Critic speak is tough, but we've got you covered.
Quote :"Encoding/Decoding," in Culture, Media, Language
Reality exists outside language, but it is constantly mediated by and through language: and what we can know and say has to be produced in and through discourse. Discursive "knowledge" is the product not of the transparent representation of the "real" in language but of the articulation of language on real relations and conditions. Thus there is no intelligible discourse without the operation of a code.
Hall isn't just saying that an "e" actually means a "q" or two dots stand for yes, one dash for no, when he emphasizes the importance of codes in communication. He means that when we read a text, we're presented with an encoded meaning that we're supposed to decode or interpret. Whether we decode it the way we're supposed to is a different matter: while a reader may sometimes interpret a text in the way desired by its producer, there's also the possibility of reading against the grain.
Sometimes a reader or viewer may depart from the encoded meaning to a minor extent; other times, they may interpret the text in a completely different, even oppositional, manner to what was intended. This can be particularly annoying for producers of media such as advertising, whose goal is to evoke particular responses on the part of potential consumers.
So, when an ad makes fun of celebrity endorsements, will the watcher interpret that as the company being honest about their advertisement and drink Sprite, or will they see it as an even more blatant money-making campaign and drink Sierra Mist instead?
What Hall is saying in the quote is that, while codes may become naturalized, they're codes all the same: they represent meanings that seem universal but that doesn't mean that they're natural and free from ulterior motives. Maybe Sprite actually tastes good, or maybe we just think so because famous athletes tell us so.