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Full-Text Articles in Social and Behavioral Sciences
Targeting In Advertising Markets: Implications For Offline Vs. Online Media, Dirk Bergemann, Alessandro Bonatti
Targeting In Advertising Markets: Implications For Offline Vs. Online Media, Dirk Bergemann, Alessandro Bonatti
Cowles Foundation Discussion Papers
We develop a model with many heterogeneous advertisers (products) and advertising markets (media). Each advertiser has a different consumer segment for its product, and each medium has a different ability to target advertisement messages. We characterize the competitive equilibrium in the media markets and investigate the role of targeting for the price and allocation of advertisements across media markets. An increase in the targeting ability leads to an increase in the total number of purchases (matches), and hence in the social value of advertisements. Yet, an improved targeting ability also increases the concentration of advertising firms in each market. Surprisingly, …
Targeting In Advertising Markets: Implications For Offline Vs. Online Media, Dirk Bergemann, Alessandro Bonatti
Targeting In Advertising Markets: Implications For Offline Vs. Online Media, Dirk Bergemann, Alessandro Bonatti
Cowles Foundation Discussion Papers
We develop a model with many advertisers (products) and many advertising markets (media). Each advertiser sells to a different segment of consumers, and each medium has a different ability to target advertising messages. We characterize the competitive equilibrium in the media markets and evaluate the implications of targeting in advertising markets. An increase in the targeting ability leads to an increase in the total number of purchases (matches), and hence in the social value of advertising. Yet, an improved targeting ability also increases the concentration of firms advertising in each market. Surprisingly, we then find that the equilibrium price of …