The authors attempt to assess what has been learned from econometric models about the effect of advertising on sales. Short-term and long-term advertising response as well as model fit are analyzed for 128 econometric models involving the impact of advertising on sales. The approach, a form of meta-analysis called “replication analysis,” treats the studies as imperfect experimental replications and uses ANOVA to identify sources of systematic variation. For short-term advertising elasticities, systematic variability is found related to model specification, estimation, measurement, product type, and setting of study. For advertising carryover and model goodness of fit, the “quasi-experimental design” is so imperfect that a high degree of sharing of explained variance among explanatory factors makes it difficult to identify the impact of a particular factor. Because the studies mostly address mature products in the U.S., suggestions are made for research needs crucial to better understanding of how advertising affects sales.
Get full access to this article
View all access options for this article.
References
1.
AakerDavid A., and CarmanJames M. (1982), “Are You Overadvertising?”Journal of Advertising Research, 22(4), 57–70.
BassFrank M. (1980), “Some Case Histories of Econometric Modeling in Marketing: What Really Happened,”Interfaces, 10(February), 86–90.
4.
BassFrank M., and LeoneRobert P. (1983), “Temporal Aggregations, the Data Interval Bias, and Empirical Estimation of Bimonthly Relations from Annual Data,”Management Science, 29(1), 1–11.
5.
BlattbergRobert C., and JeulandAbel P. (1981), “A Micro Modeling Approach to Investigate the Advertising-Sales Relationships,”Management Science, 27(9), 988–1005.
6.
ClarkeDarral G. (1973), “Sales-Advertising Cross-Elasticities and Advertising Competition,”Journal of Marketing Research, 10(August), 250–61.
7.
ClarkeDarral G. (1976), “Econometric Measurement of the Duration of Advertising Effect on Sales,”Journal of Marketing Research, 13(November), 345–57.
8.
ClarkeDarral G., and McCannJohn M. (1973), “Measuring the Cumulative Effects of Advertising: A Reappraisal,”Proceedings of American Marketing Association.
9.
ComanorWilliam S., and WilsonThomas A. (1974), Advertising and Market Power.Cambridge, MA: Harvard University Press.
10.
CooperHarris M., and RosenthalRobert (1980), “Statistical Versus Traditional Procedures for Summarizing Research Findings,”Psychological Bulletin, 87(May), 442–9.
11.
CowlingKeith, and CubbinJohn (1971), “Price, Quality and Advertising Competition: An Econometric Investigation of the United Kingdom Car Market,Econometrica, 38(November), 378–94.
12.
DhallaNorman K. (1978), “Assessing the Long-term Value of Advertising,”Harvard Business Review (January-February), 87–95.
13.
DorfmanRobert, and SteinerPeter O. (1954), “Optimal Advertising and Optimal Quality,”American Economic Review, 44(December), 826–36.
14.
DraperNorman R., and SmithHarold (1966), Applied Regression Analysis.New York: John Wiley & Sons, Inc.
15.
EricksonGary M. (1977), “The Time Varying Effectiveness of Advertising,” in Educators’ Proceedings, GreenbergBarnett A., and BellengerDanny N., eds. Chicago: American Marketing Association,125–9.
16.
FarleyJohn U., HowardJohn A., and LehmannDonald R. (1976), “A ‘Working Version’ Car Buyer Behavior Model,”Management Science, 23(3), 235–47.
17.
FarleyJohn U., and LehmannDonald R. (1977), “An Overview of Empirical Applications of Buyer Behavior System Models,” in Advances in Consumer Research, PerreaultW. D., ed. Atlanta: Association for Consumer Research,327–34.
18.
FarleyJohn U., LehmannDonald R., and RyanMichael J. (1981), “Generalizing from ‘Imperfect’ Replication,”Journal of Business, 54(4), 597–610.
19.
FarleyJohn U., LehmannDonald R., and RyanMichael J. (1982), “Patterns in Parameters of Buyer Behavior Models: Generalizing from Sparse Replication,”Marketing Science, 1(2), 181–204.
20.
FarleyJohn U., LehmannDonald R., and WinerRussell S. (1983), “Discriminating Among Disaggregate Models of Consumption,” working paper, Columbia University.
21.
FarleyJohn U., LehmannDonald R., WinerRussell S., and KatzJerrold P. (1982), “Parameter Stability and ‘Carry-over Effects’ in a Consumer Decision Process Model,”Journal of Consumer Research, 8, 465–71.
22.
FarrisPaul W., and BuzzellRobert D. (1979), “Why Advertising and Promotional Costs Vary: Some Cross-Sectional Analysis,”Journal of Marketing (Fall), 112–22.
23.
FrankRonald E., and MassyWilliam (1967), “Effects of Short-Term Promotional Strategy in Selected Market Segments,” in Promotional Decisions Using Mathematical Models, RobinsonPatrick J., ed. Boston: Allyn and Bacon.
24.
GlassGene V., and McGawBarry, and SmithMary Less (1981), Meta-Analysis in Social Research.Beverly Hills, CA: Sage Publications.
25.
GreenPaul, and CarrollDouglas, and De SarboWayne S. (1978), “A New Measurement of Predictor Variable Importance in Multiple Regression,”Journal of Marketing Research, 15(August), 356–60.
26.
HoustonMichael J., and Paul PeterJ., and SawyerAlan G. (1983), “The Role of Meta-Analysis in Consumer Behavior Research,” in Advances in Consumer Research, Vol. 10, BagozziR. P., and TyboutA. M., eds. Ann Arbor, MI: Association for Consumer Research.
27.
HoustonMichael J., and WeissDoyle L. (1974), “An Analysis of Competitive Market Behavior,”Journal of Marketing Research, 11(March), 151–5.
28.
HoustonMichael J., and WeissDoyle L. (1975), “The Cumulative Advertising Effects: The Role of Serial Correlation,”Decision Sciences, 6(July), 471–81.
29.
JohanssonJohny K. (1973), “A Generalized Logistic Function With an Application to the Effect of Advertising,”Journal of American Statistical Association, 63(December), 824–7.
30.
LambinJean-Jacques (1969), “Measuring the Profitability of Advertising: An Empirical Study,”Journal of Industrial Economics, 17(April), 86–103.
31.
LambinJean-Jacques (1970), “Optimal Allocation of Competitive Marketing Efforts: An Empirical Study,”The Journal of Business, 43(October), 468–84.
LeffNathaniel, and FarleyJohn U. (1980), “Advertising and Development,”Journal of International Business Studies, 11(Fall), 65–79.
34.
LeoneRobert P., and SchultzRandall L. (1980), “A Study of Marketing Generalization,”Journal of Marketing (Winter), 10–18.
35.
MaddalaG. S., and VogelR. G. (1969), “Estimating Lagged Relationship in Corporate Demand for Liquid Assets,”Review of Economics and Statistics, 51(February), 53–61.
36.
MetwallyM. M. (1980), “Sales Response to Advertising of Eight Australian Products,”Journal of Advertising Research, 20(October), 59–64.
37.
MonroeKent B., and KrishnanR. (1983), “The Effect of Price on Subjective Product Evaluations: A Synthesis of Outcomes,” in Advances in Consumer Research, Vol. 10, BagozziR. P., and TyboutA. M., eds. Ann Arbor, MI: Association for Consumer Research.
38.
MontgomeryDavid B., and SilkAlvin U. (1972), “Estimating Dynamic Effects of Marketing Communications Expenditures,”Management Science, 18(10), 485–510.
39.
MoriartyMark (1975), “Cross-Sectional, Time-Series Issues in the Analysis of Marketing Decision Variables,”Journal of Marketing Research, 12(May), 142–50.
40.
NelsonPhilip (1974), “Information and Consumer Behavior,”Journal of Political Economy, 78, 311–29.
41.
PaldaKristian S. (1964), The Measurement of Cumulative Advertising Effects.Englewood Cliffs, NJ: Prentice-Hall, Inc.
42.
ParsonsLeonard J. (1975), “The Product Life Cycle and Time-Varying Advertising Elasticities,”Journal of Marketing Research, 12(November), 476–80.
43.
ParsonsLeonard J. (1976), “A Ratchet Model of Advertising Carryover Effects,”Journal of Marketing Research, 13(February), 76–9.
44.
RaoRam (1981), “Continuous Time Approach to Correcting Data Interval Bias in Advertising-Sales Models,” working paper, Purdue University.
45.
ReillyMichael D., and ConoverJerry N. (1983), “Meta-Analysis: Integrating Results from Consumer Research Studies,” in Advances in Consumer Research, Vol. 10, BagozziR. P., and TyboutA. M., eds. Ann Arbor, MI: Association for Consumer Research.
46.
SawyerAllen G., and Paul PeterJ. (1983), “Significance of Statistical Tests,”Journal of Marketing Research, 20(May), 125–31.
47.
SchmalenseeRichard (1972), The Economics of Advertising.Amsterdam: North-Holland Publishing Co.
48.
SudmanSeymour, and BradburnNorman M. (1974), Response Effects in Surveys: A Review and Synthesis.Chicago: Aldine.
49.
TelserLester G. (1962), “Advertising and Cigarettes,”Journal of Political Economy, 70(October), 471–99.
50.
VanhonackerWilfried (1982), “Temporal Aggregation and Finite Parameter Efficiency Assuming First-Order Serial Correlation,” working paper, Columbia University.
51.
WeinbergCharles B., and WeissDoyle L. (1982), “On Econometric Measurement of the Duration of Advertising Effect on Sales,”Journal of Marketing Research, 19(November), 585–91.
52.
WeissDoyle L. (1968), “Determinants of Market Share,”Journal of Marketing Research, 5(August), 290–5.
53.
WeissDoyle L., WeinbergCharles B., and WindalPierre M. (1983), “The Effects of Serial Correlation and Data Aggregation on Advertising Measurement,”Journal of Marketing Research, 20(August), 268–79.
54.
WildtAlbert R. (1974), “Multifirm Analysis of Competitive Decision Variables,”Journal of Marketing Research, 11(February), 50–62.
55.
WildtAlbert R. (1976), “The Empirical Investigation of the Time Dependent Parameter Variation in Marketing Models,” in Marketing: 1776–1976 and Beyond, BeckhardtKenneth L., ed. Chicago: American Marketing Association,46–72.
56.
WittinkDick R. (1977), “Advertising Increases Sensitivity to Price,”Journal of Advertising Research, 17(April), 38–42.
