Informational and Non-Informational Advertising Content

61 Pages Posted: 3 Jan 2018 Last revised: 9 Oct 2019

See all articles by Yi-Lin Tsai

Yi-Lin Tsai

University of Delaware - Alfred Lerner College of Business and Economics

Elisabeth Honka

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: October 8, 2019

Abstract

We investigate the relationship between both advertising content and quantity and several stages of consumers' decision-making, namely, unaided and aided awareness, consideration, and purchase. Understanding how the amount and content of advertisements affect consumers' decision-making is crucial for companies to effectively and efficiently use their advertising budgets. Spanning a time period from 2010 to 2016, we combine a unique data set on TV advertising content and quantities with individual-level data containing information on purchases, consideration and awareness sets, demographic variables, and perceived prices. Our results reveal that advertising quantity significantly increases consumer (unaided and aided) awareness, but has no effect on conditional consideration and conditional purchase. However, when measuring the separate effects of different types of advertising content, we find a more nuanced set of results: advertising only containing non-informational content increases unaided awareness, while advertising only containing informational content increases aided awareness and purchase conditional on consideration. And lastly, since many companies spend a significant portion of their budgets on advertising with both informational and non-informational content, we investigate whether this type of advertising significantly affects certain groups of consumers and find it to indeed be the case. We conclude that the effects of advertising content vary along consumers' purchase funnel.

Keywords: Advertising, Advertising Content, Purchase Funnel, Auto Insurance Industry

JEL Classification: D83, G22, M37

Suggested Citation

Tsai, Yi-Lin and Honka, Elisabeth, Informational and Non-Informational Advertising Content (October 8, 2019). 2019 Academic Research Colloquium for Financial Planning and Related Disciplines. Available at SSRN: https://ssrn.com/abstract=3094448 or http://dx.doi.org/10.2139/ssrn.3094448

Yi-Lin Tsai

University of Delaware - Alfred Lerner College of Business and Economics ( email )

Newark, DE 19716
United States

HOME PAGE: http://yilint.com

Elisabeth Honka (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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