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It is sort of crazy. Consider two products A and B. They are identical, except that A is more expensive and has advertising. B is cheaper, but has no advertisin
by ssp 16y ago
It is sort of crazy. Consider two products A and B. They are identical, except that A is more expensive and has advertising. B is cheaper, but has no advertising. Which one wins? A because nobody knows that B even exists.
However, everybody is worse off. Consumers got advertising displayed to them that they didn't want to see and they got to pay more for the privilege. The manufacturer of B lost totally. Even the manufacturer of A is worse off because without the advertising, he could have split the difference with the consumer and gotten a larger profit.
The only winner is the advertising company who is making something nobody wants.
That is totally inefficient. Can it be fixed somehow?
- drblast 16y agoConsider if there were no advertising; the result would likely be that A and B would both lose because nobody would know they exist. So it's not completely inefficient. How much would you pay to not have to look around who knows where for things that you want?
- zephyrfalcon 16y ago"Consider if there were no advertising; the result would likely be that A and B would both lose because nobody would know they exist." This may have been true in the past, but this is 2010... I constantly find out about products (and other things, and people, etc) that I didn't know existed, through other means than advertisements. Without paying for it, in fact; people put reviews about ANYTHING online nowadays.
- lsc 16y agosearch engines provide some of the answer, but search engines have an upper bound to their effectiveness. If a search engine were more effective than an ad, people won't click on search engine ads, and the search engine wouldn't make any money. I think what we really need is another business model for search engines.