There is an increasingly large overlap between digital and classical product markets. Nowadays, job offers can be called up online, used cars are traded over the internet, online auctions take place. The internet is a substitute to classical markets in all of these cases. In other cases, the relationship tends to be complementary, whatsoever. A striking example is the newspaper and magazine market. Almost all important magazines now maintain an own website. Current information, that most often does not well coincide with the contents of the magazines print versions, can be called up at their websites. It is therefore to be expected that website launches are regarded as magazine quality signals from the view of consumers. In some cases, however, a substitutive relationship between online and printed magazine versions might be present. Which of these effects dominates has been the core question of this research project.Models for differentiated product demands have been used to analyze this question and were implemented into econometric panel data models. Various empirical investigations have shown that both effects apparently balance each other out magazine websites do neither have a significant effect on magazine demand nor do they significantly affect advertising demand. Additional and current running analyses are gearing at making the estimation technique more flexible so that the effect of websites on the purchasing decision is allowed to be different for different consumers. Suitable data have been made available by Burda Advertising Center.A straightforward and also currently analyzed research issue is the timing of website launches.
Discussion and Working Papers
Kaiser, Ulrich (2002), Optimal Cover Prices and the Effects of Website Provision on Advertising and Magazine Demand, ZEW Discussion Paper No. 02-54, Mannheim. Download
Kaiser, Ulrich (2002), A Note on Pricing and Efficiency in Print Media Industries, ZEW Discussion Paper No. 02-33, Mannheim. Download
Kaiser, Ulrich (2001), The Effects of Website Provision on the Demand for German Women’s Magazines, ZEW Discussion Paper No. 01-69, Mannheim, LLL:citation.label.journal: <a href="http://www.bepress.com/romsjournal/">Review of Marketing Science </a>. Download