Advertising non-premium products as if they were premium: The impact of advertising up on advertising elasticity and brand equity

Non-premium brands occasionally emulate their premium counterparts by using ads that emphasize premium characteristics such as superior performance and exclusivity. We define this practice as “advertising up” and develop hypotheses about its short- and long-term impact on advertising elasticity and brand equity respectively. We test the hypotheses in two large-scale empirical studies using a comprehensive dataset from the automotive industry that includes, among others, the content of 2317 television ads broadcast over a period of 45?months. The results indicate that advertising up increases (decreases) short-term advertising elasticity for non-premium products with a low (high) market share. The results also show that an intensive use of advertising up over time leads to long-term improvements (reductions) in brand equity for expensive (cheap) non-premium products. Furthermore, an inconsistent use of advertising up leads to reductions in brand equity. The results imply that managers of non-premium products with a low market share can use advertising up to increase advertising effectiveness in the short run. However, advertising up will only generate long-term improvements in brand equity for expensive non-premium products. Finally, to avoid long-term reductions in brand equity, advertising up should be consistently used over time.     

品牌管理视野下的广告和公共关系

在品牌管理的框架下有机地整合广告和公共关系的职能,乃是近年来许多广告机构努力的方向。本文认为,唯有打破单一的广告思维方式,在正确理解品牌管理要义的基础上,对广告和公共关系的特性有一清晰的梳理,把握它们的各自所长及其在品牌管理中的作用,才有可能实现真正意义上的互补和整合。     

Advertising Spending and Perceived Quality

Marketing Letters - In this paper we examine the relationship between advertising spending and perceived product quality. The questions we ask are: Does a product's advertising spending...     

Entrepreneurial orientation and innovation in family SMEs: Unveiling the (actual) impact of the Board of Directors

Drawing on stewardship and resource dependence theories, we examine how the board of directors (BoD) influences the link between entrepreneurial orientation (EO) and ambidextrous innovation in small and medium sized family firms (family SMEs). Our analysis of 230 Spanish family SMEs shows that family involvement in the BoD has a negative effect on their ability to turn EO into innovation. Moreover, we show that the BoD's strategic involvement in service and control tasks and the provision of knowledge and skills have positive effects, whereas the intensity of BoD activity has a surprisingly negative effect. These findings underscore that the effects of the BoD on the entrepreneurship-innovation link are more complex than previously thought, pointing to the important role of both BoD composition and BoD functioning for enabling innovation in family SMEs.     

Ad wearout wearout: How time can reverse the negative effect of frequent advertising repetition on brand preference

This paper reports a surprising reversal in the effect of advertising repetition over time. A field study shows higher annoyance with a more frequently advertised brand at the time of advertising, but greater preference for this same brand several weeks later. A longitudinal online experiment replicates the reversal in brand preference across four time points and tests an underlying mechanism for this reversal. It shows that initial annoyance with frequent ad repetition is highly susceptible to decay over time, whereas brand memory remains relatively stable. Through these two processes, brands with heavier advertising exposure move over time from lower preference to higher preference. Finally, a third experiment demonstrates a crucial condition for this reversal — product relevance at the time of consideration. This study shows that the reversal occurs only if at the later time the product category is relevant. We discuss the substantial implications of these findings for marketing theory and practice.     

The impact of digital transformation on the retailing value chain

Consumers have traditionally made purchase decisions at the store shelf, giving institutional brick-and-mortar retailers great power to learn about and influence behaviors and preferences. With the rise of e-commerce, mobile shopping, and most recently smart technologies, new competitors threaten this long-standing supremacy. Adopting a value-creation perspective, we analyze how digitization started the erosion of institutional retailing as the primary interface to the customer. We develop a framework that identifies five new sources of value creation and propose how these advance and transform competition for this interface. Depending on the importance of the new sources of value creation (in different purchase situations), stationary retailing may prevail as an important interaction point in a multichannel decision journey. However, increasing diffusion of branded-product platforms including connected devices and online retail platforms is shifting this authority to new players. For the parties involved in this multilayered competition, acknowledging the changes and actively managing their position in the evolving eco-systems is crucial.     

有效的广告千人成本——新的理论思考与操作的方法

本文旨在从实际运用的角度,提出一个具有操作性,同时具有理论价值的广告效果评估体系。文中根据央视市场研究公司（CTR）的质化研究数据,建构了中国强势电视节目的广告印象分析模型,提出一个新的概念：有效的广告千人成本。作者对有效的广告千人成本的理论基础及测量进行了详细的解释,并对其实际运用进行了分析。     

Advertising and Children

Abstract

This article reviews the debate regarding the issue of growing obesity in society in terms of issues and possible policy options. The issue is most focused on children though having obvious ramifications for adults in many economies around the world. Policy solutions such as advertising bans or taxes that have been proposed in several countries seem to be based on insufficient evidence—i.e., there is no empirical evidence to substantiate the claimed causal effect between marketing communication practices directed at children and nutrition. These solutions, if enacted in policy, could be both inequitable and ineffective. While the study is couched and framed from a New Zealand context, nonetheless it serves to illuminate issues and policies of wider relevance.     

Cournot and Bertrand Competition when Advertising Rotates Demand: The Case of Honda and Scion

We develop a model to explain why firm behavior differs in the market for small cars. Firms such as Honda compete in output (Cournot) and produce marketing campaigns with universal appeal, while firms such as Scion compete in price (Bertrand) and produce targeted marketing campaigns. We show that this mixture of Cournot and Bertrand behavior can occur when advertising rotates demand. When behaving as a Cournot-type firm such as Honda, it is more profitable to pursue a mass-market advertising campaign that rotates demand counterclockwise when it faces relatively low unit costs and a flat demand function. When behaving as a Bertrand-type firm such as Scion, it pays to pursue a niche-market advertising campaign that rotates demand clockwise when it faces relatively high unit costs and a steep demand.     

文化差异及其对广告诉求的影响:基于中美比较的视角(英文)

全球营销获得成功的首要条件是理解不同文化之间的价值观的相似性和差异性。由于缺乏以研究为基础获得的信息,这一任务对于试图与中国做生意的公司而言尤为艰巨。本研究采用霍夫斯塔德文化模型中的最新价值观来比较中美之间波莱广告诉求的有效性。在以文化维度为基础预测有效诉求的20个假设中,有9个得到了支持。另外一个假设也非常显著,但是与预想的方向正好相反。这些研究发现意味着,采用霍夫斯塔德文化维度作为有效广告诉求的唯一预测指标是不明智的。霍夫斯塔德维度或许缺乏可以有效预测各种广告诉求成功度所必需的结构。此外,广告诉求的有效性还可能由于其他因素(例如,年龄、社会趋势、政治法律环境及产品用法)而有所调整。     

Vertical Product Differentiation and Advertising

A duopoly model is developed in which firms' strategic variables include brand quality, the number of distinct market segments to enter and price. Informative advertising is used to overcome consumer ignorance about brands. In contrast to many existing models in which firms engage in price competition, the subgame perfect equilibria of the game are not characterised by the production of vertically differentiated products. Further, whilst the firms typically produce identical high quality products, in some circumstances the production of homogeneous low quality brands can be an equilibrium strategy.     

A Five-Year Regional Review of Advertising and Public Relations Education at U.S. Colleges and Universities

Abstract

This study is an investigation of advertising and public relations education over the past five years, presenting a regional analysis using data from the annual research project Where Shall I Go to Study Advertising and Public Relations? The results show the American Midwest, heartland and birthplace of advertising education, holding forth as the major region for advertising preparation. The Southeastern U.S. currently ranks first in public relations enrollment while the Midwest awards more PR degrees. In combined advertising/public relations programs, the Eastern U.S. leads in degrees awarded and student enrollment. Nationwide, all regions have experienced varying degrees of growth, reflecting the increased numbers seen in the national aggregate.     

Advertising Expenditure,Enplanement, and Market Concentration

This paper investigates the long‐run relationship between advertising expenditure and enplanement (representing the number of passengers boarding an aircraft), advertising expenditure across carriers, and advertising expenditure and market concentration for the six largest US airlines. Advertising expenditure is evidenced to be strategic, although not clearly effective at increasing enplanement, suggesting collusive behavior. Advertising is also evidenced to be, for the most part, balancing in nature across rival carriers. Further tests suggest a positive and linear relationship with positive bi‐directional causality between advertising and market concentration. This paper’s findings raise three important questions. First, if advertising is not clearly effective at increasing enplanement, then why advertise? Second, if advertising increases market concentration, then shouldn’t airline activities be under some degree of scrutiny, or even be partially regulated? Third, could airline advertising be important in explaining higher post‐deregulation fares?     

Measuring and forecasting mobile game app engagement

Monetization strategies in the large and strongly growing mobile app space must go beyond traditional purchase revenue as most mobile apps are now free to download. One key marketing innovation allows mobile app publishers to monetize ongoing engagement — in-app advertising.We study ongoing user engagement with a mobile app after the initial download decision using the $40 billion mobile gaming industry as an example. Our study investigates and forecasts user engagement after the initial download aiming to help publishers to monetize their engagement via in-app advertising. We leverage a novel dataset containing user-level engagement for 193 mobile games and propose a hierarchical Poisson model on a mobile-game level. We find significant usage heterogeneity across the mobile games studied and generate forecasts publishers can use when trying to monetize engagement via pre-sold contracts.     

The advertising effectiveness of different levels of intensity of humour and warmth and the moderating role of top of mind awareness and degree of product use

Responses to three different intensity levels of warmth (none, moderate and high) and three different levels of humour were investigated as well as the moderating role of top of mind awareness and degree of product use. Affective responses, attitude towards the advertisement (Aad) and the brand (Ab) and the favourableness of advertisement-related cognitions were enhanced by the use of warmth although the intensity level (moderate versus high intensity) did not seem to matter. As far as humour was concerned, a high-intensity humorous appeal induced most favourable affective responses, Aad and advertisement-related cognitions, while a moderate level of humour was most conducive for a favourable Ab and brand-related cognitions. Significant interaction effects suggested that the most positive advertisement effects can be obtained by combining high levels of warmth with high levels of humour, while the most positive brand effects can be obtained by combining high levels of warmth and moderate levels of humour. Emotional executions of high intensity led to the most positive affective and cognitive reactions in the case of brands that are not top of mind and to the most positive cognitive reactions in the case where the respondent was a heavy user of the product category. In particular the intensity level of humour led to significant communication effects.     

The Consumer and Advertising Regulation in the Television without Frontiers and Audiovisual Media Services Directives

This paper aims to assess the balance between the commercial interests of broadcaster and advertiser and the interests of the viewer, as well as programme makers. The new Audiovisual Media Services Directive (AVMSD) seeks to clarify and to simplify whilst maintaining the traditional European broadcasting landscape. The recurrent theme of the debate about legislative revision has been based in the vocabulary of consumer choice empowered by technology. The use of this vocabulary then leads to assumptions about the ability of the consumer to make choices. Insofar as those choices existed, they have been limited by developments in the AVMSD and in the broadcasting environment. Despite the claims of the AVMSD about viewer choice, it seems likely that the viewer will have no choice whether to receive commercial communications or not.

Nostalgia marketing and (re-)enchantment

Most marketing and branding activities are essentially concerned with enchantment—the rendering of the ordinary into something special. To create enchantment, companies are increasingly marketing past-themed brands and products. Yet, there is little research about why and how such nostalgia marketing creates enchantment for consumers. Building on different modalities of nostalgia identified in sociological literature (reluctant nostalgia, progressive nostalgia, and playful nostalgia), we analyze the creation of enchantment through a longitudinal, qualitative, multi-method program of inquiry. We find three routes to enchantment grounded in different nostalgia modes: (1) re-instantiation (symbolic retrojection into a past), (2) re-enactment (reflexively informing the present with past-themed brands and practices), and (3) re-appropriation (ludic re-interpretation of the past). By unfolding the different ways in which marketers can press rewind to create enchantment, we discern important implications for theorizing and managing past-themed brands in terms of marketing strategy, targeting and positioning, brand experience design, and marketing communications.     

The Current Impact and Carryover of Advertising on Sales in the Restaurant Industry

ABSTRACT

A common source of conflict in the relationship between restaurant franchise and franchisee involves advertising fees. Conflict arises when the franchisee feels that he or she has not received an adequate return on his or her advertising investment. This paper reports the results of a study conducted on both the short-term and long-term effectiveness (duration) of advertising among restaurant chains. The findings suggest that only a small proportion of restaurant chains enjoy immediate, positive returns to their advertising fees. However, over half of all chains examined realized a significant carryover effect of advertising. Several explanations are offered as to why these results are found and recommendations are made as to how restaurant chains should react to these findings.     

The Practicality of Super Bowl Advertising for New Products and Companies

Abstract

Companies that advertise during the Super Bowl can reach 40 million U.S. households with a 30-second commercial spot, but the cost can exceed $2 million. This research examines Nielsen television ratings and expenses for related commercial spots and suggests that the Super Bowl is not always the best site for introducing new companies or products to the marketplace. ANOVA test results indicate that younger companies may better affect purchase decisions by advertising more frequently during less expensive programming slots.