http://www.influxinsights.com/blog/ 2009-01-07T21:17:26Z http://www.influxinsights.com/blog/article/1321/the-opportunity-cost-of-watching-advertising.html <div class="ft-story-header">This letter appeared in the Financial Times newspaper today. <br><br>Dear Economist,</div><div class="ft-story-body"><p>Having recently acquired a personal video recorder, I find myself using the time-shift facility when watching commercial TV.</p><div class="ad-placeholder ad-mpusky" id="ad-placeholder-mpusky"><p><i>ADVERTISEMENT ( a web advertisment appeared here!!)</i><br></p></div><p>I start watching a programme around 15 minutes after it has commenced broadcasting - by doing this, I am able to fast forward through the adverts. Am I breaking my "contract" with the broadcaster by not watching its adverts, and do I miss out on some products that might be of value to me?</p><p>Paul, Dorset</p><p>Dear Paul,</p><p>If everybody did as you do, advertisers would give up, and broadcasters would have to find a new source of income. That need not concern you, however. If you time-shift and others do not, no harm is done. And if they all time-shift, you'd be a fool to do otherwise, wouldn't you?</p><p>The more pertinent question is whether these adverts are worth your time. If you earn £40,000 a year, then you make £5 in the time it takes you to watch 15 minutes of advertising. This is a rough guide to the opportunity cost of your time.</p><p>If the adverts are enjoyable or informative, perhaps that is a price worth paying, but it seems unlikely. While an advertisement in the Financial Times might alert you to a sophisticated product, mainstream television adverts are more likely to remind you that actors can be paid to hold fizzy drinks, or that when a car is filmed from a helicopter and driven by a stuntman along a remote mountain road, it looks rather cool.</p><p>I recommend, then, that you watch a few advertising breaks while keeping a running tally: the cost of time spent watching adverts versus your estimate of the benefits thus derived. I suspect you will find that time shifted is time saved.</p><p><br></p></div> Influx Insights 2007-04-28T14:13:48Z