A Good Example of Targeted Marketing

The following picture of an advertisement in Harlem is an excellent example of targeted marketing.

mega lotto

Risk aversion measures how willing you are to accept a bargain where the outcome is uncertain (but potentially more rewarding) compared to a bargain where the outcome is certain (but less rewarding). Statistically, the more money a person makes, the more risk-averse he is.

Therefore, poor people are more willing to take gambles with high degrees of uncertainty, but also high potential pay-offs. Thus, a lottery advertisement in Harlem – a neighborhood popularized for its extreme poverty and high crime rates – seems well-targeted to an audience willing to take the gamble with extremely unfavorable odds.

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2 thoughts on “A Good Example of Targeted Marketing

  1. While I agree with your overall thoughts, I must say that Harlem is not the Harlem of the 70s/80s. And these ads are in all neighborhoods, rich and poor.
    But I do agree, just go into any bodega in a poor area and watch the people playing hundreds of daily numbers tickets or scratchoffs.