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Ad clutter, time use, and media diversity

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  • Peitz, Martin
  • Anderson, Simon

Abstract

We introduce advertising congestion along with a time-use model of consumer choice among media. Both consumers and advertisers multi-home. Higher equilibrium advertising levels ensue on less popular media platforms because platforms treat consumer attention as a common property resource: smaller platforms internalize less the congestion from advertising and so advertise more. Platform entry raises the ad nuisance "price" to consumers and diminishes the quality of the consumption experience on all platforms. With symmetric platforms, entry still leads to higher consumer benefits. However, entry of less attractive platforms can increase ad nuisance levels so much that consumers are worse off.

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  • Peitz, Martin & Anderson, Simon, 2020. "Ad clutter, time use, and media diversity," CEPR Discussion Papers 15130, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15130
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    Cited by:

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    2. Diane Coyle & Leonard Nakamura, 2022. "Time Use, Productivity, and Household-centric Measurement of Welfare in the Digital Economy," International Productivity Monitor, Centre for the Study of Living Standards, vol. 42, pages 165-186, Spring.
    3. Shota Ichihashi & Byung-Cheol Kim, 2023. "Addictive Platforms," Management Science, INFORMS, vol. 69(2), pages 1127-1145, February.
    4. Ryoji Jinushi, 2024. "Costly Advertising and Information Congestion: Insights from Pigou's Successors," Working Papers e210, Tokyo Center for Economic Research.
    5. Martin Peitz, 2024. "Digital Attention Intermediaries," CRC TR 224 Discussion Paper Series crctr224_2024_520, University of Bonn and University of Mannheim, Germany.
    6. Peitz, Martin, 2020. "Economic policy for digital attention intermediaries," ZEW Discussion Papers 20-035, ZEW - Leibniz Centre for European Economic Research.
    7. Alagöz, Nazli, 2024. "Promotion and technological change in the music industry," Other publications TiSEM 511ceba0-62a0-4c60-a76c-f, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    Media economics; Advertising clutter; Limited attention; Information congestion; Two-sided markets;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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