<p>I was told that the advertising market as a whole shrank after Google became part of the marketing industry. Apparently, the decrease occurred in offline markets as well as online markets. </p>

<p>Is this a valid historical example (outside of theory) where a large increase in competition in a particular market has decreased the size of that market or was the marketing industry affected differently by Google?  </p>

CC BY-SA 3.0
2018-01-18T07:41:55.387Z
How is competition to be measured? It is possible for a new firm to enter and yet competition (as measured, e.g., by HHI) to decrease (because the new firm takes a huge share of the market). If competitiveness of the market decreases then it is quite natural for prices to be higher and the number of consumers served to shrink.
Ubiquitous
CC BY-SA 3.0
2014-12-08T04:05:52.543Z
It's worth noting that Google advertising is different from the advertising that it displaced.  It's on the search results or index rather than on the content.  Also, since it is targeted rather than broadcast, it may be more efficient than the advertising that it replaced.  That could explain there being less afterwards.  Finally, Craig's list is the real problem for many newspapers.  It takes their most profitable advertising segment and delivers it more cheaply.
Brythan
<markets>
Is there any historical example that a market is shrinking down after competition?
AGamePlayer
# Is there any historical example that a market is shrinking down after competition?

(Asked by: username_0 on 2014-12-08)

I was told that the advertising market as a whole shrank after Google became part of the marketing industry. Apparently, the decrease occurred in offline markets as well as online markets.

Is this a valid historical example (outside of theory) where a large increase in competition in a particular market has decreased the size of that market or was the marketing industry affected differently by Google?

**Tags:** markets

> **Comments:**
> **username_2**: It's worth noting that Google advertising is different from the advertising that it displaced.  It's on the search results or index rather than on the content.  Also, since it is targeted rather than broadcast, it may be more efficient than the advertising that it replaced.  That could explain there being less afterwards.  Finally, Craig's list is the real problem for many newspapers.  It takes their most profitable advertising segment and delivers it more cheaply.  
> **username_1**: How is competition to be measured? It is possible for a new firm to enter and yet competition (as measured, e.g., by HHI) to decrease (because the new firm takes a huge share of the market). If competitiveness of the market decreases then it is quite natural for prices to be higher and the number of consumers served to shrink.  

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## 0 answers

