limdaepl

@limdaepl@feddit.org

• ⁨Comment⁩ on ⁨How does internet advertising work? Where is all the money coming from? More...⁩ ⁨⁨4⁩ ⁨hours⁩ ago⁩:

  I think what’s happening is that each individual company has a positive ROI on ads in the sense that they would lose more than a dollar in sales if they spent a dollar less on ads, but collectively the ROI is probably smaller than one: if all companies would cut their advertising budgets in half they would all be better off, as they would keep their sales roughly the same.

  So adverting is less about sales volume (people don’t necessarily buy more things when they see more ads) but about market share (you get a bigger piece of the cake). Classic prisoner’s dilemma.