Working Paper: CEPR ID: DP8988
Authors: Simon P. Anderson; Federico Ciliberto; Jura Liaukonyte; Rgis Renault
Abstract: We model comparative advertising as brands pushing up own brand perception and pulling down the brand image of targeted rivals. We watched all TV advertisements for OTC analgesics 2001-2005 to construct matrices of rival targeting and estimate the structural model. These attack matrices identify diversion ratios and hence comparative advertising damage measures. We find that outgoing comparative advertising attacks are half as powerful as self-promotion in raising own perceived quality and cause more damage to the targeted rival than benefit to the advertiser. Comparative advertising causes most damage through the pull-down effect and has substantial benefits to other rivals.
Keywords: advertising; targets; analgesics; attack matrix; comparative advertising; diversion ratios; push and pull effects
JEL Codes: L13; L65; M37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Outgoing comparative advertising (L49) | Perceived quality of the advertiser's brand (M37) |
| Outgoing comparative advertising (L49) | Perceived quality of the targeted rival (L15) |
| Comparative advertising (M38) | Perceived quality of the targeted rival (L15) |
| Marginal dollar spent by Tylenol against Bayer (M37) | Bayer's profit (L65) |
| Marginal dollar spent by Advil against Tylenol (L42) | Tylenol's profit (L21) |
| Comparative advertising (M38) | Perceived quality of non-targeted rivals (L15) |