Who Wants You When You're Old and Poor? Exploring the Economics of Media Pricing

Martin Koschat and William Putsis

Journal of Media Economics, 2000, vol. 13, issue 4, 215-232

Abstract: This article explores the underlying causes and implications of the relationship between the demographics of a magazine's readership base and its advertising rates. The analysis generates three central insights. First, not unexpectedly, magazines with a disproportionate fraction of readers who are young or affluent or both command a significant premium over other magazines of comparable size. Second, the magnitude of the premium paid for magazines with a disproportionate fraction of young or affluent or both readers is so large that it cannot solely be explained by standard economic explanations of media valuation. Third, if the size and demographic composition of a magazine's readership has a significant impact on a magazine's revenue stream, then there is an economic incentive to skew editorial content to readers that are more "valuable" to advertisers. This article provides some empirical evidence of the strength of these influences.

Date: 2000
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DOI: 10.1207/S15327736ME1304_2

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