Websites with ads are selling eyeballs to advertising companies, who then turn around and sell them to your local cranberry juice company. There are two types

Websites with ads are selling eyeballs to advertising companies, who then turn around and sell them to your local cranberry juice company. There are two types of eyeballs: 1. Those who don't end up buying cranberry juice: In this case, you've wasted their time showing them the ad - especially if they never talk about the ad to anyone else. Companies have a very direct incentive to avoid false positives, so you don't need to do anything there. 2. Those who end up buying cranberry juice: Unless you have a problem with the cranberry juice itself, the only problem here is that the cost went up slightly to pay for the advertising. If I'm willing to pay 10 cents more for cranberry juice than an alternative like tomato juice and 10% of the total cost is advertising(on average), then the benefit of advertising is: dValue = dBenefit - dCost = 0.10 - 0.1 * cost which is negative if the juice costs more than $1. (This assumes that without advertising, I would've picked the alternative) In order for dValue to always be negative(your claim), either nobody anywhere is innovating(dBenefit is never very large) or advertising companies are charging too much(dCost is very often large). How cheap would advertising have to be for you to consider it a net positive? Give me a number as percentage of total cost for a few example items. Unless dBenefit is always 0, such a number must exist when you subset to the case #2 group. This number seems like it would be related to your proposed tax, too.