Strategies to Fight Ad-sponsored Rivals
| Authors: | Ramon Casadesus-Masanell and Feng Zhu |
|---|---|
| Published: | October 22, 2009 |
| Paper Release Date: | September 2009 |
| Feature: | Working Papers |
Many companies choose to finance themselves using ad revenues and offer their products or services—from newspapers to software applications, television programs, and online search—free to consumers. Yet the emergence of ad-sponsored entrants in various industries poses significant threats to the incumbents in these markets whose business models are often based on subscriptions or fees charged to their customers. Faced with the threat from ad-sponsored entrants, incumbents must choose strategies to respond. HBS professor Ramon Casadesus-Masanell and University of Southern California professor Feng Zhu create an analytical framework to establish guidelines for incumbent firms facing these issues. The researchers consider four alternative business models: pure-subscription-based; pure-ad-sponsored; mixed-single-product; and mixed-product-line-extension. Analysis shows that the optimal strategic and tactical choices change dramatically in the presence of an ad-sponsored rival. This is the first study to provide a comprehensive analysis of the competition between a free ad-sponsored entrant and an incumbent that has the option of choosing different business models.
Understanding Users of Social Networks
| Published: | September 14, 2009 |
|---|---|
| Feature: | Research & Ideas |
Many business leaders are mystified about how to reach potential customers on social networks such as Facebook. Professor Mikolaj Jan Piskorski provides a fresh look into the interpersonal dynamics of these sites and offers guidance for approaching these tantalizing markets.
Quantifying the Economic Impact of the Internet
| Published: | August 17, 2009 |
|---|---|
| Feature: | Research & Ideas |
Businesses around the advertising-supported Internet have incredible multiplier effects throughout the economy and society. Professor John Quelch starts to put some numbers on the impact.
Social Network Marketing: What Works?
| Q&A with: | Sunil Gupta |
|---|---|
| Published: | July 27, 2009 |
| Feature: | Research & Ideas |
Purchase decisions are influenced differently in social networks than in the brick-and-mortar world, says Harvard Business School professor Sunil Gupta. The key: Marketers should tap into the networking aspect of sites such as Facebook.
In Praise of Marketing
| Published: | February 5, 2009 |
|---|---|
| Feature: | Research & Ideas |
Marketers do a surprisingly poor job of marketing Marketing, says professor John Quelch. "They do not appreciate, let alone articulate, the economic and social benefits of marketing." Here is the story that needs to be told.
Published in 2008
Concentration Levels in the U.S. Advertising and Marketing Services Industry: Myth vs. Reality
| Authors: | Alvin J. Silk and Charles King III |
|---|---|
| Published: | December 18, 2008 |
| Paper Release Date: | September 2008 |
| Feature: | Working Papers |
How concentrated is the U.S. advertising and marketing services industry? Over the past several decades, the effects of deregulation, globalization, and technological innovation have reshaped the advertising and marketing services industry as they worked their way through the economy. Estimates from the existing literature are typically based on data from trade sources and present a picture that emphasizes rising concentration over time and domination by a handful of holding companies. These estimates are suspect as they suffer from a number of conceptual and measurement limitations. This paper analyzes changes in concentration levels in the U.S. advertising and marketing services industry, using data that have been largely ignored in past discussions of the economic organization of the industry.
Should You Bring Advertising Expertise In-House?
| Q&A with: | Alvin J. Silk |
|---|---|
| Published: | October 14, 2008 |
| Feature: | Research & Ideas |
Advertising agencies have traditionally offered services to firms that couldn't afford or didn't find value in having that expertise in-house. But a recent study indicates more firms than previously thought are developing internal advertising units. Q&A with HBS professor emeritus Alvin J. Silk.
Securing Online Advertising: Rustlers and Sheriffs in the New Wild West
| Author: | Benjamin G. Edelman |
|---|---|
| Published: | October 7, 2008 |
| Paper Release Date: | September 2008 |
| Feature: | Working Papers |
Online advertising remains a "Wild West" where users are faced with ads they ought not believe and where firms overpay for ads without getting the results they were promised. But it doesn't have to be this way. Enforcement by public agencies is starting to remind advertisers and ad networks that long-standing consumer protection rules still apply online. And as advertisers become more sophisticated, they're less likely to tolerate opaque charges for services they can't confirm they received. During the past five years, Edelman has uncovered hundreds of online advertising scams defrauding thousands of users, including all the Web's top merchants. This chapter summarizes some of what he has found and what users and advertisers can do to protect themselves.
The Internalization of Advertising Services: An Inter-Industry Analysis
| Authors: | Sharon Horsky, Steven C. Michael, and Alvin J. Silk |
|---|---|
| Published: | September 18, 2008 |
| Paper Release Date: | July 2008 |
| Feature: | Working Papers |
When are advertisers more likely to establish and maintain their own in-house agencies? Despite occasional indications to the contrary, such self-sufficiency has long been viewed by industry observers and scholars as more the exception than the rule in the U.S. advertising and marketing services business. With the background that vertical integration in this industry is a neglected domain of research, analysis by HBS professor emeritus Alvin J. Silk and colleagues suggests that while most large U.S. advertisers rely primarily on independent agencies for advertising services, many other advertisers operate in-house advertising units.
Google-Yahoo Ad Deal is Bad for Online Advertising
| Published: | August 12, 2008 |
|---|---|
| Feature: | Op-Ed |
A proposed advertising deal between Internet competitors Google and Yahoo would reduce competitiveness in the Internet advertising market, likely resulting in higher advertising rates, says Harvard Business School professor Benjamin G. Edelman.
Published in 2007
Authenticity over Exaggeration: The New Rule in Advertising
| Published: | December 3, 2007 |
|---|---|
| Feature: | Research & Ideas |
Advertisers thought technology was their friend in identifying and creating new customers. Funny thing happened along the way, though: Now consumers are using the Internet to blunt traditional commercial messages. Time for companies to rethink their strategy, says HBS professor John A. Deighton.
Broadband: Remaking the Advertising Industry
| Q&A with: | Stephen P. Bradley |
|---|---|
| Published: | September 17, 2007 |
| Feature: | Research & Ideas |
Evolving from the Marlboro Man in the 1960s to the Subservient Chicken in a recent Web campaign, advertising is undergoing a radical transformation. Harvard Business School professor Stephen P. Bradley, who is cowriting a book on how broadband technologies are remaking many industries, discusses how advertising is responding to the challenges.
How to Profit from Scarcity
| Published: | September 14, 2007 |
|---|---|
| Feature: | Research & Ideas |
This past summer's launches of the iPhone and final Harry Potter book were textbook examples of companies profiting in part by creating the illusion of scarcity. Professor John Quelch explains the advantages of this strategy when executed well, and tells how to recover from a real product shortage.
Published in 2006
Is MySpace.com Your Space?
| Q&A with: | John A. Deighton |
|---|---|
| Published: | August 16, 2006 |
| Feature: | Views on News |
Social networking sites such as MySpace.com have demographics to die for, but PR problems with parents, police, and policymakers. Are they safe for advertisers? A Q&A with Professor John Deighton.
What Customers Want from Your Products
| Published: | January 16, 2006 |
|---|---|
| Feature: | Research & Ideas |
Marketers should think less about market segments and more about the jobs customers want to do. A Harvard Business Review excerpt by HBS professor Clayton M. Christensen, Intuit’s Scott Cook, and Advertising Research Foundation’s Taddy Hall.
Published in 2005
How Can Start Ups Grow?
| Q&A with: | Mukti Khaire |
|---|---|
| Published: | November 14, 2005 |
| Feature: | Research & Ideas |
For new ventures a lack of resources makes growth difficult to come by—just ask those nine out of ten fledgling firms that fail. Professor Mukti Khaire says the key may be in acquiring intangible resources such as legitimacy, status, and reputation.
Advertising and Expectations: The Effectiveness of Pre-Release Advertising for Motion Pictures
| Authors: | Anita Elberse and Bharat N. Anand |
|---|---|
| Published: | July 5, 2006 |
| Paper Release Date: | September 30, 2005 |
| Feature: | Working Papers |
This research examines how advertising affects market-wide sales expectations for pre-release movies. The authors use data on advertising expenditures and an online stock market simulation, The Hollywood Stock Exchange (HSX), to track more than 280 movies released between 2001 and 2003. Their findings show that advertising affects the updating of market-wide expectations prior to release, and that this effect is stronger the higher the product quality.
Measuring Consumer and Competitive Impact with Elasticity Decompositions
| Author: | Thomas J. Steenburgh |
|---|---|
| Published: | July 5, 2006 |
| Paper Release Date: | May 2005, revised February 2006 |
| Feature: | Working Papers |
Do marketing actions expand the market or steal business from rival firms? One research method suggests that all of the demand created by an incremental advertising investment would be generated by market expansion; another suggests that the same increase would be stolen from rival firms. Steenburgh explains why these seemingly contradictory results actually are complementary and provide a more comprehensive understanding of the investment's impact.
The Motion Picture Industry: Critical Issues in Practice, Current Research & New Research Directions
| Authors: | Jehoshua Eliashberg, Anita Elberse, and Mark A. A. M. Leenders |
|---|---|
| Published: | July 5, 2006 |
| Paper Release Date: | March 2005 |
| Feature: | Working Papers |
This paper reviews research and trends in three key areas of movie making: production, distribution, and exhibition. In the production process, the authors recommend risk management and portfolio management for studios, and explore talent compensation issues. Distribution trends show that box-office performance will increasingly depend on a small number of blockbusters, advertising spending will rise (but will cross different types of media), and the timing of releases (and DVDs) will become a bigger issue. As for exhibiting movies, trends show that more sophisticated exhibitors will emerge, contractual changes between distributor and exhibitors will change, and strategies for tickets prices may be reevaluated.
Published in 2004
The Presentation of Self in the Information Age
| Author: | John A. Deighton |
|---|---|
| Published: | July 5, 2006 |
| Paper Release Date: | May 2004 |
| Feature: | Working Papers |
In the past, we knew a lot about the seller of a product (through ads, marketing, or reputation) but little about the individual buyer. Times have changed. From the Internet to store loyalty cards, technology has made the marketplace into an interactive exchange where the buyer is no longer anonymous. The future market will likely be one in which personal information is shared and leveraged. Consumers who are willing to share their information will be more attractive to sellers and more sought-after than those who have bad reputations or refuse to participate.
