I think the selection effect is much larger for big, well-known companies. Everyone knows eBay, so advertising is obviously going to give decreasing returns. F

I think the selection effect is much larger for big, well-known companies. Everyone knows eBay, so advertising is obviously going to give decreasing returns. For smaller, lesser-known companies, I think advertising is much more effective. The chance is much lower that people will know about your product and buy it than if you spent more on advertising.