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  3. American Economic Journal: Microeconomics
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  5. Ad Clutter, Time Use, and Media Diversity

Ad Clutter, Time Use, and Media Diversity

Abstract

We introduce advertising congestion along with a time-use model of consumer choice among media. Both consumers and advertisers multi-home. Higher equilibrium advertising levels ensue on less popular media platforms because platforms treat consumer attention as a common property resource: smaller platforms internalize less the congestion from advertising and so advertise more. Platform entry raises the ad nuisance “price” to consumers and diminishes the quality of the consumption experience on all platforms. For consumer welfare, this price effect of entry dominates the positive effect of more variety in some settings and thus consumers will then be worse off after entry.

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