Advertising's Heisenberg Problem
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.
