Does advertising work? (mini lecture)

Question 1

Advertising elasticity

Answer 1

The percentage increase in sales for a 1% increase in advertising.

Question 2

Mean short- and long-term elasticity

Answer 2

Short-term: 0.12
Long-term: 0.24
20 years ago it was almost dubbel short: 0.22 and high: 0.41.

Question 3

Possible causes change in advertising elasticity

Answer 3

Market characteristics (nu meer online), research methods and consumer response.

Question 4

Elasticity differences: durable products, foods and non foods.

Answer 4

Higher for durable products, especcially when it is a new product (novel).

Question 5

Is it possible to spend to much on advertising?

Answer 5

Yes! Optimal price is 4.6%. When budget is 30% is the same as reducing price with 1%.

Question 6

Do sex and violence sell?

Answer 6

No, It grabs attention but reduces attention for information about the brand. Attention not the same as purchase intention.

Question 7

Differences sex and violence in media and in ads.

Answer 7

In media sig negative effect on brand memory, brand attitude and purchase intentions. In ads less favorable brand attitude

Question 8

Does it matter if the content of media and ad are congruent or incongruent?

Answer 8

Yes, positive for brand memory and buying intentions.

Question 9

When is advertising more effective?

Answer 9

When product is novel, durable and the media and ad content are congruent.