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11/06/2007

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Andrew

First of all, I do not think any business wants consumers to focus on any aspect of its services that can be measured quantitativly unless it is very sure that it can maintain its advantadge. For example, if an airline drew a lot of attention to its punctuality by providing detailed statistics, then later it had a "less punctual" period, it would have a difficult time explaining why it would no longer be calling peoples' attention to its detailed statisitcs. (And, for some reason I don't entirely understand, no corporation is ever allowed to admit to having ever made any kind of mistake.)

Another possible reason is the threat of litigation. My aunt works in advertising, and she says her company's legal department is always trying to get them to avoid making specific claims because a competitor will dispute it and sue them.

John Campbell

It is outlandish to think the new facebook advertising platform is going to perform better than Google Adwords. Facebook's current platform produces about $.10 per 1000 impressions. Google earns $20+ per 1000 searches in the US. Targeting a user profile (Facebook) will always be an order of magnitude worse than targeting what the user is looking for at that instant (Google).

Daniel Griffin

Re: John Campbell

I think that aside about Facebook is rooted in the idea that Facebook, with a great many number of useful data points, will be better able to "pinpoint ads to particular tastes of the viewer" than Google's system of relying primarily on search terms (and this doesn't suppose Facebook will have a better system for monetization or to suit the marketer, but perhaps for the user).

Facebook has person-specific and easily manipulatable data that is relevant to a great deal of potential advertising and so might provide data more useful to the user, than might be possible from compilations of search terms.

There is no necessary connection between his aside and any idea that Facebook's plan will surpass Google in terms of revenue generation.
That being said, I think one might hedge the use of "always" and surmise that it is possible that Facebook could leverage, in marketing their ad-system to-their-users, the fact that they have so many data points on each user, on average, in a great many areas and so will provide great product suggestions and so on.
Of course, we all trust Google, and know that Google will do no evil, and so Google could offer an opt-in system of the same sort, requesting data points that the user knows will be used explicitly for this. Why they haven't done this already is not apparent, seeing how freely people provide information on the web.

ChinaCoalWatcher

I think some of the mystery can be resolved if one realizes that mass-advertising, just like political advertising, is only targeted towards a small slice of the audience.

In political campaigns, ads are only expected to have swaying or persuasive power on a small fraction of undecided centrists. Of course, motivating a small number of non-voters to go to the polls, or getting even a few percent of marginal voters to switch sides, can win elections in these 50-50 days.

With mass advertising, businesses create ads that target the portion of consumers that are susceptible and suggestible to advertising in the first place. There's no way to be certain, but I suspect that this portion is a small fraction.

When I buy airline tickets, my decision is advertising-insensitive (or so I like to think). I use the price-aggregator websites, like expedia, orbitz, and kayak to find the best deal, and then see if certain "upgrades" (like flying non-stop or business class) in my experience are worth the premiums.

One of those upgrades is the airline itself, since experiences with delays, overbooking, stress-level of employees, frills, seat-space, etc... tend to vary greatly across the industry. Based on my personal experience, and the word-of-mouth reporting of others - I can generally guess accurately how good or bad my experience will be.

That decision-making process seems almost universal among those to whom I've spoken about it. When viewing airline advertisements, they not only seem ridiculous to me personally, but it's hard for me to understand how they would work on anyone at all in this internet era. If one assumes that the kind of "airline-brand suggestible" people tend to have lower-incomes, then they would tend to be even more price-sensitive and less brand-loyal than others and the ad effect would wear off when they got to the point of booking.

It would be irrational for any airline to advertise if they didn't believe that doing so would produce enough extra business profit to more than compensate for the price of the ads. Absent some strong (but very hard to assess) evidence from their marketing firms, perhaps the airline executives are simply being irrational and relying on an old technique that no longer works.

Jack

Posner's choice of topic seems more of a lament about the what's happening to the airline industry than one about false or misleading advertising. Much of the problem is that of a system striving to operate at maximum capacity coupled with an inability to cooperate with its competitors in a way that would seemingly improve service and lower overall costs.

Remember the days before "dereg" when Green was delayed and they just sent you down the row with a voucher to take an empty seat on Red or Orange? It would seem that today with the quest for maxxing seat miles that such a cooperative system would return.

Today, as "China's" comment on using Expedia indicates flying has largely become a generic commodity and one in which leisure travel is extremely price sensitive, so the fundamentals would point to beating down prices below the cost of operation and providing even lower standards of service. Trying to take a price increase to cover the soaring fuel prices will likely make things worse.

I suspect the situation is ripe for the current "air buses" for most of us while elite airlines develop for the business traveler with tight schedules to meet, except that popular airports don't have the capacity for them.

China, good comments on political advertising. Advertising air travel or most other products the ad budget is self-limiting as management finds that a bigger budget is not justified in terms of units sold.

Political advertising is very different in that the value of that last vote needed to win is worth the entire campaign or more and the reason that current naive attempts to fiddle with campaign reform at the margins is futile; the money is the mechanism and "serious" candidates must get it, one way or another.

ben

No Jack. Its about advertising. Idiot.

Michael Martin

Whether Facebook's ad network will result in better conversion ratios than Google's Ad Sense is still an open question. Search text is still the most immediate and direct information about what a consumer wants. But there is no question that user profile information will improve conversion ratios by improving demographic targeting -- especially when in the context of a particular activity.

In a very abstract sense ad targeting is a little like interpreting texts. As Judge Posner makes the point in one of my favorite books of his, The Problematics of Jurisprudence, a text by itself can mean many different things. The purpose of the interpreter is very important in determing "literal" meaning.

Richard Mason

I think it is almost always a mistake to mention one's competitor in advertising.

It increases simple awareness of the competitor's brand.

It suggests that the competitor is an important peer company and worthy of consideration.

There is the danger that the viewer will forget which of the two brands mentioned was supposedly the superior one.

There is the danger that the viewer will find the comparison overstated or mean-spirited, and feel sympathy for the denigrated competing brand.

As with negative political advertising, some viewers may think worse of both the mud-slinger and the mud-slingee, and seek out a third alternative.

iNonymous

I think Judge Posner makes a possibly unwarranted assumption; that is, that the sole message of airline advertising is "Fly Airline X instead of Airline Y." I believe that a large portion of airline advertising is simply saying "Fly."

If an airline talks about its competitors delays, consumers won't think "I won't fly Airline Y because it has delays," they will think "I won't fly because airlines have delays." They'll drive instead, or in the Northeast take the Amtrak, or maybe even stay home. In short, there are a wide variety of substitute goods for air travel, and airlines are probably more afraid of these goods than of their competitor airlines.

No airline wants to run an ad that will give it a bigger piece of the pie, but at the same time cause the pie itself to shrink.

Speed

"Some cars were safer than others and why didn't the manufacturers of those cars advertise their safety features."
Volvo started promoting their safety advantages decades ago. Competitors eventually emphasized safety in their products and promotion.

ChinaCoalWatcher

I think iNonymous has a keen insight. If public perception of air travel is negative, then airline advertising may be less geared towards inspiring brand purchases than inspiring flying in general - with the hope that by convincing people to fly instead of drive, an advertising airline will get a similarly proportional slice of a larger pie.

If it were an industry-wide promotional issue, then one might except an industry-wide campaign, "Try flying again, it's not as bad as you think! Yes, really! Brought to you by the Better Airlines Association." Something like other brand-insensitive-purchase campaigns; "Beef, it's what's for dinner" or "Pork, the other white meat" or "Milk, it does a body good"

In this manner, airlines could pool their resources and probably achieve better bulk advertising rates and therefore a higher return to marketing investment ratio. But, like other game situations - there would be uncertainty as to who would benefit most from this pooling. If the campaign produces more no-frills passengers, then high-frills airlines would drop out. Airlines might also doubt whether their return was proportional to their contribution. And if airlines elect not to cooperate, they have the chance for full control over the style of advertising over which they can blast their own brand exclusively.

So, if Airline advertising is really trying to get more people to fly in general, then ridiculous efforts to promote a particular brand in those ads are perhaps the result of disputes over risk, return, and control. In other words, the uncooperative (and potentially wasteful) behavior in the market game of air travel.

neilehat

Just an air traveler observation, I used to fly just about everywhere on business and personal trips and it was an enjoyable way to travel. Now with the anti-terrorist security systems in place, cattle car mentality of the airlines, and a slew of other issues, if the distance traveled is under five hundred miles I'll drive it.

It has nothing to do with advertising, it's just so much simpler and hassle free. Ahh ..., the joys of deregulation!

Danny L. McDaniel

Politics learned "spin" from advertizers. It is the difference between using the words less or fewer. They don't mean the same and taken out of proper contexts are incorrecvt and misleading.

xue

hello Prof. Posner:
after reading this essay, I got some words to help me understand what had u said. do u think that I get the point?
-->
People received information filtered by them already. So much more information had stored in people’s brains and was classified by people’s own judgments before. Only the good things were easy to recall and remind. In fact, the things people consumed or used merely in its good aspects. People usually would make use of things good, and therefore did not be misled by information false or incomplete.

LemmusLemmus

Do companies actually know their competitions delay times?

Anonymous

The estate tax make no sense at all. The person has to pay taxes all his life and on the top of that to pay taxes when is dead.

Wes

In my view, creating an open market for airline tickets would solve many of the problems of the airline industry. As it is, a person can go online to a site like E*Trade and buy and sell stock. What if a person could go to a site like Expedia and not only buy and but also sell airline tickets?This would have a number of benefits. First, it would shift passenger focus away from price to other aspects of the service (such as on-time arrivals). This would happen because passengers would no longer be worried that the airline had (unfairly) charged them $400 for the same ticket that someone else had only paid $200 for.Second, an open market for airline tickets would allow airlines to more accurately gauge demand. As it is now, most flights are either half full or crammed full (over-booked). An open market would allow airlines to arrange their flights to accurately meet demand.

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I am from Moldova and learning to read in English, please tell me right I wrote the following sentence: "Buy comforter sets at and save! Searching online to buy comforter sets."

With best wishes :-(, Shauna.

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