The TV Advertising Industry: Demographic Segmentation and the Impact of Viewership Decline
59 Pages Posted: 26 May 2021 Last revised: 24 Jan 2022
Date Written: November 16, 2021
Abstract
Viewership of traditional television has decreased in the past decade, particularly among younger viewers. This paper studies the impact of this decline on the U.S. TV advertising industry using a two-sided model that explicitly considers viewers’ demographics. The model incorporates viewers, who choose which channel to watch; advertisers, who choose how many advertising views to purchase in each demographic group; and channels, who choose how many advertisements to show during their programs. I use the model to evaluate how viewership declines affect demographic-specific prices per ad view, advertisers from different industries, TV channels, and viewers.
Keywords: advertising, demographics, TV
JEL Classification: L82, M37
Suggested Citation: Suggested Citation