Are Bad Times Good for the Internet? An Empirical Analysis of the Shift to Internet Advertising During Recessions

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Abstract/Contents

Abstract: Internet advertising has several distinct benefits over more traditional advertising media such as television and newspapers. These include increased flexibility, cost effectiveness, targeting, and measurability. Given these advantages, it seems that internet advertising is ideally suited for times when budgets are constrained, and any marketing initiatives need to be strongly justified. This study explores whether there is a shift in the allocation of advertising expenditure towards online media as a result of recessions. A first step investigates whether the growth in internet advertising can be explained by the growth in sales in the field most closely tied to the medium: e-commerce. Next, the empirical results show that e-commerce does serve as a good baseline for explaining the growth in internet advertising, but that there is a separate, significant, and positive effect of the recession on internet advertising, both in dollar and share terms. A comparison to TV advertising expenditures shows that TV advertising does not exhibit similar behavior.

Type of resource	text
Date created	December 2009

Author	Gluck, Lara Stiris
Primary advisor	Hanson, Ward
Degree granting institution	Stanford University, Department of Economics

Subject	Stanford Department of Economics
Subject	advertising expenditure
Subject	online advertising
Subject	business cycles
Subject	internet advertising
Subject	recessions
Subject	e-commerce
Genre	Thesis

Location	https://purl.stanford.edu/fk959qm0128

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Preferred Citation: Gluck, Lara Stiris. (2009). Are Bad Times Good for the Internet? An Empirical Analysis of the Shift to Internet Advertising During Recessions. Stanford Digital Repository. Available at: https://purl.stanford.edu/fk959qm0128

Stanford University, Department of Economics, Honors Theses

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