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A Look at the Long-run Effectiveness of Multimedia Advertising and Its Implications for Budget Allocation Decisions

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  • VAKRATSAS, DEMETRIOS
  • MA, ZHENFENG

Abstract

This study examines the long-term effectiveness of multimedia advertising in a competitive setting and its implications for budget allocation decisions, using multivariate persistence methodology. Analysis of network TV, spot TV, and magazine advertising for the two major competitors in the U.S. SUV industry suggested that long-run advertising effectiveness differed considerably among media. These differences were attributed to the media lifespan, retrieval, and content of the message they convey. The authors propose that budget allocation decisions should consider the long-run effectiveness of the different media employed to increase the productivity of advertising campaigns. They also conduct a simulation experiment to further investigate long-run sales effects of alternative allocation strategy scenarios.

Suggested Citation

  • Vakratsas, Demetrios & Ma, Zhenfeng, 2005. "A Look at the Long-run Effectiveness of Multimedia Advertising and Its Implications for Budget Allocation Decisions," Journal of Advertising Research, Cambridge University Press, vol. 45(2), pages 241-254, June.
    • Handle: RePEc:cup:jadres:v:45:y:2005:i:02:p:241-254_05
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    Cited by:

    1. Vivian Qin & Koen Pauwels & Bobby Zhou, 2024. "Data-driven budget allocation of retail media by ad product, funnel metric, and brand size," Journal of Marketing Analytics, Palgrave Macmillan, vol. 12(2), pages 235-249, June.
    2. Ralph Breuer & Malte Brettel & Andreas Engelen, 2011. "Incorporating long-term effects in determining the effectiveness of different types of online advertising," Marketing Letters, Springer, vol. 22(4), pages 327-340, November.
    3. Breuer, Ralph & Brettel, Malte, 2012. "Short- and Long-term Effects of Online Advertising: Differences between New and Existing Customers," Journal of Interactive Marketing, Elsevier, vol. 26(3), pages 155-166.
    4. Mingyu Joo & Kenneth C. Wilbur & Bo Cowgill & Yi Zhu, 2014. "Television Advertising and Online Search," Management Science, INFORMS, vol. 60(1), pages 56-73, January.

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