Publication

Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective

Osinga, E. C., Leeflang, P. S. H., Srinivasan, S. & Wieringa, J. E., Jan-2011, In : Journal of Marketing. 75, 1, p. 109-124 16 p.

Research output: Contribution to journalArticleAcademicpeer-review

APA

Osinga, E. C., Leeflang, P. S. H., Srinivasan, S., & Wieringa, J. E. (2011). Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective. Journal of Marketing, 75(1), 109-124.

Author

Osinga, Ernst C. ; Leeflang, Peter S. H. ; Srinivasan, Shuba ; Wieringa, Jaap E. / Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective. In: Journal of Marketing. 2011 ; Vol. 75, No. 1. pp. 109-124.

Harvard

Osinga, EC, Leeflang, PSH, Srinivasan, S & Wieringa, JE 2011, 'Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective', Journal of Marketing, vol. 75, no. 1, pp. 109-124.

Standard

Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective. / Osinga, Ernst C.; Leeflang, Peter S. H.; Srinivasan, Shuba; Wieringa, Jaap E.

In: Journal of Marketing, Vol. 75, No. 1, 01.2011, p. 109-124.

Research output: Contribution to journalArticleAcademicpeer-review

Vancouver

Osinga EC, Leeflang PSH, Srinivasan S, Wieringa JE. Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective. Journal of Marketing. 2011 Jan;75(1):109-124.


BibTeX

@article{0d84225700b84c9f8d566b5a1deb12d1,
title = "Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective",
abstract = "Marketing managers increasingly recognize the need to measure and communicate the impact of their actions on shareholder returns. This study focuses on the shareholder value effects of pharmaceutical direct-to-consumer advertising (DTCA) and direct-to-physician (DTP) marketing efforts. Although DTCA has moderate effects on brand sales and market share, companies invest vast amounts of money in it. Relying on Kalman filtering, the authors develop a methodology to assess the effects from DTCA and DTP on three components of shareholder value: stock return, systematic risk, and idiosyncratic risk. Investors value DTCA positively because it leads to higher stock returns and lower systematic risk. Furthermore, DTCA increases idiosyncratic risk, which does not affect investors who maintain well-diversified portfolios. In contrast, DTP marketing has modest positive effects on stock returns and idiosyncratic risk. The outcomes indicate that evaluations of marketing expenditures should include a consideration of the effects of marketing on multiple stakeholders, not just the sales effects on consumers.",
keywords = "stock price returns, stock price volatility, pharmaceutical marketing, advertising, time-varying parameters, Kalman filtering, PHARMACEUTICAL PROMOTIONAL EXPENDITURES, RESEARCH-AND-DEVELOPMENT, STOCK RETURNS, PRESCRIPTION DRUGS, IDIOSYNCRATIC RISK, BRAND ATTITUDE, MARKET, BEHAVIOR, INNOVATIONS, PERFORMANCE",
author = "Osinga, {Ernst C.} and Leeflang, {Peter S. H.} and Shuba Srinivasan and Wieringa, {Jaap E.}",
year = "2011",
month = "1",
language = "English",
volume = "75",
pages = "109--124",
journal = "Journal of Marketing",
issn = "0022-2429",
publisher = "AMER MARKETING ASSOC",
number = "1",

}

RIS

TY - JOUR

T1 - Why Do Firms Invest in Consumer Advertising with Limited Sales Response? A Shareholder Perspective

AU - Osinga, Ernst C.

AU - Leeflang, Peter S. H.

AU - Srinivasan, Shuba

AU - Wieringa, Jaap E.

PY - 2011/1

Y1 - 2011/1

N2 - Marketing managers increasingly recognize the need to measure and communicate the impact of their actions on shareholder returns. This study focuses on the shareholder value effects of pharmaceutical direct-to-consumer advertising (DTCA) and direct-to-physician (DTP) marketing efforts. Although DTCA has moderate effects on brand sales and market share, companies invest vast amounts of money in it. Relying on Kalman filtering, the authors develop a methodology to assess the effects from DTCA and DTP on three components of shareholder value: stock return, systematic risk, and idiosyncratic risk. Investors value DTCA positively because it leads to higher stock returns and lower systematic risk. Furthermore, DTCA increases idiosyncratic risk, which does not affect investors who maintain well-diversified portfolios. In contrast, DTP marketing has modest positive effects on stock returns and idiosyncratic risk. The outcomes indicate that evaluations of marketing expenditures should include a consideration of the effects of marketing on multiple stakeholders, not just the sales effects on consumers.

AB - Marketing managers increasingly recognize the need to measure and communicate the impact of their actions on shareholder returns. This study focuses on the shareholder value effects of pharmaceutical direct-to-consumer advertising (DTCA) and direct-to-physician (DTP) marketing efforts. Although DTCA has moderate effects on brand sales and market share, companies invest vast amounts of money in it. Relying on Kalman filtering, the authors develop a methodology to assess the effects from DTCA and DTP on three components of shareholder value: stock return, systematic risk, and idiosyncratic risk. Investors value DTCA positively because it leads to higher stock returns and lower systematic risk. Furthermore, DTCA increases idiosyncratic risk, which does not affect investors who maintain well-diversified portfolios. In contrast, DTP marketing has modest positive effects on stock returns and idiosyncratic risk. The outcomes indicate that evaluations of marketing expenditures should include a consideration of the effects of marketing on multiple stakeholders, not just the sales effects on consumers.

KW - stock price returns

KW - stock price volatility

KW - pharmaceutical marketing

KW - advertising

KW - time-varying parameters

KW - Kalman filtering

KW - PHARMACEUTICAL PROMOTIONAL EXPENDITURES

KW - RESEARCH-AND-DEVELOPMENT

KW - STOCK RETURNS

KW - PRESCRIPTION DRUGS

KW - IDIOSYNCRATIC RISK

KW - BRAND ATTITUDE

KW - MARKET

KW - BEHAVIOR

KW - INNOVATIONS

KW - PERFORMANCE

M3 - Article

VL - 75

SP - 109

EP - 124

JO - Journal of Marketing

JF - Journal of Marketing

SN - 0022-2429

IS - 1

ER -

ID: 1956295