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Targeted advertising and advertising avoidance

Authors


  • I thank Nuffield College, Oxford University, for graciously allowing me to visit; part of this article was written there. I also thank participants at various seminars, including Simon Anderson and Heski Bar-Isaac, two anonymous referees, and Ben Hermalin.

Abstract

I examine how the increasing ability of firms to target their ads influences market outcomes when consumers have access to advertising-avoidance tools. Although firms generally benefit from improved targeting, consumers need not. I also show that there may be too little blocking of ads in equilibrium and consider the role of targeted advertising when niche firms compete against mass-market firms.

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