Determinants of Advertising Effectiveness: The Development of an International Advertising Elasticity Database and a Meta-Analysis

BuR Business Research Journal, Vol. 4, No. 2, pp. 193-239, December 2011

47 Pages Posted: 3 Jan 2012

See all articles by Sina Henningsen

Sina Henningsen

Christian-Albrechts-University Kiel - Department for Innovation, New Media, and Marketing

Rebecca Heuke

affiliation not provided to SSRN

Michel Clement

University of Hamburg

Date Written: December 19, 2011

Abstract

Increasing demand for marketing accountability requires an efficient allocation of marketing expenditures. Managers who know the elasticity of their marketing instruments can allocate their budgets optimally. Meta-analyses offer a basis for deriving benchmark elasticities for advertising. Although they provide a variety of valuable insights, a major shortcoming of prior meta-analyses is that they report only generalized results as the disaggregated raw data are not made available. This problem is highly relevant because coding of empirical studies, at least to a certain extent, involves subjective judgment. For this reason, meta-studies would be more valuable if researchers and practitioners had access to disaggregated data allowing them to conduct further analyses of individual, e.g., product-level-specific, interests. We are the first to address this gap by providing an advertising elasticity database (AED) and empirical generalizations about advertising elasticities and their determinants. Our findings indicate that the average current-period advertising elasticity is 0.09, which is substantially smaller than the value 0f 0.12 that was recently reported by Sethuraman, Tellis, and Briesch (2011). Furthermore, our meta-analysis reveals a wide range of significant determinants of advertising elasticity. For example, we find that advertising elasticities are higher for hedonic and experience goods than for other goods; for new than for established goods; when advertising is measured in gross rating points (GRP) instead of absolute terms; and when the lagged dependent or lagged advertising variable is omitted.

Keywords: advertising effectiveness, advertising elasticity, advertising elasticity database, meta-analysis, empirical marketing generalizations

JEL Classification: C10, D12, M37

Suggested Citation

Henningsen, Sina and Heuke, Rebecca and Clement, Michel, Determinants of Advertising Effectiveness: The Development of an International Advertising Elasticity Database and a Meta-Analysis (December 19, 2011). BuR Business Research Journal, Vol. 4, No. 2, pp. 193-239, December 2011, Available at SSRN: https://ssrn.com/abstract=1978698

Sina Henningsen (Contact Author)

Christian-Albrechts-University Kiel - Department for Innovation, New Media, and Marketing ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Rebecca Heuke

affiliation not provided to SSRN ( email )

Michel Clement

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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