---
title: "Are Products with More Advertising More Expensive or Cheaper?"
description: "This article argues that advertising is not a cost passed on to consumers but an investment that increases market efficiency and scale, leading to lower prices. It debunks the myth that products without advertising are cheaper, explaining that such products often have higher retail prices and poorer sales, and emphasizes that communication and distribution are as vital as product creation."
author: "响马老苗"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-08-04"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/are-products-with-more-advertising-more-expensive-or-cheaper-7ac0fe66/"
markdown: "https://xinjignxiao.com/en/articles/are-products-with-more-advertising-more-expensive-or-cheaper-7ac0fe66.md"
original_source: "https://mp.weixin.qq.com/s/BwqFPmdtOjeplUmX9JgLLg"
translation: "https://xinjignxiao.com/zh/articles/%E5%B9%BF%E5%91%8A%E6%89%93%E5%BE%97%E5%A4%9A%E7%9A%84%E4%BA%A7%E5%93%81-%E6%9B%B4%E8%B4%B5%E8%BF%98%E6%98%AF%E6%9B%B4%E4%BE%BF%E5%AE%9C-7ac0fe66.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/are-products-with-more-advertising-more-expensive-or-cheaper-7ac0fe66/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Are Products with More Advertising More Expensive or Cheaper?

> This article argues that advertising is not a cost passed on to consumers but an investment that increases market efficiency and scale, leading to lower prices. It debunks the myth that products without advertising are cheaper, explaining that such products often have higher retail prices and poorer sales, and emphasizes that communication and distribution are as vital as product creation.

********Click to read the original article for details********
**New Distribution Commentary**
When reposting, Mr. Liu Chunxiong adjusted the title to "Good Products Come with Their Own Traffic: The Drama Queens and Gimmicks of Anti-Marketing." Here, borrowing Mr. Liu's commentary: Using anti-marketing as a marketing gimmick is just about attracting attention and driving traffic. Some extreme views, such as "good products come with their own traffic," "no middlemen to take a cut," "productism doesn't need marketing," and "only bad products need marketing," are all marketing under the banner of anti-marketing. In essence, they are still marketing.
Back to the main argument: Why do we need marketing?
Because of advertising, there is scale; because of scale, prices are lower.
Products with the largest advertising spend are often the most mainstream and offer the best value for money.
Communication value is as important as creation value; this is a virtuous cycle.
**01**
If you were Liu Bei and heard about a man named Zhuge Liang, who in Longzhong compared himself to Guan Zhong and Yue Yi, you would plan to visit his thatched cottage to "seek" him.
At that moment, your third brother Zhang Fei says: "This 'Liangzi' spends all his effort on self-promotion; he must not have real talent, at least not cost-effective."
You would surely think this brother with the leopard's head and round eyes had eaten too much lard when he was slaughtering pigs.
If you are a business owner and interview a senior executive,
who speaks eloquently, knows the industry like the back of his hand, and is familiar with every detail of the profession,
but your HR says, "This person is all talk; he puts all his energy into 'speaking,' so he's definitely unreliable in action."
Then you would surely think your "teammate" is not quite right in the head.
But as consumers, we often aren't that smart.
A salesperson tells you: "Our product doesn't advertise, so it's cheaper and more affordable. When you buy that well-known brand, you're paying for their advertising."
We think that sounds reasonable.
A shrewd friend tells us how cost-effective and value-for-money their purchase was, and we didn't know about it because it had no advertising or promotion.
Before we know it, we feel our intelligence has been crushed.
When pyramid schemes praise their products, phrases like "no middlemen to take a cut" and "no advertising fees" are time-honored tricks that have successfully brainwashed many.
**02**
Even if you run your own business, it's easy to fall into this trap.
An "expert" tells you: "Use the money you'd spend on advertising to improve product quality and lower the selling price. Buyers will think it's a good deal and high value, so they'll naturally repurchase and spread word of mouth."
This is called: "The product is the best marketing." If the product is good, everything is good.
It sounds plausible, so this idea has always had a market.
As a boss, you typically have this mindset:
Buying land and building a factory feels like an investment. Doing R&D and developing new technology, even if not immediately useful, feels like an investment.
Even spending money to meet an important person, like paying millions for a meal with Warren Buffett, feels like an investment.
But when it comes to advertising and promotion, we instinctively find it hard to think that way.
Although textbooks tell us: This is also an investment, accumulating brand assets.
But after all, brand assets are intangible. Whether it's advertising or ground promotion, sales go up when you invest, and down when you stop.
So, we naturally categorize advertising and marketing promotion as expenses.
No matter how well textbooks explain it, and no matter how much we trust them, in our minds, advertising and marketing promotion are different from building factories or doing R&D; they are expenses, not long-term investments.
Therefore, when a company's performance is poor, the first thing to be cut is the "marketing" budget (actually the promotion budget).
Don't blame consumers for thinking their money includes advertising fees, which they see as "wasted money" or a "stupidity tax."
Many companies, deep down, think the same way.
**03**
Is that really the case?
Marketing expert Mr. Liu Chunxiong once shared a case: A certain MSG brand couldn't sell. The boss said, "We can't sell because our output is too small; let's continue to expand production. Once we have scale, we can advertise."
Later, that brand indeed became the market leader. Its price was not higher than other MSG brands.
In those years, Chinese home appliances defeated Japanese home appliances through advertising wars + price wars + channel wars.
Not only were prices lower than Japanese products, but they also advertised more.
Wahaha's purified water, with massive advertising, directly drove the price down to a retail price of 1 yuan, completely changing the industry landscape.
Similar examples include beer, large washing products, etc. Big brands advertise heavily while keeping prices low, becoming industry leaders, such as Snow, Tsingtao, Diao Pai, Liby, and P&G products like Rejoice, Crest, and Safeguard.
**Because of advertising, there is scale; because of scale, prices are lower.**
Isn't that magical? Different from our intuition?
Products with advertising are not necessarily expensive; the most expensive ones usually don't advertise.
For example, luxury goods, whether luxury cars, watches, or bags, rarely advertise, especially never mass-market advertising.
Of course, products without advertising can also be very cheap.
Many low-price products flooding the market, some imitation products that survive by copying, are generally cheaper than well-known brands. But these products are mostly based on poor or even inferior quality.
So, advertising has no direct relationship with price. What advertising is most related to is **scale**, as the MSG brand boss said: "When output is large, we can advertise."
Like most business activities, advertising's role in commerce is to improve efficiency; it **improves market awareness efficiency.**
For consumers, if your advertising is effective, it means their choice cost is lower and purchasing is more efficient. The total cost for the company actually decreases.
For channels, if your advertising is sufficient, it means distributors and retail terminals will sell your products faster, meaning faster capital turnover, higher capital profit margins, and more profit.
If your product lacks awareness and promotion methods, consumers have fewer choices, which means smaller sales scale.
Because you must sell through sales channels, even if you give distributors and retailers larger profit margins, they may not be willing to promote your product due to concerns about slow sales.
Therefore, products without advertising must have a higher markup rate. **You must sell at a higher price than well-known products to survive; otherwise, you can't even get on the shelf.**
And a higher price further reduces consumers' choice of your product.
So, a counter-intuitive business common sense is:
**The products we buy do not include advertising fees. Products without advertising usually have higher retail prices and poorer sales.** Of course, counterfeit and inferior products are not in this comparison.
**Large advertising must be tied to large scale; advertising must leverage scale effects to be more efficient.** Niche products don't need or only need minimal advertising. Large scale determines that the audience must be broad enough, and the products that can be accepted by the most people are often the ones with the best value for money.
So, the second counter-intuitive business common sense is:
**Products with the largest advertising spend are often the most mainstream and offer the best value for money.**
**04**
Isn't this simple common sense? In recent years, it has been ruined by the so-called "internet thinking" marketing tricks:
Distributors were originally an essential part of improving distribution efficiency, but under the cries of "de-intermediation" and "no middlemen to take a cut," distributors were made to feel insecure.
Advertising and promotion were originally essential for improving information dissemination efficiency, but were despised by concepts like "good products are the best advertising," "ultimate products," "craftsmanship spirit," and "traffic secrets," becoming synonymous with backward and outdated marketing methods.
Many marketing executives in traditional companies no longer dare to include advertising budgets or ground promotion budgets in their annual plans. Otherwise, once submitted, they are criticized for lacking innovation, being "outdated," "eliminated by the times," or "not understanding young people."
As the market matures, the "de-intermediation" trend in channels has basically subsided, and the "no middlemen to take a cut" slogan has gradually become a joke.
But counter-intuitive concepts about communication, such as "good products are good advertising" and "traffic thinking," are still widely popular and accepted by many.
Many companies have an illusion that their products are the best and people should rush to buy them. In today's internet environment, as long as the content is appropriate—write a good copy, shoot a good video—it will spread like a virus among people.
So, leaders throw cases of viral marketing at their marketing or brand departments: Pechoin, Jiangxiaobai, Genki Forest, Durex, Zhong Xue Gao, Florasis. The market never lacks viral cases, one after another.
The marketing department is also confused: now every company does content marketing, but how many actually go viral? The probability is lower than winning the lottery. Are you sure this isn't survivorship bias?
Moreover, which of these phenomenal cases didn't have massive advertising support?
Not only TV ads are advertising; terminal promotions are also advertising, Xiaohongshu seeding is advertising, and slot fees are advertising. It's just that times have changed, the main carriers of information have changed, and the forms of advertising have changed.
In recent years, fake "productism" has been prevalent, with "craftsmanship" and "obsessing over products" becoming politically correct, even standing on the moral high ground of business ethics.
For ordinary consumers who don't need to understand business knowledge, the idea that companies put all their effort into making "good products" undoubtedly makes them feel more at ease, believing they can buy the most cost-effective products this way.
So, the public and media welcome such statements with open arms. This is the public opinion and popular foundation of so-called "productism."
For some companies that are at a loss and lack a sense of security in the face of drastic market changes, "good products" are undoubtedly "controllable" and "within their grasp."
In their eyes, good products are nothing more than better materials, more advanced technology, better craftsmanship, stricter product requirements, or even more attractive packaging.
So, they keep "studying" the product, like young people who are confused in society and think reading more books can change everything, or "improving self-awareness" can change everything.
But in reality, most companies' self-perceived "good products" are actually "semi-finished products."
**A complete product is a set of solutions.** The standards for a good product from the user's perspective, the channel's perspective, and the manufacturer's perspective are different.
**Pursuing a "good product" from one's own perspective, ignoring the user and channel perspectives, and ignoring communication and distribution, is a delusion under unclear strategy, a self-comfort for lack of security in market competition, and a one-sided wishful thinking like flowers in a mirror or the moon in water.**
Some "productists" use it as a marketing tool, as a promotional hook.
Dong Mingzhu, who came from a marketing background and is the top marketing figure in China's home appliance industry, has always touted her company's "mastery of core technology" and is most resistant to marketing.
Duan Yongping, known for his marketing skills, claims he values products most and doesn't value marketing.
Even Du Guoying, who has done Backbone, Good Memory, 8848, and Xiao Guan Tea, also calls himself a "productist."
**Claiming "don't look at ads, look at results" is itself a form of advertising.**
No business owner will come out and say: "Our company was built on advertising and promotion."
Although most companies are built that way, whether in the past or now.
**05**
The so-called new consumption success formula popular in the past two years:
10,000 Xiaohongshu posts + 5,000 Douyin videos + 3,000 Bilibili videos + 2,000 Zhihu answers + one top influencer + ten mid-tier influencers = new consumption success.
All these elements are essentially advertising, just in different forms.
"Even in a different guise, we must recognize it."
Judging from the publicly available sales and financial profits of these new consumption products, these "revolutionary" models have not achieved higher efficiency than traditional advertising. And looking at the retail prices of these products, most remain high; not only do they not provide consumers with higher cost-performance, but some have become "price assassins."
**Marketing is a system: a system of discovering value, creating value, communicating value, and delivering value.** The product is part of marketing and the most important P in the 4Ps.
But we must not ignore the value communication and delivery systems, i.e., communication, promotion, and distribution.
"No middlemen to take a cut" is nonsense. Without middlemen, most products would be outrageously expensive, so expensive you couldn't afford them and couldn't buy them. It's just that in different times, distributors' operating models need to change accordingly.
Similarly, "your money includes advertising fees" is also nonsense. Advertising is used to improve transaction efficiency.
**Without advertising, market competition would be more chaotic, consumer goods companies couldn't achieve scale, bad money would drive out good, counterfeit and inferior products would run rampant, and good products would struggle.**
Of course, as times change and technology advances, media forms change, and the forms and content of advertising must also change, as must the business philosophies and methods of advertising professionals.
For consumer goods company owners, it's essential to return to basic business common sense: **Communication value is as important as creation value.** You cannot choose to escape, self-anesthetize, hide in the "small building" of product research, and then call yourself a "productist" just because media costs are high, promotional forms are changeable, and promotion is difficult.
Marketing is a system; the 4Ps are indispensable. For a specific company, the element that is the shortest board is the most important.
For most consumer goods companies today, communication is the shortest board.
**06**
The good news is that although traditional media costs are high and effectiveness is declining, **there are more and more new media forms, meaning we have more communication mix options and a greater chance to find more efficient ways.**
The success of some new consumer brands is due to new combinations of new media and new communication. The essence is the same as the brand miracles created by CCTV in the past.
But facing these new and more complex things requires a higher level of expertise.
For advertising professionals, advertising will never be eliminated, but that doesn't mean you won't be. Just as distributors won't be eliminated, it doesn't mean you as a distributor won't be.
On the contrary, this is an era that is eliminating many traditional advertising professionals.
Traditional TV ads, elevator ads, bus ads, in-store displays, signage, posters, and other advertising forms are seeing further declines in information transmission efficiency. Meanwhile, various new media and communication combinations are emerging.
McLuhan said, "The medium is the message." **Media forms determine communication content: New advertising professionals must adapt to new media forms, find the most efficient creative expression under new media, and develop more efficient communication mixes.**
**In this information society, the role of communication has not diminished but expanded. Advertising professionals face greater challenges and greater opportunities.**
Statements like "put all investment into making good products" and "don't let consumers' money go to advertising fees" are anti-business common sense. Leave them to the pyramid schemers, to the media and companies that play gimmicks, and to those companies that lack the courage and ability to communicate, bury their heads, and then call themselves "productists."
Note: Images from the internet.
Source: Old Miao Tears Marketing
(ID: yiheyingxiao)
 _**-END-**_


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671