Push-Me Pull-You: Comparative Advertising in the OTC Analgesics Industry
47 Pages Posted: 29 Apr 2012 Last revised: 19 Apr 2016
Date Written: April 15, 2016
We derive equilibrium incentives to use comparative advertising that pushes up own brand perception and pulls down the brand image of targeted rivals. Data on content and spending for all TV advertisements in OTC analgesics enable us to construct matrices of dollar rival targeting and estimate the structural model. Using brands optimal choices, these attack matrices identify diversion ratios, from which we derive comparative advertising damage measures. We find that comparative advertising causes more damage to the targeted rival than bene fit to the advertiser. We simulate banning comparative advertising to find industry profi ts rise.
Keywords: Comparative advertising, advertising targets, diversion ratios, attack matrix, push and pull effects, analgesics
JEL Classification: L13, M37, L65
Suggested Citation: Suggested Citation