Just this week I noticed a campaign from an established and credible organisation in the UK that undermined its (important) message about seat-belt usage in cars. The ads featured a borderline slop Midjourney/Grok-style image of three teens in a back seat, the brand logo and a hashtag (#beltupintheback or something).
Now, road safety is a serious social concern but all it said to me was, ‘we have to advertise this issue but can’t really be bothered, and we are certainly not going to spend anything on photography or copywriting. On top of that, we are not going to buy any decent reach; we’ll just chuck it into low-quality burned-out social feeds.’
There’s a reason that restaurants don’t need to hold much stock of the cheapest wines on the menu. Apart from the fact that the margins are not so good, many customers — even with little or no wine knowledge — ignore these options to avoid appearing cheap or unsophisticated. This price-quality heuristic simplifies decision-making, allowing consumers to make quick judgements. They might not be advertising experts, either, but the same heuristic works just fine as a strategy.
It’s understandable that marketers could be seduced by the speed and cost-efficiency of these new tools but there’s a danger of not learning the lessons from the digital advertising debacle we are still trying to recover from, and continuing to overlook the crucial marketing principle that everything communicates. Consumers are not stupid, and they subconsciously (sometimes even consciously) judge brands based on perceived effort and cost, using these as proxies for quality and value.
It was about ten years ago that I first mused on the importance of ‘signal’ in my first book, Where Did It All Go Wrong? In fact, the original blog post (remember those things?) that spawned the book was even earlier. In the title chapter, I built on a Steven Pinker anecdote.
Psychologists will tell you that humans are pretty good intuitive biologists. We have the innate ability to identify the kinds of plants that are safe to eat or animals that are likely to be predators or venomous. We are also pretty good intuitive psychologists. We can identify what others are thinking and feeling, or what kind of mood they are in with very few cues.
[I’d also argue that people are pretty good intuitive media strategists. We don’t know exactly how much a full-page ad in the broadsheet newspaper costs, but we do know that it was expensive. We don’t know exactly how much that re-targeting banner ad costs, but we know that it was cheap. Likewise, we can easily and intuitively detect high or low production values that reflect the level of economic investment in any piece of communication. All these signals carry an implicit sense of ‘cost’ that tells us the signaller can be trusted, to a degree.]
It turned out that the idea had some legs, and there were a few others talking about this at the same time as me, notably Don Marti, who was ahead of the game. He was already known for contending that while ‘targeted’ advertising may seem more efficient, it ultimately undermines the core functions of advertising as a signalling mechanism and information source, potentially harming both brands and consumers in the long run. We ended up co-presenting our combined hypothesis at Adam Ferrier’s annual Marketing Science Ideas Exchange in 2020, bemoaning how tracking and targeting causes signalling to break down in ‘Where’s The Signal In Digital?’
(Spoiler: ‘personalised’ digital advertising often signals something else other than high quality.)
This then hooked us up with audience member Professor Julie Bilby from Xi’an Jiaotong-Liverpool University in China, and she extended the argument in an academic paper, Signaling Authenticity: The Signaling Power of Creative Advertising in a Digital World, which we co-authored.
Of course, the idea that advertising serves as a signal of product quality has been around since at least the ’70s, possibly even earlier, yet it is still not as widely known as it probably should be. In a nutshell, the theory says that ads communicate more than just their explicit content — they also convey broader, and implicit, information about a product or brand.
Ambler and Hollier (The Waste In Advertising Is The Part That Works, 2004) later likened this to a phenomenon in nature, where extravagant displays act as signals of strength or fitness. The peacock’s tail is one of the most salient examples. They found that the perceived high cost of advertising could positively influence perceptions of product quality.
For the uninitiated, signalling theory originated in biology, describing how animals (including humans) use extravagant displays to signal particular traits, such as genetic fitness.
An example I often use is Thomson’s Gazelle and its signalling behaviour called stotting. When a predator like a lion or something approaches, the gazelle leaps up and down on the spot instead of making a run for it. While this behaviour appears counter-intuitive — wasting energy and risking capture — it is a costly (reliable) signal to the predator. The gazelle is essentially saying, ‘look at how fit I am—don’t even think about chasing me, you’ll never catch me.’ The predator, perceiving the signal, sensibly decides not to waste its energy going after such a healthy and capable target, and might wait around for a less confident gazelle who runs (another signal).
In economics, signalling theory explains how information about unobservable qualities, like product quality, can be reliably conveyed from one party to another. Advertising can signal in several ways. High perceived media expenditure suggests confidence in the product, as companies wouldn’t throw down money they don’t expect to recover. Big production ads — premium locations, celebrities, or high-end visuals — can also signal quality by implying significant investment.
Advertising creativity itself acts as a signal. The ‘wastefulness’ of creativity — an effort that goes beyond functionality — can serve the same purpose as biological displays in nature. Consumers often infer that a brand willing to invest in creative advertising will put the same care into its products.
And obviously the channel matters just as much. Ads placed in premium media environments will generate higher brand trust and lift due to the perceived quality of the media context itself. Look at the absolute shitshow that Twitter/X has become, and it was never great ad space in the first place.
When ads are tailored to individual users rather than tied to specific content, the signalling mechanism breaks down because they lack the context-based credibility of traditional placements (and also because the targeting itself is usually way off). The value of the surrounding content amplifies an ad’s perceived worth, creating a positive feedback loop — premium ads attract funding for superior content, which in turn enhances the signalling power of the ads, meaning the publisher can charge more.
I worked with a premium fashion title a few years ago, and this was their exact model. There was no way they were going to sully their web presence with anything other than premium ads and also premium branded content.
I can’t help thinking that the rise of cheap, AI-generated imagery in advertising repeats the exact same mistakes as targeted advertising. Just as targeted ads undermine signalling values, the obvious use of cheap AI-generated content diminishes a brand’s perceived quality and commitment.
In proper advertising and media choice, brands demonstrate the quality or the importance of the message by investing resources in broad, expansive campaigns, signalling confidence in their product’s long-term success. However, the proliferation of easily accessible AI image generators lowers the barrier to entry for low-quality products and deceptive sellers even more, making it harder still for consumers to distinguish between high and low-quality offerings.
This inverse of costly signalling is basically cheap signalling. Whilst it can be a tactic for the likes of discount retailers (consumers can infer the cheapness of goods by the cheapness of ads, and therefore it’s an honest signal, to a degree), for the most part, all it communicates is minimal resources and little or no effort.
Just as predators on the savannah interpret stotting as a reliable indicator of fitness (because only a fit gazelle can afford to stot), consumers interpret costly advertising as a reliable indicator of a brand’s quality and confidence. It’s not difficult. But still, we don’t learn.
Featured image: David Clode / Unsplash