"Two common conceptions with regard to advertising which are held by a considerable number of people are that enormously large sums of money are expended for it, and that much of this expenditure is an economic waste"

Daniel Starch points to two widespread beliefs about advertising: that ad budgets are immense and that much of the money is squandered. The first belief arises naturally from visibility. Advertising is one of the most public-facing business activities; billboards, magazine spreads, radio jingles, and now digital placements are hard to ignore. Because the outputs are conspicuous, people infer that inputs must be extravagantly large. The second belief reflects skepticism that persuasion changes real outcomes, or that when it does, it often merely shuffles market share without adding social value.

An economic lens complicates both beliefs. Advertising has dual roles: it can inform (reducing search costs, disclosing features, signaling quality) and it can persuade (shaping preferences, building brands). Informational effects tend to create value by making markets more efficient, while purely persuasive effects risk zero-sum arms races, where each firm must spend because rivals do, with little net societal gain. People sense this tension and label the persuasive side “waste.”

Starch’s life’s work implied a different posture: measure before judging. Not all advertising works, but some does, and its effects can be quantified, on recall, comprehension, brand lift, and sales. When campaigns are targeted, creatively clear, and timed to consumer needs, the spend behaves like investment, yielding cash flows and reducing uncertainty. When campaigns chase vanity metrics, reach the wrong audience, or saturate beyond diminishing returns, they resemble waste.

There are also spillovers. Ad spending finances media and content, subsidizes news and entertainment, encourages innovation by helping new products gain awareness, and can lower average prices through scale. At the same time, clutter, deceptive claims, and status competition are real costs.

Starch’s observation invites discrimination rather than dismissal: separate large from wasteful by insisting on empirical accountability. The question is not whether advertising costs a lot, but whether each dollar advances consumer understanding and profitable exchange more than the next best use of that dollar.