What and why advertising

Advertising planned for the purposes of conveying useful information to the expressed target groups or the general public if relevant. In general most advertising is a marketing strategy primarily to capture a larger share of the market.

Informative advertising is when advertising is carried out in an informative manner. The idea is to give the ad the look of an official article to give it more credibility. Also, informative ads tend to help generate a good reputation.

Advertising conveys full and accurate information about the characteristics of products. Heterogeneous consumers, who have no source of information other than advertisements, seek to purchase the products that best fit their needs. Despite the roles played by advertising in improving the matching of products and consumers, and in increasing the elasticity of demand faced by each firm, we find that the market-determined levels of advertising are excessive, given the extent of diversity in the market.

Derive a promotional equilibrium based on a specific information transmission technology, paying explicit attention to the structure of consumer information and its impact on firms' demand curves. Study the effects of changes in the advertising technology, including an increased ability to target messages to specific groups of consumers, on the equilibrium in the product market. Find that decreased advertising costs may reduce profits by increasing the severity of price competition.

Whenever firms use informative advertising, it increases the firms' expected profits, and social welfare, relative to the outcome without advertising. Informative advertising is impossible in a game of sequential advertising followed by simultaneous price setting in a homogenous-product market.

People read magazines for information - not to look at ads. It's well known that there will be ads there, but it's the information they're after. Therefore, the ads that looks and read like information will likely get read and considered.