Dissecting decline in the economy-wide advertising intensity 1997-2017

Darren Filson ()
Additional contact information
Darren Filson: Claremont McKenna College

Economics Bulletin, 2023, vol. 43, issue 3, 1444 - 1452

Abstract: The macro-level advertising-to-sales ratio of U.S.-based advertising firms is stable at approximately 3% prior to 2001 and then drops substantially (primarily during 2001-2005) to approximately 2% by 2013-2017. A decomposition shows that changes in advertising intensities in four vertical chains – food, drugs, computers, and tobacco – are critical contributors to the drop. I explore tentative explanations. It is unlikely that the diffusion of the Internet is wholly responsible; food, drugs, and tobacco are among the industries least impacted by ecommerce. Category-specific factors likely matter: commoditization, the rise of warehouse club/supercenters, the changing nature of new products, and public policies and self-regulation.

Keywords: advertising-to-sales; aggregate advertising; decomposition; macro advertising (search for similar items in EconPapers)
JEL-codes: L1 M3 (search for similar items in EconPapers)
Date: 2023-09-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I3-P123.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-23-00248

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().