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> A reminder that the existence of the advertising industry is a tax that drives up the cost of everything that you buy, because every dollar spent on advertisi

> A reminder that the existence of the advertising industry is a tax that drives up the cost of everything that you buy, because every dollar spent on advertising is a dollar that does not actually improve the product in any way, and yet must be recouped by increasing the price of the product I am not going to try to argue that advertising is good or anything, but I don't think your economic argument is accurate. If a company didn't have to spend anything on advertising, they wouldn't use that money to improve their product or to reduce the price; the money would go towards profit. So many people seem to think that prices are set at "expense + fixed profit margin = price" but that is not how any company sets their prices. The ONLY reason a business is going to lower prices is because they think that is the way to increase their profit. They aren't going to lower prices just because some cost goes away.

bonoboTP 2y ago
In an efficient market, competition would drive prices down to reach quite thin profit margins. Of course there is all sorts of friction, change in conditions, inertia, upfront costs, risk etc that reality isn't ideal.
idle_zealot 2y ago
The idea is that they would have to spend that money on improving the good/service or reducing the price in order to compete. Currently more money goes to competing for your attention than on competing on merit.
gljiva 2y ago
If advertising is giving an expected edge over competition bigger than price decrease, then the advertising will be used in sort of an arms race that could have been a competition in giving the best product for the least money instead. Still, even if there is no immediate price decrease for the customer, I would be much more satisfied if all the money went to the maker(s) of the product and well-investing shareholders than someone who provides no value and could have been working on something productive instead.

bonoboTP 2y ago

In an efficient market, competition would drive prices down to reach quite thin profit margins. Of course there is all sorts of friction, change in conditions, inertia, upfront costs, risk etc that reality isn't ideal.

idle_zealot 2y ago

The idea is that they would have to spend that money on improving the good/service or reducing the price in order to compete. Currently more money goes to competing for your attention than on competing on merit.

gljiva 2y ago

If advertising is giving an expected edge over competition bigger than price decrease, then the advertising will be used in sort of an arms race that could have been a competition in giving the best product for the least money instead. Still, even if there is no immediate price decrease for the customer, I would be much more satisfied if all the money went to the maker(s) of the product and well-investing shareholders than someone who provides no value and could have been working on something productive instead.