Three kinds of advertising

Direct response ads pay for themselves (at least they do when they work). Socially acceptable paid-for interruption leads to response, and the response (a sale, generally) generates revenue and you can run the ad again.

Google's business is driven by direct response advertising.

Trust ads are generally unmeasurable. 'I've heard of these guys, somewhere.' Without consciously realizing it, we often choose to do business with the familiar and ads increase familiarity. Particularly the right ad that runs in the right place. This is old school advertising, the first kind that appeared on TV. This is advertising that tells a story, advertising about belief, not necessarily action.

Demand enhancement ads remind us that on a hot day, we'd like a cold drink. They are ads designed to tickle and provoke, to increase the number of people in the market for what it is you sell. This is the best kind of billboard, the one that says, 'next exit.'

Every once in a while, an ad does all three things, but that's a foolish thing to hope for. Budget appropriately, because the very worst thing you can do with an ad is spend too little - it will get you the same results as spending nothing.

Read more from Seth in our Clubhouse.