The way advertising works

The portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally. Sometimes our economic models think of consumers as having fixed preferences or fixed goals. It's a simplification as consumers are driven by more than rational thought. 

Advertising proves our preferences & goals aren't just malleable, but easily malleable.  

Awareness: Telling customers, "FYI, product X exists. Here's how it works. It's available if you need it."

Persuasion: "4/5 doctors prefer Camels" or "Verizon: America's largest 4G LTE network"

Promises: promises can be explicit, like a guarantee or warrantee, but more often implicit, in the form of a brand image. Disney makes a name for itself as a purveyor of "family-friendly entertainment," customers come to rely on Disney to provide exactly that

Signaling: an ad conveys valuable information simply by existing. "We're willing to spend a lot of money on this product. We're committed to it."

Cultural imprinting is the mechanism whereby an ad, rather than trying to change our minds individually, instead changes the landscape of cultural meanings — which in turn changes how we are perceived by others when we use a product. 

What a product "says" about you is only important insofar as other people will notice your use of it.  

This ad works on an individual level and a cultural level:

The emotional inception: The above ad creates an association between the Nike brand and the idea of athletic excellence. Over time and with enough exposure, the customer will internalize this association. 

The cultural imprinting: The above ad creates an association between the Nike brand and the idea of 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.