Advertising increases value for consumers
By allowing companies to differentiate themselves and highlight their unique selling points, advertising stimulates competition in the marketplace.
Competition, in turn, means companies need to keep improving the value of their products for their consumers: pushing down prices and pushing up quality.
Just think how competition among TV manufacturers has brought about a steep fall in the price of flat-screen televisions while simultaneously increasing both their image quality and their size.
The link between advertising, competition and consumer value is immediate: when bans on advertising were lifted in some US states, the prices of spectacles fell by 30-40% thanks to increased public awareness and competition.1