Exactly... As a general rule, all other things being equal, the more informed the participants in a market are, the better the efficiency of the market. Advert

Exactly... As a general rule, all other things being equal, the more informed the participants in a market are, the better the efficiency of the market. Advertising negatively affects markets because it leads people to make decisions based on things that are not necessarily in their interests, i.e. it leads people to make more uninformed (or misinformed) decisions. In effect, it's basically exploiting a market externality: vulnerabilities in human psychology. I mean, this is not always true. Sometimes, you might become aware of a great product or service due to advertising. But I am entirely convinced that, in general, the negative effects hugely, hugely outweigh the occasional benefit, just by observing how people usually make their buying decisions in their day-to-day lives (including me, I'm not immune to that!).