9 Advertising

People don’t like intrusive ads, especially when they are vulnerable (Tybout and calkins 2005, 143)

Meta-analysis has inclusive evidence for the impact of advertising on firm performance (Sethuraman, Tellis, and Briesch 2011)

Advertising can increase firm value via consumer mindsets and behavior (F. Wang, Zhang, and Ouyang 2008)

Advertising do not directly affect traditional media, online WOM, or consumer sentiment, but directly affect firm outcome. (Hewett et al. 2016, 12)


Visual Persuasion


  • Prior distribution for TV advertising elasticity for consumer packaged goods can be found in (Shapiro, Hitsch, and Tuchman 2018). A substantial portion of products has statistically insignificant or negative estimates for advertising elasticity. TV ads might not be the best vehicle to reach the customer now.

  • (Gordon, Jerath, et al. 2019) reframe our idea of advertising effect, which should be thought in the sense of incremental effect above the baseline of an ad on consumer behavior.

  • (Gordon et al. 2017) and (Lewis and Rao 2015) provided evidence that observational data can hardly detect adverting effect from noise (i.e., we could either over or under-estimate).

  • The goal standard to measure advertising is random experiment, but it not possible. An improvement is to have panel data from different regions of your market to estimate the baseline for each market. Then, you can uncover the advertising effect.


(McGuire, 1978):

  • Information processing model of social influence (e.g., advertising effectiveness)

  • Behavioral chain of information profession model. (p. 158) (Markov process) - persuasion

  • P(presentation of message) x P(attention to message) x P(Comprehension of Conclusion) x P(Yielding to the Conclusion) x P (retention of the new belief) x P (Behaving on the basis of belief)

    • Presentation of message = # of reach (advertising investment)

    • attention to message = # of true reach or Recognition test

    • comprehension = recall test or semantic differential profiles or checklist tests

    • yielding = attitude change

    • retention = attitude change after time interval

    • behavior = actual observation

  • Independent variables (components of persuasive communication): source, message, channel, receiver, and destination (Table 1, p. 167)

  • Matrix of persuasion

  • Advertising appeals:

    • Positive (gain): reduce anxiety

    • Negative (loss): increase anxiety

  • Development in the field: this model assume 1 hierarchy, but later developments change the idea of hierarchy model.


Court et al. (2009)

Traditional funnel:

  1. Awareness

  2. Familiarity

  3. Consideration

  4. Purchase

  5. Loyalty

    1. Active loyalist

    2. Passive loyalist

Consumer decision journey McKinsey (2009):

  1. Initial consideration set
  2. Active evaluation
  3. Decision at moment of purchase
  4. Postpurchase experience
  • Customer Decision Journey is from the perspective of consumers

  • Customer Funnel is still important but it’s from the company’s perspective.

  • Analogy here is that you look from 3D (Customer Decision Journey) to 2D (Customer Funnel).


(Maclnnis and Jaworski 1989)

  1. Hierarchy of effects model (1960s)

  2. Multiattribute attitude model and cognitive response models (1970s)

Proposed model:

  • Antecedents:

    • Types of needs

      • Utilitarian needs

      • Expressive needs

        • Socially expressive needs: to express, or reflect self-image

        • Experiential needs: to satisfy one’s cognitive or sensory

    • Motivation (in CB involvement): “the desire to process brand information in the ad.” (p. 4)

      • situational

      • enduring

  • Processing

    • Attention:

      • higher processing motivation leads to higher attention

      • higher utilitarian needs, more focused on brand attributes

      • higher expressive needs, more focused on symbolic/ experiential value

    • Processing capacity:

      • greater processing motivation leads to greater processing capacity for analyzing the ad

      • greater the processing capacity results in less processing capacity for other task.

    • Level of brand processing matches processing operations

      1. feature analysis: salient properties/features

      2. basic categorization

      3. meaning analysis: basic understanding

      4. information integration: Is this brand association?

      5. role-taking

      6. constructive processes

    • Ability and opportunity are moderators of processing

  • Consequences

    • Cognitive responses (thoughts)

    • Emotional responses (feelings)

    • Another classifications of responses:

      • message-related (brand-relevant)

      • execution-related (brand-irreverent)

      • viewing-context-related (environment-related)

Advantages of the proposed model: Incorporate

  • Elaboration Likelihood model: (Petty and Cacioppo 1986)

  • Mitchell’s brand processing model

  • Greenwald and Leavitt’s model

  • Lutz’s typology

Note:

  • \(A_{Ad}\) mediates \(A_B\) based on levels of processing (specifically, meaning analysis, information integration, and role taking - high levels).
  • Tradeoff between brand/message-related elements and ad-execution elements
  • Cohen and chestnut 1990, behavioral loyalty and attitudinal loyalty stem did not stem from the gap between attitude and actual behavioral.


(Vakratsas and Ambler 1999)

  • Advertising input -> Filters -> Consumer (Cognition, Affect, Experience) -> Behavior

  • Market Response Models:

    • Aggregate level (Bass’ model): market data

      • 3 exposures per purchase cycle is optimal (p. 29)
    • Individual level: individual brand choice

  • Cognitive Information Models (C)

    • There is a differential effect between price (increase) and non-price (decrease) advertising on price sensitivity
  • Pure Affect Models (A)

    • Mere exposure theories

      • Response competition and Optimal arousal theories: “wear-in” effect which means it takes time to getting familiar to advertising messages to reach optimal effectiveness.

      • Two-factor theory: wear-out effect: after optimal exposures, the effect of advertising starts to decrease

      • Hence, advertising response has an inverted-U shape

    • Affective responses to advertising:

      • Attitude towards the brand

      • Attitude towards the ad

  • Persuasive Hierarchy Models (CA)

    • Cognition -> Affect -> behavior. (CA)

    • Elaboration Likelihood Model (ELM): (Petty and Cacioppo 1986)

    • Another model is (Maclnnis and Jaworski 1989)

    • Fishbein-Ajzen (1975) involvement model

    • Batra and Ray (1985): Utilitarian and hedonic effect on attitudes towards the brand

    • Involvement moderates the effect of ad evaluation (persuasion is found in low-involvement consumers with attitude towards the ad).

    • Little support for CA model, but the authors still believe in it.

  • Low-involvement (motivation) Hierarchy Models (CEA)

    • Cognition -> Experience -> Affect
  • Integrative Models (CAE)

    • Information Integration Response Model (IIRM)

    • Deighton’s (1984, 1986) two-stage model:

      • first experience = expectations

      • second stage = product trail/experience

  • Hierarchy-Free Models (NH)

  • Generalizations:

    1. Experience, affect, cognition are mediators of advertising effects.

    2. “Short-term ad elasticities are small and decrease during the product life cycle (p. 35).


(Wind and Sharp 2009)

  • 23 Empirical Generalizations

  • Gaps:

    • Boundary conditions

    • Advertising properties

    • Measurement issues


(Batra and Keller 2016)

  • Considerations for a well-integrated marketing communications program

    • Consistency

    • Complementarity

    • Cross-effects

  • Dynamic Expanded Customer Decision Journey

    • traditional media

    • newer media

      • Search ads

      • display ads

      • websites

      • email

      • social media

      • Mobile

  • Interaction and Cross-effects

    • Traditional media synergies

    • sales force and personal selling interactions

    • Online and offline synergies

  • Drawbacks

    • Limited outcome variables

    • Limited longitudinal studies

    • Did not account for consumer decision stage

  • Media type

    • Paid (TV, print, direct)

    • owned (websites, blogs, apps, social media)

    • earned (WOM, press coverage)

  • Factors that affect consumer communication processing (model) (p. 130)

  • Communication Matching Model: “matches the expected main and interactive effects of different media options with the communications objectives for a brand”

  • Communications Optimization Model

    • Coverage

    • Cost

    • Contribution

    • Commonality: different communications share the same meaning

    • Complementarity

    • Cross-Effects

    • Conformability

  • IMC Conceptual Framework


9.1 Cognitive and Affective

Cognitive and Affective mediators of Advertising Effects

Evaluative responses = attitude

Cognitive approach -> Affective approach (not only comes from cognitive) -> Behavioral approach (Fishbein & Ajzen, 1975 - theory of planned behavior)

System 2: is kinda of independent of Cognitive, but Affective is system 1.

  • Expanded model added subjective norm

  • (Zajonc 1980)

  • Evaluation from cognitive approach is multi-attribute model

  • Anthony Greenwald: Cognitive Response Theory: what important is what is in the consumer mind when they see the ad.


Conditioning:

  • Classical (Pavlovian) conditioning: physiological automatic reaction occurred after being exposed to an unconditioned stimulus.

  • Evaluative conditioning: direct transfer of affect from one stimulus to another via a conditioning paradigm.


Affective route:

Moods = diffuse, hard to pin down the source, more long-lasting

Emotion = specific, discrete

(Wright 1973)

  • Three modes of spontaneous cognitive responses to advertising stimulus:

    • Counterargument

    • Source Derogation

    • Support Argument

\[ Accecptance = w_{SA} \sum_{i} SA_i - w_{CA} \sum_j CA_j - w_{SD} \sum_k SD_k \]

Situational Factors

  • Content-processing involvement: “stemming from receiver’s perception of the relevancy”

  • Message Modality: audio, print


(Batra and Ray 1986a)

  • Advertising repetition increases brand attitude and purchase intention when support and counter argument production are low; while under high level of such production, brand attitude and purchase intention level off.

  • What happen to make the downturn of advertising repetition earlier or later?

  • Appropriate interval: purchase cycle (number of exposure per purchase cycle). 3 exposures per purchase cycle is the optimal number

  • Wear-in: how many times it takes for the ad to take effect?

  • Wear-out: how many times it takes for the ad to bore you?

    • If you change the ad execution, the wear-out is pushed back.
  • Traditional thoughts advertising repetition would always wear out (inverted-U curve between repetition and impact on customer’s attitude) because of wearout and mere exposure

  • Ability, motivation and opportunity are antecedents of cognitive processing


(Kupor and Tormala 2015)

  • Momentary interruptions can promote persuasion

    • higher for low need for cognitive individuals (motivation to engage in thoughtful processing) than high ones
  • In other words, interruptions can increase consumers’ processing of a message.

  • Interruption amplified arousal (need for completion/ goal pursuit and curiosity)


(Gibson 2008): Affective Responses Mediating Acceptance of Advertising

  • Using Implicit Association Test (???)

  • Evaluative conditioning only influences explicit attitudes when there is no previous strong preference or priori


(Batra and Ray 1986b)

  • Antecedents of attitude towards the ad:

  • Attitude toward the ad leads changes in brand attitudes (MacKenzie, Lutz, and Belch 1986; Mitchell and Olson 1981)

  • In low involvement context, execution cues and source likeability (message-oriented and communicator-oriented) have greater impact on persuasion

  • Affect typologies (p. 237)


(Pham, Geuens, and De Pelsmacker 2013)

  • ad-evoked feelings positively influence brand attitudes both directly and indirectly (via changes in attitude toward the ad), regardless of involvement with the product category, products types (e.g., durables, nondurables, services, search or experience goods).

  • This effect is greater among hedonic products than utilitarian ones.


(Holbrook and Batra 1987)

  • emotional reactions mediate the effect of advertising on attitudes toward ad or brand.

  • Why divided two articles? the second study claimed that the last paper’s list of positive affective mediators was limited, the second one expands to range of emotions.

  • Is there a difference between affect and emotions?


(Batra and Ahtola 1991; Voss, Spangenberg, and Grohmann 2003) offer scale to measure the hedonic and utilitarian dimensions of consumer attitude


(Dall’Olio and Vakratsas 2022) Effect of Advertising Creative strategy on Advertising Elasticity

  • offer composite metrics that measure aspects of creative strategy

  • Content affect advertising elasticity in the following descending order

    • Experiential content

    • Cognitive content

    • Affective content

9.2 Involvement

Two overarching frameworks in this stream of research are:

  1. Elaboration LIkelihood Model (Petty and Cacioppo 1979)
  2. Heuristic-Systematic Model H(Chaiken 1980)

Involvement as a key moderator in advertising effectiveness

From the ELM by (Petty and Cacioppo 1986) by use the word “motivation” in place of involvement. And if you use the term “motivation”, reviewers are less likely to fight with you since involvement is so fragmented

For review and operationalization, check (Muehling, Laczniak, and Andrews 1993) (preferable) or (Andrews, Durvasula, and Akhter 1990) and famous scale is (“Personal Involvement Inventory” 1985)

Possible manipulation of involvement:

  • ego-involvement: how a product is relevant to you (e.g., pick a free product for you, or for others)

Involvement roughly means “How deeply you are as a consumer wants to think about a product,”

Motivation (2) Opportunity (kinda under ability in the original ELM, we as marketers separate this factor) (3) Ability are necessary for elaboration likelihood model (Petty, Cacioppo, and Schumann 1983)

Defensive processing is not fully captured under the ELM model: Motivation: not the desire to think, but also the desire to find out the truth, assuming that consumers want to find out the truth.

Involvement vs. Engagement:

  • According to (Greenwald and Leavitt 1984) (p. 583), define audience involvement and actor involvement (should be called engagement).


(Greenwald and Leavitt 1984)

  • derived from Sherif & Hovland (1961) Social Judgment (ego-involvement)

  • Enduring involvement vs. situational involvement (Houston & Rothschild, 1977) (A Paradigm for Research on Consumer Involvement)

  • Four levels of involvement:

    1. Preattention: little capacity

    2. Focal attention: modest capacity to decipher the message

    3. Comprehension: more capacity to analyze the message

    4. Elaboration: most capacity to integrate the message into the audience’s knowledge.

  • Antecedents: Situational involvement

  • Consequences:

    • Under high involvement: communication can modify beliefs

    • Under low involvement: communication affect perceptions, and can gradually be persuasive after repeated exposure.

    • Under ego-involvement: high involvement is more resistance to persuasion.

  • Processes of involvement:

    • High involvement creates link between new info to previous experience or attitude

    • differentiate high vs. involvement by central vs. peripheral routs to persuasion (Petty and Cacioppo 1986)

    • Mitchell (1979) equates high involvement to arousal/drive

  • Involvement stems from

    • Actor (participant) or audience (observer)

    • Distinction: Attentional capacity and attentional arousal

      • Arousal = “a state of wakefulness, general preparation, or excitement that facilitates the performance of well-leaned response.” (p. 583)

      • Capacity (also known as effort by Kahneman (1973)) = ” a limited resource that must be used to focus on a specific task and that is needed in increasing amounts as the cognitive complexity of a task increases.” (p. 583)

    • Levels of processing: influences long-term memories

    • Principles for the control of involvement:

      • Bottom-up (data-driven) processing

      • Top-down (concept-driven) processing

      • Competence (data) limitation

      • Capacity (resource) limitation

    • Effects of involvement

      • Immediate Effects: “analyze codes produced by prior processing”

      • Enduring Effects

        • Preattention: no definitive conclusion

        • Focal attention: (1) Familiar stimuli could be identified as separated objects and (2) Unfamiliar stimuli primes sensory memory traces

        • Comprehension: create traces at the propositional level of representation

        • Elaboration: “substantial freedom of memory and attitude from the specific details of th original message or its setting.”

      • Principle of higher-level dominance: the effect of the highest level of involvement is dominant in cases where the effects of different levels oppose one another.

        • Both routes can happen at the same time

        • deeper thinking, play judgment will dominate the net results (weights on whatever route is higher)


(Petty, Cacioppo, and Schumann 1983)

  • provides evidence for the two routes to persuasion

    • Central route: long-lasting and predictive of behavior

    • Peripheral route: associated with positive or negative cues , can be temporary and unpredictive of behavior.

  • Argument quality influences attitudes more under high than low involvement

  • Product endorsers (celebrities vs. joe) influences attitudes more under low than high involvement

  • Can use this as an example of (1) message content, and (2) executional cues (e.g., endorsers) can influence persuasiveness.


(Batra and Stayman 1990)

  • Mood affects cognitive elaboration, bias the argument quality, peripherally affect brand attitudes.

    • Positive moods reduces elaboration


(Macinnis, Rao, and Weiss 2002)

  • Under ELM, for the endorsers to have an effect, customers have to have some motivation (require some levels of cognition), while affective processing does not require any motivation. Hence, for consumers have higher ability (know about products because it’s mature).

  • For mature brands, affectively based executional cues can induce sales

  • Advertisement with positive feelings induces sales


(“Consumers Engagement with Brand-Related Social-Media Content Scale” 2016)

  • Propose consumers’ engagement scales (in the context of social media)

  • Three dimensions of consumer’s engagement based on previous research Muntinga, Moorman, and Smit (2011)

    • Consumption (e.g., using)

    • Contribution: (e.g., liking or sharing, participating)

    • Creation: (e.g., posting, producing contents)


McQuarrie (1998): Meta analysis

  • Lab experiments (in advertising context) are different from real-world phenomenon because:

    • Forcing exposure

    • Failing to measure choice

    • does not consider competitive ads, decay, repeated exposures or mature/familiar brands.


(Muehling, Laczniak, and Andrews 1993)

  • A review on involvement in advertising research

  • See figure 1 (p. 43) for involvement conceptualization


9.3 Visual Cues

X.-Y. (Marcos). Chu, Chang, and Lee (2021)

  • Prestigious brands whose brand image is associated with status and luxury, consumers’ attitude toward the product becomes more favorable and their willingness to pay a premium for the product grows as the distance between the visual representations of the product and the consumer increases.

  • Popular brands whose brand image is associated with broad appeal and social connectedness, the closer the distance, the more favorable is consumers’ attitude and the higher their willingness to pay a premium.

9.4 Advertising Effects

The following section and reading are based on professor Kenneth C. Wilbur’s Seminar on Advertising

A. Mitra and Lynch, Jr. (1995)

  • Advertising affect price elasticity via:

    • the size of consideration set

    • the relative strength of preference


Anand and Shachar (2011)

  • Horizontal differentiation: “advertisement (informational role) decreases the consumer’s probability of not choosing her best alternative by approximately 10%.”


Stephens-Davidowitz, Varian, and Smith (2017)


Lewis and Reiley (2014)


Draganska, Hartmann, and Stanglein (2013)


Hoban and Bucklin (2015)


Hartmann and Klapper (2018)


N. Sahni, Zou, and Chintagunta (2014)


9.5 Estimation of Advertising Effects

Shapiro (2016)


Blake and Coey (2014)


Lewis and Rao (2015)


Lewis, Rao, and Reiley (2011)


9.6 Spillovers

Kitts et al. (2014)


Joo et al. (2014)


N. S. Sahni (2016)


Yang and Ghose (2010)


Ghose and Todri-Adamopoulos (2016)


Rutz and Bucklin (2011)

9.7 Attribution of Advertising Effects

H. (Alice). Li and Kannan (2014)


Blake, Nosko, and Tadelis (2015)


Simonson et al. (2001)


Zantedeschi, Feit, and Bradlow (2017)


Lambrecht and Tucker (2013)


9.8 Advertising Content

Sudhir, Roy, and Cherian (2016)


Tucker (2015)


Liaukonyte, Teixeira, and Wilbur (2015)


A. Rao and Wang (2015)


Xu et al. (2014)


T. Teixeira, Picard, and el Kaliouby (2014)


9.9 Consumer Demand for Ads

Tuchman, Nair, and Gardete (2017)


Goldstein et al. (2014)


Wilbur (2016)