Journal of Advertising Research - June 2012
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Celebrating 50 years, the Journal of Advertising Research 50th Anniversary Special Edition is packed with analysis and insights from over 40 internationally renowned academics and industry leaders.

June 2012, Volume 52, No. 2
Andrew Ehrenberg: A Tribute

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Editorial: Lessons from a Legend
Geoffrey Precourt

Send This to Your CFO … Anonymously
Pat LaPointe

Lifting the Productivity of Television Advertising: Nothing Matters More Than the Brand. Nothing.
Jenni Romaniuk

The Economic Value of Celebrity Endorsements
Anita Elberse, Harvard Business School and Jeroen Verleun
What is the pay-off to enlisting celebrity endorsers? Although effects on stock returns are relatively well documented, little is known about any impact on sales—arguably a metric of more direct importance to advertising practitioners. This study of athlete endorsements finds there is a positive pay-off to a firm’s decision to sign an endorser, and that endorsements are associated with increasing sales in an absolute sense and relative to competing brands. Furthermore, sales and stock returns jump noticeably with each major achievement by the athlete. However, whereas stock-return effects are relatively constant, sales effects exhibit decreasing returns over time. Implications for practitioners are outlined.

The High Stakes of Sweepstakes: Too Much of a Good Thing Can Demotivate Digital Consumers
Caroline Wilcox and Arch G. Woodside
In preference-matching contexts—specifically, where people enter hoping to find some particular product or service they already know themselves to prefer—more choices should increase the likelihood that they will be successful in their search. Increasing the number of choices, however, actually increases the cognitive workload of consumers, and they may decide consciously or unconsciously simply to apply heuristics—such as clicking the delete button on complex e-mails. This study tested these two alternative theories in a large-field experiment focusing on advertising an experience brand (France as a vacation destination) to Americans under multiple treatment conditions. The findings supported the theory that fewer choices increase behavioral responses, but this effect reversed when an e-mail includes a sweepstakes offer. Consequently, the authors found that “it depends on what is offered in conjunction with the direct-sales offers” may be the more accurate perspective than the “less-is-more” proposition.

How Validation Can Trump Digital Waste and Generate Value across the Digital Advertising Ecosystem
Linda Boland Abraham, Anne Hunter, and Andrea Vollman
The research demonstrates the impact of measuring ‘validated’ ad impressions as opposed to simply counting ads that are delivered to a computer as has historically been done in online advertising measurement. ‘Validation’ holistically measures the visibility of ads by consumers as well as the geographic accuracy, brand safety and legitimacy of the ad delivery. Based on eighteen campaigns from twelve major brand advertisers, including Kellogg’s, General Mills, Ford, Sprint and more, the study found that there is a significant difference between gross and validated delivery, representing a substantial optimization opportunity for both buyers and sellers of digital advertising.

Andrew Ehrenberg: A tribute
The Laws of Marketing Science: Andrew S. C. Ehrenberg (1926–2010)

The Ehrenberg Legacy: Lessons in Buying Behavior, Television, Brand Perception, Advertising, and Pricing
John Scriven and Gerald Goodhardt
This review outlines the scientific principles that underpinned Andrew Ehrenberg’s working methods, then summarizes his ground-breaking findings in buyer behavior and brand perceptions. It follows on to describe how he applied that knowledge to produce his theory of how advertising works mainly as publicity, now widely if not universally accepted but highly controversial at the time. It concludes with an appreciation of the extraordinary breadth and influence of the body of work, and the inspiration it provides for future scientific study, not least as evidenced in this Special Edition of the Journal of Advertising Research.

It’s a Dirichlet World: Modeling Individuals’ Loyalties Reveals How Brands Compete, Grow, and Decline
Byron Sharp, Malcolm Wright, John Dawes, Carl Driesener, Lars Meyer-Waarden, Lara Stocchi, and Philip Stern
The Dirichlet is one of the most important theoretical achievements of marketing science.  It provides insights into the distribution of consumer loyalties and is used widely in industry for benchmarking and interpreting brand performance. The Dirichlet’s implications run counter to some well-entrenched marketing pedagogy and so, unsurprisingly, it has attracted criticism arguing that it cannot adequately reflect the dynamic nature of consumer choice. The authors address these criticisms by discussing how consumer loyalties are manifested and examining whether changes in consumer loyalties do, in fact, disrupt Dirichlet buying patterns. To the best of our discipline’s knowledge, based on extensive empirical and theoretical work, brands compete in a Dirichlet world.

The Power of Before and After: How the Dirichlet Can Analyze the Sales Impact of a Promotional Activity
James McCabe, Philip Stern, and Scott G. Dacko
The Dirichlet is a well-established theoretical model that describes and predicts patterns of purchasing behavior in stationary markets. This paper uses data from a highly nonstationary market to demonstrate that the Dirichlet norms also provide a baseline to interpret change in purchasing behavior—in particular, change wrought by sustained promotional activity. The empirical analysis of industrial purchasing data describes how one supplier more than doubled its share of the market. This share increase was achieved by, first, securing a higher share of the category purchases made by heavy buyers (increasing purchase frequency) before adopting a more typical growth strategy of attracting more buyers (increasing penetration).

The 38-Percent Solution: Empirical Generalizations for Repeat Viewing of Television Programs
Peter J. Danaher and Tracey S. Dagger
Repeat viewing is commonly used as an indication of program loyalty. The authors extended the pioneering work by Ehrenberg, Barwise and Goodhardt by examining a unique dataset of prime time television shows that change time in midseason. These data help to unravel the difference between loyalty to programs and loyalty to particular time periods. For example, across 42 different datasets of programs that changed time, the authors calculated repeat viewing levels for the four weeks before and after the change.  A resulting empirical generalization was that repeat viewing is 38 percent—both before and after the time change. This generalization is true across all program types, and even when a program changes day. In addition, a surprising finding is that many programs retain their share of audience when moved to a new time slot.

New Brand Extensions: Patterns of Success and Failure
Jaywant Singh, John Scriven, Maria Clemente, Wendy Lomax, and Malcolm Wright
The success of brand extensions is crucial for businesses. This study examines the performance of successful and failing new brand extensions. The analysis framework consists of purchase data for 47 extensions across 30 consumer-packaged-goods categories in a large-scale U.K.-based consumer panel. The results show that the performance of successful new extensions is comparable to that of established ones by the second quarter following their launch. Successful extensions continue to gain customers from that point forward. Failing extensions, however, show declines in both the number of customers and the repeat-purchase rate from the third quarter onwards. The study suggests a diagnostic framework to assess the performance of new brand extensions.

Brand Image and Brand Usage: Is a Forty-Year-Old Empirical Generalization Still Useful?
Jenni Romaniuk, Svetlana Bogomolova, and Francesca Dall’Olmo Riley
In this paper the authors provide evidence of the breadth and longevity of Andrew Ehrenberg’s work—a testimony to the quality of his research approach. To demonstrate this vitality, the authors drew on 45 new data sets to test findings about the relative brand image response patterns from customer usage groups (Bird, Channon and Ehrenberg, 1970). The data cover different categories (among them, services, durables and retailers), countries (including emerging markets), and newer data collection methods (i.e., online).  The authors found the generalization that brand association responses are strongly and systematically linked to past brand usage still holds—both qualitatively and, to a large extent, quantitatively. This has implications for researchers and practitioners.

In 25 Years, Across 50 Categories, User Profiles for Directly Competing Brands Seldom Differ: Affirming Andrew Ehrenberg’s Principles
Mark Uncles, Rachel Kennedy, Magda Nenycz-Thiel, Jaywant Singh, and Simon Kwok
It has been claimed that the user profiles of directly competing brands seldom differ. This surprises many in marketing, leading to some doubts about the validity of the claim. In the empirical generalization tradition, the authors:

  • re-examine the previous claim using newer data;
  • consider the scope of the claim in terms of brands in emerging markets, private labels, variants, and composite segments; and
  • discuss potential boundary conditions.

Despite attempts by marketers to differentiate brands and provide customized features for distinct target audiences, the evidence of the current study confirms that user profiles of directly competing brands seldom differ.

What’s Not to “Like?” Can a Facebook Fan Base Give a Brand the Advertising Reach it Needs?
Karen Nelson-Field, Erica Riebe, and Byron Sharp
A marketer with a Facebook Fan base has at least some ability to advertise to that audience. What quality of reach, however, does this sort of “earned media” deliver? The landmark discovery by Andrew Ehrenberg of the negative binomial distribution (NBD) implies that the most effective advertising requires media that reach across both heavy and light buyers of the brand. This article investigates the buying concentration of the Facebook Fan base of two different brands (both Fast Moving Consumer Goods (FMCG) categories) and compares it to the brands’ actual buying bases. The buyer base of each of
the brands is distributed in the typical NBD, whereas the Fan base delivered by Facebook is skewed in an opposite pattern—skewed toward the heaviest of the brands’ buyers— making the quality of Facebook’s reach appear rather unappealing.

Brand Growth at Mars, Inc.: How the Global Marketer Embraced Ehrenberg’s Science with Creativity
Rachel Kennedy and Bruce McColl
Can science help brands grow? Mars, Inc. has embarked on a program to apply the marketing laws originally developed and promoted by Andrew Ehrenberg. Mars has discovered that both creativity and science can—and should—work together. Just as an architect marries creativity with the laws of physics; marketers should construct brand plans that embrace the laws of growth. Mars executives are learning that creativity is more productive when unleashed within known boundaries of buyer behavior. The authors share some lessons from a continuing journey that may help others also make the transformation to a marketing science culture.

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