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Targeted Advertising in Magazine Markets and the Advent of the Internet

Author

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  • Ambarish Chandra

    (Department of Economics, University at Albany, Albany, New York 12222; and Department of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Ulrich Kaiser

    (Department of Business Administration, University of Zurich, 8032 Zurich, Switzerland; ZEW Centre for European Economic Research, 68161 Mannheim, Germany; Centre for Industrial Economics, University of Copenhagen, 2000 Frederiksberg, Denmark; and Institute for the Study of Labor, 53113 Bonn, Germany)

Abstract

This paper examines how the ability of traditional media firms to engage in targeted advertising has changed with the advent of the Internet. We find that the premium for reaching a homogeneous audience increases for magazines that have a companion website, as well as for those whose readers are more likely to be online. This indicates a complementarity between offline and online channels with respect to targeted advertising. We hypothesize that this result is driven by multihoming consumers who enhance the value of targeted advertising, in contrast to the usual assumption that multiple advertising messages are redundant. This paper was accepted by Pradeep Chintagunta, marketing.

Suggested Citation

  • Ambarish Chandra & Ulrich Kaiser, 2014. "Targeted Advertising in Magazine Markets and the Advent of the Internet," Management Science, INFORMS, vol. 60(7), pages 1829-1843, July.
    • Handle: RePEc:inm:ormnsc:v:60:y:2014:i:7:p:1829-1843
    DOI: 10.1287/mnsc.2013.1830
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    References listed on IDEAS

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    3. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," SciencePo Working papers hal-03393063, HAL.
    4. Shi, Ce Matthew & Li, Danhou, 2023. "The impact of broadband Internet on public media: Evidence from China," Information Economics and Policy, Elsevier, vol. 65(C).
    5. repec:spo:wpmain:info:hdl:2441/4ec86lkes59hv9tfv77ld1p5fr is not listed on IDEAS
    6. Susan Athey & Emilio Calvano & Joshua S. Gans, 2018. "The Impact of Consumer Multi-homing on Advertising Markets and Media Competition," Management Science, INFORMS, vol. 64(4), pages 1574-1590, April.
    7. Yingchao Zhang & Oliver Fabel & Christian Thomann, 2015. "Pay inequity effects on back-office employees’ job performances: the case of a large insurance firm," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(2), pages 421-439, June.
    8. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," SciencePo Working papers Main hal-03393063, HAL.
    9. Chiou, Lesley & Kafali, E. Nilay & Rysman, Marc, 2020. "Internet use, competition, and geographical rescoping in Yellow Pages advertising," Information Economics and Policy, Elsevier, vol. 52(C).
    10. Yessica C.Y. Chung & Hung-Hao Chang & Yukinobu Kitamura, 2021. "Digital and traditional media advertising and business performance of agribusiness firms - Empirical evidence in Japan," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(2), pages 51-59.
    11. Cai, Ya-Jun & Choi, Tsan-Ming, 2023. "Omni-channel marketing strategy in the digital platform era," Journal of Business Research, Elsevier, vol. 168(C).
    12. Xiuxian Li & Pengwen Hou & Shuhua Zhang, 2023. "The optimal advertising strategy with differentiated targeted effect consumers," Annals of Operations Research, Springer, vol. 324(1), pages 1295-1336, May.
    13. Kyeonggook Francis Park & Robert Seamans & Feng Zhu, 2021. "Homing and platform responses to entry: Historical evidence from the U.S. newspaper industry," Strategic Management Journal, Wiley Blackwell, vol. 42(4), pages 684-709, April.
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