The Impact of Advertising on Markets

This paper is a preliminary report of research being carried out into the influence of advertising in five major areas of consumer expenditure. In each case it tests the proposition that changes in advertising cause changes in consumption, employing Box—Jenkins techniques to determine the existence of causality using quarterly data during the period 1963 to 1978. No market showed advertising to have any effect upon its size.     

Context effects of TV programme-induced interactivity and telepresence on advertising responses

This article provides an analysis of the relationship between annual advertising expenditures and sales, using a time series regression procedure, for beer, wine, and liquor sold in the United States from 1971 to 2012. Information from these four decades provides a comprehensive analysis of the relationships of numerous variables with aggregate alcohol category sales. Even though per capita alcohol consumption has not changed much throughout this period, alcohol advertising media expenditures for all alcohol beverages have increased almost 400% since 1971. This study has provided evidence of consumption changes across categories of alcohol beverages over the past 40-plus years with the preponderance of those changes significantly correlated to fluctuations in demography, taxation and income levels – not advertising. Despite other macro-level studies with consistent findings, the perception that advertising increases consumption exists. The findings here indicate that there is either no relationship or a weak one between advertising and aggregate category sales. Therefore, advertising restrictions or bans with the purpose of reducing consumption may not have the desired effect. Implications on policy decisions regarding advertising controls are addressed.     

Performance of China’s advertising agencies: a time series cross-sectional analysis

Although China has been the world’s second largest advertising market after the United States in terms of advertising spending since 2006, the performance of advertising agencies in China and the factors that contribute to this performance have been understudied. However, by incorporating the structure-conduct-performance model and agency theory into the integrative framework and conducting a time series cross-sectional analysis, we determine that the degree of concentration in the advertising agency industry and number of regulations in the advertising industry have had significant negative effects on the financial performance of agencies. In addition, agencies with mainly foreign capital have performed better than those with only Chinese capital. Agencies adopting strategies of initial public offering (IPOs) or engaging in name changes and mergers have performed better than those that have done nothing. Implications are also discussed.     

The Typicality and Accessibility of Consumer Attitudes Toward Television Advertising: Implications for the Measurement of Attitudes Toward Advertising in General

Despite the wide array of contemporary advertising formats and media, television advertising remains the most dominant form to which typical consumers are exposed. Research on attitudes toward advertising in general (Att-AiG) implicitly assumes that the Att-AiG measure represents advertising as a whole. A major finding of the current research is that consumers tend to have a mental representation, or exemplar, of the most typical type of advertising—television advertising—when they report their Att-AiG. Therefore, in reality, Att-AiG primarily reflects attitudes toward television advertising. In addition, the results of our experiments indicate that television ad exemplars generate temporal changes in consumers’ reported Att-AiG and attitudes toward television advertising. Theoretical and practical implications are discussed.     

Banking on Advertising

During the last decade, advertising has emerged as a most important promotion medium for the banks. The competitive pressures within the personal savings markets have become more intense. The banks have become noticeable by their aggressive promotion, through increased advertising expenditure, radical changes in style and forms of advertising, and their increasing use of television. In 1971, the joint stock banks spent M£2.5on advertising and only 4 per cent of this was directed through television. By the end of 1981, expenditure had increased to M£22.6 with over 50 per cent directed through television.     

A New World Order: The Role of Advertising in Russia and the NIS

Changes in worldwide political and economic strategies have contributed to the changing role of advertising as an institution in Russia. One result is the rapid growth of Russia's advertising industry and its similarity to Western classical liberalism and neoliberalism propositions of marketing communication. This article builds on the author's previous studies on the role of advertising in what is now Russia through participants' own words and visions of advertising. In-depth interviews with business and industry professionals, academicians and government representatives provided insight into changes in the perception and practice of advertising in Russia.     

The Effects of Advertising Rates on Newspaper Advertisng Linage: A Pilot Study

The highly complex area of newspaper economics is often reduced to the simple statement-advertising revenue is a function of circulation. While this statement is obviously oversimplified, it does express the perceived importance of the circulation/advertising relationship to management of newspapers. The relationship's importance is further amplified by the fact that newspapers partially base advertising rate structures on circulation and advertising linage levels. Yet, surprisingly, very few attempts have been made to study the relationship between newspaper circulation, advertising rates and advertising linage empirically.

This study examines the effect of differences in newspaper circulation and advertising rates on the amount of total advertising linage, national advertising linage and retail advertising linage.

The results imply that circulation seems to have a significant and strong positive effect on total advertising linage in the sample analyzed. Time-series analysis confirm this finding. Circulation's effect on national advertising linage is even greater-elasticities of one or larger.

The effect on local advertising linage is much less elastic. but still significant. The effects of the advertising rate on advertising linage are much less clear from this research. In fact. it is not possible to draw any significant conclusions concerning the way advertisers respond to changes in the advertising rate from the results of the research. This is an area that needs more indepth research.     

Determinants of advertising expenditures: aggregate and cross-media evidence

Advertising expenditures account for 1 per cent of developed country GDP, having grown at an average real rate of 5 per cent p.a. over the 1980s. Trends in New Zealand have been similar to trends overseas. Hence analysis of the determinants of advertising in New Zealand should assist understanding of the determinants of advertising expenditures in other developed countries. We discuss changes in NZ's advertising industry and use a multi-equation co-integration framework to model the determinants of NZ advertising expenditure, both in total and across different media. We find that expenditure on advertising in all media is strongly pro-cyclical, that the allocation of expenditures depends on circulation patterns, and that press and magazines are complementary media and are substitutes for TV advertising.     

Decomposing the effect of advertising: What happens in the retail channel?

The diverging interests of manufacturers and retailers famously give rise to the double marginalization problem but have consequences far beyond pricing. Advertising is another marketing instrument that is under the control of the manufacturer but its ultimate effect on consumer demand also depends on retailers’ pricing decisions. We decompose the effect of advertising in the channel and highlight an additional route through which advertising affects sales, namely via the changes in the retail price that a strategic retailer makes in response to changes in demand following manufacturer advertising. The total demand effect of advertising thus comprises the direct effects of advertising on market shares, and the indirect effects coming through adjustments that the retailer makes to the in-store prices of all the brands in a given product category in response to the shifted demand due to advertising. We match advertising data for four different categories (both food and non-food) to store-level scanner panel data, which also include information on wholesale prices. Controlling for wholesale prices, we establish in a reduced-form model that the retailer reacts to manufacturer advertising by changing retail prices instead of simply imposing a constant markup on the wholesale price. To further explore the role of the strategic response of the retailer in a systematic fashion and quantify the effects derived in the decomposition, we estimate a discrete-choice model of demand and determine the magnitude of the direct and indirect effects. We find that the indirect effect of advertising through retailer prices is about half the size of the direct effect, and thus substantively affects advertising effectiveness.     

经济衰退期的广告影响——国外研究述略

在经济衰退期间减少广告支出,将导致在衰退期间及以后的商品销量下降,且不能带来实质性的利润的增加。在经济衰退期间增加广告支出对企业的销量、市场份额、利润及品牌资产都有积极的作用,且其影响远大于经济扩张期和稳定期。增减广告支出的影响时效往往超出衰退期本身。     

Has the COVID-19 pandemic changed the influence of word-of-mouth on purchasing decisions?

The COVID-19 outbreak has led to drastic changes in influential media for purchasing decisions. Which media have been used more frequently after COVID-19? Do these changes differ between product types? To provide insights into these questions, we analyzed 12,000 respondents between 2018 and 2021. The results show that the influence of word-of-mouth on purchase decisions decreased after COVID-19, while the influence of social media advertising increased. We also find that the influence is moderated by product type; for example, video advertising, a subset of social media advertising shows a higher influence for search goods than for experience goods.     

Maintenance person or architect?

This paper suggests that, while advertising has changed, advertising research has not. Indeed, questions asked of advertising research more than 20 years ago have still not been answered. The enormity of change in advertising compounded by the lack of response from researchers suggests the traditional academic advertising research model requires more than routine maintenance. It seeks an architect with vision to redesign an academic research model that is probably broken or badly outdated. Five areas of the academic research approach are identified as needing rethinking: (1) the advertising problem, (2) sample frame and subjects, (3) assumptions regarding consumer behaviour, (4) research methodologies and (5) findings. suggestions are made for improvement. But perhaps the biggest challenge is academic leadership. This paper proposes the establishment of a blue-ribbon panel to report back on recommended changes or improvements.     

A longitudinal study of the professions' attitudes towards competition & advertising

The attitudes towards competition and advertising of the members of five professions in New Zealand were monitored in three surveys carried out in 1985, 1988 and 1994. This paper reports on the changes in attitudes that occurred over this nine-year period, noting marked trends in all the professions towards an acceptance of a competitive orientation and advertising in particular. A partial exception to the general trend favouring competition has been the attitudes towards matters directly related to money (for example, fees and credit facilities), where there was markedly less enthusiasm for competition. Attitudes towards advertising by professional practices have relaxed sufficiently to question whether advertising needs to be a matter of concern to the professions.     

Who’s messing with whose mind?

Regulation of advertising to children is receiving increased attention. We need to distinguish areas where practice needs reform from criticism based on flawed models of how advertising works and from wrongly perceived changes in advertising practice. This paper summarises the criticisms by Nairn and Fine (IJA, 27(3), 2008). It then sets out what seems to be reliable (i.e. the common ground) before raising concerns with other assertions. The argument that children cannot cope with advertising because their rational faculties are not yet developed collapses as it turns out, as Nairn and Fine concede, that the same applies for any age group. Maybe more controls are needed for product placement and/or advertising masquerading as editorial, but neither of these are areas where the rights of, or responsibilities to, children differ from adults. In other words, Nairn and Fine confound their concern for children with their antipathy to certain forms of advertising to all age groups. Nairn and Fine may also be confusing changes in advertising theory with changes in advertising practice. After reviewing other areas of contention, this paper concurs with the final Nairn and Fine recommendation, namely that the advertising industry should review self-regulation in regard to advertising to children.     

Market mechanics: A study to measure the effect of marketing instruments on the market position of fast-moving consumer goods

The objective of the research was to establish the various effects of the marketing instruments on the market shares of fast-moving consumer goods. The marketing instruments analyzed were price level, price changes, promotion, advertising, and media mix. Within the analysis the integrated effect of the distribution pattern had to be taken into account. The analysis of 186 brands and the data gathered over 7 three-month periods was taken from two models loosely based on Koyck. The results can be used to estimate the effectiveness of the marketing tools under scrutiny and their declining marginal revenue in the German market. A number of different efficiency ratings can be detected between the separate product categories under analysis. For marketing managers there are three particularly interesting points: (1) Brands with a low price index have only relatively small market advantages in comparison with expensive brands; (2) but price changes lead to very strong movements in the market shares; (3) in the case of brands with a small share of the advertising spent, both print and TV advertising have a similar effectiveness. With a larger share of advertising, the TV effectiveness declines because of saturation effects.     

从概念的符号表达到沟通的价值创造——知识产品营销时代的广告变革

随着知识经济的发展,越来越多的知识产品进入我们的日常生活,并且实物产品也开始通过知识化来取得竞争优势。知识产品所具有的无形性、路径依赖性和共生性等特点,使营销路径发生变化的同时,也促使广告产业的核心价值链以及广告运作从概念的符号表达到沟通价值创造的转变。     

新媒体与广告未来发展——2011年西方广告研究热点评析

本文以西方目前主导性广告学术类六大刊物在2010-2011年间所刊登的188篇学术论文为主要考察对象,整理出比较突出的广告研究热点:社交媒体与广告的研究热潮、互动媒体环境要求新的社会营销模式、植入式广告在新媒体环境中的效果、少数群体的广告也成为了"热点"、广告道德规范、当广告遭遇"回避"、广告效果认知的误区、市场调查的未来发展等八个方面,希望由此勾画出西方广告学术研究发展的最新脉络。     

Market Segment Response Through Field Experimentation

A key assumption underlying segmentation studies is that marketing efforts have differential effects on market segments. This question was investigated in the context of a field experiment involving enlistment in the armed forces. Approximately 8000 completed questionnaires administered at various stages in the US Navy enlistment recruiting process were collected at two points in time, corresponding to a pre- and post-experimental intervention. Attitudinal data were analysed to identify meaningful segments. Differential responses of market segments to advertising and recruiter changes were found, providing direction for evaluation of, and changes in, the creative component of advertising.     

The impact of the lost decade on advertising in Japan

This study describes the perceptions of Japanese advertising professionals regarding the evolution of advertising planning and execution over a three-decade period. Senior management and creatives from 18 of Japan’s top agencies participated in extensive in-person interviews to compare the traditional nature of Japanese advertising with that of the US, and to explore factors that may have caused a shift in the style of Japanese advertising since the 1980s ‘bubble economy’. A grounded theory approach was utilised as an interpretive methodology. The study finds that the dramatic recession experienced during Japan’s ‘lost decade’ indeed had a strong influence on the nature of Japanese advertising. Along with additional factors such as changes in the media landscape and the adoption of American-born audience measures, economic uncertainty during the 1990s pushed adverting agencies towards a more direct and persuasive selling approach. This trend contrasts sharply with a general societal shift from materialist to post-materialist values in Japan during this period.     

Consumer reactions to female and male cosmetic surgery beauty in Asian advertisements

Existing research shows that the attractiveness of advertising models enhances the effectiveness of firms’ commercial messages. However, it is unclear how consumers react to models who have enhanced their physical attractiveness through cosmetic surgery. We report on three empirical studies and show that when female or male advertising models have undergone cosmetic surgery procedures, both female and male consumers are likely to notice these changes. These perceptions of cosmetic surgery result in lower evaluations of model attractiveness, particularly when the consumers assess female models, which in turn affects other advertising outcomes. However, cosmetic surgery does not reduce consumers’ perceptions of models’ pride in their own identity, which are also relevant to consumers’ evaluations of model attractiveness.