Comments on: Hard to explain http://blogs.law.harvard.edu/doc/2007/10/12/hard-to-explain/ Same old blog, brand new place Tue, 01 Dec 2009 04:14:59 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Trey http://blogs.law.harvard.edu/doc/2007/10/12/hard-to-explain/comment-page-1/#comment-3138 Trey Sat, 13 Oct 2007 10:17:50 +0000 http://blogs.law.harvard.edu/doc/2007/10/12/hard-to-explain/#comment-3138 Almost as bad as having to watch and explain embarrassing commercials to young viewers is the probable deadweight economic loss when they are aired. Advertisers pay per impression for those ads, even though only a very tiny fraction of the audience is a potential buyer. They may rationalize that they are "building a brand" with the untold millions spent on reaching younger people and women, but a drug brand is not a typical brand- as in just a few years all of those medicines will be off patent and facing massive price competition from generics, so most of the brand equity will diminish. Someday soon we may have a relational media model in place where marketers can precisely target messages at individuals who have demonstrated an interest in receiving them. Companies that sell niche products will have very strong economic incentives to withdraw their pleas from the mass media and reap bigger rewards in relational media. This improved marketing efficiency will at least partially eliminate the deadweight loss and improve our lives as we can sit and watch television with our families and see commercials that are not embarrassing and maybe even enticing enough to not Tivo over- since all those watching may have some interest in the product or service. Almost as bad as having to watch and explain embarrassing commercials to young viewers is the probable deadweight economic loss when they are aired.

Advertisers pay per impression for those ads, even though only a very tiny fraction of the audience is a potential buyer. They may rationalize that they are “building a brand” with the untold millions spent on reaching younger people and women, but a drug brand is not a typical brand- as in just a few years all of those medicines will be off patent and facing massive price competition from generics, so most of the brand equity will diminish.

Someday soon we may have a relational media model in place where marketers can precisely target messages at individuals who have demonstrated an interest in receiving them. Companies that sell niche products will have very strong economic incentives to withdraw their pleas from the mass media and reap bigger rewards in relational media.

This improved marketing efficiency will at least partially eliminate the deadweight loss and improve our lives as we can sit and watch television with our families and see commercials that are not embarrassing and maybe even enticing enough to not Tivo over- since all those watching may have some interest in the product or service.

]]> By: Britt Blaser http://blogs.law.harvard.edu/doc/2007/10/12/hard-to-explain/comment-page-1/#comment-3124 Britt Blaser Sat, 13 Oct 2007 03:35:30 +0000 http://blogs.law.harvard.edu/doc/2007/10/12/hard-to-explain/#comment-3124 If Big Pharma hires such genius marketers, why have we never heard the most obvious tag line in this market space? "For a good time, Cialis." If Big Pharma hires such genius marketers, why have we never heard the most obvious tag line in this market space?

“For a good time, Cialis.”

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