It pays to un-advertise

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(following on from last post)

Joel complains that he can't stop competitors from advertising to people searching for him on google. Fair enough I say. But evidently this is something people are prepared to pay for lawyers to fight about. Why not just pay Google not to run the ad?

Let's think about this for a bit...

Joel comes off ahead, his competitor isn't stealing customers any more. In fact, Joel may as well pay Google not to display his competitor's ads anywhere. Google gets more money. Google can also sell the space that used to display that ad to someone else (in which case Joel need not fully match his competitor's offer). Google could even sell the space to Joel. Google wins a lot from this.

So what does the world look like if this happens everywhere? No-one's displaying the big ticket ads anymore. No more Pepsi and no more Coke. No more Nike and no more Adidas. People with advertising space might display lesser paying ads (if there's no direct competitors who want to cancel them out). But now the people who actually get hit by the ads are competing against small fry, they can for a modest fee eliminate advertising in their locality completely.

A rather different dynamic, but it makes economic sense. Better than the alternative we are heading towards, advertising everywhere.




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