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

Philippe Aurier and Anne Broz-Giroux
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Philippe Aurier: MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School

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Abstract: 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.

Keywords: Advertising campaign; Advertising carry-over; Advertising econometric model; Campaign profitability antecedents; Advertising Adstock (search for similar items in EconPapers)
Date: 2014
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Published in Marketing Letters, 2014, 25 (2), pp.193-206. ⟨10.1007/s11002-013-9252-3⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02012287

DOI: 10.1007/s11002-013-9252-3

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