I need help with a homework assignment, which is a puzzling me on how to conduct a detailed response. Do you have any Ideas?
In the past, the Super Bowl has been touted as an opportunity for firms to create a "splash" with advertising. The fact that the Super Bowl promises a large audience is a big draw for advertisers (84 million people watched the game last year). However, Advertising during the Super Bowl is also very expensive. This year, with the economic slowdown, many firms are passing on the Super Bowl and choosing to advertise at other "high visibility" events such as the Olympics, Academy Awards, and so on.
The supply of advertising during the Super Bowl is fixed: With the slack in demand, some claim the price has fallen to $1.5 million for 30 seconds. (The network broadcasting the Super Bowl, Fox, denies this claim.) Last year, the price was around $2 million per 30 seconds, and in 2000 the price was $2.2 million. Due to the high price of advertising slots, some firms have only been willing to pay the price for new launches or expensive campaigns. Some firms have also claimed that, given the current economic conditions, there are fewer new products to promote.
The article is accompanied by two charts. The first gives us the estimated price for 30 seconds of advertising for different programs and the audience share that the relevant program later received:
The second chart shows a group of companies which paid an average of $2 million to advertise during last year's Super Bowl, their current market share, and the change in the market share over the past year:
The questions are:
1.) The demand for advertising, like any good, depends on the price of the good. Consider the data from the first reported chart above. Which programs offer the lowest price for an Ad? Why might this be a misleading measure of price?
2.) Construct a better measure of price based on the information above? Compute a few examples. Which programs now appear to be less expensive? Would this be a good way to price advertising? Explain.
3.) Assume that a firm produces the product “XQC.” draw up a supply and demand curve graph for “XQC.” When firms pay to advertise, what is there ultimate goal? Use your supply and demand graph to demonstrate.
4.) Consider the information from the second chart. How does that information relate to your answer to question 3?
5.) Could you interpret the data from the second chart as showing the success (or lack thereof) of the Super Bowl at in its attempt to change consumer tastes? Why or why not?
Edited so that it is easier to read for members
- Without Wings
In the past, the Super Bowl has been touted as an opportunity for firms to create a "splash" with advertising. The fact that the Super Bowl promises a large audience is a big draw for advertisers (84 million people watched the game last year). However, Advertising during the Super Bowl is also very expensive. This year, with the economic slowdown, many firms are passing on the Super Bowl and choosing to advertise at other "high visibility" events such as the Olympics, Academy Awards, and so on.
The supply of advertising during the Super Bowl is fixed: With the slack in demand, some claim the price has fallen to $1.5 million for 30 seconds. (The network broadcasting the Super Bowl, Fox, denies this claim.) Last year, the price was around $2 million per 30 seconds, and in 2000 the price was $2.2 million. Due to the high price of advertising slots, some firms have only been willing to pay the price for new launches or expensive campaigns. Some firms have also claimed that, given the current economic conditions, there are fewer new products to promote.
The article is accompanied by two charts. The first gives us the estimated price for 30 seconds of advertising for different programs and the audience share that the relevant program later received:
The second chart shows a group of companies which paid an average of $2 million to advertise during last year's Super Bowl, their current market share, and the change in the market share over the past year:
The questions are:
1.) The demand for advertising, like any good, depends on the price of the good. Consider the data from the first reported chart above. Which programs offer the lowest price for an Ad? Why might this be a misleading measure of price?
2.) Construct a better measure of price based on the information above? Compute a few examples. Which programs now appear to be less expensive? Would this be a good way to price advertising? Explain.
3.) Assume that a firm produces the product “XQC.” draw up a supply and demand curve graph for “XQC.” When firms pay to advertise, what is there ultimate goal? Use your supply and demand graph to demonstrate.
4.) Consider the information from the second chart. How does that information relate to your answer to question 3?
5.) Could you interpret the data from the second chart as showing the success (or lack thereof) of the Super Bowl at in its attempt to change consumer tastes? Why or why not?
Edited so that it is easier to read for members
- Without Wings
Last edited by a moderator:
