The Impact of the Internet on Advertising Markets for New Media
Post on 08-Apr-2018
221 Views
Preview:
Transcript
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 1/156
Will the Internet Destroy the
News Media?Susan Athey, Emilio Calvano & Joshua Gans
May 2011
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 2/156
The chart of doom
Source:NewspaperAssocia0onofAmerica
NewspaperAdRevenue(198$m)
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 3/156
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 4/156
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 5/156
The chart of doom
Source:NewspaperAssocia0onofAmerica
1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008
$0
$7,500
$15,000
$22,500
$30,000
NewspaperAdRevenue(198$m)
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 6/156
Explaining the decline
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 7/156
Psychology (digital less effective)
Explaining the decline
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 8/156
Psychology (digital less effective)
Explaining the decline
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 9/156
Psychology (digital less effective)
Explaining the decline
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 10/156
Economic fundamentals
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 11/156
Attention is still scarce ...
Economic fundamentals
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 12/156
Attention is still scarce ...
and advertisers still want to access that
attention.
Economic fundamentals
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 13/156
Disruption
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 14/156
Disruption
The Internet has disrupted the traditional
business model ...
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 15/156
Disruption
The Internet has disrupted the traditional
business model ...
need to wait for experiments to sort itout.
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 16/156
Disruption
The Internet has disrupted the traditional
business model ...
need to wait for experiments to sort itout.
Most experiments rely on the ‘waterbed
effect’ ...
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 17/156
Disruption
The Internet has disrupted the traditional
business model ...
need to wait for experiments to sort itout.
Most experiments rely on the ‘waterbed
effect’ ...
but based on assumption readers choose
content and advertisers sell access.
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 18/156
Only two facts
Wednesday, 18 May 2011
O l t f t
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 19/156
The Internet has facilitated consumer
switching between outlets
Only two facts
Wednesday, 18 May 2011
O l t f t
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 20/156
The Internet has facilitated consumer
switching between outlets
There is imperfect tracking between
outlets
Only two facts
Wednesday, 18 May 2011
Puzzles
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 21/156
Puzzles
Wednesday, 18 May 2011
Puzzles
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 22/156
Puzzles
Evidence that competition reduces ad prices
Wednesday, 18 May 2011
Puzzles
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 23/156
Puzzles
Evidence that competition reduces ad prices
Outlets claim mergers will improve ad revenue
Wednesday, 18 May 2011
Puzzles
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 24/156
Puzzles
Evidence that competition reduces ad prices
Outlets claim mergers will improve ad revenue
For-profit outlets object to lifting of adrestrictions on public broadcasters
Wednesday, 18 May 2011
Puzzles
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 25/156
Puzzles
Evidence that competition reduces ad prices
Outlets claim mergers will improve ad revenue
For-profit outlets object to lifting of adrestrictions on public broadcasters
Larger outlets earn higher ad revenue per consumer
Wednesday, 18 May 2011
Switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 26/156
Switching
Wednesday, 18 May 2011
Switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 27/156
Browsing
Switching
Wednesday, 18 May 2011
Switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 28/156
Browsing
Free content
g
Wednesday, 18 May 2011
Switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 29/156
Browsing
Free content
Aggregators, social
networks and
search
g
Wednesday, 18 May 2011
Switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 30/156
Browsing
Free content
Aggregators, social
networks and
search
Wednesday, 18 May 2011
Tracking
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 31/156
Wednesday, 18 May 2011
Tracking
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 32/156
Switching alone does not explain the
decline.
Wednesday, 18 May 2011
Tracking
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 33/156
Switching alone does not explain the
decline.
With no tracking or perfect tracking do
not care where consumers are.
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 34/156
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 35/156
Two attention periods.
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 36/156
Two attention periods.
Two outlets with ad capacity per unit of attention, ai.
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 37/156
Two attention periods.
Two outlets with ad capacity per unit of attention, ai.
If they have opportunity to choose, consumers select outlet i with
probability xi.
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 38/156
Two attention periods.
Two outlets with ad capacity per unit of attention, ai.
If they have opportunity to choose, consumers select outlet i with
probability xi.
In a given period, the probability that a consumer can choose is ρ.
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 39/156
Two attention periods.
Two outlets with ad capacity per unit of attention, ai.
If they have opportunity to choose, consumers select outlet i with
probability xi.
In a given period, the probability that a consumer can choose is ρ.
Di
l = x
i− x
i(1− x
i)ρ
Ds= 2ρ x
1 x
2
Wednesday, 18 May 2011
Advertising supply
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 40/156
Two attention periods.
Two outlets with ad capacity per unit of attention, ai.
If they have opportunity to choose, consumers select outlet i with
probability xi.
In a given period, the probability that a consumer can choose is ρ.
Di
l = x
i− x
i(1− x
i)ρ
Ds= 2ρ x
1 x
2
i's ad inventory = Di
l 2ai+ D
sa
i
Wednesday, 18 May 2011
Advertiser demand
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 41/156
Wednesday, 18 May 2011
Advertiser demand
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 42/156
Advertisers want to impress each consumer once over the two periods …
Wednesday, 18 May 2011
Advertiser demand
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 43/156
Advertisers want to impress each consumer once over the two periods …
and have heterogeneous values (v) on impressingconsumers with distribution F (v); assumed to be U[0,1].
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 44/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 45/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 46/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 47/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 48/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 49/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 50/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 51/156
Morning Afternoon
Outlet 1
Outlet 2
Wednesday, 18 May 2011
The impression game
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 52/156
Morning Afternoon
Outlet 1
Outlet 2
If Starbucks single-homes, it misses impressions.
If Starbucks multi-homes, it wastes impressions.
Wednesday, 18 May 2011
The advertiser’s dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 53/156
Custom analysis of data provided to authors by
ComScore of 30 recent large, cross-outlet campaigns
Wednesday, 18 May 2011
The advertiser’s dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 54/156
Custom analysis of data provided to authors by
ComScore of 30 recent large, cross-outlet campaigns
Wasted
Impressions
Wednesday, 18 May 2011
Solving the dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 55/156
Wednesday, 18 May 2011
Solving the dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 56/156
No switching
Wednesday, 18 May 2011
Solving the dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 57/156
No switching
No tracking
Wednesday, 18 May 2011
Solving the dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 58/156
No switching
No tracking
Coordination in time
Wednesday, 18 May 2011
Solving the dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 59/156
No switching
No tracking
Coordination in time
Pay per click
Wednesday, 18 May 2011
Solving the dilemma
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 60/156
No switching
No tracking
Coordination in time
Pay per click
Perfect tracking
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 61/156
Expected Unique Impressions
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 62/156
Expected Unique Impressions
Single-Home on i
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 63/156
Expected Unique Impressions
Single-Home on iθ
i
= Di
l +
1
2
Ds
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 64/156
Expected Unique Impressions
Single-Home on i
Multi-Home
θ i
= Di
l +
1
2
Ds
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 65/156
Expected Unique Impressions
Single-Home on i
Multi-Home θ 12= D
1
l + D
2
l +
3
4D
s
θ i
= Di
l +
1
2
Ds
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 66/156
Expected Unique Impressions
Single-Home on i
Multi-Home θ 12= D
1
l + D
2
l +
3
4D
s
θ i
= Di
l +
1
2
Ds
Multi-Home (2 on i)
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 67/156
Expected Unique Impressions
Single-Home on i
Multi-Home θ 12= D
1
l + D
2
l +
3
4D
s
θ i
= Di
l +
1
2
Ds
Multi-Home (2 on i) ′θ 12= 1
Wednesday, 18 May 2011
Missed & wasted impressions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 68/156
Expected Unique Impressions
Single-Home on i
Multi-Home θ 12= D
1
l + D
2
l +
3
4D
s
θ 12
≤ θ 1+θ
2= ′θ
12for ρ > 0
θ i
= Di
l +
1
2
Ds
Multi-Home (2 on i) ′θ 12= 1
Wednesday, 18 May 2011
No switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 69/156
Quantity (Impressions)
Price
Multi-homers
(1 impression)
Wednesday, 18 May 2011
No switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 70/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Wednesday, 18 May 2011
No switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 71/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
v = 1
Wednesday, 18 May 2011
No switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 72/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
v = 1
v = p
Wednesday, 18 May 2011
No switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 73/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
v = 1
v = p
Wednesday, 18 May 2011
No switching
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 74/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
v = 1
v = p
p
Wednesday, 18 May 2011
More switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 75/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
v = 1
v = p
p
Wednesday, 18 May 2011
More switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 76/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
v = 1
v = p
p
Wednesday, 18 May 2011
More switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 77/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
↑ Ds ⇒↓ p
v = 1
v = p
p
Wednesday, 18 May 2011
High switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 78/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 1 MH 2 on 2
v = 1
v = p
p
Wednesday, 18 May 2011
High switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 79/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 1 MH 2 on 2
v = 1
v = p
p
Wednesday, 18 May 2011
High switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 80/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 1 MH 2 on 2 ↑ Ds ⇒↑ p
v = 1
v = p
p
Wednesday, 18 May 2011
High switchers
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 81/156
Quantity (Impressions)
Price
2a
Supply
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 1 MH 2 on 2 ↑ Ds ⇒↑ p
if a high
v = 1
v = p
p
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 82/156
Incentives to adopt perfect tracking
Low ad capacity (a)
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 83/156
Profits
Imperfect
Tracking
Ds
Wednesday, 18 May 2011
Incentives to adopt perfect tracking
Low ad capacity (a)
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 84/156
Profits
Imperfect
Tracking
PerfectTracking
Ds
Wednesday, 18 May 2011
Incentives to adopt perfect tracking
Imperfect
T ki
High ad capacity (a)
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 85/156
Profits Tracking
Perfect
Tracking
Ds
Wednesday, 18 May 2011
Incentives to adopt perfect tracking
P fi
Imperfect
T ki
High ad capacity (a)
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 86/156
Profits Tracking
Perfect
Tracking
Ds
Wednesday, 18 May 2011
Incentives to adopt perfect tracking
P fit
Imperfect
Tracking
High ad capacity (a)
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 87/156
Profits Tracking
Perfect
Tracking
Ds
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 88/156
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 89/156
Blogs and other non-ad
content …
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 90/156
Blogs and other non-ad
content …
decrease available ad
capacity in the market …
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 91/156
Blogs and other non-ad
content …
decrease available ad
capacity in the market …
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 92/156
Blogs and other non-ad
content …
decrease available ad
capacity in the market …
and reduce adverse effect
of switching …
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 93/156
Blogs and other non-ad
content …
decrease available ad
capacity in the market …
and reduce adverse effect
of switching …
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 94/156
Blogs and other non-ad
content …
decrease available ad
capacity in the market …
and reduce adverse effect
of switching …
Causing impression pricesto rise.
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
Public broadcasters & blogs
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 95/156
Blogs and other non-ad
content …
decrease available ad
capacity in the market …
and reduce adverse effect
of switching …
Causing impression pricesto rise.
Quantity (Impressions)
Price Supply
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 96/156
Positional advantages
in advertising markets
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 97/156
Positional advantages
in advertising markets
Content quality
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 98/156
Positional advantages
in advertising markets
Content quality Paywalls
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 99/156
Positional advantages
in advertising markets
Content quality Paywalls Magnet content
Wednesday, 18 May 2011
Asymmetric Quality
Low D s High D s
x 1= x
2
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 100/156
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
v = 1
v = p
Multi-homers(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 1 MH 2 on 2
v = 1
v = p
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 101/156
Asymmetric Quality
Low D s High D s
x 1> x
2
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 102/156
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
v = 1
v = p2
Multi-homers(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 2
v = 1
v = p2
v = p1v = p1
Wednesday, 18 May 2011
Asymmetric Quality
Low D s High D s
x 1> x
2
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 103/156
Multi-homers
(1 impression)
Single-home on 1
Single-home on 2
v = 1
v = p2
Multi-homers(1 impression)
Single-home on 1
Single-home on 2
MH 2 on 2
v = 1
v = p2
Outlet 1 gains a positional advantage
in the advertising market
v = p1v = p1
Wednesday, 18 May 2011
Paywalls
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 104/156
Wednesday, 18 May 2011
Paywalls
“No [it’s not a two way street with Google sending
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 105/156
traffic] What’s the point of someone comingoccasionally who likes a headline they see on Google?
Sure we go out and say we have so many millions of
visitors. The fact is that there is not enough advertising
in the world to go around to make all the websites
profitable. We’d rather have fewer people coming to
our websites but paying. They don’t suddenly become
loyal readers of our websites.” (Rupert Murdoch)
Wednesday, 18 May 2011
Paywalls
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 106/156
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 107/156
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 108/156
D2
l = x2
−x2 x1ρ 21
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 109/156
D2
l = x2
−x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 110/156
D2
l = x2
−x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 111/156
D2
l = x2
−x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments ↑ ρ 12,↓ ρ
21
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 112/156
D2
l
= x2−
x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Subscriptions
↑ ρ 12,↓ ρ
21
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 113/156
D2
l
= x2−
x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Subscriptions
↑ ρ 12,↓ ρ
21
↓ ρ 21
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 114/156
D2 = x2−
x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Subscriptions
Limited paywall
↑ ρ 12,↓ ρ
21
↓ ρ 21
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 115/156
D2 = x2−
x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Subscriptions
Limited paywall
↑ ρ 12,↓ ρ
21
↓ ρ 21
↑ ρ 12
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 116/156
D2 = x2−
x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Subscriptions
Limited paywall
↑ ρ 12,↓ ρ
21
↓ ρ 21
↑ ρ 12
D1
l < D
2
l
Wednesday, 18 May 2011
Paywalls
D1
l = x
1− x
1 x
2ρ 12
l
ρ
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 117/156
D2 = x2−
x2 x1ρ 21
Ds= (ρ
12 + ρ 21) x1 x2
Micropayments
Subscriptions
Limited paywall
↑ ρ 12,↓ ρ
21
↓ ρ 21
↑ ρ 12
D1
l < D
2
l
Paywalls may cause a positional disadvantage in advertising markets
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 118/156
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 119/156
Wednesday, 18 May 2011
Magnet Content
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 120/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Wednesday, 18 May 2011
Magnet Content
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 121/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Suppose that Outlet 2 has
limited content
Wednesday, 18 May 2011
Magnet Content
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 122/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Suppose that Outlet 2 has
limited content
... and so can only serve one
period of attention.
Wednesday, 18 May 2011
Magnet Contentρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 123/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Suppose that Outlet 2 has
limited content
... and so can only serve one
period of attention.
Wednesday, 18 May 2011
Magnet Content D1
l =
x1−
x1 x2
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 124/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Suppose that Outlet 2 has
limited content
... and so can only serve one
period of attention.
Wednesday, 18 May 2011
Magnet Content D1
l =
x1−
x1 x2
D2
l = 0ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 125/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Suppose that Outlet 2 has
limited content
... and so can only serve one
period of attention.
Wednesday, 18 May 2011
Magnet Content D
1
l = x
1− x
1 x
2
D2
l = 0
Ds= x
2(1+ x
1)
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 126/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Suppose that Outlet 2 has
limited content
... and so can only serve one
period of attention.
Wednesday, 18 May 2011
Magnet Content
Low x2
D1
l = x
1− x
1 x
2
D2
l = 0
Ds= x
2(1+ x
1)
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 127/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Wednesday, 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 128/156
Magnet Content
Low x2
D1
l = x
1− x
1 x
2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 129/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = 1
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Wednesday, 18 May 2011
Magnet Content
Low x2
D1
l = x
1− x
1 x
2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 130/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v 1
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Wednesday, 18 May 2011
Magnet Content
Low x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 131/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v 1
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
Wednesday, 18 May 2011
Magnet Content
Low x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 132/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v 1
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 133/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 134/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1 v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 135/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v 1
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1 v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 136/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1 v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 137/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1 v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 138/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1
− x1
x2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1 v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 139/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p2
v = p1
Wednesday, 18 May 2011
Magnet Content
Low x2 High x2
D1
l = x
1− x
1 x
2
D2
l = 0
Ds= x
2(1+ x
1)
v = 1 v = 1
ρ = 1
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 140/156
Multi-Home 2 on 2
Single-home on 1
Single-home on 2(2 impressions)
v = p2
Single-home on 2(2 impressions)
Single-home on 1
Single-home on 1(2 impressions)
v = p2
v = p1
v = p1
Wednesday, 18 May 2011
Profits
Magnet Content
0.15
0.20
Full content provider
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 141/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
Wednesday, 18 May 2011
Profits
Magnet Content
0.15
0.20
Full content provider
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 142/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Wednesday, 18 May 2011
Profits
Magnet Content
0.15
0.20
Full content provider
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 143/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Wednesday, 18 May 2011
Profits
Magnet Content
0.15
0.20
I f T ki
Full content provider
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 144/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Wednesday, 18 May 2011
Profits
Magnet Content
0.15
0.20
I f t T ki
Full content provider
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 145/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Evolution away from frequency and towards reach.
Wednesday, 18 May 2011
Profits
0.15
0.20
I f t T ki
Full content provider
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 146/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Evolution away from frequency and towards reach.
Wednesday, 18 May 2011
Profits
0.15
0.20
Imperfect Tracking
Full content provider
150 million US accounts
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 147/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Evolution away from frequency and towards reach.
Wednesday, 18 May 2011
Profits
0.15
0.20
Imperfect Tracking
Full content provider
150 million US accounts
95% users visit once every 2 days
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 148/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Evolution away from frequency and towards reach.
Wednesday, 18 May 2011
Profits
0.15
0.20
Imperfect Tracking
Full content provider
150 million US accounts
95% users visit once every 2 days
10% of US site visits
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 149/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Evolution away from frequency and towards reach.
Wednesday, 18 May 2011
Profits
0.15
0.20
Imperfect Tracking
Full content provider
150 million US accounts
95% users visit once every 2 days
10% of US site visits
30% of US display ads
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 150/156
0.2 0.4 0.6 0.8 1.0
0.05
0.10
x 2
Imperfect Tracking
Limited content provider
As limited content provider’s share rises, industry profits rise.
Twice the return to magnet content than full content.
Higher return per reader due to positional advantage.
Evolution away from frequency and towards reach.
Wednesday 18 May 2011
Conclusions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 151/156
Wednesday 18 May 2011
The efficient operation of advertising markets are dependent
upon consumer behavior.
Conclusions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 152/156
Wednesday 18 May 2011
The efficient operation of advertising markets are dependent
upon consumer behavior.
A combination of consumer switching and imperfect tracking
Conclusions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 153/156
can explain competitive effects in advertising markets for
news media.
Wednesday 18 May 2011
The efficient operation of advertising markets are dependent
upon consumer behavior.
A combination of consumer switching and imperfect tracking
Conclusions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 154/156
can explain competitive effects in advertising markets for
news media.
Tracking technologies may assist in efficiency but adoptionfaces impediments.
Wednesday 18 May 2011
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 155/156
The efficient operation of advertising markets are dependent
upon consumer behavior.
A combination of consumer switching and imperfect tracking
l i i i ff i d i i k f
Conclusions
8/6/2019 The Impact of the Internet on Advertising Markets for New Media
http://slidepdf.com/reader/full/the-impact-of-the-internet-on-advertising-markets-for-new-media 156/156
can explain competitive effects in advertising markets for
news media.
Tracking technologies may assist in efficiency but adoptionfaces impediments.
In addition to deterring consumers, paywalls may cause outlets
to have a positional disadvantage in advertising markets.
Incentives to provide content move from full line provision to
magnet but limited content provision.
Wednesday 18 May 2011
top related