Information content of advertising: empirical evidence from the OTC analgesic industry

We empirically study the information-persuasion trade-off in advertising using data on the information content of advertisements, which we measure with the number of information cues in ads. We propose a simple theoretical framework to motivate an ordered probit model of information content. We find that stronger vertical differentiation is positively associated with the delivery of more product information in a brand’s advertisements: brands with higher levels of quality include more information cues. Next, comparative advertisements contain significantly more product information than self-promotional advertisements. Finally, brands with higher market shares and brands competing against strong generic substitutes have less information content

Getting into Your Head(Ache): The Information Content of Advertising in the Over-the-Counter Analgesics Industry

We study how much information firms include in their advertisements and what determines their choices. We use data from advertisement videos from the US OTC analgesics industry between 2001 and 2005 to measure information content in ads. For each video we code the number of cues it contains. The correlation between any two cues is rarely large, suggesting that each cue provides different information. We find: i) brands with inherently better characteristics (e.g. faster relief) transmit more information; ii) comparative advertisements contain significantly more information than self-promotion ads; iii) market share is negatively associated with the amount of information content; iv) a higher market share of the generic version of a brand is also associated with less information by the brand. Not controlling for endogeneity of market share and the decision to use comparative advertising would lead to significant estimation bias. Result (iii) is consistent with recent theoretical work that larger firms disclose less information, while result (iv) indicates the likely presence of information spillovers from brands to their generic counterparts

Information content of advertising: empirical evidence from the OTC analgesic industry

We use data from video files of all advertisements in the OTC analgesics industry from 2001 to 2005 to measure the information content in ads. We propose a simple theoretical framework to motivate an ordered probit model of information content. We find that stronger vertical differentiation is positively associated with the delivery of more product information in a brand’s advertisements: brands with higher levels of quality include more information cues. Comparative advertisements contain significantly more product information than noncomparative advertisements. Brands with higher market shares and brands competing against generic substitutes with higher market shares have less information content

Information content of advertising: empirical evidence from the OTC analgesic industry

We use data from video files of all advertisements in the OTC analgesics industry from 2001 to 2005 to measure the information content in ads. We propose a simple theoretical framework to motivate an ordered probit model of information content. We find that stronger vertical differentiation is positively associated with the delivery of more product information in a brand’s advertisements: brands with higher levels of quality include more information cues. Comparative advertisements contain significantly more product information than noncomparative advertisements. Brands with higher market shares and brands competing against generic substitutes with higher market shares have less information content

Examining consumer response to commodity-specific and broad-based promotion programs for fruits and vegetables using experimental economics

WP 2010-12 July 2010JEL Classification Codes: M37; Q13Generic promotion and advertising activities have traditionally been used to promote individual agricultural commodities. However, there is renewed interest in implementing a mandatory ?broad-based? promotion program for all fruits and vegetables, and this idea is highly controversial among those in the horticultural industry. Here we use data from an experiment that introduces subjects to various promotional efforts for fruits and vegetables to estimate the direct and indirect effects of advertising. Econometric results indicate that commodity-specific promotional efforts may be less effective at increasing demand for fruits and vegetables than earlier studies have suggested, yet such campaigns do appear to have a significant clockwise rotational effect on the demand for fruits and vegetables. Broad-based advertising does have a direct effect on the demand for fruits and vegetables, and after controlling for various demographic differences between treatments our results show that average willingness-to-pay for fruits and vegetables was 41% higher among subjects in the broad-based group compared to the control group

Push-me pull-you: comparative advertising in the OTC analgesics industry

We derive equilibrium incentives to use comparative advertising that pushes up own brand perception and pulls down the brand image of targeted rivals. Data on content and spending for all TV advertisements in OTC analgesics 2001-2005 enable us to construct matrices of dollar rival targeting and estimate the structural model. Using brands' optimal choices, these attack matrices identify diversion ratios, from which we derive comparative advertising damage measures. We find that outgoing comparative advertising attacks are half as powerful as self-promotion in raising own perceived quality and cause more damage to the targeted rival than benefit to the advertiser. Comparative advertising causes most damage through the pull-down effect and has substantial benefits to other rivals