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Interesting line of reasoning. :-) That would imply, that (globally) we spent significantly [EDIT: remove -less-, insert:] more on advertising before the adven
by repelsteeltje 3y ago
Interesting line of reasoning. :-)
That would imply, that (globally) we spent significantly [EDIT: remove -less-, insert:] more on advertising before the advent of personalized targeting.
- smeej 3y agoI think it's the other way around. If we go back to the situation in the past, price goes up, not down.
- repelsteeltje 3y agoCorrect, my bad. Got confused while writing by the observation that ad expenditure is rising year after year. So clearly, the "savings" allegedly attributed to personalized targeting have not translated to advertisers.
- spacebanana7 3y agoNot necessarily, cost reductions can increase, decrease or have no effect the total expenditure on goods. The total effect is quite ambiguous depending on the income and substitution effects.
- aesh2Xa1 3y agoI agree. I've always heard "charge what the market will bear." Why would a reduction in advertising costs equate to lower consumer pricing — if there's a better margin to be had instead?
- hirako2000 3y agoBecause for most products brand fidelity isn't keeping competition away. Higher than necessary margin does not last long in a competitive market.
- aesh2Xa1 3y agoGood point. That can be true if two competitors are competing on price as a primary factor. Price might not be the biggest factor, however, and improving the margin would be attainable in that gap.