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Targeted information and limited attention


Hefti, Andreas; Liu, Shuo (2019). Targeted information and limited attention. Working paper series / Department of Economics 230, University of Zurich.

Abstract

We examine the implications of limited consumer attention for the targeting decisions of competing firms. Limited attention alters the strategic role of information provision as firms may become incentivized to behave as mass advertisers, despite perfect targeting abilities. We analyze the consequences of limited attention for targeting, strategic pricing, market shares, attention competition between firms, and the value of marketing data to firms. Accounting for limited attention in an otherwise standard targeting framework can explain several recent key issues from the advertising industry, such as consumer-side information overload or the increased usage of ad blocking tools.

Abstract

We examine the implications of limited consumer attention for the targeting decisions of competing firms. Limited attention alters the strategic role of information provision as firms may become incentivized to behave as mass advertisers, despite perfect targeting abilities. We analyze the consequences of limited attention for targeting, strategic pricing, market shares, attention competition between firms, and the value of marketing data to firms. Accounting for limited attention in an otherwise standard targeting framework can explain several recent key issues from the advertising industry, such as consumer-side information overload or the increased usage of ad blocking tools.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D43, L13, M37
Uncontrolled Keywords:Targeted advertising, limited attention, ad avoidance, salience competition, privacy concerns
Language:English
Date:December 2019
Deposited On:12 Jul 2016 10:50
Last Modified:07 Jan 2020 11:38
Series Name:Working paper series / Department of Economics
Number of Pages:11
ISSN:1664-7041
Additional Information:Revised version
OA Status:Green
Official URL:https://www.econ.uzh.ch/static/release/workingpapers.php?id=909

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