Oh, then nevermind.

  14. How can you conclude that you’re the only one when we are all still in a Schr?dinger state regarding our appalledness? (I couldn’t resist.)

    Yes, physics metaphors can get a little strained when applied by nonphysicists. If it bothers you, there are pills you can take for that.

  15. Jason Ligon,

    “Q: What’s worse than branding that creates strong associations in consumers?

    A: Some sort of third party arbiter of semiotic fairness.”

    It’s unfortunate that you can’t discuss cultural phenomena in their own right, without imposing a political agenda on top it. What about the issue of whether the “semiotic aura” of rocking Nike is actually welfare-enhancing? Any thoughts on that?

  16. Warren,

    What are you talking about? Everyone knows that the coolness of a shoe and its utility are non commuting operators.

    Delta(Coolness)*Delta(Utility) is greater than or equal to h-bar / 2

    That’s all Julian is saying.

    If a joke is worth going in for a penny, it’s worth going in for a pound I always say. Maybe that’s why nobody else thinks I’m funny ….

  17. Just remember-even if you wear Nikes, Julian is not going to fuck you.

  18. “It’s unfortunate that you can’t discuss cultural phenomena in their own right, without imposing a political agenda on top it. What about the issue of whether the “semiotic aura” of rocking Nike is actually welfare-enhancing? Any thoughts on that?”

    Fair enough. Off the top of my head, I’d say that rocking Nike has value as a cultural glue. Icons and symbols are cultural capital. Now, that doesn’t tell us anything about Nike in particular, because any icon has communication and expressive value in that sense.

    I think I’d have to say that a given semiotic aura could be welfare enhancing, neutral, or welfare diminishing in the aggregate.

    The obvious example of a welfare reducing is probably the cigarrette or drugs of certain types. To the extent that one might desire to be like the cool kids and therefore smoke, as opposed to just smoking to calm your nerves, or, as my military friends found smoking to alleviate boredom on fire watch, there is something bad about the associations.

    Welfare enhancing attachments might be signaling mechanisms when you hire someone. Someone who rocks the right brands will have advantages over someone who doesn’t. If the job is sufficiently social, that can be a very important signalling mechanism. Most of we in the geeky set like to believe that such things shouldn’t matter, but I would appeal to The Tipping Point on this one for an analysis of how powerful cultural navigation skills really are.

    I’m rambling and making it up as I go, but that is my first set of thoughts …

  19. What about the issue of whether the “semiotic aura” of rocking Nike is actually welfare-enhancing? Any thoughts on that?

    Relative to a balanced nutritious meal or relative to a couple forty dollar rocks?

    Depends on what expenditures the aura is displacing.

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