Newspaper vs. Online Advertising – Is There a Niche for Newspapers in Modern Advertising Markets?
Newspapers have experienced declining circulation figures and declining advertising revenues for several years. In particular, declining advertising figures put a threat on newspapers – this is especially severe in the US where 73% of their revenues are generated through advertising. On the advertising side many companies have expanded their advertising expenditure towards online. Consequently, there are concerns about online advertising substituting newspaper advertising – in the same way as it has been feared for many years for the readership side. Both possible effects might put a threat on the further existence of (print) newspapers. However, though the internet – compared to newspapers – offers a variety of advantages for advertising companies, substitution tendencies cannot be generalized. In particular, we argue that newspaper advertising offers great benefits for the retailing industry. Consequently, we believe that retail advertising offers a niche for regional and local newspapers that can be expected to represent a sustainable segment of complementarity within the otherwise predominantly substitutional advertising markets. The paper substantiates this argument by applying the economic theory of advertising – in particular the differentiation between persuasive/complementary and informative advertising. The latter one presents the reason for retailers to continue advertising in newspapers. Subsequently, we conclude that no complete substitution between newspaper and online advertising can be expected to take place on the advertising side in the foreseeable future. The authors like to thank the participants of the EMMA-conference in Moscow (June 2011) and the members of the research group ‘Markets & Competition’ as well as Anna Lund Jepsen for helpful comments on an earlier version of this paper.
|Date of creation:||Sep 2011|
|Contact details of provider:|| Postal: Niels Bohrs Vej 9, 6700 Esbjerg|
Phone: (+45) 6550 1000
Fax: (+45) 6550 1091
Web page: http://www.sam.sdu.dk/ime
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dirk Bergemann & Alessandro Bonatti, 2010.
"Targeting in Advertising Markets: Implications for Offline vs. Online Media,"
Cowles Foundation Discussion Papers
1758R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2010.
- Dirk Bergemann & Alessandro Bonatti, 2010. "Targeting in Advertising Markets: Implications for Offline vs. Online Media," Levine's Working Paper Archive 661465000000000284, David K. Levine.
- Bergemann, Dirk & Bonatti, Alessandro, 2010. "Targeting in Advertising Markets: Implications for Offline vs. Online Media," CEPR Discussion Papers 7988, C.E.P.R. Discussion Papers.
- Dirk Bergemann & Alessandro Bonatti, 2010. "Targeting in Advertising Markets: Implications for Offline vs. Online Media," Cowles Foundation Discussion Papers 1758, Cowles Foundation for Research in Economics, Yale University.
- Dewenter, Ralf & Haucap, Justus, 2008. "Wettbewerb als Aufgabe und Problem auf Medienmaerkten: Fallstudien aus Sicht der "Theorie zweiseitiger Maerkte"," Working Paper 78/2008, Helmut Schmidt University, Hamburg.
- Gary S. Becker & Kevin M. Murphy, 1993. "A Simple Theory of Advertising as a Good or Bad," The Quarterly Journal of Economics, Oxford University Press, vol. 108(4), pages 941-964.
- Hsiang Iris Chyi & Dominic Lasorsa, 2002. "An Explorative Study on the Market Relation Between Online and Print Newspapers," Journal of Media Economics, Taylor & Francis Journals, vol. 15(2), pages 91-106.
- Fare, Rolf & Grosskopf, Shawna & Seldon, Barry J. & Tremblay, Victor J., 2004. "Advertising efficiency and the choice of media mix: a case of beer," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 503-522, April.
- Ioana Chioveanu, 2005.
"Advertising, Brand Loyalty and Pricing,"
UFAE and IAE Working Papers
639.05, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Ulrich Doraszelski & Sarit Markovich, 2007. "Advertising dynamics and competitive advantage," RAND Journal of Economics, RAND Corporation, vol. 38(3), pages 557-592, 09.
- Nadine Lindstädt & Oliver Budzinski, 2012.
"Newspaper and Internet Display Advertising – Co-Existence or Substitution?,"
114/12, University of Southern Denmark, Department of Environmental and Business Economics.
- Lindstädt, Nadine & Budzinski, Oliver, 2012. "Newspaper and internet display advertising - co-existence or substitution?," Ilmenau Economics Discussion Papers 74, Ilmenau University of Technology, Institute of Economics.
- Anderson, Simon P. & Gabszewicz, Jean J., 2006.
"The Media and Advertising: A Tale of Two-Sided Markets,"
Handbook of the Economics of Art and Culture,
- ANDERSON, Simon P. & GABSZEWICZ, Jean J., "undated". "The media and advertising: a tale of two-sidedmarkets," CORE Discussion Papers RP 1888, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simon P., ANDERSON & Jean J., GABSZEWICZ, 2005. "The media and advertising : a table of two-sided markets," Discussion Papers (ECON - Département des Sciences Economiques) 2005060, Université catholique de Louvain, Département des Sciences Economiques.
- Anderson, Simon P & Gabszewicz, Jean Jaskold, 2005. "The Media and Advertising: A Tale of Two-Sided Markets," CEPR Discussion Papers 5223, C.E.P.R. Discussion Papers.
- ANDERSON, Simon P. & GABSZEWICZ, Jean J., 2005. "The media and advertising : a tale of two-sided markets," CORE Discussion Papers 2005088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- L. G. Telser, 1968. "Some Aspects of the Economics of Advertising," The Journal of Business, University of Chicago Press, vol. 41, pages 166-166.
- Matthew Gentzkow & Jesse M. Shapiro, 2006.
"Media Bias and Reputation,"
Journal of Political Economy,
University of Chicago Press, vol. 114(2), pages 280-316, April.
- George Lisa M, 2008. "The Internet and the Market for Daily Newspapers," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-33, July.
- Avi Goldfarb & Catherine Tucker, 2011. "Search Engine Advertising: Channel Substitution When Pricing Ads to Context," Management Science, INFORMS, vol. 57(3), pages 458-470, March.
- Justin P. Johnson & David P. Myatt, 2006.
"On the Simple Economics of Advertising, Marketing, and Product Design,"
American Economic Review,
American Economic Association, vol. 96(3), pages 756-784, June.
- David P. Myatt & Justin P. Johnson, 2004. "On the Simple Economics of Advertising, Marketing, and Product Design," Economics Series Working Papers 185, University of Oxford, Department of Economics.
- Matthew Gentzkow, 2007. "Valuing New Goods in a Model with Complementarity: Online Newspapers," American Economic Review, American Economic Association, vol. 97(3), pages 713-744, June.
- Ferguson, James M, 1983. "Daily Newspaper Advertising Rates, Local Media Cross-Ownership, Newspaper Chains, and Media Competition," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 635-654, October.
- Kaiser, Ulrich & Song, Minjae, 2009. "Do media consumers really dislike advertising? An empirical assessment of the role of advertising in print media markets," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 292-301, March.
- Dewenter, Ralf, 2003. "The Economics of Media Markets," Working Paper 10/2003, Helmut Schmidt University, Hamburg.
- Boyer, Kenneth D, 1974. "Informative and Goodwill Advertising," The Review of Economics and Statistics, MIT Press, vol. 56(4), pages 541-548, November.
- David S. Evans, 2009. "The Online Advertising Industry: Economics, Evolution, and Privacy," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 37-60, Summer.
When requesting a correction, please mention this item's handle: RePEc:sdk:wpaper:113. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ulla H. Oehlenschläger)
If references are entirely missing, you can add them using this form.