Informational and Non-Informational Advertising Content
61 Pages Posted: 3 Jan 2018 Last revised: 9 Oct 2019
Date Written: October 8, 2019
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: Suggested Citation