A survey of the econometric literature is undertaken to determine the duration of cumulative advertising effect on sales. The surveyed studies yield conflicting estimates of the duration interval. The data interval is shown to have a powerful influence on the implied duration of advertising effect. The evidence leads to the conclusion that the cumulative effect of advertising on sales lasts for only months rather than years.
Get full access to this article
View all access options for this article.
References
1.
AakerDavid A. and DayGeorge S.. “Appraising Communications Effects with a Recursive Model,” Proceedings, AMA, 1971, pp. 460.
2.
AakerDavid A. and DayGeorge S.. “A Recursive Model of Communication Processes,” in AakerDavid A., ed., Multivariate Analysis in Marketing: Theory and Application.Belmont, California: Wads worth, 1971.
3.
AckoffRussell L. and EmshoffJames R.. “Advertising Research at Anheuser-Busch, Inc. (1963–68),” Sloan Management Review, 17 (Winter1975), p. 1–15.
4.
AlmonS. “The Distributed Lag Between Capital Appropriations and Expenditures,” Econometrica, 33 (January1965).
5.
BallR. J. and AgarwalaR.. “An Econometric Analysis of the Effects of Generic Advertising on the Demand for Tea in the U.K.,” British Journal of Marketing, 4 (Winter1969), 202–17.
6.
BassFrank M. “Testing vs. Estimation in Simultaneous-Equation Regression Models,” Journal of Marketing Research, 8 (August1971).
7.
BassFrank M. and ParsonsLeonard J.. “Simultaneous-Equation Regression Analysis of Sales and Advertising,” Applied Economics, 1 (May1969), 103–24.
8.
BassFrank M. and ClarkeDarral G.. “Testing Distributed Lag Models of Advertising Effect,” Journal of Marketing Research, 9 (August1972).
9.
BeckwithNeil E. “Multivariate Analysis of Sales Responses of Competing Brands to Advertising,” Journal of Marketing Research, 9 (May1972).
10.
BlockHarry. “Advertising and Profitability: A Reappraisal,” Journal of Political Economy, 82 (March/April1974), p. 267–86.
11.
BuzzellRobert D. “Predicting Short-Term Changes in Market Share as a Function of Advertising Strategy,” Journal of Marketing Research, 1 (August1964).
12.
BuzzellRobert D., KolinMarshall, and MurphyMalcolm. “Television Commercial Test Scores and Short-Term Change; in Market Shares,” Journal of Marketing Research, 2 (August1965).
13.
ClarkeDarral G. “An Empirical Investigation of Advertising Competition,” unpublished doctoral dissertation, Purdue University, 1972.
14.
ClarkeDarral G. “Sales-Advertising Cross-Elasticities and Advertising Competition,” Journal of Marketing Research, 10 (August1972).
15.
ClarkeDarral G. “Econometric Measurement of the Duration of the Advertising Effect on Sales,” Marketing Sciences Institute Working Paper, #75–106, April1975.
16.
ClarkeDarral G. and McCannJohn M.. “Measuring the Cumulative Effects of Advertising: A Reappraisal,” Proceedings, AMA, 1973.
17.
ClarkeDarral G. and McCannJohn M.. “Cumulative Advertising Effect. The Role of Serial Correlation: A Reply,” Decision Sciences, forthcoming (January1977).
18.
DominquezLouis V. and PageAlbert L.. “A Note on a Simultaneous-Equation Regression Study of Advertising and Sales of Cigarettes,” Journal of Marketing Research, 8 (August1971).
19.
FrankRonald F. and MassyWilliam F.. “Effects of Short-Term Promotional Strategy in Selected Market Segments,” in RobinsonPatrick J., ed., Promotional Decisions Using Mathematical Models.Boston: MSI with Allyn and Bacon, 1967.
20.
GrilichesZvi. “Distributed Lags: A Survey,” Econometrica, 35 (January1967).
21.
HoustonFranklin S. and WeissDoyle L.. “An Analysis of Competitive Market Behavior,” Journal of Marketing Research, 11 (May1974).
22.
HoustonFranklin S. and WeissDoyle L. “Cumulative Advertising Effects: The Role of Serial Correlation,” Decision Sciences, 6 (July1975), p. 471–81.
23.
JohanssonJohny K. “On the Estimation of Lagged Effects of Advertising,” Working Paper #73, University of Illinois, 1972.
24.
KoyckL. M.Distributed Lags and Investment Analysis.Amsterdam: North Holland Publishing Co., 1954.
25.
LambinJean-Jacques. “Measuring the Profitability of Advertising: An Empirical Study,” Journal of Industrial Economics, 17 (April1969), pp. 86.
26.
LambinJean-Jacques. “Optimal Allocation of Competitive Marketing Efforts: An Empirical Study,” Journal of Business, 43 (October1970).
27.
LambinJean-Jacques. “A Computer On-Line Marketing Mix Model,” Journal of Marketing Research, 9 (May1972), pp. 119.
28.
LambinJean-Jacques. “Is Gasoline Advertising Justified?” Journal of Business, 45 (October1972), pp. 505.
29.
MaddalaG. S. and VogelR. C.. “Estimating Lagged Relationships in Corporate Demand for Liquid Assets,” Review of Economics and Statistics, 51 (February1969), pp. 54.
30.
MelroseKendrick B. “An Empirical Study on Optimizing Advertising Policy,” Journal of Business, 32 (July1969), pp. 282.
31.
MassyW. F., MontgomeryD. B., and MorrisonD. G.. Stochastic Models of Buying Behavior, Cambridge: MIT Press, 1970.
32.
MontgomeryDavid B. and SilkAlvin J.. “Estimating Dynamic Effects of Market Communications Expenditures,” Management Science, 18 (June1972).
33.
MoriartyMark. “Cross-Sectional Time-Series Issues in the Analysis of Marketing Decision Variables,” Journal of Marketing Research, 12 (May1975), p. 142–50.
34.
NakanishiMasao. “Advertising and Promotion Effects on Consumer Response to New Products,” Journal of Marketing Research, 10 (August1973).
35.
NerloveMarc and WaughF. V.. “Advertising Without Supply Control: Some Implications of a Study of the Advertising of Oranges,” Journal of Farm Economics, 43 (October1971), pp. 813.
36.
PaldaKristian. The Measurement of Cumulative Advertising Effects.Englewood Cliffs, New Jersey: Prentice-Hall, Inc., 1964.
37.
ParsonsLeonard and SchultzRandall L.. “The Impact of Advertising on the Aggregate Consumption Function: I. Preliminary Results,” Institute for Research in the Behavioral, Economic and Management Sciences, Krannert Graduate School of Industrial Administration, Purdue University, Paper #443, March1974.
38.
PelesYoram. “Economies of Scale in Advertising Beer and Cigarettes,” Journal of Business, 44 (January1971), pp. 32.
39.
PelesYoram. “Rates of Amortization of Advertising Expenditures,” Journal of Political Economy, 79 (September-October1971), p. 1032.
40.
ReekieW. Duncan. “Some Problems Associated with the Marketing of Ethical Pharmaceutical Products,” Journal of Industrial Economics, 19 (November1970), pp. 33.
41.
SamuelsJ. M. “The Effect of Advertising on Sales and Brand Shares,” British Journal of Advertising, 4 (Winter1970–71), 187–207.
42.
SasieniMaurice W. “Aggregation of Data,” unpublished manuscript.
43.
SchmallenseeRichard. The Economics of Advertising.Amsterdam: North Holland Publishing Co., 1972.
44.
SchnabelMorton. “An Oligopoly Model of the Cigarette Industry,” Southern Economic Journal, 38 (January1972).
45.
SchultzRandall L. “Market Measurement and Planning with a Simultaneous-Equation Mobel,” Journal of Marketing Research, 8 (May1971), pp. 153.
46.
SethiS. Prakook. “A Comparison Between the Effect of Pulse versus Continuous TV Advertising on Buyer Behavior,” Proceedings, AMA, 1971.
47.
SextonDonald E. “Estimating Marketing Policy Effects on Sales of a Frequently Purchased Product,” Journal of Marketing Research, 7 (August1970).
48.
SextonDonald E. “A Cluster Analytic Approach to Market Response Functions,” Journal of Marketing Research, 11 (February1974).
49.
SimonH. A. “On Judging the Plausibility of Theories,” in Rootselaarvan and eds. Staal, Logic, Methodology and Philosophy of Sciences III.Amsterdam: North Holland Publishing Co., 1968.
50.
SimonJulian. “The Effect of Advertising on Liquor Brand Sales,” Journal of Marketing Research, 6 (August1969).
51.
TaylorL. D. and WeiserbsD.. “Advertising and the Aggregate Consumption Function,” American Economic Review, 62 (September1972), p. 642–55.
52.
TelserLester. “Advertising and Cigarettes,” Journal of Political Economy, 70 (October1962).
53.
TelserLester. “The Demand for Branded Goods as Estimated from Consumer Panel Data,” The Review of Economics and Statistics, 44 (August1962), p. 300–24.
54.
WeissDoyle L. “Determinants of Market Share,” Journal of Marketing Research, 5 (August1968).
55.
WilderRonald P. “Advertising and Inter-Industry Competition: Testing a Galbraithian Hypothesis,” Journal of Industrial Economics, 22 (March1974), pp. 215.
56.
WildtAlbert R. “Multifirm Analysis of Competitive Decision Variables,” Journal of Marketing Research, 11 (February1974).