Advertising Bans and the Substitutability of Online and Offline Advertising

Internet and Search and Advertising

Article Snapshot

Author(s)

Avi Goldfarb and Catherine Tucker

Source

Journal of Marketing Research, Vol 48, No. 2, pp. 207-227, 2011

Summary

This paper demonstrates that local government advertising controls are undermined by Internet advertisements.

Policy Relevance

Local advertising restrictions that aim to reduce the consumption of particular goods are unlikely to be effective when those goods are advertised online.

Main Points

  • Governments often restrict advertisements on goods like alcohol, tobacco, and legal services.
     
  • These restrictions are often effective in reducing demand for the advertised goods.
     
  • However, Internet advertisements were markedly more effective when viewed in areas where the goods advertised could not have been promoted in another medium.
    • In particular, customers were exposed to advertisements for alcoholic beverages. Some lived in regions where these beverages could be advertised; others lived in areas where advertisements for alcoholic beverages are banned.
       
    • Before viewing online alcohol ads, consumers living in areas where alcoholic beverage ads are banned were 8% less likely to intend to purchase alcohol than consumers in areas without advertising bans. After viewing online ads, the gap narrowed to 3%.
       
    • Regional variation in traits like alcoholism rates, state-level restrictions on alcohol sales, and per-capita alcohol consumption did not change this outcome.
       
  • Online advertisements seem to be a substitute for offline advertisements, especially billboards.
     

 

Get The Article

Find the full article online

Search for Full Article

Share