How does advertising create value?

Advertising creates value primarily through the perception and meaning it instills in consumers. Rory Sutherland argues that value can be created in the mind as much as it is in the factory. He disputes the notion that marketing is merely an optional extra or "fairy dust" on top of a product's intrinsic value. Instead, advertising transforms the perception of what a product means through storytelling, framing, and recontextualization, making things more valuable and enjoyable without necessarily changing the physical product 1.

Moreover, advertising can create environmentally friendly perceived value. Sutherland notes that embedding meaning into a product through psychological mechanisms often requires less carbon consumption compared to physically enhancing the product. For example, making a train journey more enjoyable is easier and more impactful than significantly increasing its speed, demonstrating how psychological enhancements can offer substantial perceived value 1.

Another aspect discussed by Rory Sutherland is how advertising reshapes consumer experiences. Advertising doesn't just inform consumers about a product; it changes how they experience it. By creating trustworthy brands and memorable signals—similar to how flowers attract bees with their large petals—advertising enhances the perceived promise and reliability of a product, leading to sustained consumer interest and repeat purchases 2.