Kenneth C. Wilbur

Hybrid Advertising Auctions

Facebook and Google offer hybrid advertising auctions that allow advertisers to bid on a per-impression or a per-click basis for the same advertising space. This paper studies the properties of equilibrium and considers how to increase efficiency in this new auction format. Rational expectations require the publisher to consider past bid types to prevent revenue losses to strategic advertiser behavior. The equilibrium results contradict publisher statements and suggest that, conditional on setting rational expectations, publishers should consider offering multiple bid types to advertisers. For a special case of the model, we provide a payment scheme that achieves the socially optimal allocation of advertisers to slots and maximizes publisher revenues within the class of socially optimal payment schemes. When this special case does not hold, no payment scheme will always achieve the social optimum.

Correcting Audience Externalities in Television Advertising

When a television advertisement causes viewers to switch channels, it reduces the audience available to subsequent advertisers. This audience loss is not reflected in the advertisement price, resulting in an audience externality. The present article analyzes the television networks problem of how to select, order, and price advertisements in a break of endogenous length in order to correct audience externalities. It proposes the Audience Value Maximization Algorithm (AVMA), which considers many possible advertisement orderings within a dynamic programming framework with a strategy-proof pricing mechanism. Two data sets are used to estimate heterogeneity in viewer-switching probabilities and advertiser willingness-to-pay parameters in order to evaluate the algorithms performance. A series of simulations shows that AVMA typically maximizes audience value to advertisers, increases network revenue relative to several alternatives, and runs quickly enough to implement.

The effectiveness of post-release movie advertising

Frequent new product introductions and short product lifecycles lead to unusually high levels of advertising in the movie industry. We study the effectiveness of television advertisements aired after the theatrical opening of a motion picture (“post-release advertising”). We estimate an instrumental-variables, lagged effects model using a novel dataset constructed to obviate simultaneity concerns and temporal aggregation biases. We find that post-release movie advertising exhibits a high degree of heterogeneity across films, but generates substantial returns for some movies. Our findings suggest that studios may find it beneficial to experiment with higher post-release advertising budgets. Further, exhibitors may benefit from extended movie lifecycles if they share post-release advertising responsibility with studios.

Price Advertising by Manufacturers and Dealers

The central prediction of the current paper is that manufacturer price advertising may be a less effective tool for influencing demand than retailer price advertising. We manipulate the source of a price advertisement in an experiment run on a sample of pickup truck owners. Manufacturer price advertising leads to lower indicators of potential demand than dealer price advertising, even among consumers who are experienced with the brand. An econometric analysis of pickup truck sales, price, and advertising data shows that this effect is large enough to detect in market data. Manufacturer and dealer price advertising both increase the demand intercept and the responsiveness of demand to price, but the effects of dealer price advertising are larger. Although dealer price advertising is more effective than manufacturer price advertising, manufacturer price advertising may still be useful to reduce channel conflict. This paper was accepted by Pradeep Chintagunta, marketing.

Local Media Ownership and Media Quality

The Federal Communications Commission regulates local media ownership to promote competition, diversity and the provision of local programming. This study investigates how local media cross-ownership, co-ownership and ownership diversity are associated with media market outcomes. Cross-sectional regressions indicate that television station ownership consolidation is associated with increased local TV news production but lower news ratings. However, panel estimation finds that changes in local media ownership are uncorrelated with local media usage or programming, producing confidence intervals that are tightly centered around zero.

Market-based measures of viewpoint diversity

Existing market-based measures of viewpoint diversity in the media have been criticized for lacking a theoretical foundation. This paper proposes a theoretical framework to develop market-based measures of viewpoint diversity. It then uses this framework to develop four viewpoint diversity measures using a panel dataset of local television ratings. Finally, an econometric model relates these viewpoint diversity measures to media ownership variables. It does not appear that market-based measures of viewpoint diversity are strongly related to media ownership structures.

Empirical models of manufacturer-retailer interaction: A review and agenda for future research

The nature of the interaction between manufacturers and retailers has received a great deal of empirical attention in the last 15 years. One major line of empirical research examines the balance of power between them and ranges from reduced form models quantifying aggregate profit and other related trends for manufacturers and retailers to structural models that test alternative forms of manufacturer-retailer pricing interaction. A second line of research addresses the sources of leverage for each party, e.g., trade promotions and their pass-through, customer information from loyalty programs, manufacturer advertising, productassortment in general, and private label assortment in particular. The purpose of this article is to synthesize what has been learnt about the nature of the interaction between manufacturers and retailers and the effectiveness of each party’s sources of leverage and to highlight gaps in our knowledge that future research should attempt to fill. (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrowed from another version of this item.) (This abstract was borrow (This abstract was borrowed from another version of this item.)

Advertising Content and Television Advertising Avoidance

This article proposes a new measure of television advertising avoidance, the Passive/Active Zap (PAZ), as an occurrence of a set-top box switching channels during a commercial break after at least 5 min of inactivity prior to the break. Twenty-seven percent of eligible commercial breaks are interrupted by a PAZ. A proportional hazards model is applied to a unique dataset to estimate the impact of advertising content and commercial break characteristics on PAZ behavior. The results show that advertising avoidance is negatively associated with movie ads and positively associated with advertising for websites, auto insurance and women’s clothing. Ad avoidance also tends to rise with repeated exposures to the same ad creative, advertising aired on general-interest television networks, later hours of the evening, and rainfall.

Recent Developments in Mass Media: Digitization and Multitasking

Abstract Technology and consumer behavior are changing supply and demand for mass media. Digitization has increased consumer control over media content and advertising, with implications for advertising avoidance, advertising targeting and personalization, competition among media platforms, and media market outcomes. In addition, consumers increasingly use a “second screen” to multitask during media programs, enabling immediate online response to program and advertising content, but also offering new opportunities to divert attention. This chapter presents recent data showing that video has remained the dominant mass medium and establishing the prevalence of digitization and multitasking behavior. It then selectively reviews academic research on the antecedents and consequences of the changing picture of mass media consumption, with a particular focus on the past 5–10 years.

Effects of Television Advertising on Internet Search

This paper investigates the possibility that television advertising influences online search using the AOL search dataset. It uses a novel keyword mining technique to classify keywords as brand related, category related (generic), or unrelated, distinguishing between category search and consumers’ tendency to search a branded keyword. A three-level conditional choice model is estimated to determine whether hourly changes in brands’ television advertising expenditures are related to deviations from baseline trends in search behaviors. The results indicate a statistically significant relationship between TV advertising and consumers’ tendency to search branded keywords (e.g. “Fidelity�?) rather than generic category-related keywords (e.g. “stocks�?) in the dataset. The effect is largest for relatively young brands during standard business hours with an elasticity, .07, comparable to extant measurements of advertising’s impact on sales. However, television advertising is not found to influence category search incidence and has limited effects on click-through rates.