Two-Sided Matching between Fashion Firms and Publishers: When Firms Strategically Target Consumers for Brand Image

Abstract

Many fashion companies strategically choose publishers for advertising to target preferred consumers, because such consumers not only generate revenue, they also influence the companies’ brand image. Meanwhile, publishers also select companies because the ads posted by companies affect publishers’ image as well. It is important to jointly model the preferences of firms and publishers in this scenario, because observed advertising is an outcome of mutual selection from both sides. We develop a two-sided matching framework to model advertising as realized from such a two-sided selection process. The preference of a third party (consumers) is embedded in this framework through a consumer product choice model. Applying the proposed model to two unique datasets of fashion brand purchases, magazine readership, and advertising record, we are able to detect magazines and watch brands’ preferences separately. More expensive magazines also prefer more luxurious fashion watch brands. Watch brands prefer magazines with a potential consumer network with more male, well-educated and wealthy readers. Advertising effect is more prominent in terms of consumers’ awareness set formation compared to the brand purchase persuasion in general, but Asian brands can benefit more from advertising at the brand choice stage instead of the awareness formation stage.