Share of Voice: Findings from the US Automotive Industry

Rae Yule Kim ()
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Rae Yule Kim: Montclair State University

Economics Bulletin, 2020, vol. 40, issue 4, 3306-3312

Abstract: This paper examines the impact of advertising spending on financial performances. It is often difficult to justify the ROI of advertising because the gain is often intangible. We utilize signaling theory to predict that competitive advertising spending should positively influence brand perceptions and nudge consumers to choose the brand over competitors that spend less on advertising. We implemented the system GMM on panel data to examine how competitive ad spending contributes to market share while controlling for persistence. The findings indicate that not the advertising spending but the competitive advertising spending share in the market significantly predict market dominance.

Keywords: Budgeting; business economics; advertising spending; marketing ROI (search for similar items in EconPapers)
JEL-codes: M2 M3 (search for similar items in EconPapers)
Date: 2020-12-28
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