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> [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets] Assu

> [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets] Assuming you meant all spending, this cannot be true, because all marketing budgets are paid out of people's spending. You are paying for advertisements, they are included in prices of goods and services you buy.

Freak_NL 7y ago
It can be true if people spend more than they think they are willing to spend on content via advertisements. That is, people underestimate how much advertisements affect them. And of course there are people who simply block advertisements. Either that, or advertisers overestimate the impact of online advertising.
buboard 7y ago
marketing pays itself to an extent through increased revenue and scale. Historically, companies have spent more or less the same percentage of their revenue on marketing. It seems they find an equilibrium
dangrossman 7y ago
I can't forego buying food and housing and medication so that I can reallocate "what I pay for advertisements" to tipping websites. If there's less advertising inventory available on websites, P&G is going to reallocate that spend to some other form of advertising, they're not going to drop the price of the shampoo and toilet paper I buy from them. The money's not in my pocket to spend, it's in theirs.
- C4stor 7y ago
  You can reallocate. Only top tier brands use ads, and the price of the advertising is part of the premium you pay for the brand name. For a lot of products, there's no functional difference with their cheaper alternatives. So, this brand premium is in fact discretionary spending that you could reallocate.
  - dangrossman 7y ago
    This is kind of an academic point. "Reshaping the economics of the web" probably shouldn't involve assuming all consumers will want to change what brand of laundry detergent they buy so they can read more blogs.
    - C4stor 7y ago
      Why not ? Amazon has launched an offer where you can pay to access all kind of otherwise paywall gated media content (Amazon video and music and twitch prime etc) while also having 2 day delivery on a set of retail products not necessarily including your prefered brand. And people subscribe to Amazon, which finances the said media content, all the while changing their laundry detergent of choice. I don't say this must be a direct rational choice, but it's already kind of happening in some places.

Freak_NL 7y ago

It can be true if people spend more than they think they are willing to spend on content via advertisements. That is, people underestimate how much advertisements affect them. And of course there are people who simply block advertisements. Either that, or advertisers overestimate the impact of online advertising.

buboard 7y ago

marketing pays itself to an extent through increased revenue and scale. Historically, companies have spent more or less the same percentage of their revenue on marketing. It seems they find an equilibrium

dangrossman 7y ago

I can't forego buying food and housing and medication so that I can reallocate "what I pay for advertisements" to tipping websites. If there's less advertising inventory available on websites, P&G is going to reallocate that spend to some other form of advertising, they're not going to drop the price of the shampoo and toilet paper I buy from them. The money's not in my pocket to spend, it's in theirs.

C4stor 7y ago
You can reallocate. Only top tier brands use ads, and the price of the advertising is part of the premium you pay for the brand name. For a lot of products, there's no functional difference with their cheaper alternatives. So, this brand premium is in fact discretionary spending that you could reallocate.
- dangrossman 7y ago
  This is kind of an academic point. "Reshaping the economics of the web" probably shouldn't involve assuming all consumers will want to change what brand of laundry detergent they buy so they can read more blogs.
  - C4stor 7y ago
    Why not ? Amazon has launched an offer where you can pay to access all kind of otherwise paywall gated media content (Amazon video and music and twitch prime etc) while also having 2 day delivery on a set of retail products not necessarily including your prefered brand. And people subscribe to Amazon, which finances the said media content, all the while changing their laundry detergent of choice. I don't say this must be a direct rational choice, but it's already kind of happening in some places.