This post is pretty weak on economics: First, customers often give you more money over time. Maybe they buy level one of your video game when they click on the

This post is pretty weak on economics: First, customers often give you more money over time. Maybe they buy level one of your video game when they click on the ad, but then they may buy levels two and three the next day after they beat level one...In the first case, the worst that happens is you don’t buy as many ads as you should. It should make some difference to you whether the lifetime value of a customer is equal to the value of your first sale (e.g. you sell caskets) or the value of the customer is many, many times the first sale (e.g. you sell heroin). A casket seller should try to make a profit on every sale; a heroin dealer can pay 5X or 10X the cost of the first sale to acquire a customer, and still come out ahead. Similarly, AaronSW claims that it's okay to advertise to people who were already going to buy your product, since the money you lose would just have been used to fund more ads. But that seems equally true whether you lose the money by buying ads or by flushing it down the toilet. Aaron's assumptions aren't key to his argument, but they betray a real willingness to simplify his model past the point of absurdity.