DEFINITION of 'Parasitic Advertising'

A type of marketing that promotes one product at the cost of lost sales for another product. Parasitic advertising often occurs when two products are close substitutes for one another. Firms generally attempt to avoid parasitic advertising within their own product offerings because it is not the most effective way of maximizing the return on ad spending.

BREAKING DOWN 'Parasitic Advertising'

Parasitic advertising can be a problem for large firms like Procter and Gamble, which owns many brands. This means that advertising must be coordinated across the firm in order to minimize the degree to which P&G's brands compete with each other. One way to avoid parasitic advertising is to target brands toward different segments of consumers, perhaps by making one a luxury brand while making another a mid-price brand.

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