Shouting to Be Heard in Advertising

Advertising competes for scarce consumer attention, so more profitable advertisers send more messages to break through the others’ clutter. Multiple equilibria can arise: more messages in aggregate induce more "shouting to be heard", dissipating profit. Equilibria can involve a small range of loud shouters or large range of quiet whisperers. All advertisers prefer there to be less shouting. There is the largest diversity in message levels for a middling width of advertiser types: both a very wide or very narrow width have only one message per advertiser. The number of advertisers at each message level decreases with the level if the profit distribution is log-convex. Increasing the cost of sending messages can make all advertisers better off. A new technique is given for describing multiple equilibria, by determining how much examination is consistent with a given marginal advertiser. J C : D11, D60, L13. K : information overload, congestion, advertising, lottery, junk mail, e-mail, telemarketing, multiple equilibria, ad caps. Simon P. Anderson: Department of Economics, University of Virginia, PO Box 400182, Charlottesville VA 22904-4128, USA, [email protected]. André de Palma: ENS-Cachan (Economics and Management Department), Centre d’Economie de la Sorbonne, FRANCE. [email protected]. The first author gratefully acknowledges research funding from the NSF under grant SES-0452864 and from the Bankard Fund at the University of Virginia. We thank various seminar participants and conference participants at SWIO 2006 (Auckland, NZ), CRETE (Rethmynon, 2006), IIOC 2007 (Savannah, GA), CEPR 2007 (Taragonna), the Workshop on the Psychology and Economics of Attention (Toulouse, 2011), and the Paris School of Economics (2012), as well as Jim Dana, Martin Peitz, and Sanjay Raneev (Cambridge), two referees and an Associate Editor for perceptive comments, and Charlie Murry for research assistance. Well, it’s a non-stop blitz of advertising messages. Everywhere we turn we’re saturated with advertising messages trying to get our attention. We’ve gone from being exposed to about 500 ads a day back in the 1970’s to as many as 5,000 a day today. We have to screen it out because we simply can’t absorb that much information. We can’t process that much data and so no surprise, consumers are reacting negatively to the kind of marketing blitz; the kind of super saturation of advertising that they’re exposed to on a daily basis. All of this marketing saturation that’s going on is creating this kind of arms race between marketers where they have to up the ante the next time out because their competitors have upped the ante the last time they were out. And the only way you can win is to have more saturation.