Comment by jzb

"This is something that I still struggle to wrap my head around: if a company is paying X$ for advertisement, it means that people subjected to this advertisement will give Y$ to this company that they would not have paid otherwise"

You seem to be assuming that, in the absence of advertising, the company will sell as much as it did before -- just with lower overhead costs -- rather than advertising driving more sales and possibly lowering costs because the company has more customers. For some items / things this may be true-ish. I'm going to buy paper towels because I need paper towels, and advertising has little influence on that -- except, maybe, which brand I buy. But I'm going to spill things, and my cats are going to keep barfing on the floor from time to time, so I'm going to need paper towels regardless. And I'm not going to buy a bunch of extra ones just because the ads are so good.

Don't get me started on soda advertising and such because the amount of money those companies spend on ads is mind-boggling and I don't think it moves the needle very much when it comes to Coke vs. Pepsi...

But, would I go see a movie without ads to promote it? Would I buy that t-shirt with a funny design if I didn't see it on a web site? Sign up for a SaaS offering if I don't see an ad for it somewhere?

If a SaaS lands 20% more customers because ads (and other forms of marketing) that's not necessarily going to mean I pay more for the SaaS because ads. It may very well mean that the prices stay lower because many of their costs are fixed and if they have 20% more paying customers, they can charge less to be competitive. If a publication has more subscribers because it advertises, it may not have to raise rates to stay / be profitable.

In some cases you may be correct -- landing customers via ads equals X% of my costs, so my prices reflect that. But it's not necessarily true.