What's the "baseline" you claim? You can prove it yourself by buying some ads. 24 hours and a few thousand dollars and you can sell pretty much anything (which is a much greater signal than just views or clicks).
The obvious explanation to that is that it works, unless you want to call it magic. Also you probably do not realize how much advertising you are exposed to everyday, far beyond some banners or search results. It's never that simple.
Baseline: sale of product sans _digital_ advertising.
I'm not saying digital advertising never works. I'm simply asking for what it incrementally offers over other channels generally.
By digital advertising I'm being very specific: purchased ad space, be it real time advertising networks, sponsored content, and similar. Not "influencers" or other branding efforts for which proving effect is unlikely to be possible.
Further, I can see a difference from launching a new product using digital means versus the (much larger) established companies migrating or updating their marketing portfolio to include digital advertising. But a new launch may be choosing a sub-quality channel. Knife company sales aren't going to be great on digital versus going to a trade show, say, so the margin is what rules the day.
My request is not unreasonable. Show me the proof, the diff-in-diff, the actual assessment of incrementality generalizable to the channel for established companies. Otherwise there are competing theories which equally explain the effectiveness or lack thereof of the digital advertising channel, such as FOMO/prisoner's dilemma.
It either works or it doesn't, I didn't speak about efficacy which varies greatly depending on 1000s of factors. If you accept that it does work then I'm not sure what you're disagreeing about.
Does it improve over the baseline? Yes. It's very easy to see with modern analytics pipelines that report sales in real-time. Ask any growing venture-funded company selling a product or service. Stop the digital ad spend, see what happens. Start it again and see what happens. This has been done by channel, format, campaign and more to do media trials for the largest companies. These tests may not tell you exactly which ad was best but you can derive that this campaign works, or this format works, and can definitely see that the entire medium works. That's before getting into advanced referral tracking and econometric attribution modeling, or even simply asking customers where they last saw the ad.
All these media buying companies might waste money but they aren't in the business of losing it. FOMO/prisoner's dilemma from the other poster is just an interesting perspective regarding signaling, but it is not new. Advertising works but that's completely different from "it works for opposing sides or competing companies to create a net zero influence" which is just a cost of playing the game and a perfectly acceptable strategy. Maintaining market share is just as important as growing a new product and brands spend to signal that they can spend, thereby showing quality and success. Here's more on that: https://en.wikipedia.org/wiki/Signalling_(economics)
I'm not sure what you would like as proof but the Nielsen company has been doing this for decades and is accepted by the industry. Digital advertising isn't a new concept, it's just exposure like it was in TV, radio, print and signage since the beginning. It's just much faster, more personalized and much more pervasive in today's media and devices, and also much cheaper to run.
>> Show me the proof, the diff-in-diff, the actual assessment of incrementality generalizable to the channel for established companies. Otherwise there are competing theories which equally explain the effectiveness or lack thereof of the digital advertising channel, such as FOMO/prisoner's dilemma.
From your comment, you agree with FOMO/prisoner's dilemma even if you don't agree with the context of the jargon. As you mention, signaling theory is a more proper term for what we are describing, but signaling is efficient if we get to a separating equilibrium (e.g. quality differentiation of product) which clearly we don't see. Ergo FOMO/prisoner's dilemma is likely a better fitting model (though with some admittedly post hoc bias).
So the proof I am asking for is not existence of digital marketing spend, because that isn't proof of effectiveness of digital impact at all and has competing theories sufficient to cast shade on it as full explanation, but incremental improvement over other existing channels (and for established companies, doing nothing at all).
It either works or it doesn't, and you seem to agree that it does, so you're asking how it's better than existing channels? That's completely up to implementation and 1000s of factors as mentioned, and it doesn't need to be better than any other model to be useful for the bottomline, only that it returns a positive ROAS (return on ad spend).
A company selling to younger people might only advertise online while another only sells well through TV commercials. I don't see how that tells you anything useful other than to use the right media mix for your marketing needs.
That being said, whether a medium works is very easily proven by changing spend in isolation and seeing the impact on sales, and it's done by every major company. If spend exists, then campaigns exist, and so a outcome on sales can be measured as compared to the lack of spend (and thus campaigns). I'm unsure sure why that isn't evidence for you.
The obvious explanation to that is that it works, unless you want to call it magic. Also you probably do not realize how much advertising you are exposed to everyday, far beyond some banners or search results. It's never that simple.