The cost of an advertisement is not positively correlated with its effectiveness. Consider the following:
Advertisement 1
Media: TV Commercial (2007)
Company: Shell Oil (with Ferrari Formula 1 Cars)
Cost to produce: $3.9 million
Advertisement 2
Media: Signage
Company: A-1 American Chimney and Roofing
Cost to produce: $500 – $1,000 (estimate)
It’s obvious which one is more memorable.
Creative advertising has little to do with how much cash you throw at the project. Inexpensive, smart and funny will win every time.
[...] I agree that access to capital has certain advantages. You can hire more salespeople, open more stores, and buy more advertising (although a costly ad doesn’t necessarily translate into an effective one). [...]