The Case Against Marketing
"Is a bad solution with good marketing"
For some time now I have been collecting a list of things that, while I can understand how they came to be, aren't beneficial to our society. This is a long list that I´ll share at some point, probably along with a blog post on incentives. But there was one particular offender that I feel like I have enough things to say for its own write-up.
The title of the post is inspired by Brian Kaplan´s "The Case Against Education", a book that I haven´t read but I think I got the gist of its ideas from his substack(be warned this guy is a hardcore libertarian, unsurprisingly, he is a professor at George Mason University. While I don´t agree with him on most of what he says, I like his writing style and I am interested in what he thinks about the world.
The main thesis for his case is that current educational structures are not useful for making students acquire knowledge and that most of the value from universities is in job market signaling, not in improving human capital. He argues that higher education is highly ineffective and for most people enrolled in college, it won't be worth it, at least in the EEUU. He proposes cuts in education spending and increased vocational education. To me, that's a bit too much since that signaling has to happen at some point since apparently recruiters are no better than a coinflip
This is an unpopular opinion, and while I don't think one can accurately quantify the benefits of going to college, I am convinced that other forms of education could be much more useful and cheap. There are plenty of 4-year degrees that can be done in 2 years easily, and many others that shouldn't exist in the first place. I will probably explore that topic another time, but I wanted to explain this to show the correlation that I see with marketing.
The needs of producers should be considered only with regard to meeting the needs of consumers.
This quote from The Wealth of Nations can be considered as one of the first iterations on the concept of marketing. This philosophy wouldn't become widely accepted until nearly 200 years later, at the end of WW2. With the variety of products rising rapidly as well as discretionary income, customers could afford to be selective and buy only those products that precisely met their needs. This was an unprecedented situation that gave rise to many of the structures that permeate today.
Of course, marketing existed way before this, and also before any of Adam Smith´s writings, so what is it really? As it´s becoming a tradition in this blog, we can start with the definitions. The American Marketing Association has been keeping a log and updating its definition over the years. That will be useful since much of my argument relies on how marketing has changed over time, especially in current times. The most recent definition says that marketing is:
"the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large".
Compare this with the original definition, coined in 1935:
"Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers"
Note how, in the almost 100 years that passed, the main difference is that there are now a bunch of new groups involved in this scheme, that one could see as extracting surplus value from the rest of the workforce. Unluckily I don´t really have a structured argument to prove this (that's what I'm hoping to get by writing this), so I'll just point out some of the things that led me to believe this.
I would like to make my point really clear here as my writing style is chaotic and not really focused (not happy with that, will try to improve).
Marketing is a broad concept much of it happens without orchestration. The importance given to marketing has been steadily growing for some time and we are at point where the resources being allocated there are wasted and can have negative externalities. Real value is being lost in favor of appearances and no one seems to care. There is no easy solution to this.
One of the keys lies in the original quote by Adam Smith. The needs of the consumer that he talks about were not immediately obvious at the time, and trial and error is a costly strategy, so companies now had to move their focus toward customers before developing a product. That dynamic has dramatically shifted over time, and while marketing in itself is not a bad thing, what today carries that name does not fulfill the same function as it originally did.
One important distinction here is between marketing and publicity. The second is a subset of the first, focused on media and public attention. It´s important because this post is about marketing, so it involves publicity but it's not limited to that.
Marketing is a tool, and as with everything, too much is always bad. At the end of the day, most of life´s decisions are about the allocation of resources. We have fought wars and written thousands of books on different strategies, so it's a topic that I take kind of seriously.
Marketing to me is a clear-cut case of a race to the bottom. The more that your competition invests in it, the more that you are forced to do the same just to keep up. But crucially, the product tends to remain the same. Interestingly there is a subset of companies that refuse to play this game, and as far as I know, it's going well for them since the value is there anyway. In my opinion, pure HTML websites are the most beautiful, accessible, and eye-catching. Some personal favorites include tinygrad, Berkshire Hathaway, and motherfucking website pt.2.
But marketing is not only is it an infinite money pit, it doesn't even work. As Recuenco notes in his thread, ad fraud is between 60 and 80%. Since the move to the internet that jumpstarted this whole saga, bots and all kinds of strategies were developed to fuck with the companies. One of the most scandalous cases of this is Spotify´s war on fake artists, and as far as I know, that is still losing them a ton of money as of today.
Another thing that Recuenco sees is that, if Spain enforced European legislation, at least half of ad-tech companies would have to close. That makes sense to me since the information that they use to make relevant campaigns is precisely what the EU is trying to regulate. But regulation is not working in this case, once again there is a clear case seeing how the whole cookie policy thing turned out (we ended up worse than before).
Anecdotally, I find that some of the software companies that come to the job fairs at my college have close to half of their staff allocated to sales/marketing. It certainly isn´t their fault, as it's what works in this system, but to me is a glaring example of what I complain about. It´s not the value of the product that determines the success of a company, but how well they can sell it. I will come back to this point later on, but this feels like a consequence of financing ventures not by cash flow but through external funding.
This can be partially explained by the complexity and time that projects require nowadays, but I find much more convincing the version given by Ed Zitron in The Rot Economy (has a couple of posts about it):
Public and private investors, along with the markets themselves, have become entirely decoupled from the concept of what “good” business truly is, focusing on one metric — one _truly noxious_ metric — over all else: growth.
This is probably the root evil behind this marketing scheme. If you want to keep growing, but can't improve on what you are selling for some reason, your only options left are to lie or convince investors of some miraculous economy at scale that will save the company in the future. We see this in businesses like scooter rental or Spotify; and while those are rare cases, the 'fake it till you make it' philosophy influences everyone else in the market.
When you have too much talking a too little doing you get bubbles, and if you follow that link you will find that people like bubbles!!! While I can admit that some unique opportunities are found in weird market conditions like this, it's my understanding that the compounded effect is negative for most people involved. It's one of the reasons why AI has not been able to develop at a stable pace and instead goes through boom and bust cycles (winters and springs).
I don't like that for many reasons, but a major one is that the only way to ensure that you don't destroy the lives of millions of people with the introduction of these paradigm-changing technologies is to do it slowly. I believe that there is a non-negligible possibility that human civilization will end in the next thousand years because of the mismanagement of this kind of technology. Pausing it is neither viable nor beneficial, but I don't think that pouring extreme amounts of money in short cycles and expecting infinite growth is the most responsible way to handle it.
Somewhat related to this is the concept of enshitification. Cory Doctorow1has been talking about it for some time, it´s a pattern of decreasing quality observed in online services and products. And it seems too obvious to not be deliberate. This is happening on Amazon, Google, Facebook, Twitter, Bandcamp, Reddit, Uber, Unity... While his analysis of the situation is much more in-depth than mine, I want to focus my efforts on some examples related to my case against marketing.
Cory finds 2 prerequisites that need to be followed to avoid the enshitification of platforms: The right of exit and respect of the end-to-end principle.
The right of exit is a topic in itself, I remember the first time that I engaged with the concept seriously was after watching this presentation and it fascinated me. It's the main reason why I stand for smaller states and facilities to move between them. That aside, it´s a core part of a well-functioning market, as if you can´t change products there is no incentive for companies to keep improving instead of mining the customer as a resource.
But the reason why Google has gone to shit I believe has more to do with the other requisite, the end-to-end principle. Thanks to the ongoing trial for monopolistic practices, many documents have surfaced that allow us to better understand the decisions made by Google and why. And it doesn´t look pretty. This one is a great breakdown of the events, but the short story is that the mindset of growth at all costs, coupled with a new professional-managerial class, made it so the value of the company drifted away from their consumers and towards sales and ads. Google even responded to it.
Some time ago when I saw this news article about this young guy who makes "more than 100.000€/moth" with apps he developed for SEO and IA. As I looked a bit deeper into it, I was not surprised at all to see that he sells courses and that most of his business is a net negative to society. The way I see it, he is not the kind of person that I'd want to be anyone's role model. But it's not his fault, google himself forces pages to add bullshit content to list them.
By allowing — and encouraging — search engine optimization (SEO), Google handed matches to arsonists and pointed to the most flammable parts of the internet. The existence of SEO is inevitable, but Google should never have encouraged these people
While far from a novel story, it shows how little concern people who make decisions professionally tend to have towards the actual product they are selling. And that is because the product doesn't matter anymore, the competition doesn't lie in the specs of the product but in how well can you sell it. I know this has been the case for the history of capitalism, but I firmly believe that we are living in the worst of times for that.
There are an infinity of reasons why this is the case, but one of them might be how specialized we have become as a species. As a simple example, when most of the population were farmers, people were able to trade were able to trade confidently judging the value of cattle just by eye. Nowadays, the amount of domain knowledge that you need to compare 2 solutions is presumably much more complex. Most products and processes have become orders of magnitude more complicated and determining the real value of something is much more difficult. When I go to the website of a software-based company, most of the time I have no idea what they do even after reading for a while. And that's probably by design since extended A/B tests proved to them that obfuscating their business works for the better.
Software in particular is possibly the worst offender at this, but not by chance. Turns out that most of the important businessmen that allocate our capital are incompetent when it comes to computers. To be fair, up until some time ago you could be quite successful and have no idea of what an operating system was. That is slowly changing, but currently, most software companies take advantage of this by charging exorbitant prices for products that they have already designed and they just have to change the logo.
As any decent hacker knows, security through obscurity is the same as having no security at all, so these practices are disappearing thanks to competition. But the fact remains that the people who make decisions typically arrive at their conclusions based on hunches and external advice, and that makes them extremely vulnerable to narratives and beautiful-looking UIs.
The open-source ecosystem offers an alternative to this dystopia, and I´ve yet to see an example where an inferior solution holds a big part of the market. This happens naturally as contributors can fork and choose where to spend their efforts, and using methods as outdated as mail chains they are keeping most of the software infrastructure of our societies up. As I´ve made the case multiple times, freedom of information is one of the greatest levelers I know of.
Another plausible explanation that I can think of for why now this feels like such a problem comes from the markets. Never has the whole world been as invested in the global economy as we are now. What I mean by that is that there are a lot of people who will do whatever it takes so that the SP500 keeps going up. They are in the government, in hedge funds, in banks... that isn´t necessarily bad, since for better or worse it has led us to the situation that we are in today. Everybody knows that Tesla isn´t worth this much, but people hope that in the future they will be and that´s why it has the share price that it has.
I dislike speculation, but at the end of the day, the stock market is just a resource allocator that gives money to those who can convince people that they will get their money back with some extra on top. Typically the best way to do that is to develop a great product and present it to investors in hopes that they share your mission, but if you have followed anything out of Silicon Valley this past few years, you know that reality is much more close to the TV show.
There are plenty of cases like Theranos that are straight-up fraud, and 90% of current AI startups (GPT wrappers) fall under the same category in my opinion. This thread is a good example (though I can't vouch for how accurate it is) on how products were presented to the public compared to the narrative-fueled apps that are getting million dollar valuations (Rabbit r1, Humane). I'm certainly not the first person to notice this, and veteran reviewers like mkbhd have been openly complaining for some time.
I believe that letting products compete in the free market purely based on specifications is much more beneficial to everyone compared with the alternative. It limits price distortions and speculation, and will allocate the resources to those that deserve it more; markets are simply information systems, so the more accurate the information the better, and marketing obfuscates that information. One could argue that these companies end up failing anyway and the capital diverted to better investments, but I just don't think that's the case nowadays, many ventures fall into the 'too big to fail' umbrella. I also don't think that it will lead to less investment in long-term goals, as the people who invest in that tend to have much more domain knowledge than the average investor (I would hope).
One might not be too bothered by their mobile phone carrier creating a fake narrative for how they operate, but the stakes get higher if you think about the medicines and tools that doctors use. Well turns out that in Spain it was quite common to have medical salesmen invite doctors to Cuba to show them their products. I'm pretty sure you know what I mean by that, and while is not as obvious, many of these salesmen eat at the most expensive and private restaurants and indulge in another type of luxury as a way to sell more, and it works.
It bothers me that the medicine that I'm being prescribed is not decided on purely meritocratic terms but on some other rank. And the same that it bothers me with medicine it bothers me with every other item in our markets. In the beginning, I thought that the solution to this problem relied mostly on regulation, but I don´t think that´s the case anymore. Usually, I try to offer alternatives, but in this case, I can't find anything other than educating more in critical thinking.
That being said there are some cases where regulation makes a lot of sense, mainly in marketing things that are quite clearly bad (alcohol, tobacco), as far as I know, this has mostly been a success and presents interesting ideas such as de-marketing or how to properly use health warning labels.
At this point, I realized that it´s mostly just the engineer in me speaking and that most people wouldn't prefer to live in the world that I envision. I am not against aesthetics or beauty, but when talking about a commodity that affects life, it weighs very little compared to usefulness. I can understand how that´s not the case for everybody, as a more illustrative example, I don´t care what my food looks like. I do care what it tastes like since I´m going to eat it, but I don´t particularly care about all the stories that an expensive restaurant might sell around it 2. At the end of the day, most things come down to the story that you build around it.
This is most apparent when accurately judging value is extremely difficult or impossible, such as finance or arts. The music industry is full of people who are not even trying to compete in the music anymore. Most artists don´t make their money from music and certainly don´t do it themselves. I don´t want to sound bitter about this, but we reap what we sow, and the lack of creativity in the mainstream appears because they are not selling the music, they are selling narratives and we are buying them.
The same thing happens in politics, thought that was a losing game from the beginning. Some day I will take my time and dissect why, but the point is that they are not running on policy or values, they are running exclusively on narratives and stories that no one expects to be true anyway. It's a difficult loop to escape when accountability is so rare.
Nuclear is a good example, as it's clear to me that the only reason why is not powering more of our grids are narratives created by people with misaligned incentives that skip the actual data and specifications part. Another interesting case is the one proposed in the city authentic, where cities are forced to become brands (cultural commodification) to attract real state developers and "entrepreneurs". In the midst of that, the less privileged people living there suffer the most (gentrification).
Another theory that I play with it's that things were much more durable before since people bought mostly out of necessity (contrary to consumerism today), so there was no narrative capable of convincing them to buy a lesser product. But that's not how we make decisions today so planned obsolescence is permitted and all around us.
The branding problem is another big one, mostly related to publicity. Everything needs to be branded (politics, influencers, companies…) to work (since everyone else is branded as well), but good branding has certain requirements, like repeating things many times and not changing positions. You can see how that can become a problem if the president runs on a war campaign but then finds out how geopolitics works. That´s an extreme example, but the imposition that there is on businesses and individuals to become a Brand© forces them to take stances that are not beneficial even to themselves.
At some points, this becomes entangled with ideology, but in a way, that's just marketing on values.
This is laid out in the book/essay The Death of Expertise. There Tom Nichols proves how during the last decades and, especially, throughout the 21st century, expert knowledge is in decline in the USA. And right now, marketing culture everywhere is downstream from the Americas. There is a rejection of science and rationality that I also find in my real-life interactions. This is partly the fault of the experts, who have a responsibility to educate people, but also of the degrading university system and the journalists. 3
Eric Weinstein argues that an important reason why expert communities face pressure to distort facts are Embedded Growth Obligations (EGOs), very much related to the rot economy presented earlier.
Large institutions built on implicit growth expectations don't die when growth runs out. They simply become pathological in steady state.
There is a social contract that we take for granted in liberal democracies, but the future is not looking too bright on that front. We must work to avoid authoritarian outcomes, both in politics and economics. I believe that the marketing environment of today is not helping towards this but it seems impossible to prove.
This is as good a point as any to introduce the concept of Technofeudalism. Varufakis recently published a book about it and it´s making the rounds all around, but I believe the concept was first popularized by Benjamin Bratton in his book "The Stack" (currently reading it) as Cloud Feudalism. The idea is that the powers that govern us are changing, and advanced technology is used to create systems of social control reminiscent of feudalism. Large tech companies act as feudal estates and hold enormous power over both the digital and physical domains. This concentration of power can kill competition, limit innovation, and exacerbate social inequalities.
This is another key to why the marketing scheme is so devious to me, as over time, the balance between consumers and producers has considerably shifted, and at some point, marketing became less about finding consumer problems to solve and more about creating needs (systems of control). Companies were nicer at the beginning, but once they found themselves in a position equivalent to that of a feudal lord, consumers began to get exploited and perverted towards consumerism and wasteful behavior.
A friend of mine holds that this is a problem of the individual and that companies should be allowed to operate with this kind of practice since people have the option to move at any time, but that isn't true in the world I live in. While that option exists, most people didn't know there were options to begin with, and for many others (myself included), the peer pressure is more than enough to keep me playing in their system.
One exception to the rule where I would like to see more marketing is on basic societal policies that everyone agrees that are good, like having children.
Up until now, I´ve tried to make my argument on purely practical grounds. I´d like to think of myself as a pragmatist and I don´t tend to give much weight to moral arguments, but in this case, something was bugging me from the start. As I was struggling to find the words, I heard a podcast featuring Brian Eno and Yanis Varoufakis (I know that's a weird crossover of bald guys). As Eno says:
The most important question you can ask yourself is what is it you really like (...) That´s the foundation of every decision you make about the future. And there´s a whole industry devoted to telling you what you like.
Some other related quotes of people that to me have proven to have a pretty accurate world model, but couldn't find a place in the blog:
You’re doing sales because you failed at marketing. You’re doing marketing because you failed at the product. Naval
las cosas pierden tanta fuerza cuando las dices que solo vale la pena hacerlas y que hablen por sí solas. baby pantera
How GeoHotz would fix Qualcomm
Nerds might wish that distribution could be ignored and salesmen banished to another planet. All of us want to believe that we made up our minds, that sales don’t work on us. But it’s not true. Everybody has a product to sell—no matter whether you’re an employee, a founder, or an investor. It’s true even if your company consists of just you and your computer. Look around. If you don’t see any salespeople, you’re the salesperson.” Peter Thiel (I'm nerds and he is wrong)
I will try to update this post whenever I find some examples that I feel add to my point.
Another thing that Cory has been talking about for a while is the liberalization of copyright laws, which I am very much in favor of as explained in a previous post that needs a part 2. Also apparently the enshittification word wasn't coined by him, but the wiki page supports his narrative. A good reminder of the kind of biases Wikipedia tends to have.↩
This more "pragmatic" view of the world that I hold has some real drawbacks. I have never been interested in fashion or generally looking good, and I'm pretty sure that has been a net negative in my life.↩
This is comedically pointed out by Taleb in The Intellectual Yet Idiot, which to be honest made me feel a bit called out, as he listed many positions that I held and found to be wrong and current ones that I'm convinced about. I wouldn't like to be an IYI, but if supporting GMOs makes me one I'll go for it.↩