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Comment by julienfr112 | Hacker News Reader

There is also one agent problem : manager status is linked to headcount or/and budget. As a head of marketing, you have no interested at all at reducing your ad budget, quite the opposite !

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That’s a rather naive way of looking at how corporations work. If you’re the head of marketing and go to the CFO and say “hey, we found a way to get the exact same results we currently get but at half the cost” you can bet you will be rewarded for it.

Depends. Are you sticking with that company or do you want to shop your resume around?

And given the terrible career advancement options in our industry it makes total sense to optimise for "resume value" as opposed to "business value" since your resume will compensate you much more (in the next company you're going to end up at) than contributing to your current company where you'll end up with a pitiful statutory raise.

No one is going to half the cost, and executives don't in general do any sort of cost reduction activities for two reasons. First, they would be fighting diminishing returns since there is only so much reduce-able cost. Second, they might in reality only be able to do a small cost reduction, then they are doubly screwed as they will reach diminishing returns faster. If the company mandates cost reduction executives will just fire a few hundred or thousand employees because that is deterministic, easy, and instant savings. They will just restaff when the cost reduction campaign is over.

Headcount is a sad driver for promotions, so managers are not really incentivize to do it. Only the good ones would try to keep the team lean and fast.

Right, if you do science and it turns out your department has a smaller effect on revenue you just lost power/status. So these experiments won't be done at most orgs.

A smart manager won't just let their budget be cut, because that won't be good for the company. If they find that marketing approach X doesn't work as well as Y or Z, they will simply move funds to do more of Y and Z.

By doing so they will increase revenue and profits all the while keeping ad spending at the same level.

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