Informational and Non-Informational Advertising Content

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. Advertising with both informational and non-informational content affects shoppers' but not non-shoppers' awareness and the awareness of other groups of involved consumers.

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

JEL Classification: D83, G22, M37