The Effect Of Publicity And Advertising Spending On Marketing And Company Performance

The Effect Of Publicity And Advertising Spending On Marketing And Company Performance

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Summary of article:
The research team of a company is always anxious to evaluate the results of advertising and media publicity. This statistical study focused on analyzing the effects of advertising spend and publicity on 5 major factors of the marketing-productivity chain: brand attitude, sales, corporate reputation, profitability and firm value. The annual company performance reports from January 2000 to July 2003 of 12 computer technology sector companies were analyzed.
The data for the study was collected from different sources for each individual variable. The positive and negative publicity data were collected by CARMA International based on 18 national US magazines and newspapers. Corporate reputation was determined by Fortune magazine’s; “Most admired” corporate survey. To analyze stakeholder’s attitude towards the brand, 1500 buyers were asked for their opinion (positive or negative). Brand value was calculated using the Tobin’s Q which is the ratio of the market value to the replacement costs of the company’s assets.
All these factors were compared through unrelated regression analysis. Indirect effect of each predicted and predictor variable was calculated and compared with separate ordinary least square regressions.
The key findings from this study are:
• Customer and market metrics are differently/dissimilarly?? influenced by advertising spending and publicity.
• Sales is not the only outcome of advertising and publicity. They influence other factors of a company; like corporate reputation and firm value.
• Publicity has superiority over advertising when we consider the factors of corporate reputation and brand attitude.
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... middle of paper ...


...ing communication efforts. Social media is an integral aspect from a corporate reputation standpoint. Back in 2000-2003 it was not that common, hence the current application of the results is restricted.

- Rubai Soni
This article was published in the Journal of Advertising Research, December 2015 edition. The authors are Harlan E. Spotts, Marc G. Weinberger and Michelle E. Weinberger. The link to the article is http://www.journalofadvertisingresearch.com/content/55/4/416.full.pdf+html.



Notes:
The data sources for the various elements were:
• The annual reports had data and numbers on media spending for traditional and outdoor media.
• Compustat database gave information about the quarterly sales revenue and profit of the 12 companies.
• External factors like multicollinearity/environmental/strategic issues are also responsible for negative publicity of a company.

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