This is a question about the economics of information goods on the Web.
Let's say that there is an information good that is sold on the Web, that can be produced at some cost of production D, using capital and labor. Notice that this cost of production is only for the first unit, and it costs virtually $0 to make additional copies of the good, since it is an information good.
Assume that there is a scarcity of attention, so that without advertising, the good will not be found by many people. Assume that, effectively, the number of the goods sold is proportionate to the advertising budget, but with diminishing returns from advertising.
In such a case, is it right to "absorb" the advertising cost into the cost of production? The way I can justify doing this is to say that if I absorb the advertising cost into the cost of production, it is as if I am making additional copies of this information good at some non-zero cost and selling these. In other words, absorbing the cost of advertising into the production cost of the information good makes the information good look like a traditional good (in terms of production costs, especially at the margin).
Since there are diminishing returns from advertising, the shape of the cost curves looks similar to the situation for a traditional good where I assume the factors of production to only consist of capital and labor. However, the marginal product of advertising, which is the additional goods sold with every additional dollar of advertising spending, cannot really be connected to the marginal product of capital and labor, so I'm not sure if my approach is correct.