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Economists are quick to point out that, compared to competitive markets, monopolies raise prices for consumers by restricting supply compared to what would be optimal for society. Economists also point out that advertising and marketing serves to (artificially, in a lot of cases) increase the demand for the products being marketed. Therefore, when you put these two concepts together, you have a double whammy of inefficiency.

This concept is nowhere better illustrated than in the market for diamonds. Essentially, the DeBeers diamond company convinced men (and, by extension, women) a while back that engagement rings were absolutely necessary, and then they went around buying up all of the world’s diamonds so that they could release them at a pace that is profit-maximizing for the company.

Another fun fact from the article: Diamonds don’t actually hold their value, so don’t let an unscrupulous jeweler tell you otherwise.

Banksy recently stated that advertisers have taken advantage of people for too long. It seems we are very much the bad guys, and the general public is weak, innocent and should start standing up for themselves. Here’s the thing. As someone who spends much of his time spray painting his own messages across wals around the world, is he not the pot calling the kettle black? You can read his full statement, and my rebuttal, right here. And when you’ve read it, come back and answer this poll.

Twitter announced a new video advertising program today called Twitter Amplify that is designed to synchronize promotions on TV with promotions via tweets.

The new TV ad-targeting product seems kind of creepy, since it’s attempting to figure out who’s watching particular TV shows in real time so advertisers can reach those Twitter users in both places–on TV and whatever screen they’re using to tweet.

But the new TV-Twitter synch-up an interesting twist on cross-media advertising, for sure.

More about how Twitter Amplify works.

Other than a love of great food? Well, they are the focus of two articles based on entertainment, and its relationship to advertising. From great advice based on the disheveled detective, to a case study in horrendousness from Kitchen Nightmares, there’s a lot to learn. Also featured, teaser trailers, comedians, and great documentaries. It’s an entertainment special, and you can read it all here.

In advertising, publicity, brochures, anywhere in your business: Using an image of anyone without their permission is a bad idea, and particularly using the image of a celebrity must be pre-approved, with a model release. Marie Loughran, Guide to Arts/Crafts Businesses,  discusses what can happen if you use a celebrity photo without first getting permission – lots of legal hassle, which translates into lots of money spent on attorneys.

Use of someone’s photo is both a privacy issue and a copyright issue.

It’s not just celebrities who require a release. ANY TIME you use someone’s photo in your business, you must get a model release before the image is published. This includes photos of your own family and friends. You never know when the marriage or friendship can go sour and leave you with a nasty lawsuit (“You used my photo without my permission!”), and it’s easier not to make exceptions.

A model release is basically a contract between you and the person whose photo is being used. A simple model release form gives a specific entity (your business) permission to use photographs of a specific named person. It’s easiest to say “any photo taken on a specific date” for a specific purpose, which leaves you the flexibility to select which photo or photos you want to use. Releases for children should be signed by a parent or legal guardian.

Just to be clear, you don’t need a release to take a photo of someone, but you do need a release if you are going to use that photo to promote your business. And, yes, this includes on your business blog or elsewhere on your business website.

Related information:

Business contracts

Copyrights

Keep up to date with the latest on legal and tax issues affecting your business  – subscribe to my newsletter or Twitter feed or check out my Facebook page.

Looks like Yahoo wants a serious piece of what Tumblr’s got goin’ on. According to a report from All Things D, the young and hip blogging service could be purchased by Yahoo for as much as $1 billion.

• 10 crazy Tumblr blogs to follow

Yahoo has had its fair share of problems to deal with over the past few years, and maintaining its “cool” factor has been a big one. The struggling search engine and web portal site hasn’t quite been able to cracke the code when it comes to the youth demographic, so Tumblr’s loyal 18 to 24 year-old userbase looks like an attractive buy at the moment.

Tumblr, however, has had its own set up problems to deal with. The blogging service gets a big chunk of its traffic from the hoards of stolen, copyright-violated content and porn that its users continue to post. And even though advertisements were launched on its mobile apps just last month, a solid revenue generation strategy that actually works has yet to be developed.

But who knows, maybe Yahoo’s much more established advertising team could give Tumblr the push it really needs to make more money, all the while strengthening Yahoo’s ability to target and hold on to a larger chunk of the youth demographic. If the acquisition rumors live up to the hype and a $1-billion deal is eventually reached, it would be comparable to the Facebook-Tumblr acquisition that was made last year.

• Where to find free Tumblr themes

Most seasoned Internet users can easily recognize that Tumblr is basically the complete opposite of what Yahoo is right now, but Yahoo apparently really, really wants it, and the company is ready to step up its startup buying game to get just what it wants.

We’ll be keeping an eye out on this one. Stay tuned, friends.

Photo © Getty Images

Mike Jeffries, CEO of Abercrombie & Fitch, made some comments in 2006 that certainly made his fashion brand sound nothing short of uber-elitist. Now, those comments are coming back to haunt him and his brand. And it looks like they will do some permanent damage.

It’s one thing to be honest. But anyone from the UK will know what happened to Ratner’s jewelers when their CEO, Gerald Ratner himself, made the following comment:

“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, “How can you sell this for such a low price?”, I say, “because it’s total crap.”

Ratner’s lost over $500 million in value, which spelled the end for the chain. It changed its name to the Signet Group, but the damage was done.

Now, although Abercrombie is not a purveyor of cheap clothing, the CEO has committed the cardinal sin of advertising. He ignored his brand. There is nothing wrong with being honest, but really, his opinions of “fat people” and “ugly people” are not opinions you want tied to your multi-million dollar empire.

People are donating Abercrombie clothes to Goodwill left and right. Sales are dropping. Soon, A&F will stand for Assholes and Fascists. You can read more about this right here. But in a word…disaster.