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 optimally. Meta-analyses offer a basis for deriving benchmark elasticities for advertising. Although they provide a variety of valuable insights, a major shortcoming of prior meta-analyses is that they report only generalized results as the disaggregated raw data are not made available. This problem is highly relevant because coding of empirical studies, at least to a certain extent, involves subjective judgment. For this reason, meta-studies would be more valuable if researchers and practitioners had access to disaggregated data allowing them to conduct further analyses of individual, e.g., product-level-specific, interests. We are the first to address this gap by providing (1) an advertising elasticity database (AED) and (2) empirical generalizations about advertising elasticities and their determinants. Our findings indicate that the average current-period advertising elasticity is 0.09, which is substantially smaller than the value 0f 0.12 that was recently reported by Sethuraman, Tellis, and Briesch (2011). Furthermore, our meta-analysis reveals a wide range of significant determinants of advertising elasticity. For example, we find that advertising elasticities are higher (i) for hedonic and experience goods than for other goods; (ii) for new than for established goods; (iii) when advertising is measured in gross rating points (GRP) instead of absolute terms; and (iv) when the lagged dependent or lagged advertising variable is omitted.

Marginalization of the Youth – a Current Societal Development?

The last two years a discussion on reforming the public sector has emerged. At its very heart we find important concepts like ‘quality reform’, ‘democracy’, and ‘development’. Recently I have presented an example of the ‘quality reform’ in SocMag, and this leads me to prolong that discussion on central themes on welfare state and democracy. Much energy is invested in arguing about management of the public sector: Do we need more competition from private companies? Do we need more control? Are more contracts concerning outcome needed? Can we be sure about the accountability needed from politicians? How much documentation, effectiveness measurement, bureaucracy, and evidence-based policy and practice are we looking for? A number of interesting questions – but strange enough we do not discuss the purpose of ‘keeping a welfare state’. What sort of understanding is lying behind the welfare state, and what kind of democracy are we drawing upon?