Handbook on the Economics of the Media

Handbook on the Economics of the Media

Edited by Robert G. Picard and Steve S. Wildman

This Handbook explores the economic features of the media and its infrastructure to provide readers with a sophisticated understanding of the critical issues and their influence on companies, audiences and regulators. The contributors explore and explain the impact of underlying factors such as multi-sided platforms, advertising and industry structure. They assess the unique economic factors affecting print, broadcast and broadband-based media, and highlight how the economics of the media can influence policy making. Each original chapter introduces the reader to a specific topic, reviews the literature on the development of knowledge in the field, explores critiques of the approach, and provides an understanding of applying this knowledge and the implications.

Chapter 5: Economics of advertising: the role of commercial media

Anthony Dukes

Subjects: economics and finance, cultural economics, industrial economics, innovation and technology, technology and ict


Firms and organizations have the need to communicate with the public. For instance, a consumer package goods manufacturer informs its customers about a new product, or a retail merchant announces its upcoming price reductions. We define this form of communication as advertising. As with any form of communication, a medium is necessary to deliver the message. Commercial media is the typical medium for advertising. In this chapter we study the economics of advertising with particular attention to the role that commercial media play in facilitating businesses’ and non-profits’ desire to communicate with consumers. We examine advertising from an economic perspective. That is, we assume that advertising is a market activity in which participants respond to their private incentives. The market for advertising is a significant aspect of economic activity – typically over 2 percent of the US gross domestic product in recent years. But where does this money go? Until recently, economists had not addressed this question. Rather, they focused on the demand side of advertising, trying to understand the effects of advertising on consumers and on the markets for the advertised products. Such a focus, however, overlooks the supply side of advertising: the role of commercial media to supply consumer attention to advertisers. The primary source of revenue for commercial media is, in fact, through the sale of advertising. There has been a surge of academic activity that examines the supply side aspects of advertising into which this chapter taps.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information