Targeted Advertising: The Role of Subscriber Characteristics in Media Markets
AbstractThis paper seeks to establish the importance of targeted advertising in media markets. Using zip-code level circulation for US daily newspapers, I show that newspapers facing more competition have lower circulation prices but higher advertising prices than similar newspapers facing little or no competition. I explain this by showing that newspapers in more competitive markets are better able to segment readers according to their location and demographics. This leads to greater homogeneity in the characteristics of subscribers and raises advertisers' willingness to pay for such readers. The results imply a substantial benefit to advertisers and media firms from targeted advertising.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 7955.
Date of creation: Mar 2008
Date of revision:
Targeted Advertising; Media Markets; Newspapers; Media Segmentation;
Find related papers by JEL classification:
- D4 - Microeconomics - - Market Structure and Pricing
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-15 (All new papers)
- NEP-COM-2008-04-15 (Industrial Competition)
- NEP-CUL-2008-04-15 (Cultural Economics)
- NEP-MIC-2008-04-15 (Microeconomics)
- NEP-MKT-2008-04-15 (Marketing)
- NEP-URE-2008-04-15 (Urban & Real Estate Economics)
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- Dirk Bergemann & Alessandro Bonatti, 2010.
"Targeting in Advertising Markets: Implications for Offline vs. Online Media,"
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Open Access publications from Katholieke Universiteit Leuven
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