>If these costs are being borne evenly, then it's complete societal waste. We could pay X for the content, and not incur the overhead. If these costs are not borne evenly, and some people are paying for the consumption of more disciplined people, it's probably contributing to terrible cycles of poverty (ie: some kid spending money on fancy new shoes he doesn't need and can't afford is paying for a well-paid tech-users YouTube habits, because it preys on their lack of education). Either way it's terrible.
Advertising isn't a complete societal waste. If I find a way to compete with an established business by offering the same product at a lower cost, or a better product at the same cost, or a new product that is worth the money but no one had thought of before, my only hope to connect people to that product (not to mention make myself money) is through advertising. Word of mouth and objective reporting in news outlets will also do the information spreading work, but advertising does a considerable amount. In other words, it's competition increasing.
I think economists have done studies on markets with and without advertising and have found results indicating it does bring down costs in those markets by increasing competition [1]. In economic terms that would be a gain since without advertising we would consume an inefficiently low amount of said product. Note that even if there is a gain to efficiency because of lower prices, it may be completely offset by the cost of advertising itself (costs being the cost of consumers having to be irked by looking at them and the effort that went into crafting the advertisements).
Essentially, advertising is useful when you need to tell people about a new product or service. Beyond that, it's playing a game. Once people know a service exists and have been accurately informed as to its benefits, then for the most part, people will use it if they need it and spread it by word of mouth if its useful for other people (and/or they had a good experience).
Advertising beyond that mostly serves to solidify brand integrity and trust and ways to undercut competitors and is an ever growing conflagration of an arms race. It has little to do with the interests of the public.
Which do you think wins, low budget factually honest advertising or high budget advertising that builds consumer loyalty or craving using whatever psychological means necessary?
I'm pretty certain the latter wins far more often than the former, in which case advertising hurts healthy competition. You may in fact have the better or cheaper product, but the establish company has the huge advertising budget by virtue of being the established company. Advertising serves as a moat far more than it serves as a bridge.
So while the naive view is that advertising communicates the existence and benefits of products so that consumers can make informed choices, in reality it is more often and more successfully used to communicate lies and manipulation, and raise insurmountable barriers to new competition.
>and raise insurmountable barriers to new competition.
Why do we assume that the dishonest and manipulative nature of advertising would be more effectively wielded by the companies already in the market than by new ones trying to break in to the market?
Primarily 'cause they have larger budgets. And sure, a new entry into the market might innovate on advertisement instead of product, but is that what we want?
I made this edit right after I posted it so perhaps you didn't see it, but I added:
"Note that even if there is a gain to efficiency because of lower prices, it may be completely offset by the cost of advertising itself (costs being the cost of consumers having to be irked by looking at them and the effort that went into crafting the advertisements)."
I think that speaks to your comment about the lost productivity of users of the web. I do think all costs should be considered, absolutely. Didn't quite follow your last two paragraphs. You seem to have a gut feeling that all the costs outweigh all the benefits? I have no such gut feeling.
While I have no strong gut feeling as to the total cost/benefit, as someone who has studied marketing and spent quite a bit of time in the sector, I get the impression the cost of advertising itself is very high, perhaps even dwarfing all the rest, comparatively.
And the industry as I've seen it is not particularly efficient/cost-effective or pleasant either. Most of the shoddiest work, unhappiest employees and shittiest bosses/manager that I've encountered were in this sector, by far. The only environment where I got a similar vibe was a bank/insurance company where I worked.
Advertising isn't a complete societal waste. If I find a way to compete with an established business by offering the same product at a lower cost, or a better product at the same cost, or a new product that is worth the money but no one had thought of before, my only hope to connect people to that product (not to mention make myself money) is through advertising. Word of mouth and objective reporting in news outlets will also do the information spreading work, but advertising does a considerable amount. In other words, it's competition increasing.
I think economists have done studies on markets with and without advertising and have found results indicating it does bring down costs in those markets by increasing competition [1]. In economic terms that would be a gain since without advertising we would consume an inefficiently low amount of said product. Note that even if there is a gain to efficiency because of lower prices, it may be completely offset by the cost of advertising itself (costs being the cost of consumers having to be irked by looking at them and the effort that went into crafting the advertisements).
[1] Could I be remembering this paper? http://www.jstor.org/stable/724797?seq=1#page_scan_tab_conte...