Tuesday, October 14, 2014

Net advertising / net neutrality

            My first research question is the different reach and perceptions in mobile and online version of same brand advertising. Specifically, this study aims at examining whether the Internet advertising and mobile advertising in the smartphone or tablet PC would complement or supplement each other for the product company. Nowadays, mobile service already penetrated the advertising market, having some comparative advantages rather than the Internet layout in terms of smaller screen size and shorter user sessions. Advertisers and product companies might concern the portfolio management for news products, which means that ‘new projects (mobile advertising) are evaluated, selected, and prioritized; existing products (may be accelerated, killed, or deprioritized; and resources are allocated and reallocated to active projects (Cooper, Edgett, Kleinschmidt, 2001, p.3).’ It is questionable whether the Internet and mobile users are mutually exclusive or not. Thus, this study will examine the patterns of two users first, which might be decisive to determine whether online and mobile advertisings complement or supplement each other. This study will benefit academic and practical area together. For academic, this study might confirm the idea of complementary and supplementary goods and find the new ground: the influence of mobile advertising. For advertisers or brand managers, this study will help them establish marketing strategies based on the results.

            The second research question is about the relationship between network neutrality and social welfare. The definition of net neutrality is that owners of the networks that provide access to the Internet should not control how consumers lawfully use that network and should not be able to discriminate against content provider access to that network (Wu, 2003). In 2010, the FCC’s Open Internet Order (FCC, 2010) announced three basic rules to maintain net neutrality: transparency, no blocking and no unreasonable discrimination. However, net neutrality is being currently threatened by service providers, like Comcast, AT&T, Verizon and so on because they insisted that net neutrality is a government intrusion into the private sector (Steigler & Sprumont, 2010), harming efficiency of source allocation. 
           From the perspective of market shares, government regulates the market of network to pursue the equivalent distributions of the net. From the perspective of supply and demand curve, government forcibly intervened the price decision process, setting the accessible price for the most person. This was possible because still the Internet was defined as a common career and public good. Such an intervention by government might affect consumer welfares. However, after the extinction of net neutrality, more competitions among service providers will be expected, increasing the price of the Internet. Thus, my second research question is to figure out the differences of market status in free competition and regulated markets for net neutrality. Case studies and mathematical analysis based on the current data (undecided) will be conducted.

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