| > But I do think there might be an economic argument in favour of at least some advertising to bring awareness of new market entrants, and especially of new categories of product/service. That's the standard argument made: Consumers learn about new products through advertising. In fact, this is not what happens. At least I've virtually never seen it. The most effective ways to learn about new products are things like trade journals (including ones like Hacker News), blogs, etc. In those contexts, writers select for products which are interesting or which work well. To the contrary, advertising strongly favors entrenched players with money: - If Microsoft builds a SaaS, you build a better SaaS, but you have $50k to advertise, and Microsoft has $500M, there will be a gap in consumer perception, in favor of the inferior player. - If I know, from advertising, that no one ever got fired for buying Microsoft, and Microsoft has additional generic brand recognition, you're at an even greater disadvantage. In practice, advertising almost always favors entrenched players over new market entrants. Perhaps there's an exception to new market entrants from big players, but that's not nearly enough to justify the economic cost. |