Ads Are a Positional Good
11 days ago
- #advertising
- #economics
- #positional-goods
- Ads are pervasive even in paid services, suggesting traditional explanations like free services funded by ads or transaction overhead are incomplete.
- Ads function as a positional good, where their value comes from relative advantage over competitors rather than intrinsic value.
- Positional goods, like university degrees, derive value from scarcity and relative standing, not absolute utility.
- In advertising, companies pay more than rivals to secure ad slots, not to increase demand but to sway consumer choice.
- Advertising largely represents competitive value destruction, redirecting economic surplus to ad platforms, with human attention as collateral damage.