Article Figures & Data
Figures
- Figure 1
Conceptual Framework
Tables
- Table 1
Customers’ Perceptions Regarding Different Categories
Category Mean scores for: INVOLV NPL FREQa Apparel and shoes 4.68 5.35 3.28 Appliances 4.40 4.90 4.43 Beverages: soft drinks 3.90 4.82 2.55 Beverages: beer 4.37 5.36 2.29 Beverages: spirits 3.99 5.09 3.00 Cameras 4.72 5.47 4.84 Cars 5.12 5.47 4.82 Clothing stores 4.65 5.64 3.34 Computer accessories 4.99 5.49 4.42 Consumer banks 4.92 4.50 4.21 Consumer electronics: audio/visual 5.01 5.40 4.11 Consumer packaged goods: coffee and tea 4.36 4.85 2.76 Consumer packaged goods: dairies 4.61 4.60 2.42 Consumer packaged goods: juices and mixes 3.76 4.74 2.89 Consumer packaged goods: ready meals 3.79 5.40 2.70 Consumer packaged goods: snacks and sweets 4.58 5.64 2.60 Consumer packaged goods: water 4.15 4.25 2.92 Consumer packaged goods: other food products 4.37 5.30 2.58 Credit cards 5.05 5.11 4.41 Department stores 4.78 5.04 3.40 Dining: casual dining 4.48 4.87 2.91 Dining: fast casual dining 4.30 5.22 2.82 Dining: fast food 4.03 5.10 2.72 Dining: steakhouses and top casual dining 4.55 4.49 3.51 Discount stores 4.80 5.22 3.08 Drugs: over-the-counter 4.72 4.98 3.70 Drugs: prescription 4.86 5.27 3.34 Electronic devices: accessories 4.91 5.13 4.21 Financial services 4.78 4.87 4.09 Internet service provider and cellular services 5.24 5.06 4.38 Investment management 4.81 4.26 4.02 Medical devices 4.73 5.01 3.67 Payment systems 4.56 4.70 3.51 PCs and laptops 5.15 5.50 4.55 Restaurants: pizza stores 4.29 5.02 3.23 Shops/restaurants: coffee and donut 4.25 4.82 2.86 Shops/restaurants: ice cream-smoothie 4.34 5.21 3.15 Smart home devices and systems 4.56 5.35 4.14 Software and apps 4.86 5.38 3.63 Tablets and phones 5.16 5.67 4.29 Tools and hardware 4.48 5.00 3.87 Travel: airlines 4.41 3.84 3.98 Travel: amusement, theme, and water parks 4.40 4.51 4.22 Travel: cruises 4.59 4.39 4.87 Travel: ground transportation 4.17 4.32 3.81 Travel: hotels 4.67 4.58 3.78 Travel: other tourist attractions 4.41 4.62 4.23 Travel: online travel agencies 4.40 4.58 4.14 Note: NPL = new product launch frequency.
↵a Higher values indicate lower purchase frequency (or more interpurchase time).
- Table 2
Variables and Descriptions
Variable Operationalization Source/Reference Perceived quality (PQ) Percentage of respondents who chose the focal brand in response to the question “Which of the following brands do you think represents good quality?” minus the percentage of respondents who chose the focal brand in response to the question “Which of the following brands do you think represents poor quality?” during each month (a respondent could only choose high-/low-quality brands among those brands for which earlier they had indicated an awareness). YouGov/Du et al. (2019) Advertising expenditures (AD) Brand’s total monthly advertising expenditures across different advertising channels (log-transformed). Kantar Media Advertising volatility (VOLATIL) Variance in total monthly (log-transformed) advertising expenditures (AD) of a brand over the past six months (before the current time period). Higher values suggest more inconsistency. Kantar Media Ownership (OWN) Average of percentage of people who are current customers and percentage of people who, in the past, were customers of services/products offered by the brand. YouGov/Du et al. (2019) Brand equity (EQUITY) Whether the brand made it (.5) into the top 200 brands in the United States in the previous year, according to Young & Rubicam’s Brand Asset Valuator, or not (−.5). Young & Rubicam Product involvement (INVOLV) (α= .78) Average of three items (“This category is very important to me,” “This category interests me a lot,” and “I would rate shopping in this category as being of the highest importance to me”), with each item rated on a 5-point Likert scale. Mturk survey/Dholakia (2001); Steenkamp, Van Heerde, and Geyskens (2010) Purchase frequency (FREQ) Interpurchase time in a product category as measured by the following item: “How often do you purchase a product (or a service) in this category?” Responses were: weekly or more often; once a week to once a month; once a month to once every 6 months; once every 6 months to once a year; once a year to once every 5 years; and once every 5 years or more. Mturk survey/Farris and Buzzell (1979) Product category age (CATAGE) A binary variable indicating whether the product category is old (−.5) or new (.5). The dichotomy is based on median split of average age of all brands in the category. Google Search, Wikipedia, Factiva New product launch frequency (NPL) The extent of new product launch intensity in a category as measured by responses to the following item: “In this category, new products and services are frequently introduced” (5-point Likert scale). Mturk survey/Fischer et al. (2010) Macroeconomic condition (gross domestic product per capita; GDPPC) Macroeconomic condition of the country as measured by real quarterly GDPPC. Federal Reserve Economic Data - Table 3
Correlations
Variable PQ AD OWN VOLATIL EQUITY INVOLV CATAGE NPL FREQ GDPPC PQ — AD .17 — OWN .72 .29 — VOLATIL .07 −.17 .01 — EQUITY .53 .25 .44 −.01 — INVOLV .02 .18 −.21 −.09 .06 — CATAGE .01 −.10 −.01 .01 −.07 .18 — NPL .19 .11 .13 .06 .16 .21 .02 — FREQ .01 .14 −.29 −.10 .07 .66 .06 −.17 — GDPPC .00 .04 −.04 .02 −.01 .00 .01 .01 .00 — Note: PQ = perceived quality; AD = advertising expenditures; OWN = ownership; VOLATIL.= advertising volatility; EQUITY = brand equity; INVOLV = product involvement; CATAGE = product category age; NPL = new product launch frequency; FREQ = purchase frequency; GDPPC = macroeconomic condition (gross domestic product per capita).
- Table 4
Effects of Brand-, Category-, and Country-Level Factors on the Relationship between Aggregate Advertising Expenditures and Perceived Quality
Covariate M1.0: Month FEs and Brand RE M1.1: M1.0 + Main Effect Variables M1.2: M1.1 + Interactions M1.3: M1.2 + Control Function AD .089† .089† .092† .283*** Interactions AD × VOLATIL −.005** −.005** AD × OWN .064† .064† AD × EQUITY −.113** −.112** AD × INVOLV −.106** −.104** AD × FREQ .038 .037 AD × CATAGE .035 .034 AD × NPL .085*** .084*** AD × GDPPC 1.492** 1.486** Main Effects/Controls VOLATIL −.001 −.005 −.005 OWN 4.324† 4.330† 4.245† EQUITY −.231 −.045 −.034 INVOLV −.734 −.751 −.963 FREQ 3.385† 3.412† 3.364† CATAGE −.858 −.847 −.693 NPL 4.708† 4.717† 4.785† GDPPC −1.827 −1.884 −.347 Month FEs Included Included Included Included Brand RE Included Included Included Included Control Function Included Intercept 15.489† 15.489† 15.440† 15.487† Number of observations 43,081 43,081 43,081 43,081 Number of brands 898 898 898 898 Note: FE = fixed effect; RE = random effect; AD = advertising expenditures; VOLATIL = advertising volatility; OWN = ownership; EQUITY = brand equity; INVOLV = product involvement; FREQ = purchase frequency; CATAGE = product category age; NPL = new product launch frequency; GDPPC = macroeconomic condition (gross domestic product per capita).
*p < .10;
↵** p < .05;
↵*** p < .01;
↵† p < .001 (significance assessed with brand cluster-adjusted standard errors).
- Table 5
The Effect of Advertising Expenditures on Perceived Quality across Different Advertising Channels
Variable N3.0 N3.1 N3.2 N3.3 TELEVISION .044 .034† .029† .020*** INTERNET .017** .001 .006 .003 PRINT .015*** .022*** .011* .009 RADIO .020** .013 .021** .017* OUTDOOR .031*** .028* .028** .027*** Controls Brand FEs Included Included Included Included Year FEs Included Included Included Included Quarter FEs Included Included Included Included Brand × Year FEs Included Included Included Brand × Quarter FEs Included Included Included Brand × Year × Quarter FEs Included Five Control functions Included Included Included Included Intercept 14.881† 14.953† 14.967† 15.025† Number of observations 43,081 43,081 43,081 43,081 Number of brands 898 898 898 898 Note: The authors use five control functions to account for the endogeneity of advertising expenditures in each channel. To construct each of the control functions, the authors use an instrumental variable by utilizing average monthly advertising expenditures across all other brands in the category in a particular advertising channel. All five predictors (TELEVISION, INTERNET, PRINT, RADIO, and OUTDOOR) have been log-transformed so that the coefficients for different channels can be comparable (i.e., the coefficients capture change in perceived quality due to a 1-percent increase in advertising expenditures in that channel). FE = fixed effect; RE = random effect.
↵* p < .10;
↵** p < .05;
↵*** p < .01;
↵† p < .001.
Web Appendix
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