How Advertising Works

The most interesting thing I read today was Kevin Simler's blog post on how advertising works. My biggest takeaway was about how ads work by creating common knowledge in a community rather than simply advertising to an individual:

The cultural imprinting story goes like this: The above ad  creates an association between the Nike brand and the idea of athletic  excellence. (So far, so similar.) Over time and with enough exposure,  the customer will realize that "Nike" is synonymous with "athletic  excellence" out in the broader culture. Later, when he's  shopping for shoes, his brain will use this information (intuitively) to  predict what his peers will think of him if he shows up on the court  wearing Nike shoes (vs. wearing some other brand). At the margin, this  will tip him toward buying Nike.