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Circulation versus Advertiser Appeal in the Newspaper Industry: An Empirical Investigation

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  • Thompson, R Stephen

Abstract

Advertising space is not a homogeneous commodity, but something whose value depends on the characteristics of a newspaper's readership. It is suggested, in particular, that the proportion of readers belonging to the more affluent social categories will exert a strong positive influence on advertising. This paper investigates the circulation/readership-profile relation using a simple simultaneous equation framework. The model is then estimated across a sample of British and Irish daily and Sunday newspapers, using data collected from industry sources. The paper then seeks to quantify the trade-off between circulation and the proportion of high income readers. Copyright 1989 by Blackwell Publishing Ltd.

Suggested Citation

  • Thompson, R Stephen, 1989. "Circulation versus Advertiser Appeal in the Newspaper Industry: An Empirical Investigation," Journal of Industrial Economics, Wiley Blackwell, vol. 37(3), pages 259-271, March.
    • Handle: RePEc:bla:jindec:v:37:y:1989:i:3:p:259-71
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    Cited by:

    1. Robert Ekelund & George Ford & John Jackson, 1999. "Is Radio Advertising a Distinct Local Market? An Empirical Analysis," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(3), pages 239-256, May.
    2. Robert Ekelund & George Ford & John Jackson, 2000. "Are Local TV Markets Separate Markets?," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 7(1), pages 79-97.
    3. GABSZEWICZ, Jean & LAUSSEL, Didier & SONNAC, Nathalie, 2002. "Network effects in the press and advertising industries," LIDAM Discussion Papers CORE 2002062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Ambarish Chandra, 2009. "Targeted Advertising: The Role Of Subscriber Characteristics In Media Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 57(1), pages 58-84, March.
    5. Kaiser, Ulrich, 2002. "Optimal Cover Prices and the Effects of Website Provision on Advertising and Magazine Demand," ZEW Discussion Papers 02-54, ZEW - Leibniz Centre for European Economic Research.
    6. Lisa George & Joel Waldfogel, 2000. "Who Benefits Whom in Daily Newspaper Markets?," NBER Working Papers 7944, National Bureau of Economic Research, Inc.
    7. Nicolas Pietersma, 2006. "What Advertisers Want: A Hedonic Analysis of Advertising Rates in South African Consumer Magazines," Working Papers 041, Economic Research Southern Africa.
    8. Kremhelmer, Susanne & Zenger, Hans, 2008. "Advertising and the screening role of mass media," Information Economics and Policy, Elsevier, vol. 20(2), pages 107-119, June.
    9. Ambarish Chandra & Allan Collard‐Wexler, 2009. "Mergers in Two‐Sided Markets: An Application to the Canadian Newspaper Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 1045-1070, December.
    10. Susanne Kremhelmer & Hans Zenger, 2004. "Advertising and the Media," Industrial Organization 0403003, University Library of Munich, Germany.
    11. Matthew Ellman & Fabrizio Germano, 2009. "What do the Papers Sell? A Model of Advertising and Media Bias," Economic Journal, Royal Economic Society, vol. 119(537), pages 680-704, April.
    12. Depken II, Craig A., 2004. "Audience characteristics and the price of advertising in a circulation industry: evidence from US magazines," Information Economics and Policy, Elsevier, vol. 16(2), pages 179-196, June.
    13. Kaiser, Ulrich & Wright, Julian, 2006. "Price structure in two-sided markets: Evidence from the magazine industry," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 1-28, January.
    14. Knotek II, Edward S., 2008. "Convenient prices, currency, and nominal rigidity: Theory with evidence from newspaper prices," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1303-1316, October.
    15. Jorge A, Ferrando & Jean J, Gabszewicz & Didier Laussel & Nathalie Sonnac, 2004. "Two-Sided Network Effects and Competition : An Application to Media Industries," Working Papers 2004-09, Center for Research in Economics and Statistics.
    16. Ulrich Kaiser, 2004. "An Estimated Model of the German Magazine Market," CIG Working Papers SP II 2004-07, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    17. Asplund, Marcus & Eriksson, Rickard & Strand, Niklas, 2001. "Prices, Margins and Liquidity Constraints: Swedish Newspapers 1990-1996," SSE/EFI Working Paper Series in Economics and Finance 470, Stockholm School of Economics.
    18. Geoffrey Brooke & Lydia Cheung, 2018. "An Empirical Analysis of Competition in Print Adversiting among Paid and Free Newspapers," Working Papers 2018-07, Auckland University of Technology, Department of Economics.
    19. Lisa George & Joel Waldfogel, 2003. "Who Affects Whom in Daily Newspaper Markets?," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 765-784, August.
    20. Jorge Ferrando & Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2008. "Intermarket network externalities and competition: An application to the media industry," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(3), pages 357-379, September.
    21. Kremhelmer, Susanne, 2004. "Fairness, Property Rights, and the Market for Media," Munich Dissertations in Economics 2521, University of Munich, Department of Economics.

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