Why is marketing so expensive?

Marketing is a two-step process. The first step is making people aware that your product exists. If people do not know that your product exists, there is zero chance they will buy it. The second step is persuading a person who knows your product exists to spend money on it. You cannot persuade a person to buy a product they do not know exists. This means that a lot of marketing is actually pushing for the first step.

The goal also isn’t to just let everybody in the world know that the product exists, since not everybody has the same chance of being persuaded to buy the product. There are constraints on the people the marketing team wants to reach – people who own gaming PCs who enjoy open world games, and/or people who own PS4s and enjoy fighting games. A large part of marketing costs is figuring who these people are and the best ways to reach them. Then, it is spending the money to craft a message that serves the dual purpose of letting these people know that the product exists and stir up enough interest in them for launch, when the product becomes available.

This is also a constantly moving target, because people are very very good at tuning out advertisement for things they don’t care about or get bored of. This means that marketing is in a constant arms race at finding the next “big thing” in grabbing attention. Grabbing peoples’ attention always suffers from diminishing returns – the initial novelty wears off and things get played out, which makes them all easier to ignore later. When this happens, the cost goes up to get more attention and the number of people reached also goes down. Marketing is in a constant research cycle to find new ways to reach people as their old ways become too cost-inefficient.

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