All the cost of advertising inevitably makes products more expensive. Ads are not a charity, obviously. Sooner or later you pay for it.

When you buy milk or a shampoo or a car you only wanted the product itself and you did not CHOOSE to pay for the ads.

That means you unwillingly paid for the ads with your attention - first - and then you paid with your money - again.

This is assuming products are priced based purely on cost rather than based off the market forces of supply and demand.

Or another way to look at this issue is if a company cut their advertising budget (as many did early in the pandemic) do they also follow through with a reduction in price? If not, why do we assume an increase in marketing budget means an increase in price?

> This is assuming products are priced based purely on cost

No, I never made such assumption.

> if a company cut their advertising ... do they also follow through

This is a strawman. The price point for a single product from a single company is subject to a million forces so nothing can be said. The behavior of an entire industry is a different thing and costs don't magically vanish.

This is like saying that if I heat up some water I cannot prove that each molecule changed behavior so heat transfer does not happen.

>No, I never made such assumption.

Sure you did. Your argument was that all (or at least all advertising) costs are passed onto the consumer.

>The price point for a single product from a single company is subject to a million forces so nothing can be said. The behavior of an entire industry is a different thing and costs don't magically vanish.

That logic goes both ways and basically eliminates any point in having this debate.

Have you stood in a shopping aisle at some point in your life, comparing the price of generic brand items with those brands that bombard you with ads every day?

Most people have. To them you might as well be proposing that the sky is a particular shade of red for all the time it'll take them to dismiss that thought.

That's a little bit different. The brand names demand higher prices because people desire them more. It's not a result of the cost of advertising, but of the effects of advertising.

The generic isn't cheaper because it didn't spend money on advertising, the generic is cheaper because if it were the same price as the brand name, you'd buy the brand name. It is my firm belief that Kraft (aka Mondelez) has been getting away with selling garbage products for at least a decade now just because the brand is so strong.

The differences between name brands and generic brands is not purely advertising. I will grant you most of the difference is marketing, but advertising is just one piece of what falls into marketing overall. There are plenty of brands that don't advertise and still have a strong and prominent brand identity. Sometimes not advertising even becomes an element of that brand identity.

In a working market, the cost of a good is very close to its cost.

>In a working market[1], the cost of a good is very close to its cost.

I would add a footnote in that comment.

[1] - A working market without large barriers to entry, information asymmetry, regulatory capture, monopolistic or oligopolistic companies, or basically anything else that deviates from the dozen or so different assumptions made in the "perfect competition" examples used in econ 101 classes that rarely exist in the real world.

I'm fully aware that markets don't actually work satisfactorily in practice.

Not just are they not free, they are actually MORE expensive, since the $x has to cover the overhead of providing the at platform. There is also the hidden additional expense of the marketing department and the expense to create the ad.

If you were to pay, you would only have to pay the part that covers what the platform would earn on the ad.

And then there is the design issue: if Facebook charged their users they would design Facebook so that it gave more value to you, instead of just sucking in as much time as possible.

On average, yes, they are not free. The way things break down, however, is a small subset of users subsidize the rest. So if you're the kind of person that pretty much never clicks on adds and doesn't pay much attention to them, then you are only paying the opportunity cost of consuming the product and ads, which is likely less than the per-user cost to the service.

> So if that's actually true on average, ad-suppprted services aren't really "free"?

That's always been the case

> I pay for them in all the extra spending I do because of the ads, and the margin on those product prices that goes to advertising.

Well not the full cost, just the net cost compared to your previous alternative. If an ad gets you to buy a Coke instead of a Pepsi and they both have the same price, the choice didn't cost you anything.

There should be a legal option to pay Facebook or others a monthly fee to use of the service and they shouldn't be allowed to use any of your data.

I think the amount of revenue generated per user is considerably more than anyone would pay.

And considerably more than it would cost per user to host and maintain the service.

What the fuck?

There should be a payment to me set by me for seeing an ad.

In general, an ad is an attempt to modify my behaviour in the future and I suffer damage by seeing it. My fair compensation €5 per ad. If you don't consider me worth of €5 of business you have to filter me out of your advertisements. If you still show me an ad, I expect a deposit for each impression. Or I would in a perfect world..

Yes, it is possible to argue that users of Facebook are de facto unpaid employees. They produce the data that then Facebook sells, but does not pay any salary. It would be interesting to see Facebook getting Ubered.