It only assumes they are aware that the category of products exists, and ordinary word-of-mouth communication is sufficient to propagate that knowledge.
How does word-of-mouth communication propagate knowledge that is currently in the possession of zero existing customers? Or operate for products that people have little reason to discuss with other people?
Suppose you sell insulation and replacing the insulation in an existing house could save $2 in heating and cooling for each $1 the insulation costs. Most people know that insulation exists, but what causes them to realize that they should be in the market for it when they "already have it"?
People don't need to discuss specific products, they only need to be aware of the existence of product categories. If it's genuinely the case that whole product categories are unknown to many people who could realistically benefit from them, as determined by a disinterested third party, an exception could be made for advertising that does not mention specific products or brands.
The insulation example can be solved by publication of data on average heating costs. When people learn that their neighbors are paying less they will be naturally incentivized to investigate why. Equivalent problems can be solved with the same general technique.
> If it's genuinely the case that whole product categories are unknown to many people who could realistically benefit from them, as determined by a disinterested third party, an exception could be made for advertising that does not mention specific products or brands.
Now all of the "brought to you by America's <industry group>" ads are back in. So is every pharma ad and every other patented product because they don't have to tell you a brand when there is only one producer.
> The insulation example can be solved by publication of data on average heating costs.
Publication where? In the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying "Beware of the Leopard"? Also, who decides to publish it, decides what it will say or pays the costs of writing and distributing it?
An industry group is not a disinterested party. Minimum competition requirements can be imposed. As I said elsewhere in the thread, a solution being imperfect is not a good reason to leave the problem unaddressed.
No, but they can convince a disinterested party that people aren't aware of <fact about industry that industry wants people to know> because that's actually true.
> Minimum competition requirements can be imposed.
But that brings back the original problem. Company invents new patented invention, how does anybody find out about it?
> a solution being imperfect is not a good reason to leave the problem unaddressed.
This is the legislator's fallacy. Something must be done, this is something, therefore we must do this.
If a proposal is full of problems and holes, the alternative isn't necessarily to do nothing, but rather to find a different approach to the problem.
Proposals that are full of holes are often worse than nothing, because the costs are evaluated in comparison to the ostensible benefit, but then in practice you get only a fraction of the benefit because of the holes. And then people say "well a little is better than nothing" while not accounting for the fact that weighing all of the costs against only a fraction of the benefit has left you underwater.
>Suppose you sell insulation and replacing the insulation in an existing house could save $2 in heating and cooling for each $1 the insulation costs. Most people know that insulation exists, but what causes them to realize that they should be in the market for it when they "already have it"?
The same legit things that can cause them to realize it today. Word of mouth, a product review, a personal search that landed them on a new company website, a curated catalog (as long as those things are not selling their placements).
An ad is the worse thing to find such things out - the huge majority ranges from misleading to criminally misleading to bullshit.