TV Advertising Effectiveness and Profitability: Generalizable Results From 288 Brands

@article{Shapiro2021TVAE,
  title={TV Advertising Effectiveness and Profitability: Generalizable Results From 288 Brands},
  author={Bradley T. Shapiro and G{\"u}nter J. Hitsch and Anna E. Tuchman},
  journal={Econometrica},
  year={2021}
}
We estimate the distribution of television advertising elasticities and the distribution of the advertising return on investment (ROI) for a large number of products in many categories. Our results reveal substantially smaller advertising elasticities compared to the results documented in the literature, as well as a sizable percentage of statistically insignificant or negative estimates. The results are robust to functional form assumptions and are not driven by insufficient statistical power… 

Figures and Tables from this paper

Externalities across advertising markets

ABSTRACT This paper analyzes externalities generated by offline advertising campaigns on the performance of online ads. Using advertising data on a panel of firms in the hotel industry, we estimate

Soda Taxes and Dynamic Advertising

Soda taxes are commonly used to reduce sugar consumption. The effects of taxes on prices and consumption have been widely studied, however there is less work on the impact of taxes on firms’

Public and Private Provision of Information in Market-Based Public Programs: Evidence from Advertising in Health Insurance Marketplaces

This paper studies the effect of provision of information by the government and private firms through marketing activities in the Affordable Care Act health insurance marketplace. Using detailed TV

The Impact of Advertising Creative Strategy on Advertising Elasticity

This study provides a comprehensive assessment of the impact of advertising creative strategy (ACS) on advertising elasticity, founded on an integrative framework that distinguishes between the

HAVE MERGERS RAISED PRICES? EVIDENCE FROM U.S. RETAIL

We document the price and quantity effects of all US retail mergers from 2006–2017 associated with deals larger than $340 million. Prices increase by 0.49% on average for merging parties, with an

Auction Throttling and Causal Inference of Online Advertising Effects

Causally identifying the effect of digital advertising is challenging, because experimentation is expensive, and observational data lacks random variation. This paper identifies a pervasive source of

Naive Analytics Equilibrium

We study interactions with uncertainty about demand sensitivity. In our solution concept (1) firms choose seemingly-optimal strategies given the level of sophistication of their data analytics, and

Cross-National Differences in Market Response: Line-Length, Price, and Distribution Elasticities in 14 Indo-Pacific Rim Economies

The field's knowledge of marketing-mix elasticities is largely restricted to developed countries in the North-Atlantic region, even though other parts of the world—especially the Indo-Pacific Rim

Estimating the Value of Offsite Data to Advertisers on Meta

We study the extent to which advertisers benefit from data that are shared across applications. These types of data are viewed as highly valuable for digital advertisers today. Meanwhile, product

Disentangling the Effects of Ad Tone on Voter Turnout and Candidate Choice in Presidential Elections

We study the effects of positive and negative advertising in presidential elections. We develop a model to disentangle these effects on voter turnout and candidate choice. The central empirical

References

SHOWING 1-10 OF 36 REFERENCES

Political Advertising and Election Results

We study the persuasive effects of political advertising. Our empirical strategy exploits FCC regulations that result in plausibly exogenous variation in the number of impressions across the borders

Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment

Internet advertising has been the fastest growing advertising channel in recent years, with paid search ads comprising the bulk of this revenue. We present results from a series of large‐scale field

The Unfavorable Economics of Measuring the Returns to Advertising

Twenty-five large field experiments with major U.S. retailers and brokerages, most reaching millions of customers and collectively representing $2.8 million in digital advertising expenditure, reveal

Determinants of Advertising Effectiveness: The Development of an International Advertising Elasticity Database and a Meta-Analysis

Increasing demand for marketing accountability requires an efficient allocation of marketing expenditures. Managers who know the elasticity of their marketing instruments can allocate their budgets

How Advertising Affects Sales: Meta-Analysis of Econometric Results

The authors attempt to assess what has been learned from econometric models about the effect of advertising on sales. Short-term and long-term advertising response as well as model fit are analyzed

Legacy discounts in the market for national television advertising∗

Advertising is an important input in the production of many final products sold to consumers, and national television ads still command the majority of ad dollars spent in the U.S. Yet, firms face

Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals

We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertising markets generated by idiosyncrasies

Advertising Spillovers: Evidence from Online Field Experiments and Implications for Returns on Advertising

The author analyzes the impact of online ads on the advertiser's competitors, using data from randomized field experiments on a restaurant-search website. He finds that ads increase the chances of

An Empirical Model of Advertising Dynamics

This paper develops a model of dynamic advertising competition, and applies it to the problem of optimal advertising scheduling through time. In many industries we observe advertising “pulsing”,

Getting the most out of advertising and promotion.

"Single source" data correlate information on actual consumer purchases with information on the corresponding television advertising those consumers receive or on the promotion events they see, which allows managers to measure the incremental impact of advertising and promotion and to improve marketing productivity.