Lynne Kiesling
So it looks like my speculation from Sunday was correct, and ESPN will not practice entry deterrence.
Eric McErlain has the goods on the just-inked NHL-OLN deal.
Looks promising, particularly that “NHL Network” to be named later part.
Archive for August 18th, 2005
METHANE CAPTURE IN BANGLADESH
August 18, 2005Lynne Kiesling
Check out this Wired article about methane capture from a trash dump in Bangaledesh. Methane capture technology can serve three objectives here: generating power, improving the utilization of the dump, and creating fertilizer that can enrich the thin soil in the area. When it gets going, this system can produce enough electricity to power 50,000 Bangladeshi households.
CHINESE DEMAND FOR OIL
August 18, 2005Lynne Kiesling
James Hamilton’s recent discussion of Chinese oil demand mentions the government actions to subsidize oil consumption to fuel economic growth (yikes, what a far-flung distortion!). A WSJ article (subscription required) from Wednesday describes the consequences of China’s refined fuel subsidies: shortages and queues.
Drivers in southern China have been queuing for as long as three hours for a tank of gasoline this week, only to face limits on spending and prohibitions against filling spare containers. In Guangzhou city, protests erupted briefly at the Luoxi Gas Station yesterday after attendants provided dwindling supplies to police who jumped to the front of the queue. After a busy morning, Luoxi tapped out. …
… Beijing has kept a tight grip on fuel prices, because they are central to the cost of transportation, utilities and industrial production. Government officials fear that any sharp spike in fuel costs would spur inflation and, possibly, social unrest.
Sounds to me from this article like they are getting social unrest because of the shortages and queues, a consequence of failing to allow real markets to adapt to changes in real conditions.
ECONOMETRICS IN ADVERTISING
August 18, 2005Lynne Kiesling
There was an interesting little blurb in Tuesday’s Wall Street Journal on the increasing use of econometrics in advertising (subscription required).
Econometrics uses statistical analysis to measure the relationship between different sets of events, such as the effect of educational qualifications on wage levels. To determine an advertisement’s effectiveness, econometricians write an equation to measure the effect on sales of different factors, including the weather, price cuts and advertising. For the advertiser, the purpose is to help decide which ads to run.
I’ve often thought that such an approach would improve the returns to advertising, by providing a systematic tool to evaluate the effect of advertising on sales revenue, controlling for other factors that influence sales.
I wonder how they account for price cuts as an independent variable; the dependent variable is P*Q, so if you include anything to do with P on the right-hand side you have to take a fancier approach. Perhaps they measure price cuts as a percentage discount, or a dummy variable …
Not everyone is convinced this is a good thing:
For an ad industry that prides itself on its creative spirit, the idea of being judged by mathematical models is upsetting, if not heretical, to some. Some creative staff argue that it is impossible to measure the buzz generated by good advertising.
No it’s not: the buzz that matters is the buzz that leads to increased sales revenue. Easy to quantify. A firm’s objective is to maximize profit, not to maximize the creativity of advertising. The point is to use more systematic tools to figure out what resonates with consumers.
