Enough people to sustain the model still click. At Meta's scale, you only need a small fraction of clicks and conversions to make it worth it. Meta reaches billions of people, so even a small slice of that is still a huge chunk of people.
There's also a bit of competitive pressure. Even if people get numb to ads, business, especially small businesses, can't afford to not show up if their competitors are still showing up in feeds.
The usual advertising psychology tricks still apply also which is why ads still work. Even if the ad itself doesn't result in a conversion, there's still the exposure effect of someone seeing your brand over and over again in their feed. The more times someone sees it, they'll subconsciously start preferring that brand or see it as more trustworthy. Among other tricks.
Thanks for the thoughts -- the points you make align with my understanding. It still seems so... frail? At least given how much money is circulating in that world.
Attribution, for example, has to be an absolute mess. Especially in the case of the psychology tricks you mention... If I was shown an ad for Subway, and then ate a Subway sandwich a few days later -- it had absolutely nothing to do with the ad. I only eat there when there aren't better options. Yet, I bet some ad conversion counter ticked up somewhere. I see ads for ShopRite all the time, but it's the only grocery store in my area, so of course I shop there. When you repeat this millions of times, it's surprising to me that ads are still provably effective to the point of being a trillion dollar industry.
I wonder if it will become less so as older generations go offline.
There's also a bit of competitive pressure. Even if people get numb to ads, business, especially small businesses, can't afford to not show up if their competitors are still showing up in feeds.
The usual advertising psychology tricks still apply also which is why ads still work. Even if the ad itself doesn't result in a conversion, there's still the exposure effect of someone seeing your brand over and over again in their feed. The more times someone sees it, they'll subconsciously start preferring that brand or see it as more trustworthy. Among other tricks.