A race to the bottom ?

A note on competitive ads

From Knowledge@Wharton

Zhang, a Wharton marketing professor, has found that combative ads -- the sort of comparative spots that beer makers, particularly Anheuser-Busch and Miller, are famed for -- may backfire. Instead of pulling consumers to an advertiser, they may just make people indifferent to all offerings in a product category. And that, in turn, can lead to lower profits for everyone as businesses cut prices to lure these buyers.

And as a funny anecdote:

Presidents, or rather a presidential campaign, originally motivated Zhang to take a closer look at ads. He started scrutinizing them seriously six years ago, when George Bush and Al Gore squared off. He found that the negative ads that are so common in modern campaigns didn't draw him to one of the candidates, but made him uneasy about both. That got him wondering whether commercial claims might have the same effect. "Most of the political scientists say advertising doesn't play much of a role in people's voting choices," he says. "They just reinforce what people already believe, their preferences and partisanship. But sometimes you also observe that you feel a little more indifferent to the politicians after your hear their ads."