Are two brands better than one? Investigating the effects of co-branding in advertising on audience memory

Co-branded advertising, where advertisements feature two partnered brands from different categories, should ideally benefit both brands. We test this assertion by studying the effect of featuring a second brand in advertisements on ad and brand name memorability, and the role of category context on which brand is recalled. Our test covers online display advertisements for consumer-packaged brands paired with charity and retailer brands in three markets (USA, UK, and Australia). Independent sample comparisons across 54 brand pairs show that advertising two brands has a neutral effect on ad memorability and negative effect on brand memorability. Furthermore, the advertisement’s category context determines which of the brands is recalled. Our findings support a competitive interference theory of dual-brand processing, whereby the two brands compete for attention resources. The results have implications for the return on investment from advertising expenditure, which will vary substantively depending on whether the costs of advertising are shared or borne by one brand in the pair.     

What if something unexpected happens to my brand? Spillover effects from positive and negative events in a co‐branding partnership

Brands sometimes enter into co‐branding agreements and major events can occur to one of the brands which can have either negative or positive consequences for the brands involved in the partnership. The current study investigates as yet unanswered research questions regarding whether and how positive and negative events happening to one brand in a co‐branding partnership affect the brand equities of the other brands in the partnership. The authors provide and test a new integrated attribution‐diagnosticity framework to explain the process that underlies the magnitude of these spillover effects. Findings show that while positive and negative event‐related spillover effects occur between the co‐brand and both parent brands, they were surprisingly absent between the parent brands. Further, the (a)symmetry of parent brand equity before the event influences the magnitude of event‐related spillover the parent brands receive from the co‐brand. Theoretical and practical implications of these findings are discussed.     

When retailers and manufacturers advertise together; examining the effect of co-operative advertising on ad reach and memorability

Retailers often feature manufacturer brands in their advertising with the aim to drive sales for those brands and, at the same time, increase in-store traffic. The adoption of such co-operative advertising strategies should reach an expanded audience base comprising of store and brand buyers. Based on empirical evidence in non-retail settings, these buyers are more likely to remember the advertising than non-buyers. This usage-bias effect implies that co-operative advertisements achieve greater cut through than would be the case if either brand advertised alone. Our paper tests this hypothesis in the context of retailer advertisements that feature manufacturer brands in the US, UK and Australia. Our results confirm that a retail brand's shoppers are more likely to recall its advertisements than non-shoppers, extending the usage-bias generalisation to a retailing context. However, while co-operative advertising does expand the buyer-base reach, any uplift in ad-memorability is negated by a reduced ability for buyers of only one of the two brands to recall the advertisement. Information overload on cognitive processing is a possible explanation for this finding, and has implications for extracting value from any investment in co-operative advertising.     

Modeling advertising impact at campaign level: Empirical generalizations relative to long-term advertising profit contribution and its antecedents

Research on advertising effectiveness is focused on sales and provides few empirical generalizations on profitability and its antecedents. To fill this gap, we develop an econometric model to capture the impact of advertising at campaign level, using retail panel data coupled with TV audience tracking data. Our study involves 31 brands from six packaged goods categories observed weekly and nationally over 4 years and representing 264 TV campaigns. Although we confirm empirical generalizations on the capacity of advertising to increase sales, we establish a different picture for profitability. Only 11 % of campaigns make a positive contribution to profit. Advertising is more profitable for challengers and medium brands, whereas leaders and small brands (recent or established) have a lower profitability. Advertising intensity in the category and campaign carry-over emerge as the strongest (respectively) negative and positive drivers of profitability. The antecedents of carry-over are also analyzed and discussed.     

Advertising spending patterns and competitor impact

In most industries, brand managers do not advertise continuously. Instead, advertising is switched on and off systematically, a phenomenon often referred to as pulsing. Moreover, spending levels vary considerably across periods when brands do advertise. Surprisingly, this variety in advertising spending patterns as observed in practice, as well as competitor impact on these patterns and their sales outcomes, have received relatively little empirical attention. In this paper we focus on two core aspects of observed advertising patterns: incidence and magnitude. Insights are based on the analysis of advertising spending for 370 CPG brands in 71 product categories over a four-year period. We also collected feedback from practitioners dealing with advertising across a wide range of firms. We first empirically establish that pulsing is the dominant form of advertising scheduling. Observed patterns, in turn, are largely driven by television and print advertising. Next, we show that, after accounting for a wide range of other possible drivers, advertising in-sync with competitors is more common than out-of-sync. However, the results suggest that competitive reasoning plays only a relatively minor role in advertising decisions. Finally, we show that, across a wide range of real-world scenarios, investing in top-of-mind awareness through maintenance advertising insulates brands from competitors' actions and boosts sales.     

The implications of recency and gender effects in consumer response to ambush marketing

So-called ambush marketers, are companies that use clever advertising imagery (and/or ad placement) to link their brand(s) with a major event, in the minds of its audience, without having to purchase the expensive rights fees that event properties often charge for official sponsorship status. This study uses an experimental design to explore certain effects of the ambush marketing strategy. Its focus is on the potential impact of recency (of ad exposure), as well as gender differences, on measures of memory, brand attitude, and behavioral intentions for brands perceived to be official sponsors. Respondents (n-215) were randomly assigned to groups viewing Olympics programming intercut with advertising for either official sponsors or ambush marketers. No statistically significant differences are observed between males and females in their pretest sponsor recall or recognition levels, whereas recency of ad exposure is found to be a significant influence on posttest sponsor awareness in the aggregate. Significant gender differences are detected, however, in attitude toward the brand and purchase intentions for two of three product categories investigated, as females have higher mean scores for those two measures. The implications of these results are discussed and followed by recommendations for event promoters seeking to preserve the value of event sponsorships, along with defensive advertising-strategies to protect the investments of their official sponsors. © 1998 John Wiley & Sons, Inc.     

Public Information and Consumer Skepticism Effects on Celebrity Endorsements: Studies among Young Consumers

This article reports on a survey and an experimental study that were conducted to determine the extent to which public information about celebrity endorsers influences consumers' attitudes and perceptions, and whether this was moderated by an individual difference factor, consumer skepticism. Participants in the survey were more likely to recall and discuss negative events involving male sports celebrities; thought that these negative events had little or no effect on their perceptions of brands or companies associated with embattled celebrities; and focused discussion on the case of Kobe Bryant, when they were asked to discuss a specific case of a controversy involving a celebrity endorser. The experimental study revealed significant main and interaction effects of nature of information about a celebrity and consumer skepticism. It revealed that consumer skepticism has its greatest impact when information is neutral. The experimental study established that advertisers have to take into account the level of consumer skepticism when they use celebrities in their advertisements to target different groups of consumers.     

Image feedback effects of brand extensions: Evidence from a longitudinal field study

This paper examines the issue of image feedback effects and potential drivers of these effects by analyzing real-world extensions that have been introduced successfully in the market, using a longitudinal field study. Within the context of typical FMCG extensions, the authors find strong evidence that even for successful extensions, negative image feedback effects can occur, particularly when the perceived quality of the extension fails to meet the quality level of the parent brand. Strong brands tend to be more vulnerable to negative image feedback effects because consumers have a higher reference level for their extensions than for those of weaker brands. The likelihood of negative feedback effects decreases as the level of perceived fit and consumers’ perceptions of the general extendibility of the parent brand increases. But managers cannot, at least in the short run, mitigate negative image feedback effects through increased advertising support. Finally, the findings demonstrate that the feedback effects of a new extension product on parent brand image diminish over time.

Contextual advertising in games: Impacts of game context on a player’s memory and evaluation of brands in video games

Contextual advertising is growing in digital marketing communication. Previous research on traditional media has shown that the surrounding context affects advertising effectiveness. Similarly, the context in a game may influence a player’s processing of brands advertised in that game. To examine the effects of contextual advertising in games, the present article affords two independent experiments investigating how positive and negative game contexts influence players’ memories and attitudes with respect to brands advertised via billboards in games. Drawing from literature on the limited capacity model, the authors demonstrate that positive and negative game contexts decrease brand memory since they require a high level of cognitive effort. The authors also find that varying a game context influence the perception of brands advertised in the game via the contextual priming mechanism and that positive contexts generate more positive brand attitudes than negative or neutral contexts. The findings have important implications for consumer researchers and marketers, as they indicate how contexts in games can be utilized to establish brand awareness and increase positive brand perceptions in contextual advertising using games.     

About the authors

This paper has the implicit theme that there are changes afoot in both the marketing and accounting professions. Explicitly, how changes in the accounting area may affect marketing people is explored. The particular focus is brands, especially their capitalization in the balance sheet of some companies. The controversy around this practice is discussed, and suggestions for the possible impact on marketing outlined. Many companies are already reviewing the way that they manage their brands, and some are. restructuring accordingly. This may be the beginning of many such changes.

The brand valuation and capitalization debate is reviewed from the late 1980s to date. The Accounting Standards Board (ASB) has now released Financial Reporting Standards that relate to the discussion, but do not, as one might hope, conclude it. The standards deal with intangible assets generally, rather than brands specifically. Hence the treatment of brands remains ambiguous and open to interpretation.

Financial reporting systems, which still seem to focus brands as short‐term propositions, are far removed from the way that many marketers and some accountants believe brands should be managed. Therefore, it is concluded to be unlikely that these ASB pronouncements will have created a new order.     

A Dual-Step and Dual-Process Model of Advertising Effects: Implications for Reducing the Negative Impact of Advertising on Children's Consumption Behaviour

Children are important targets of advertising campaigns from companies. However, children have been found to be particularly vulnerable to negative effects of advertising, and protecting children from these effects is an important task of consumer policy. Two important aspects have to be considered in this task. First, advertising affects judgements and behaviour not only during ad exposure but also in delayed consumption and purchase contexts. Second, advertising operates largely at an implicit level—during ad exposure as well as in consumption decisions. The current article introduces a dual-step (ad exposure vs. purchase/consumption) and dual-process (implicit vs. explicit) model of advertising effects on children. The model is based on a review of implicit advertising effects and implicit mechanisms of self-control. It implies that consumer policies intending to prevent undesired advertising effects should support interventions that strengthen advertising and purchasing literacy and, in addition, implicit self-control mechanisms in children. As self-control in consumption decisions is largely relevant for, and learned during, shopping and consumption, such interventions should focus on educating parents or other primary caregivers because they are the most likely persons to accompany children in such situations and have a great influence on children's implicit learning.     

Consistency and commonality in advertising content: Helping or Hurting?

Scholars and practitioners widely argue that strong, successful brands are built on consistent and unique positioning, which should be reflected in the brands’ advertising. Surprisingly, however, little empirical evidence supports this claim, especially with regard to advertising content. The authors investigate whether and to what extent brands’ advertising content consistency—the similarity in the firm’s own advertising content over time—and commonality—the similarity between the firm’s and competitors’ advertising content—affect brands’ sales. Insights emerge from the analysis of the impact on sales of the content of 247 television ads aired by 33 brands in six consumer packaged goods categories over a four-year period. Results indicate that more than advertising spending, both consistency and commonality in advertising content affect sales, especially with respect to long-term cumulative sales. However, brands differ considerably regarding the direction of the effects. While small brands tend to benefit from increased consistency and commonality in advertising content, large brands tend to suffer from increased consistency. Thus, whether consistency and commonality in advertising content will help or hurt depends on the size of the brand.     

Advertising effects on consumer welfare: Prices paid and liking for brands selected

The effect of advertising on consumer welfare has been the subject of dispute among economists, arising largely from disagreement among scholars regarding the persuasive versus the informative role of advertising. This paper reports two experiments that explore the welfare implications of advertising effects. Experiment 1 shows that the same advertisements can either increase or decrease prices paid for selected brands, depending on the degree to which the choice situation requires brands to be recalled in order to be considered. However, an increase in prices paid caused by advertising does not necessarily imply detrimental effects on consumer welfare. Experiment 2 shows that, even under circumstances in which differentiating advertising leads consumers to select brands with higher average prices, it can provide useful information to consumers that allows them to make purchases that are more in line with their personal tastes than are the choices of consumers not exposed to the advertisements.     

How augmented reality affects advertising effectiveness: The mediating effects of curiosity and attention toward the ad

Many major consumer-driven companies have started to use augmented-reality (AR) technology and AR apps to enrich their customers' shopping experiences and engagement with their brands, and to ultimately increase sales. However, there is scant research discussing the application of AR in an advertising context. Thus, the major goal of this study is to explore how, why, and when augmented reality influences advertising effectiveness. A field experiment and two laboratory experiments demonstrate that an AR advertisement increases consumers’ attitude toward the ad through an increase in their curiosity toward the ad and attention toward the ad (i.e., measured by a physiological measure using eye-tracking). However, the effects only hold when consumers are unfamiliar with the AR ad technology. Overall, this study provides practical implications to advertisers who are considering integrating augmented reality technology in their advertising efforts.     

Participation by U.S. Agencies in International Brand Advertising: An Empirical Study

Abstract

Marry ad agency executives have proclaimed the era of the global advertising agency. They observe that corporations are moving towards placement of their worldwide advertising through a single agency, and they predict that a few large “mega-agencies” will take over a majority of international advertising accounts. Yet, no published studies have examined how many brands are actually handled by the same ad agency worldwide. This paper presents the results of a survey examining the extent to which U.S. companies use the same agency to advertise abroad and in the home market. The study found that of the brands sold abroad, only about one-third are handled by the same agency both at home and abroad. This proportion does not vary significantly with advertising budgets, by product class, or between standardized and non-standardized brands. In addition, no single-agency group or “mega-agency” handles more than eight percent of the sample brands, and no agency handles a majority of its U.S. brands abroad.     

Brand placements in video games: How local in-game experiences influence brand attitudes

Brand placements are omnipresent in video games, but their overall effect on brand attitudes is small and varies substantially between studies. The present research takes an evaluative conditioning perspective to explain when and how brand placements in video games influence brand attitudes. In two experiments with a 3D first-person video game, we show that only brands encountered during positive in-game experiences benefit from the placement, but not those encountered during negative in-game experiences. Building on the cognitive processes underlying evaluative conditioning, we also show that brand attitudes largely depend on the memory for the pairing of a brand with positive/negative in-game experiences. Pairing memory and thus also evaluative conditioning effects increase when players attend to the pairing of brands and positive/negative experiences, for example, when such pairings are a central part of the game's storyline. Overall, our findings show that evaluative conditioning and its cognitive mechanisms can be utilized to explain and predict advertising effects in applied settings, such as brand placements in video games.     

Ambush marketing: The undeserved advantage

The Olympic Games, as the world's largest and most prestigious sports event, has been a major target for ambush marketing activity. The position of the International Olympic Committee is that the practice of ambush marketing represents a deliberate attempt to mislead consumers into believing that the companies involved are supporters of the Olympic Games. The opposite is in fact the case. The activities of ambushers erode the integrity of major events and may potentially lessen the benefits to official sponsors, who are the real supporters of such events. Ambush marketing breaches one of the fundamental tenets of business activity, namely, truth in advertising and business communications. The IOC, as custodian of the Olympic Games, successfully adopts a twofold strategy of protection and prevention to counter the threat of ambush marketing. © 1998 John Wiley & Sons, Inc.     

Predicting Consumer Avoidance of Native Advertising on Social Networking Sites: A Survey of Facebook Users

Abstract

As a result of constant efforts to improve consumers’ online advertising experiences, native advertising has started to gain popularity on social networking sites (SNSs). This survey study examined antecedents of avoidance of native advertising on SNSs and the moderating role of consumer skepticism toward native advertising. Our findings suggest perceived intrusiveness and perceived informative and entertainment advertising value as major antecedents of consumer advertising avoidance. Additionally, the number of brands that consumers are following on SNSs and negative communication among peers on SNSs were found to be factors affecting native advertising avoidance. Finally, consumer skepticism toward native advertising was found to be an important moderating variable in the mechanism of advertising avoidance on SNSs.     

Linking corporate reputation and shareholder value using the publication of reputation rankings

Good corporate reputation is one of the most valuable assets and causes a multitude of favorable impacts within different stakeholder groups. As a consequence, a lot of studies analyze the relationship between corporate reputation and financial performance. However, most of them raise the question of causation due to their methodology. In order to isolate the causal impact of corporate reputation on financial performance, some authors conduct event studies, but without remarkable success. Therefore, this study provides initially a comprehensive theoretical background for why reputation should affect financial performance. According to the resulting hypotheses, an event study is conducted to analyze the impact of the publication of reputation rankings by the German Manager Magazin on share prices. As hypothesized, positive and negative announcement effects exist regarding upgraded or downgraded companies respectively. Consequently, investors gain new information from the published rankings (increases or decreases in reputation) to adjust share prices.     

Advertising Spending Efficiency of Beauty-Care Product Companies: Comparison Between Local Companies and Multinational Companies in the U.S. Market

ABSTRACT

In this study, the authors apply data envelopment analysis (DEA) to evaluate the financial efficiency of U.S. beauty-care companies and foreign companies based on their media advertising expenditures in eight key media outlets (i.e., magazines, newspapers, outdoor, network TV, spot TV, syndication TV, cable TV, and radio) and their revenues in the U.S. market. The analyses revealed that 47.4% of the companies examined advertised efficiently. Companies that advertised inefficiently could save, on average, 75% of their advertising spending. The results also indicated that although U.S. companies are more efficient overall than are non-U.S. companies in terms of advertising spending, the competitiveness of non-U.S. companies should not be underestimated because some of them advertised efficiently (e.g., Kao Corporation from Japan) or almost efficiently.