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What Influences Advertising Price in Television Channels?: An Empirical Analysis on the Spanish Market

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  • Germa Bel
  • Laia Domenech

Abstract

Advertising has an important role in the media industry. In a context where advertising generates a negative externality for viewers, this article analyzes the factors explaining ad prices in free TV empirically. This article also considers the participation of government-owned broadcasters in the Spanish market. This study finds that private ownership is associated with higher advertising prices. The results show a positive relation between audience size and ad price and a negative relation between ad price and advertising time. In addition, this study finds that higher prices are associated with the percentage of the population between 14 and 29 years old and the regional gross domestic product per capita in the broadcast area.

Suggested Citation

  • Germa Bel & Laia Domenech, 2009. "What Influences Advertising Price in Television Channels?: An Empirical Analysis on the Spanish Market," Journal of Media Economics, Taylor & Francis Journals, vol. 22(3), pages 164-183.
    • Handle: RePEc:taf:jmedec:v:22:y:2009:i:3:p:164-183
    DOI: 10.1080/08997760903129440
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    References listed on IDEAS

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    1. Goettler, R., 1999. "Advertising Rates, Audience Composition, and Competition in the Network Television Industry," GSIA Working Papers 1999-28, Carnegie Mellon University, Tepper School of Business.
    2. Hansen, Bodil O. & Keiding, Hans, 2006. "Public and Private Activity in Commercial TV Broadcasting," Working Papers 02-2006, Copenhagen Business School, Department of Economics.
    3. Reisinger, Markus, 2004. "Two-Sided Markets with Negative Externalities," Discussion Papers in Economics 478, University of Munich, Department of Economics.
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    Cited by:

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    2. Crawford, Gregory S. & Deer, Lachlan & Smith, Jeremy & Sturgeon, Paul, 2017. "The Regulation of Public Service Broadcasters : Should there be more advertising on television?," Economic Research Papers 269092, University of Warwick - Department of Economics.
    3. Woohyung Lee & Ki-Dong Lee, 2018. "Strategic behaviors on privatization between regions," Asia-Pacific Journal of Regional Science, Springer, vol. 2(1), pages 227-242, April.
    4. Francisco Martínez-Sánchez, 2022. "Privatization Policies by National and Regional Governments," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-23, June.
    5. Miguel González-Maestre & Francisco Martínez-Sánchez, 2014. "The role of platform quality and publicly owned platforms in the free-to-air broadcasting industry," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(1), pages 105-124, March.
    6. Francisco Martínez-Sánchez & Miguel González-Maestre, 2010. "The role of program quality and publicly-owned platforms in the free to air broadcasting industry," Working Papers. Serie AD 2010-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    7. Miguel González-Maestre & Francisco Martínez-Sánchez, 2015. "Quality choice and advertising regulation in broadcasting markets," Journal of Economics, Springer, vol. 114(2), pages 107-126, March.
    8. Dubois, Pierre & Abi Rafeh, Rossi & Griffith, Rachel & O'Connell, Martin, 2023. "The Effects of Sin Taxes and Advertising Restrictions in a Dynamic Equilibrium," TSE Working Papers 23-1480, Toulouse School of Economics (TSE), revised Feb 2024.
    9. Greiner, Tanja & Sahm, Marco, 2018. "How effective are advertising bans? On the demand for quality in two-sided media markets," Information Economics and Policy, Elsevier, vol. 43(C), pages 48-60.

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