A Deeper Look at the Economics of Advertiser Support for Television: The Implications of Consumption-Differentiated Viewers and Ad Addressability

Eun-mee Kim and Steven Wildman

Journal of Media Economics, 2006, vol. 19, issue 1, 55-79

Abstract: Commercial addressing technologies are currently being trialed that will make it possible to simultaneously deliver different ads to different viewers. Because the members of the audience for a given program often consume different products, addressable ads promise to substantially increase the revenue generated by television ad time. This article presents models of competitive television markets with addressable and nonaddressable ads and shows that addressability significantly alters strategies for profit maximization and, most likely, equilibrium mixes of programs. This article also shows that allowing for viewers who are differentiated in their preferences for products can lead to dramatic departures from the equilibria and audience maximization strategies described in the traditional program choice literature. Ironically, the predictions of the traditional models are likely to be more accurate for television markets with addressable ads than for the markets with nonaddressable ads they were supposed to describe.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1207/s15327736me1901_4 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jmedec:v:19:y:2006:i:1:p:55-79

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/HMEC20

DOI: 10.1207/s15327736me1901_4

Access Statistics for this article

Journal of Media Economics is currently edited by Nodir Adilov

More articles in Journal of Media Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().