Audience Economics

Audience Economics: Media Institutions and the Audience Marketplace

PHILIP M. NAPOLI
Copyright Date: 2003
Pages: 256
https://www.jstor.org/stable/10.7312/napo12652
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  • Book Info
    Audience Economics
    Book Description:

    Focusing on the electronic media -- television, radio, and the Internet -- Audience Economics bridges a substantial gap in the literature by providing an integrated framework for understanding the various businesses involved in generating and selling audiences to advertisers. Philip M. Napoli presents original research in order to answer several key questions:

    • How are audiences manufactured, valued, and sold?

    • How do advertisers and media firms predict the behavior of audiences?

    • How has the process of measuring audiences evolved over time?

    • How and why do advertisers assign different values to segments of the media audience?

    • How does audience economics shape media content?

    Examining the relationship between the four principal actors in the audience marketplace -- advertisers, media firms, consumers, and audience measurement firms -- Napoli explains the ways in which they interact with and mutually depend on each other. He also analyzes recent developments, such as the introduction of local people meters by Nielsen Media Research and the establishment and evolution of audience measurement systems for the Internet. A valuable resource for academics, students, policymakers, and media professionals, Audience Economics keeps pace with the rapid changes in media and audience-measurement technologies in order to provide a thorough understanding of the unique dynamics of the audience marketplace today.

    eISBN: 978-0-231-50118-7
    Subjects: Sociology, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. ACKNOWLEDGMENTS
    (pp. ix-xii)
  4. INTRODUCTION
    (pp. 1-14)

    The media industries represent a unique component of the U.S. economy (Napoli 1997a). These industries are different from other industries in part because of the enormous amount of time and money that the public spends interacting with them. Recent data show that the average American spends more than five hours each day consuming some form of media. Consumer spending on communications and media products has been estimated at more than $150 billion for 2001 (Veronis, Suhler, and Associates 2001). Thus the prominence of the media industries in the U.S. economy has demanded the extensive attention and analysis that they receive....

  5. CHAPTER 1 THE AUDIENCE MARKETPLACE
    (pp. 15-35)

    The audience marketplace is a vital component of the U.S. economy. In 2001 the investment-banking firm of Veronis, Suhler, and Associates estimated that the media industries had earned more than $190 billion over the previous year through the sale of their audiences to advertisers. Before I examine the dynamics of the audience marketplace, a review of the key participants in this marketplace, their primary activities, and their relationships to one another is in order. This overview will help place later discussions about the nature of the audience product and the effects of changes in the predictability, measurement, and valuation of...

  6. CHAPTER 2 THE PREDICTED AUDIENCE-MEASURED AUDIENCE RELATIONSHIP
    (pp. 36-64)

    Forecasting media audiences is rife with uncertainty. Given that they cannot control the behavior of media audiences, buyers and sellers in the audience marketplace always face the possibility that the predicted audience upon which a transaction is based will not match the measured audience that ultimately is produced by measurement firms. How does the inherent uncertainty in this relationship between the predicted audience and the measured audience affect participants in the audience marketplace? How do participants attempt to cope with—and reduce—this uncertainty? Reducing this uncertainty is central to the audience marketplace. Because the buying and selling of audiences...

  7. CHAPTER 3 THE MEASURED AUDIENCE–ACTUAL AUDIENCE RELATIONSHIP
    (pp. 65-95)

    Just as incongruities exist between the predicted audience and the measured audience, so there are significant incongruities between the measured audience and the actual audience. Most important, these incongruities, and the efforts undertaken to reduce them, have important effects on the structure and behavior of the media institutions participating in the audience marketplace.

    Regardless of the medium at issue, the ability of measurement techniques and technologies to accurately capture an audience’s media consumption patterns is far from perfect. In this chapter I examine the processes by which measured audiences are created, emphasizing the weaknesses in contemporary audience measurement and the...

  8. CHAPTER 4 AUDIENCE VALUATION
    (pp. 96-133)

    An increasingly important characteristic of the audience marketplace is that advertisers place different values on different members of the media audience. Advertisers seek to place their messages within content whose audiences represent the most likely consumers of their product. These presumptions regarding the probable consumers of certain products have a significant influence on how much advertisers are willing to pay for different audience segments. Audiences that are more likely to purchase the advertised product will be more expensive than audiences that are less likely to purchase the advertised product.

    Typically, these presumptions about probable purchasing habits are based on various...

  9. CHAPTER 5 NEW TECHNOLOGIES AND THE AUDIENCE PRODUCT
    (pp. 134-170)

    Historically, changes in audience measurement technologies have had profound effects on media technologies and vice versa. Indeed, the inherent dynamism of the audience marketplace largely is a function of frequent changes in both media and audience measurement technologies. Thus current and pending developments in both media and audience measurement technologies can affect the audience product.

    Typically, analyses of the new media environment focus on the opportunities that it offers for both content providers and advertisers.¹ Thus, for instance, much has been made of the new media environment’s ability to segment audiences into increasingly narrow niches, to provide increasingly interactive advertising...

  10. CHAPTER 6 THE FUTURE OF THE AUDIENCE MARKETPLACE
    (pp. 171-184)

    What might the decline in the quality of the audience product mean for the future of advertiser-supported media? The effects could be wide ranging, affecting, for example, where and how advertisers spend their marketing dollars; the content production decisions of media organizations; and the pursuit of new revenue streams or business models by content providers.

    Continued declines in the quality of the audience product probably would affect the structure of audience transactions and where marketing dollars are spent, with advertisers increasingly avoiding traditional advertising-supported media and/or resisting traditional pricing structures. The most common transactional form in the audience marketplace currently...

  11. NOTES
    (pp. 185-198)
  12. REFERENCES
    (pp. 199-228)
  13. INDEX
    (pp. 229-236)