The company believed that roughly 5 percent of sales were driven by paid-search advertising, meaning that they believed that if we would pull the plug on advertising, sales would drop by 5 percent. What we found was that sales dropped by about half a percent. So, that’s an order of magnitude less. And it was not statistically different from zero.
As we have been noting here in our Dot-Com 3.0 series for some time, the internet advertising model does not work, and so these social media companies are just treading water until they can be made into utilities.
This means that all the stuff that we traded away to make a “services economy,” such as manufacturing and agriculture, might be more necessary than we think. Too bad unions, taxes, regulations, affirmative action, and lawsuits raised the price of American industry to unsupportable levels in most cases. Too bad the same costs drove out the small companies and replaced them with mega-corporations while keeping startups down so that these monopolies can continue.
Looks like democracy has been making especially bad decisions since the Clinton era. Perhaps these people are just high-end Dunning-Kruger Effect cases, smart enough to achieve what they want but oblivious to the patterns of reality and therefore unaware and uncaring about the long-term consequences they are creating.