5 ms·

Tobacco gives an interesting case study on advertising. In many developed nations all tobacco advertising and marketing is banned. I would argue that this is a

Tobacco gives an interesting case study on advertising. In many developed nations all tobacco advertising and marketing is banned. I would argue that this is actually good for the tobacco companies: they save billions of dollars a year and no new competitor to them can emerge, as it would have no way of telling smokers it exists. This example makes me think that advertising of mass market consumer goods is like nuclear weapons: if your competitors are doing it, you'd be too scared of losing market share not to do it too. But in aggregate, all that really happens is that consumer prices are higher, and the ad industry gets rich. But actually, if none of the companies advertise, consumers still find what they need through retailers, word of mouth, or simply continuing to buy what they already buy.

jasode 6y ago
>But actually, if none of the companies advertise, consumers still find what they need through retailers I don't know how it works in the UK but in USA, advertising also happens inside the retailers' locations: - endcaps displays of products via promotional payments are a form of advertising [0][1]. A related concept is "slotting fees" - instant tear off coupons on the aisle shelves is a form of advertising - workers giving out free food samples (e.g. blue uniform contractors at Costco) is advertising - informational videos mounted on displays in the aisles is advertising >, word of mouth, The first person in the word of mouth chain was often a recipient of advertising. > or simply continuing to buy what they already buy. But a lot of consumers don't want to always buy what they already buy. They want to buy new and improved products. In my case, I saw an advertisement for Oatly in a magazine which is a new brand of non-dairy milk. I used to use soy milk which didn't taste great but it was better than drinking black coffee. The new oatmeal-based milk tastes much better and I would have never found it by going to the same regular retail grocery store I normally shopped at. I had to go out of my way to find a different retailer that carried it. Although 99% of advertising is terrible and irrelevant, it sometimes exposes me to new products that make me happier. [0] https://en.wikipedia.org/wiki/Endcap https://en.wikipedia.org/wiki/Endcap [1] http://www.cockeyed.com/citizen/retail/raleys.php http://www.cockeyed.com/citizen/retail/raleys.php
- amelius 6y ago
  A simple search for "reddit non diary milk" would also have found that suggestion and a bunch of others: https://www.reddit.com/r/vegan/comments/9ghlbh/in_your_opinion_whats_the_best_tasting_nondairy/ https://www.reddit.com/r/vegan/comments/9ghlbh/in_your_opini...
- lifeisstillgood 6y ago
  I think the 'Armitage Shanks' Advertising principle applies here - I similarly drink a brand of Swedish Oat Milk - i even pay extra for the Barrista version (added chalk for whiteness) because i saw people in my hipster coffee house making it with that very brand so when I saw the brand in the local supermarket i swapped away from soya. They did not need to 'advertise' in the traditional sense - they just needed to logo-ise their packaging in a recogniseable way. Armitage Shanks for those not of a certain age in the UK is a brand of toilet bowl manufacturer - they simply put the name of their company visibly on the bowl of every toilet I used for probably 30 years. I doubt they ever spent a penny (!) on billboards.
anthonypasq 6y ago
> This example makes me think that advertising of mass market consumer goods is like nuclear weapons: if your competitors are doing it, you'd be too scared of losing market share not to do it too. But in aggregate, all that really happens is that consumer prices are higher, and the ad industry gets rich. Pretty much every single intro to marketing class talks about this and uses it as the default example when first discussing game theory.
JSavageOne 6y ago
> no new competitor to them can emerge, as it would have no way of telling smokers it exists. A competitor's product could just show up in the store, and if the product was superior and/or the price was better, consumers would choose the other one. I'm not a smoker, but if this isn't happening, I'm guessing it's because the products aren't really that differentiated and/or the consumer gets (biologically) addicted to whatever brand they started with meaning they don't really have the desire to try something new since they just want to satiate their addiction.

jasode 6y ago

>But actually, if none of the companies advertise, consumers still find what they need through retailers I don't know how it works in the UK but in USA, advertising also happens inside the retailers' locations: - endcaps displays of products via promotional payments are a form of advertising [0][1]. A related concept is "slotting fees" - instant tear off coupons on the aisle shelves is a form of advertising - workers giving out free food samples (e.g. blue uniform contractors at Costco) is advertising - informational videos mounted on displays in the aisles is advertising >, word of mouth, The first person in the word of mouth chain was often a recipient of advertising. > or simply continuing to buy what they already buy. But a lot of consumers don't want to always buy what they already buy. They want to buy new and improved products. In my case, I saw an advertisement for Oatly in a magazine which is a new brand of non-dairy milk. I used to use soy milk which didn't taste great but it was better than drinking black coffee. The new oatmeal-based milk tastes much better and I would have never found it by going to the same regular retail grocery store I normally shopped at. I had to go out of my way to find a different retailer that carried it. Although 99% of advertising is terrible and irrelevant, it sometimes exposes me to new products that make me happier. [0] https://en.wikipedia.org/wiki/Endcap https://en.wikipedia.org/wiki/Endcap [1] http://www.cockeyed.com/citizen/retail/raleys.php http://www.cockeyed.com/citizen/retail/raleys.php

amelius 6y ago
A simple search for "reddit non diary milk" would also have found that suggestion and a bunch of others: https://www.reddit.com/r/vegan/comments/9ghlbh/in_your_opinion_whats_the_best_tasting_nondairy/ https://www.reddit.com/r/vegan/comments/9ghlbh/in_your_opini...
lifeisstillgood 6y ago
I think the 'Armitage Shanks' Advertising principle applies here - I similarly drink a brand of Swedish Oat Milk - i even pay extra for the Barrista version (added chalk for whiteness) because i saw people in my hipster coffee house making it with that very brand so when I saw the brand in the local supermarket i swapped away from soya. They did not need to 'advertise' in the traditional sense - they just needed to logo-ise their packaging in a recogniseable way. Armitage Shanks for those not of a certain age in the UK is a brand of toilet bowl manufacturer - they simply put the name of their company visibly on the bowl of every toilet I used for probably 30 years. I doubt they ever spent a penny (!) on billboards.

anthonypasq 6y ago

> This example makes me think that advertising of mass market consumer goods is like nuclear weapons: if your competitors are doing it, you'd be too scared of losing market share not to do it too. But in aggregate, all that really happens is that consumer prices are higher, and the ad industry gets rich. Pretty much every single intro to marketing class talks about this and uses it as the default example when first discussing game theory.

JSavageOne 6y ago

> no new competitor to them can emerge, as it would have no way of telling smokers it exists. A competitor's product could just show up in the store, and if the product was superior and/or the price was better, consumers would choose the other one. I'm not a smoker, but if this isn't happening, I'm guessing it's because the products aren't really that differentiated and/or the consumer gets (biologically) addicted to whatever brand they started with meaning they don't really have the desire to try something new since they just want to satiate their addiction.