The influence of commercial TV on the volume of advertising in magazines and newspapers

Date of publication: June 15, 1991

Author: Gianluca Aru

Abstract:

They fear that the develop of the commercial television in Europe could restrain the press. A great deal of attention has been paid to this topic by the Italian advertising sector and by the legislature. We shall attempt to answer showing that this hypothesis isn't TRUE via an analysis at two different levels: An empirical level in which we shall demonstrate that the decline of investments in press advertising due to television is an optical illusion and that, on the contrary, there has never been such growth in investments in press advertising as we have seen in the TV boom years. A deductive level in which the empirical evidence in confirmed by using an economic model (indifference curves, the "income" effect and the Giffin paradox) that explains why, in Italy, the growth of commercial television has had a positive effect on press advertising investments as well. The reduction in television prices since the RAI monopoly gave way to competition from commercial networks has probably had an "income" effect, shifting portions company income from other ways of communicating with and putting pressure on consumers towards classic advertising, to the benefit of both the press and television

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