Parasitic Advertising


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.

  1. Advertising Budget

    An estimation of a company's promotional expenditures over a ...
  2. Comparative Advertising

    A marketing strategy in which a company shows how its product ...
  3. Business-To-Business Advertising

    Marketing efforts directed toward other businesses rather to ...
  4. Advertising-To-Sales Ratio

    A measurement of the effectiveness of an advertising campaign ...
  5. Marketing

    The activities of a company associated with buying and selling ...
  6. Brand Identity

    The components of the brand are created by the business itself, ...
Related Articles
  1. Home & Auto

    Don't Be Misled By Investment Advertising

    Investment companies and brokers want to sell. Unfortunately, this can result in promotional material that is not entirely frank, or far worse, truly misleading.
  2. Professionals

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  3. Professionals

    How To Target Ideal Customers

    Expand your definition of a lucrative client and uncover a new realm of possibilities.
  4. Professionals

    The Lucrative World Of Third-Party Marketing

    Hedge funds don't sell themselves. Marketing experts reel in the big fish.
  5. Entrepreneurship

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  6. Professionals

    Why Advisors Must Create a Mobile Strategy NOW

    Mobile devices will replace laptops and desktops. Financial advisors must deal with this revolution to ensure their marketing strategies are up to speed.
  7. Entrepreneurship

    Top 3 Most Successful Korean Entrepreneurs

    Discover the backgrounds of some of the most successful Korean entrepreneurs and information about the companies and projects leading to their success.
  8. Entrepreneurship

    Why Every Small Business Needs A Website

    The reality of living in the twenty-first century is that customers find business information and product offerings predominantly on websites, and small businesses without an online presence ...
  9. Entrepreneurship

    How Twitter Cards Can Help Drive Traffic to Your Website

    Understand what Twitter cards are and how they are used to increase website traffic. Learn about the top six ways these cards drive Web traffic.
  10. Entrepreneurship

    5 Ways to Make Money on Twitter

    Find out how people are making money online on Twitter, and get some ideas that can turn Twitter into a source of revenue for you or for your small business.
  1. Is a financial advisor allowed to pay a referral fee?

    A financial advisor is allowed to pay a referral fee to a third party for soliciting clients. However, the Securities and ... Read Full Answer >>
  2. How does a long tail become profitable?

    A long tail becomes profitable because the costs to produce, market and distribute a product or service in a niche are low, ... Read Full Answer >>
  3. How do companies with a large product portfolio use BCG Analysis?

    BCG analysis is used to evaluate an organization's product portfolio in sales planning and marketing. It is specifically ... Read Full Answer >>
  4. What are the similarities between product differentiation and product positioning?

    Product differentiation and product positioning are important elements in a marketing plan, and most marketing strategies ... Read Full Answer >>
  5. Why is product differentiation important in today's financial climate?

    Product differentiation is essential in today's financial climate. It allows the seller to contrast its own product with ... Read Full Answer >>
  6. What are the major categories of financial risk for a company?

    There are many ways to categorize a company's financial risks. One possible perspective is provided by separating financial ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!