zlacker

Interesting line of reasoning. :-)

That would imply, that (globally) we spent significantly [EDIT: remove -less-, insert:] more on advertising before the advent of personalized targeting.

>>repels+(OP)
I think it's the other way around. If we go back to the situation in the past, price goes up, not down.

>>repels+(OP)
Not necessarily, cost reductions can increase, decrease or have no effect the total expenditure on goods. The total effect is quite ambiguous depending on the income and substitution effects.

>>smeej+V
Correct, my bad.

Got confused while writing by the observation that ad expenditure is rising year after year. So clearly, the "savings" allegedly attributed to personalized targeting have not translated to advertisers.

>>spaceb+P3
I agree. I've always heard "charge what the market will bear."

Why would a reduction in advertising costs equate to lower consumer pricing — if there's a better margin to be had instead?

>>aesh2X+pb
Because for most products brand fidelity isn't keeping competition away. Higher than necessary margin does not last long in a competitive market.

>>hirako+aC1
Good point. That can be true if two competitors are competing on price as a primary factor. Price might not be the biggest factor, however, and improving the margin would be attainable in that gap.