BornEntrepreneur

Paradox goes as follows:

1. Company A buys mainstream advertising. Ex. TV advertisement
2. Competitors, Companies B & C, must spend extra money on ads to keep up with Company A. This causes an oversaturation of messages to consumers, which decreases effectiveness (and sales).
3. In response to decreased effectiveness and decreased sales, Companies A, B, & C spend more on advertising.
4. Cycle repeats.

I wonder how companies can spend their advertising budget with a bit more innovativeness and subsequently eliminate this otherwise inevitable paradox.

P.S. Happy 2008.