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

Author

Listed:
  • Nadine Lindstädt

    (Department of Environmental and Business Economics, University of Southern Denmark)

  • Oliver Budzinski

    (Department of Environmental and Business Economics, University of Southern Denmark)

Abstract
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.

Suggested Citation

  • Nadine Lindstädt & Oliver Budzinski, 2012. "Newspaper and Internet Display Advertising – Co-Existence or Substitution?," Working Papers 114/12, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    • Handle: RePEc:sdk:wpaper:114
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    References listed on IDEAS

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    1. Dewenter, Ralf & Haucap, Justus, 2008. "Wettbewerb als Aufgabe und Problem auf Medienmaerkten: Fallstudien aus Sicht der "Theorie zweiseitiger Maerkte"," Working Paper 78/2008, Helmut Schmidt University, Hamburg.
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    Cited by:

    1. Nadine Lindstädt & Oliver Budzinski, 2011. "Newspaper vs. Online Advertising – Is There a Niche for Newspapers in Modern Advertising Markets?," Working Papers 113/11, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.

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    More about this item

    Keywords

    : media economics; advertising; complementation; substitution; newspapers; internet;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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