When advertising is a value-enhancing complement to consumption [Becker and Murphy (1993)], customization can permit firms to discriminate in advertising strategies, rather than in pricing. We investigate customized complementary advertising in a spatial model of horizontal differentiation. We...

We examine the impact of targeted advertising on competition and welfare when advertising directly affects the consumer’s utility, as in Becker and Murphy (1993). We show that as targeted advertising becomes less costly, market concentration and prices increase. Yet consumer welfare also...