> Ads suppress customer choice, along with innovations. Can you recall any recent innovative carbonated drink? Marketing budgets of pepsi/coca cola make competition and innovation impossible.
...I don't think this is actually reasonable to ascribe to advertising.
This is a problem with hyperconsolidation.
Competition is driven by having many players in the market who are all within spitting distance of each other's overall size, however you want to measure it. Once consolidation shrinks the number of players down to a handful or less, that's when competition and innovation are stifled.
You say it yourself: the problem isn't that there's advertising. It's the marketing budgets of Pepsi and Coke. Which are (probably, didn't look it up) larger than the annual budgets of some countries. That couldn't happen if they weren't utterly unchallengeable juggernauts.
I still don't understand what the marketing budgets of coke or pepsi or any other business has to do with innovation or consumer choice outside of potentially spurring it? I read lots of stories of founder/entrepreneurs (like the one who wrote this blog post from my research) who can't build a business and then blame it on everything except their own failings to understand the fundamentals of business.
> Once consolidation shrinks the number of players down to a handful or less, that's when competition and innovation are stifled.
Yeah, and ads is the main mechanism why. Ban ads of carbonated drinks, and pepsi/coca cola will become no different from any other manufacturer of that stuff. They do have economy of scale for their advantage, but I don’t think it will help them much. The price/weight ratio of their product is rather low, and technically pipes are way more efficient at moving water than semitrailers.
Without marketing, it would make economic sense to produce these drinks locally at smaller scale. An example of similar commodity (in terms of the price/weight ratio) unaffected by ads is concrete. Roughly speaking, there’re 100 coca cola bottling facilities in US, versus 2000 concrete plants.
I'm quite curious where you live that you have a low selection of carbonated beverages? Here in Canada I feel like that is the biggest product category for competition these days, used to be frozen meals. Seems every week there is a new soda fridge in my corner store with some new fangled carbonated tea or whatever. We're going through a trade war right now so everyone is buying Canadian, so everyone is buying ad space on the fridges to show their product is Made in Canada.
...Nnno. Mergers and acquisitions are how you consolidate. It doesn't matter if you show 10 million more ads than your nearest competitor; you're not going to somehow end up owning them unless you buy them out somehow.
The laws and regulations surrounding M&A were loosened several decades ago, and that has, very clearly and directly, led to the level of consolidation we have today.
The effects of ads and the effects of this on ads are both byproducts.
> Ads suppress customer choice, along with innovations. Can you recall any recent innovative carbonated drink? Marketing budgets of pepsi/coca cola make competition and innovation impossible.
...I don't think this is actually reasonable to ascribe to advertising.
This is a problem with hyperconsolidation.
Competition is driven by having many players in the market who are all within spitting distance of each other's overall size, however you want to measure it. Once consolidation shrinks the number of players down to a handful or less, that's when competition and innovation are stifled.
You say it yourself: the problem isn't that there's advertising. It's the marketing budgets of Pepsi and Coke. Which are (probably, didn't look it up) larger than the annual budgets of some countries. That couldn't happen if they weren't utterly unchallengeable juggernauts.