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Trading Dollars for Dollars: The Price of Attention Online and Offline

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  • Matthew Gentzkow

Abstract

Popular accounts suggest that advertising revenue per unit of consumer attention is lower online than offline, and has fallen in traditional media as the Internet has made advertising markets more competitive. I assess these claims theoretically and empirically, and compare the patterns we observe for the Internet to trends in advertising around the introduction of television and radio. The evidence suggests that the price of attention for similar consumers is actually higher online than offline, and that the growth of new media is not robustly associated with a declining price of attention.

Suggested Citation

  • Matthew Gentzkow, 2014. "Trading Dollars for Dollars: The Price of Attention Online and Offline," American Economic Review, American Economic Association, vol. 104(5), pages 481-488, May.
    • Handle: RePEc:aea:aecrev:v:104:y:2014:i:5:p:481-88
    Note: DOI: 10.1257/aer.104.5.481
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    Citations

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    Cited by:

    1. He Xi & Lopez Rigoberto & Liu Yizao, 2017. "Are Online and Offline Advertising Substitutes or Complements? Evidence from U.S. Food Industries," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 15(2), pages 1-10, December.
    2. Charles Angelucci & Julia Cage, 2019. "Newspapers in Times of Low Advertising Revenues," SciencePo Working papers hal-03391880, HAL.
    3. Charles Angelucci & Julia Cagé, 2019. "Newspapers in Times of Low Advertising Revenues," American Economic Journal: Microeconomics, American Economic Association, vol. 11(3), pages 319-364, August.
    4. He, Xi & Lopez, Rigoberto A. & Liu, Yizao, 2015. "Substitution between Online and Offline Advertising: Evidence from the Carbonated Soft Drink Industry," Working Papers 37, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    5. Bruns, Christian & Himmler, Oliver, 2016. "Mass media, instrumental information, and electoral accountability," Journal of Public Economics, Elsevier, vol. 134(C), pages 75-84.
    6. Ni Huang & Jiayin Zhang & Gordon Burtch & Xitong Li & Peiyu Chen, 2021. "Combating Procrastination on Massive Online Open Courses via Optimal Calls to Action," Information Systems Research, INFORMS, vol. 32(2), pages 301-317, June.
    7. Jiménez, Juan Luis & Perdiguero, Jordi & Gutiérrez, Inmaculada, 2022. "Bias in media coverage of antitrust actions," International Review of Law and Economics, Elsevier, vol. 72(C).
    8. Adithya Pattabhiramaiah & Eric Overby & Lizhen Xu, 2022. "Spillovers from Online Engagement: How a Newspaper Subscriber’s Activation of Digital Paywall Access Affects Her Retention and Subscription Revenue," Management Science, INFORMS, vol. 68(5), pages 3528-3548, May.
    9. repec:spo:wpmain:info:hdl:2441/4edekc99or8n2bu86nu4ua8adl is not listed on IDEAS
    10. repec:hal:spmain:info:hdl:2441/4edekc99or8n2bu86nu4ua8adl is not listed on IDEAS
    11. Charles Angelucci & Julia Cage, 2019. "Newspapers in Times of Low Advertising Revenues," SciencePo Working papers Main hal-03391880, HAL.
    12. Ammar Ikhwan Yahaya & Anuar Nawawi & Ahmad Saiful Azlin Puteh Salin, 2017. "The Influence of Advertisement on Media Users: Empirical Evidence from Three Generational Differences in Malaysia," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(5), pages 258-275, May.
    13. Antoine Dubus & Christine Halmenschlager & Patrick Waelbroeck, 2024. "Fighting Free with Free: Freemium vs. Piracy," Working Papers hal-03991858, HAL.
    14. Ayush Pant & Federico Trombetta, 2022. "The Newsroom Dilemma," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2205, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).

    More about this item

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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