TV Viewing and Advertising Targeting
70 Pages Posted: 9 Mar 2017 Last revised: 13 Dec 2017
Date Written: January 16, 2017
Television (TV), the predominant advertising medium, is being transformed by the micro-targeting capabilities of set-top boxes (STBs). Accordingly, this paper uses a proprietary, household-level, single source data set to develop a second-by-second show and advertisement viewing model, using this approach to forecast consumers’ exposure to advertising and the downstream consequences for sales.
We find that micro-targeting can lower advertising costs and raise incremental profit. Further, these advantages are amplified when advertisers are allowed to buy real-time as opposed to up-front. Overall, we find considerable targeting gains.
Keywords: TV Advertising, Targeting, Set-Top Box, Sampling
JEL Classification: M31, M37, L10, L82, C61
Suggested Citation: Suggested Citation