For discussion purposes, television advertising can be broken up into four stages. The first stage involves each TV channel choosing its quantity of advertising and a programming schedule.
The goal is to maximize profits by determining how much advertising to allocate and which programs to broadcast. In the next stage, each producer determines how much to advertise on a specific TV channel.
An advertising firm looks at viewer demographics and audience size when deciding which channel and commercial to use to realize the most benefits. The viewer then decides whether or not to watch TV and, if so, which TV channel to watch.
They make their decision after the TV channel and producer have already completed their advertising decisions. Finally, the producers compete in the product market by advertising and differentiating their products. The goal is to distinguish their product from others. By making price less of a factor than product differences, producers participate in non-price competition McConnell Brue We are now in a position to investigate how the equilibrium outcome detailed in Section 2 is affected by a change in the number of advertisers, n.
This number may increase, either through an increase in the number of firms in each market, i. Total spending on advertising increases as a result of a reduction in the number of firms, keeping constant the number of product markets.
A reduction in the number of firms makes each remaining firm more concerned about the fact that own advertising tends to reduce the number of viewers. This dampens the incentive for each firm to increase advertising and would, all else equal, result in a reduction in total advertising. On the other hand, fewer firms result in a higher price-cost margin. This encourages firms to advertise more. They invest more in programming, thereby attracting more viewers and even more advertising. The result is that both total advertising and total investment in programming increase following a reduction in the number of firms.
Note also that the total number of viewers increases following a reduction in the number of firms. Finally, note that the price per advertising slot also increases. However, total spending on advertising can also increase as a result of an increase in the number of advertising firms, if this latter increase is solely due to an increase in the number of product markets.
In such a case, price-cost margins are unaffected by a change in the number of firms. This spurs an increase in total advertising. They invest more in programming, thereby increasing the total advertising even more. The economic literature on advertising has been slow on modeling the market for advertising. The present contribution aims at filling this gap, by presenting a model of the market for advertising that incorporates some crucial features of the TV industry, the main provider of advertising space.
Combining this model of the TV industry with a model of product-market competition with advertising, we are able to discuss how asymmetries between various product markets affect the equilibrium outcome. We find that even small asymmetries have dramatic effects. In the case of two product markets where one product market has more firms than the other, but where the markets otherwise are identical, the firms in the product market with many firms choose not to advertise.
At an increase in the price of advertising, the firms in the market with many firms would, as expected, reduce their demand for advertising. This would, in turn, reduce the congestion of advertising on TV and thereby attract more viewers. The firms in the market with few firms would respond to an increase in the number of viewers by increasing their demand for advertising, despite the price of advertising having increased.
The second issue is how product-market competition affects the equilibrium outcome. We found that the profit potential in the product market is of importance for the amount of programming investments as well as for the amount and price of advertising. The less intense product-market rivalry is, the larger is the potential revenue generated by advertising.
A TV channel exploits this in two ways. First, it reduces its supply of advertising slots. Second, it invests more in programming to attract more viewers and thereby to encourage the producers to advertise more. As a result, a relaxation of price competition in the product markets results in higher prices of advertising, more advertising, and more investment in programming.
This suggests that there are two successive battles over the profit potential in the product markets: An escalation of advertising by the producers spurs more investment in programming, and vice versa. Product market competition may also be affected by a change in the number of firms. We found that the effect of increasing the number of advertising firms depends on whether the increase is by increasing the number of firms in each market, making the markets less concentrated, or by increasing the number of markets.
The former way of increasing the number of advertising firms reduces the price-cost margin and thereby the profit potential in the product markets. Thus, while there now are more firms demanding advertising, they also earn less from advertising. You can order a custom research paper, essay, term paper, thesis or dissertation on Advertising topics from our professional custom writing service which provides students with high-quality custom written papers.
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You can apply it to moral values, patriotism, consumer trends, social events and so much more. Advertising and the image of perfection. Beautiful women and handsome men have always been sued in advertising — but what does this say about our society? How does it affect the viewers?
Pretty much anything someone reads, sees on television or views on a billboard is likely to have some type of subliminal advertising. See what examples you can find of subliminal advertising and explore their effectiveness, frequency or other aspects in a research paper.
What images or situations would be too offensive to put into advertisement? Examining the censorship rules of advertising, as well as the changes in advertising censorship over the years, can be a captivating topic. Advertising in different countries. What countries advertise and how they advertise says loads about the country as a whole.
Advertisements come in many different forms: Examining the different styles of advertisements and how they relate to the target audience, product or company could be a fascinating research paper choice.
Choosing a research paper topic is never easy – especially when it involves a specific subject, like advertising. However, choosing an advertising research paper topic becomes much easier if you have a basic idea to work off of.
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Advertising is the persuasion of an audience to take some action, which is usually buying the product. Advertising research paper due and don’t know how to start it? How about like this? Advertising tries to give the audience enough information about the product to create an interest, but not so much as to bore the audience with details. As a result, . 1 Marketing Research Paper Connie F. Dents MKT/ April 16, Sean Duclaux 2 Marketing Research Paper Kudler Fine Foods is an upscale food store that specializes in specialty food, domestic, and imported wines. Kudler Fine Foods are located in the Metropolitan area of San Diego California.
Advertising for new products tends to be more effective than advertising for established products (it’s the “news value” of the new product). In other words, it’s easier to create effective advertising for new products than it is for established products. The ARF is the premier advertising industry association for creating, aggregating, synthesising and sharing the knowledge required by decision makers to lead and succeed. godliterature.tk JAR is published four times a year for the Advertising Research Foundation by WARC.