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Newspaper and Internet Display Advertising – Co-Existence or Substitution?

July 29, 2012

Newspaper and Internet Display Advertising – Co-Existence or Substitution? (PDF)
Source: Research Papers in Economics

Newspapers have been experiencing declining circulation figures and diminishing advertising revenues for several years – both effects might pose a threat to the continuing existence of (print) newspapers. In an earlier paper, Lindstädt & Budzinski (2011) argued from a theoretical viewpoint that industry-specific patterns exist that determine substitution or complementation effects between internet and newspaper advertising. It was argued that retail advertising, in particular, may offer a niche for regional/local newspapers that can be expected to present a sustainable segment of complementarity along with the otherwise mostly substitutional advertising markets. This paper empirically tests these hypotheses by analyzing advertising spending data for newspaper and internet display advertising of 13 different industries in the U.S. from 2001-2010. We find evidence for some of the hypotheses. Whereas some industries showed clear substitution effects between internet display and newspaper advertising, the majority of our hypotheses could be only partly rejected: newspaper substi-tution effects could be observed, however, in the direction to traditional media platforms instead of internet display advertising. For two retail-sub-industries, the hypotheses could not be rejected for the analyzed period. The authors would like to thank the College of Communications at the Pennsylvania State University and in particular Anne Hoag and Dennis Davis for hosting Nadine Lindstädt as a Research Visiting Scholar in 2010/2011 which made it possible to access and use the Kantar Media Intelligence Ad$pender™ database for this research.

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Categories: business and economics, media and entertainment, Research Papers in Economics, technology and internet
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