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> ad revenue is the new shrink-flation without it prices will rise. Some prices rise, some prices go down. Ads aren't free money, the advertisers are paying f
by cogman10 12d ago
> ad revenue is the new shrink-flation without it prices will rise.
Some prices rise, some prices go down.
Ads aren't free money, the advertisers are paying for them (I know, seems obvious) but where do the advertisers get the money to advertise? Well, it's baked into the cost of the goods they advertise. That makes everything that advertises more expensive.
- socalgal2 12d agoAnd yet advertising raises demand, which in intern causes people to offer to meet that demand which means competition, which lowers prices. Lots of examples of this cycle you can search for.
- cogman10 12d agoThat only works for smaller and unestablished brands. There are diminishing returns to the economy of scale. Coca-cola, for example, isn't going to lower their prices in response to increased demand from their $4 billion marketing budget.
- chadgpt5 12d agoHigher demand causes higher prices, not lower. Competition is irrelevant because startup competitors have to advertise a lot more, making their prices even higher.