Yeah, in competitive markets this would inherently cause some downward pressure on prices.

> look at groceries. It's a terrible, single-digit percentage margin business but they sell everything from placement in catalogue to whether the product is in a convenient spot on the shelf. That's a clear case where ads make it _cheaper_ for consumers.

I don't follow... it certainly improves the grocer's margins, but how does that do anything at all for the consumer?

I should have been clearer: it's a terrible single-digit percentage business, including the ads. The ads are cross-subsidizing the food.

> The ads are cross-subsidizing the food.

I don't think you were unclear, that's what I understood you to be saying.

Surely, the grocer just pockets the extra ad money? Never in my life have I seen a for-profit corporation voluntarily charge a lower price than the market will bear because they increased their margin by other means.

The ads are also inherently shitty to the producers: they all have to spend money on the grocer's ads now, because if they don't, their competitors will. If you look at it that way, the ads are almost extortion.