Header

UZH-Logo

Maintenance Infos

Effects of Advertising and Product Placement on Television Audiences


Wilbur, Kenneth C; Goeree, Michelle S; Ridder, Geert (2009). Effects of Advertising and Product Placement on Television Audiences. Working paper series / Institute for Empirical Research in Economics No. 449, University of Zurich.

Abstract

Digital video recorder proliferation and new commercial audience metrics are making television networks’ revenues more sensitive to audience losses from advertising. There is currently limited understanding of how traditional advertising and product placement affectntelevision audiences. We estimate a random coefficients logit model of viewing demand for television programs, wherein time given to advertising and product placement plays a role akinnto the “price” of consuming a program. Our data include audience, advertising, and program characteristics from more than 10,000 network-hours of prime-time broadcast television from 2004 to 2007. We find that the median effect of a 10% rise in advertising time is a 15% reduction in audience size. We find evidence that creative strategy and product category are importantndeterminants of viewer response to advertising. When we control for program episode quality,nwe find that product placement time decreases viewer utility. In sum, our results imply thatnnetworks should give price discounts to those advertisers whose ads are most likely to retain viewers’ interest throughout the commercial break.

Abstract

Digital video recorder proliferation and new commercial audience metrics are making television networks’ revenues more sensitive to audience losses from advertising. There is currently limited understanding of how traditional advertising and product placement affectntelevision audiences. We estimate a random coefficients logit model of viewing demand for television programs, wherein time given to advertising and product placement plays a role akinnto the “price” of consuming a program. Our data include audience, advertising, and program characteristics from more than 10,000 network-hours of prime-time broadcast television from 2004 to 2007. We find that the median effect of a 10% rise in advertising time is a 15% reduction in audience size. We find evidence that creative strategy and product category are importantndeterminants of viewer response to advertising. When we control for program episode quality,nwe find that product placement time decreases viewer utility. In sum, our results imply thatnnetworks should give price discounts to those advertisers whose ads are most likely to retain viewers’ interest throughout the commercial break.

Statistics

Citations

8 citations in Microsoft Academic

Downloads

636 downloads since deposited on 29 Nov 2011
26 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:September 2009
Deposited On:29 Nov 2011 20:09
Last Modified:18 Feb 2018 00:55
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
OA Status:Green
Official URL:http://www.econ.uzh.ch/wp.html

Download

Download PDF  'Effects of Advertising and Product Placement on Television Audiences'.
Preview
Filetype: PDF
Size: 293kB