Great idea. Let's run with it

In the early days of commercial television, when Mrs A and Mrs B first test-drove their different brands of floor cleaner, advertising was a simple business. It was all to do with pack-shots and slogans, chirpy housewives and men in loin-cloths; platoons of well-drilled children could chorus the wonders of deep-fried theme snacks while animated molars would scream for mercy in the presence of mouthwash. Later, more complex adverts might utilise the cosy dynamics of an abbreviated situation comedy, or the Martini internationalism of a Riviera romance, but the public still knew that an advert was an advert: a sealed world of simple formulae that were geared towards parting us from our money.

Nowadays, the intention of advertising is precisely the same, but the narrative of adverts has become so complex that they require a thorough fluency in the language of other cultural media in order to spring their trap. Today, most successful adverts are based on direct references to movies, pop songs and, increasingly, other adverts. Advertising, in fact, has become the recycling plant of contemporary culture, converting the essence of well-known films and songs into 30-second passion plays during which our recognition of the source material empowers the advertised product with a sub-textual meaning and glamour. Adverts, therefore, possess a pop cultural topicality, electing themselves to be a kind of osmotic membrane through which bought-in snippets of movies and music can flow unimpeded to reinforce our dialogue with a product.

This has turned advertising into a mass-media comedy of recognition. Last week, for instance, there was a late-night commercial break on Channel 4 during which "Shirley Valentine" sold Findus Lean Cuisine, the Nissan Micra was revealed through the food-as-erotica conceit of 91/2 Weeks, and a little comedy for Polo mints appeared suspiciously indebted to the flawless genius of Wallace and Gromit. And, to prove that the osmotic membrane permits two-way traffic, it is interesting to note that the escape of the cyberpooch Preston, in Wallace and Gromit's A Close Shave, was lovingly based on Terminator.

In order to understand this trend according to its own logic, perhaps we should look back to a scene in the yuppie drama thirtysomething. Miles Trelman, the boss of the advertising agency where Michael Steadman has hourly battles with his conscience, has overheard one of his employees remarking, "Another day - selling cars." Before you can say "Mum's Gone to Iceland", Trelman replies: "Gentlemen, we no longer sell cars - we sell the idea of cars..." This neo-Platonic one-liner comes close to defining the notion of cultural recycling that fuels the greater part of contemporary advertising. After 30-odd years of television advertising, not only have we become super-sophisticated in our reading of adverts, but the basic narratives of the TV hard-sell have become worn out. Thus, if you want to sell a Peugeot, you borrow the premise of Thelma & Louise and then place the characters into a miniature drama that parodies the filming of a famous scene in the original. This, it could be argued, is slightly more complicated than the plot of Coriolanus, but we the consumers of modern media get it in one, irony and all. To sell us the idea of its car (small but gutsy), Peugeot has found a completely new signifier, ready- made and culturally empowered, to do its work for it. Thus, despite the claims of more militant post-modernists, we can see that signs have meaning.

Peugeot also has a poster campaign, "The Great Escapade", which borrows from the scene at the end of The Great Escape when Steve McQueen attempts to jump a border barricade on a motorbike. Of course, the Peugeot is describing a delicate parabola into freedom, while McQueen fell off and got picked up by the Germans. But when adverts borrow from cinema history they always make their product the hero. We can see this again in a TV advert for the Ford Fiesta, in which the pastel-shaded suburbia that was colour-coordinated to such effect in Edward Scissorhands is transmuted (the Situationists would have seen it as an example of subversive detournement) into the stifling world of Small Town. Our Fiesta driver, needless to say, has had enough and takes out what appears to be a sorority pin in order to puncture the oppressive landscape, then drives off into an artist's impression of Norfolk to the strains of what might be an instrumental by Peter Frampton. This plastic heroism on the part of the loyal consumer, when derived from the celebrated menace of Reservoir Dogs, can turn the hard-sell into a stick-up. How else could the iconography of Tarantino's gangsters be used to urge our purchase of "I Can't Believe It's Not Butter"?

The trend for inter-media punning can be seen as either degrading to its source material or the greatest form of flattery. What higher medal, in the structure of democratic consumerism, could be awarded for services rendered? After all, Andy Warhol maintained that he wanted to be an advert - eternally secure from the anxieties of reality in a product-driven world where everything was always the same - and he, as the architect of Pop art, must have understood the cultural value of advertising. When Warhol turned adverts into art, he was laying the foundations of a prophetic philosophy; deftly reversed, art can be turned into adverts.

But beneath the plateau of dehumanised conceptualism that Warhol chose to call home, how do most of us feel when one of our favourite films or songs is somehow cheapened by the physics of advertising? Art is tamed by advertising, not least because of the essential conformism of the latter, which is bound to the pursuit of profit. Dispossessed fans of The Smiths were fed a moment of ultimate heresy when their anthem of doomed outsiderdom was used to serenade two nice young alternative types in Pepe jeans. The thrill of recognition was eclipsed by a sense of betrayal, thus turning the intentions of the advertisers against themselves. For the advertisers, who are hoping to harness the power of what Warhol described as his "aura", the appropriation of cherished cultural arcana is reduced to a mere stock exchange of signs.

Aura, however, is worth its weight in radium, and when it works it really works. This can be seen in the meteoric success of the current Levi's campaign, which has shot the wonderful "Spaceman", by Babylon Zoo, to the top of the UK charts. It has also, arguably, blurred the boundaries between art and advertising once and for all. It is more or less impossible to determine whether "Spaceman" is the source material for the Levi's campaign or vice versa. And, it could also be argued, it doesn't really matter. Levi's sells lots of jeans and Britain is introduced to a great new pop group: everyone is happy.

More established artists, however, might not take so kindly to the appropriation of their good ideas. Damien Hirst is threatening legal action against a British Design and Advertising Festival promotion that showed a computer- generated image of a lamb in a tank of Boddingtons beer. So where does the irony end?

It ends, perhaps, in the fact that Babylon Zoo are being chased up the charts by Goldbug, whose remix of "Whole Lotta Love" features a sample of the hallowed Pearl & Dean theme music used for cinema commercials. Is nothing sacred?

n 'Reservoir Dogs' is released on video on 5 Feb. We have 15 copies to give away: see page 21