Advertising spending patterns and competitor impact

Maarten J. Gijsenberg, Vincent R. Nijs

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)

Abstract

In most industries, brand managers do not advertise continuously. Instead, advertising is switched on and off systematically, a phenomenon often referred to as pulsing. Moreover, spending levels vary considerably across periods when brands do advertise. Surprisingly, this variety in advertising spending patterns as observed in practice, as well as competitor impact on these patterns and their sales outcomes, have received relatively little empirical attention. In this paper we focus on two core aspects of observed advertising patterns: incidence and magnitude. Insights are based on the analysis of advertising spending for 370 CPG brands in 71 product categories over a four-year period. We also collected feedback from practitioners dealing with advertising across a wide range of firms. We first empirically establish that pulsing is the dominant form of advertising scheduling. Observed patterns, in turn, are largely driven by television and print advertising. Next, we show that, after accounting for a wide range of other possible drivers, advertising in-sync with competitors is more common than out-of-sync. However, the results suggest that competitive reasoning plays only a relatively minor role in advertising decisions. Finally, we show that, across a wide range of real-world scenarios, investing in top-of-mind awareness through maintenance advertising insulates brands from competitors' actions and boosts sales.

Original languageEnglish
Pages (from-to)232-250
Number of pages19
JournalInternational Journal of Research in Marketing
Volume36
Issue number2
Early online date19-Dec-2018
DOIs
Publication statusPublished - Jun-2019

Keywords

  • PULSING POLICIES
  • PRODUCT LINE
  • MODEL
  • INTERFERENCE
  • WEAROUT
  • SALES
  • ENTRY
  • PRICE
  • TIME

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