The interest in the value relevance of marketing investments has given rise to numerous studies on the marketing–finance interface. This study integrates extant research findings and establishes empirical generalizations on marketing's impact on firm value. Specifically, the authors conduct a meta-analysis of prior econometric elasticity estimates of the stock market impact of marketing actions and marketing assets. Analyses based on 488 elasticities drawn from 83 studies reveal a mean elasticity of .04 for advertising expenditure variables and of .54 for marketing asset variables. Among marketing assets, customer-related assets show a higher mean elasticity of .72, compared with .33 for brand-related assets. Further analyses show that advertising elasticities are lower in more concentrated industries and that marketing asset elasticities are higher during recession times. Researchers should also be aware that characteristics of the research design (e.g., the type of firm value metric used, the omission of control variables, or not accounting for endogeneity) may affect the estimation results.
AlbersSönke (2012), “Optimizable and Implementable Aggregate Response Modeling for Marketing Decision Support,”International Journal of Research in Marketing, 29 (2), 111–22.
2.
AlbersSönke, MantralaMurali K., and SridharShrihari (2010), “Personal Selling Elasticities: A Meta-Analysis,”Journal of Marketing Research, 47 (October), 840–53.
3.
AndersonEugene W., FornellClaes, and MazvancherylSanal K. (2004), “Customer Satisfaction and Shareholder Value,”Journal of Marketing, 68 (October), 172–85.
4.
AndersonEugene W., FornellClaes, and RustRoland T. (1997), “Customer Satisfaction, Productivity, and Profitability: Differences Between Goods and Services,”Marketing Science, 16 (2), 129–45.
5.
AssmusGert, FarleyJohn U., and LehmannDonald R. (1984), “How Advertising Affects Sales: Meta-Analysis of Econometric Results,”Journal of Marketing Research, 21 (February), 65–74.
6.
BarthMary E., ClementMichael B., FosterGeorge, and KasznikRon (1998), “Brand Values and Capital Market Valuation,”Review of Accounting Studies, 3 (1/2), 41–68.
7.
BezawadaRam and PauwelsKoen (2013), “What Is Special About Marketing Organic Products? How Organic Assortment, Price, and Promotions Drive Retailer Performance,”Journal of Marketing, 77 (January), 31–51.
8.
BijmoltTammo H.A. and PietersRik (2001), “Meta-Analysis in Marketing when Studies Contain Multiple Measurements,”Marketing Letters, 12 (2), 157–69.
9.
BijmoltTammo H.A., Van HeerdeHarald J., and PietersRik G.M. (2005), “New Empirical Generalizations on the Determinants of Price Elasticity,”Journal of Marketing Research, 42 (May), 141–56.
10.
BirdM., ChannonC., and EhrenbergA.S.C. (1970), “Brand Image and Brand Usage,”Journal of Marketing Research, 7 (August), 307–14.
11.
BlattbergRobert C. and DeightonJohn (1996), “Manage Marketing by the Customer Equity Test,”Harvard Business Review, 74 (July/August), 136–44.
12.
CaponNoel, FarleyJohn U., and HoenigScott (1990), “Determinants of Financial Performance: A Meta-Analysis,”Management Science, 36 (10), 1143–59.
13.
ChintaguntaPradeep, ErdemTülin, RossiPeter E., and WedelMichel (2006), “Structural Modeling in Marketing: Review and Assessment,”Marketing Science, 25 (6), 604–16.
14.
ConcharMargy P., CraskMelvin R., and ZinkhanGeorge M. (2005), “Market Valuation Models of the Effect of Advertising and Promotional Spending: A Review and Meta-Analysis,”Journal of the Academy of Marketing Science, 33 (4), 445–60.
15.
DanaherPeter J., BonfrerAndré, and DharSanjay (2008), “The Effect of Competitive Advertising Interference on Sales for Packaged Goods,”Journal of Marketing Research, 45 (April), 211–25.
16.
DeleersnyderBarbara, DekimpeMarnik G., SteenkampJan-Benedict E.M., and LeeflangPeter S.H. (2009), “The Role of National Culture in Advertising's Sensitivity to Business Cycles,”Journal of Marketing, 46 (October), 623–36.
17.
EisendMartin and TarrahiFarid (2014), “Meta-Analysis Selection Bias in Marketing Research,”International Journal of Research in Marketing, 31 (3), 317–26.
18.
FamaEugene F. (1970), “Efficient Capital Markets: A Review of Theory and Empirical Work,”Journal of Finance, 25 (2), 383–417.
19.
FarleyJohn U., LehmannDonald R., and SawyerAlan (1995), “Empirical Marketing Generalization Using Meta-Analysis,”Marketing Science, 14 (3), G36–46.
20.
FischerMarc, AlbersSönke, WagnerNils, and FrieMonika (2011), “Dynamic Marketing Budget Allocation Across Countries, Products, and Marketing Activities,”Marketing Science, 30 (4), 568–85.
21.
GanesanShankar, ed. (2012), Handbook of Marketing and Finance. Cheltenham, UK: Edward Elgar.
22.
GatignonHubert (1984), “Competition as a Moderator of the Effect of Advertising on Sales,”Journal of Marketing Research, 21 (November), 387–98.
23.
GeyskensInge, KrishnanRekha, SteenkampJan-Benedict E.M., and CunhaPaulo V. (2009), “A Review and Evaluation of Meta-Analysis Practices in Management Research,”Journal of Management, 35 (2), 393–419.
24.
GreeneWilliam H. (2012), Econometric Analysis, 7th ed. New York: Prentice Hall.
25.
HanssensDominique M. and DekimpeMarnik G. (2008), “Models for the Financial-Performance Effects of Marketing,” in Handbook of Marketing Decision Models, WieringaBerend, ed. New York: Springer, 501–23.
26.
HanssensDominique M., ParsonsLeonard J., and SchultzRandall L. (2001), Market Response Models: Econometric and Time Series Analysis, 2nd ed. Boston: Kluwer Academic Publishers.
27.
HanssensDominique M., PauwelsKoen H., SrinivasanShuba, VanhueleMarc, and YildirimGokhan (2014), “Consumer Attitude Metrics for Guiding Marketing Mix Decisions,”Marketing Science, 33 (4), 534–50.
28.
HoffmannArvid O.I., PostThomas, and PenningsJoost M.E. (2013), “Individual Investor Perceptions and Behavior During the Financial Crisis,”Journal of Banking and Finance, 37 (1), 60–74.
29.
HimmeAlexander and FischerMarc (2014), “Drivers of the Cost of Capital: The Joint Role of Non-Financial Metrics,”International Journal of Research in Marketing, 31 (2), 224–38.
Huedo-MedinaTania B., Sánchez-MecaJulio, Marín-MartínezFulgencio, and BotellaJuan (2006), “Assessing Heterogeneity in Meta-Analysis: Q Statistic or I2 Index?”Psychological Methods, 11 (2), 193−206.
32.
JacobsonRobert and MizikNatalie (2009), “Customer Satisfaction-Based Mispricing: Issues and Misconceptions,”Marketing Science, 28 (5), 836–45.
33.
JohanssonJohny K., DimofteClaudiu V., and MazvancherylSanal K. (2012), “The Performance of Global Brands in the 2008 Financial Crisis: A Test of Two Brand Value Measures,”International Journal of Research in Marketing, 29 (3), 235–45.
34.
JoshiAmit and HanssensDominique M. (2010), “The Direct and Indirect Effects of Advertising Spending on Firm Value,”Journal of Marketing, 74 (January), 20–33.
35.
KrasnikovAlexander and JayachandranSatish (2008), “The Relative Impact of Marketing, Research-and-Development, and Operations Capabilities on Firm Performance,”Journal of Marketing, 72 (July), 1–11.
36.
KremerSara T.M., BijmoltTammo H.A., LeeflangPeter S.H., and WieringaJaap E. (2008), “Generalizations on the Effectiveness of Pharmaceutical Promotional Expenditures,”International Journal of Research in Marketing, 25 (4), 234–46.
37.
LehmannDonald R. (2004), “Metrics for Marketing Matter,”Journal of Marketing, 68 (October), 73–75.
38.
LuJane W. and BeamishPaul W. (2004), “International Diversification and Firm Performance: The S-Curve Hypothesis,”The Academy of Management Journal, 47 (4), 598–609.
39.
LuoXueming, RaithelSascha, and WilesMichael A. (2013), “The Impact of Brand Rating Dispersion on Firm Value,”Journal of Marketing Research, 50 (June), 399–415.
40.
MizikNatalie and JacobsonRobert (2009), “Financial Markets Research in Marketing,” in “Commentaries and Rejoinder to ‘Marketing and Firm Value: Metrics, Methods, Findings and Future Directions,’”Journal of Marketing Research, 46 (June), 320–24.
41.
MorganNeil (2012), “Marketing and Business Performance,”Journal of the Academy of Marketing Science, 40 (1), 102–19.
42.
OuYi-Chun, de VriesLisette, WieselThorsten, and VerhoefPeter C. (2014), “The Role of Consumer Confidence in Creating Customer Loyalty,”Journal of Service Research, 17 (3), 339–54.
43.
RappaportAlfred (1998), Creating Shareholder Value: A Guide for Managers and Investors, 2nd ed. New York: The Free Press.
44.
ReinartzWerner, ThomasJacquelyn S., and KumarV. (2005), “Balancing Acquisition and Retention Resources to Maximize Customer Profitability,”Journal of Marketing, 69 (January), 63–79.
45.
RustRoland T., AmblerTim, CarpenterGregory S., KumarV., and SrivastavaRajendra (2004), “Measuring Marketing Productivity: Current Knowledge and Future Directions,”Journal of Marketing, 68 (October), 76–89.
46.
RustRoland T., LehmannDonald R., and FarleyJohn U. (1990), “Estimating Publication Bias in Meta-Analysis,”Journal of Marketing Research, 27 (May), 220–26.
47.
RustRoland T., LemonKatherine N., and ZeithamlValarie A. (2004), “Return on Marketing: Using Customer Equity to Focus Marketing Strategy,”Journal of Marketing, 68 (January), 109–27.
48.
SchulzeChristian, SkieraBernd, and WieselThorsten (2012), “Linking Customer and Financial Metrics to Shareholder Value: The Leverage Effect in Customer Based Valuation,”Journal of Marketing, 76 (March), 17–32.
49.
SethuramanRaj, TellisGerard J., and BrieschRichard A. (2011), “How Well Does Advertising Work? Generalizations from Meta-Analysis of Brand Advertising Elasticities,”Journal of Marketing Research, 48 (June), 457–71.
50.
ShahDenish, RustRoland T., ParasuramanA., StaelinRichard, and DayGeorge S. (2006), “The Path to Customer Centricity,”Journal of Service Research, 9 (2), 113–24.
51.
SmithV. Kerry and HuangJu-Chin (1995), “Can Markets Value Air Quality? A Meta-Analysis of Hedonic Property Value Models,”Journal of Political Economy, 103 (1), 209–27.
52.
SorescuAlina B. and SpanjolJelena (2008), “Innovation's Effect on Firm Value and Risk: Insights from Consumer Packaged Goods,”Journal of Marketing, 72 (March), 114–32.
53.
SrinivasanRaji, LilienGary L., and SridharShrihari (2011), “Should Firms Spend More on Research and Development and Advertising During Recessions?”Journal of Marketing, 75 (May), 49–65.
54.
SrinivasanShuba and HanssensDominique M. (2009), “Marketing and Firm Value: Metrics, Methods, Findings, and Future Directions,”Journal of Marketing Research, 46 (June), 293–312.
55.
SrinivasanShuba, VanhueleMarc, and PauwelsKoen (2010), “Mind-Set Metrics in Market Response Models: An Integrative Approach,”Journal of Marketing Research, 47 (August), 672–84.
56.
SrivastavaRajenda K., ShervaniTasadduq A., and FaheyLiam (1998), “Market-Based Assets and Shareholder Value: A Framework for Analysis,”Journal of Marketing, 62 (January), 2–18.
57.
StahlFlorian, HeitmannMark, LehmannDonald R., and NeslinScott A. (2012), “The Impact of Brand Equity on Customer Acquisition, Retention, and Profit Margin,”Journal of Marketing, 76 (July), 44–63.
58.
SteenkampJan-Benedict E.M. and (Er) FangEric (2011), “The Impact of Economic Contractions on the Effectiveness of R&D and Advertising: Evidence from U.S. Companies Spanning Three Decades,”Marketing Science, 30 (4), 628–45.
59.
TirunillaiSeshadri and TellisGerard J. (2012), “Does Chatter Really Matter? Dynamics of User-Generated Content and Stock Performance,”Marketing Science, 31 (2), 198–215.
Van HeerdeHarald J., GijsenbergMaarten J., DekimpeMarnik G., and SteenkampJan-Benedict E.M. (2013), “Price and Advertising Effectiveness over the Business Cycle,”Journal of Marketing Research, 50 (April), 177–93.
62.
VerhoefPeter C. and LeeflangPeter S.H. (2009), “Understanding the Marketing Department's Influence Within the Firm,”Journal of Marketing, 73 (March), 14–37.
63.
YooBoonghee, DonthuNaveen, and LeeSungho (2000), “An Examination of Selected Marketing Mix Elements and Brand Equity,”Journal of the Academy of Marketing Science, 28 (2), 195–211.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
