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> Of course bigger ones spend more money on advertising - but then they also invest more heavily in stock and production lines, and have a correspondingly great
by md224 13y ago
> Of course bigger ones spend more money on advertising - but then they also invest more heavily in stock and production lines, and have a correspondingly greater need to recover their investment.
Not sure I follow the logic here, but I don't know much about economics. Your logic seems to be... big companies that spend a lot of money need to make a lot of money to cover their expenses, so it's okay for them to be able to advertise more heavily than smaller companies, since they need to sell more stuff? Is that the argument?
- anigbrowl 13y agoClose. I'm not saying 'it's OK' but rather than they have a strong economic incentive to do so. Suppose, for example, that company A has revenues of $50m/year, and launches new product at a cost of $10m each year. Company B is a boutique manufacturer in the same market that pulls in $2m a year and spends $500k to launch a new product every 3 years. If they both spend 5% of their launch budget on advertising, Company A will be buying an awful lot more ads, and probably getting them at a lower price per impression.