Do Advertisements Really Work On People?

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The economic principle I’m exploring is “People generally respond to incentives in predictable ways.” 

My research question to help me study the economic principle is “Do advertisements really work on people?”

The article published in The Atlantic titled “A Dangerous Question: Does Internet Advertising Work at All?” demonstrates this economic principle by arguing/showing that ads work by endogeneity, people may not be paying attention to advertisement, and we would rather buy something it based on information rather than marketing.

First, many people who are influenced by advertisements do not truly know that they are being influenced to buy a product. People may think that “I was already going to buy that” when they see an ad and this phenomena is called “endogeneity.” This is important because most advertisements we see in 2019 are either on a website or on television, and we pay little attention to it. Also they work because we do not realize they work.

Second, many people who see advertisements online or on television will tune them out and not pay very much attention to them. This could mean that advertisements are now losing their effect because people would rather use an adblocker when on the internet, or skipping ads on their television. This means that advertisements would have to leave a greater impact on the viewer.

Third, people are most likely to buy a product based on information rather than someone telling them to buy the product. This could either be a review from a credible person, or a specification list listing all of the products capabilities. This means that old advertisements that say "buy our food" will not work anymore, and instead a "customer" saying how great their food is would leave a greater impact.

 In my next blog post I will research the question: Do advertisements that focus on life style work better than traditional advertisements?