How instead of how much? How budget and strategic configuration impact advertising effectiveness
How instead of how much? How budget and strategic configuration impact advertising effectiveness
Advertising effectiveness remains a major challenge for firms, particularly as advertising expenditure continues to grow and managers face increasingly complex decisions about how to allocate resources. This dissertation examines how firms can improve advertising effectiveness by considering both media and message decisions in relation to brand size and specific purchase funnel objectives.
First, it investigates the joint and relative importance of advertising mix planning (AMP) decisions, including budget, channel allocation, scheduling, and timing. Chapter 2 uses Dutch lager FMCG data, a Panel VAR model, and 52,920 counterfactual simulations to assess their effects on awareness, consideration, preference, and sales. The findings show that effectiveness is highly context-dependent. Channel allocation is the most influential decision, budget is less important than commonly assumed, and effective scheduling strategies differ substantially between large and small brands. Furthermore, strategies that improve attitudinal outcomes do not necessarily maximise sales.
Second, Chapter 3 examines advertising creativity as a relative construct, comparing a brand’s advertising creativity with that of its competitors, using data on 220 advertisements for 19 Dutch brands across three product categories. Low relative creativity harms awareness, while excessively high relative creativity can reduce sales. Small brands require at least average creativity to build awareness, whereas large brands derive limited benefits from highly creative advertising.
Overall, the dissertation shows that advertising decisions should be evaluated jointly and in relation to the competitive context, brand size, and specific objectives, providing guidance on improving effectiveness and reducing inefficient advertising spending.