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The purpose of this paper is to understand the impact of components of marketing expenditures, i.e. advertising and distribution expenditures on intangible value of firm (measured in terms of Tobin's Q). The relationship is studied in the context of branding approaches (corporate and house of brands) that various firms follow.

The data are collected from databases of Centre for Monitoring Indian Economy (CMIE) and from the web site of National Stock Exchange. Time series regression is performed using SPSS software to test the model.

Advertising expenditure has a positive impact on the intangible value of the firm and this relationship is stronger for firms following corporate branding than for firms that follow house of brands strategy. Distribution expenditure has negative impact on the intangible value of the firm and this relationship is stronger for firms following corporate branding than for firms that follow house of brands strategy.

Since most of the data retrieved for the analysis were of B2B (business to business) firms, the findings may not be generalized for all firms.

Advertising expenditure has a diminishing marginal utility in creating intangible value. It would be useful for firms to understand where they are on this continuum and whether their advertising expenditure is giving adequate returns or may be better spent elsewhere.

In the literature, researchers have expressed mixed viewpoints regarding the impact of total marketing spend on intangible value. The marketing expenditures are found to have both positive and negative impact on intangible value, with respect to various contexts. However, the impact of major components of marketing expenditures is not addressed. This gap is addressed in this research paper.

The purpose of this paper is to examine the impacts of advertising expenditure on brands' market shares, utilizing a novel four‐week advertising‐sales data from the highly competitive oligopolistic Finnish beer market in which price competition among the homogeneous larger‐type beer brands is not allowed during the period of the study.

Competition is modelled using the Lanchester model. The impacts of advertising on market shares are estimated using the impulse‐response functions from vector autoregression, and the full information maximum likelihood and advertising elasticities.

Some new insights into beer market dynamics are obtained. First, the impacts of advertising are not similar across brands. Second, overspills of advertising impacts across brands are detected. Third, the reactions to competitors' advertising attacks are mild.

The paper utilizes four‐week brand‐level data on the market shares of the leading beer brands in Finland and the brands' advertising expenditure. During the period of the data, price competition is not allowed, which creates a unique opportunity to study the impacts of advertising on the market shares of brands.

The purpose of this paper is to examine the relationship of CEO compensation plans and the risk of managerial equity portfolios with the extent of strategic investments in advertising, capital expenditures and research and development (R&D). The elements of compensation are salary, bonuses, options and restricted stock grants. The authors proxy the design of CEO equity portfolios by the price performance sensitivity of the holdings and the portfolio deltas.

The authors use the components of executive compensation and portfolio risk as the dependent variables, regressing these against measures for the level of strategic investment. The authors test for non-linear relationships between the components of CEO compensation and strategic investments. The sample is a broad cross-section from 1992 to 2016.

The authors find strong support for non-linear relationships of capital expenditures and R&D with CEO bonuses, option grants and restricted stock grants. There are very complex relationships between the components of executive compensation and R&D expenditures, but little evidence of a relationship with advertising expenditures. The authors also find strong complex relationships in the design of CEO equity portfolios with advertising and R&D.

Little earlier research has considered advertising, capital expenditures and R&D in a unified framework. Also, testing for non-linear associations provides much greater insight into the relationship between the components of executive compensation and strategic investment. The findings represent a valuable incremental contribution to the executive compensation literature. The results also have normative policy implications for compensation committees’ design of optimal annual CEO compensation packages to incentivize or discourage particular strategic investment behavior.

This paper documents the impact of product market competition on the value of advertising expenditures.

The authors use the data for non-financial firms from India and the pooled regression procedure to test their arguments during the period between 2009 and 2018.

The results show that advertising expenditures of firms operating in sectors with relatively high competition are more valuable than advertising expenditures of firms operating in sectors with relatively low competition. The results of the study are robust across various proxies of advertising expenditures and firm performance. Furthermore, the results also show that the positive impact of product market competition on the value of advertising expenditures is confined only to firms that already have lower agency problems.

The results of the study highlight the importance of product market competition on the value of advertising expenditure in the emerging market setting, where agency problems are supposed to be high.

The decisions marketing managers make on advertising expenditures are vital to maintaining the sales and profitability of a firm. However, these decisions have not been taken into account to a great enough extent when determining a firm’s performance. The purpose of this paper is to better understand the marketing-finance interface and to reveal the effect marketers’ discretionary advertising expenditures can have on firm performance. In particular, the real activities method of managed earnings (ME) will be used to study this phenomenon.

The initial sample consisted of all the companies that appear in the North American COMPUSTAT files over the period 1970-2014. Since the focus here is on the effect of discretionary advertising expenses on firm performance, the authors restricted the samples to only include observations with advertising expenses. Therefore, the sample included 14,732 firms.

OLS regressions revealed a negative relationship between marketers’ discretionary advertising expenditures and firm performance using return on assets as a proxy for firm performance. Additional regressions displayed similar results for return on sale and return on cash adjusted asset proxies. Fixed effect and Tobit regressions also confirmed these findings. Finally, this effect was especially true for low performing firms. The economic significance of these findings on firm performance is also discussed.

The decisions made by marketing managers on advertising promotional efforts impact sales directly and brand equity indirectly, but they can also have an impact on firm performance. Therefore, it is important for investors to understand the level of ME in relation to marketing and advertising decisions that are taking place at their firm.

The purpose of this paper is twofold. First, it examines the communication strategies pursued by firms related to alcohol beverages in Spain during a decade with major changes in alcohol marketing regulations. Second, it analyzes the relationship between these strategies and underage alcohol consumption before and after 2007.

Panel data methodology is implemented using data from ESTUDES national survey (average sample size 26,000 interviews, 2004-2010) and INFOADEX (nationwide advertising expenditure, 1999-2013).

The results show that, under a restrictive alcohol marketing framework, firms related to alcohol beverages adapt their communication strategies: budget deviation from advertising to sponsorship. Regarding alcohol quantity and frequency models, the relationship between alcohol advertising expenditure and underage alcohol consumption after 2007 is very small but still positive and significant. However, contrary to expectations, in the case of alcohol sponsorship, the relationship between expenditure and underage alcohol consumption has not been affected by the observed budget deviation from advertising to sponsorship after 2007.

Changes in alcohol advertising and sponsorship regulation lead firms related to alcohol beverages to change their communication strategies to overcome new regulatory restrictions and to reach their target group. Overall, despite the relationships between both advertising and sponsorship expenditure and underage alcohol consumption diminish between periods, they still remain positive and significant. Closer and updated monitoring of alcohol communication strategies pursued by firm is needed to keep controlling the alcohol advertising and sponsorship exposure to under age people.

This is a pioneer study in analyzing communication strategies within the Spanish alcohol beverages sector and in proposing a model to analyze the dynamic effect of such strategies on underage alcohol consumption.

Editors' Note In this short article the authors briefly review and comment on the most common approaches used by companies or proposed by specialists for setting the budgets to be spent on advertising in an organisation.

It is perhaps unfortunate that the Corporate Report (CR) should have been published almost simultaneously with the publication of the Sandilands Report on Inflation Accounting 1 Insofar as the former is a discussion paper published for comment whereas the latter contains firm proposals, considerably more attention is likely to be paid to Sandilands. There is a danger therefore that the Corporate Report will be pushed into the background and will not receive the full discussion and comment it deserves.

The manager responsible for making advertising budget decisions is assailed with a plethora of advice and aids from specialists. Of necessity, many of the methods advocated by such specialists are not universally applicable, so their use is qualified. Many actual circumstances a manager is faced with do not conform to textbook circumstances, and the skill required is that of appreciating significant differences, and modifying the “best course of action answer” accordingly. There are often several crucial imponderables associated with making an optimum or even appropriate advertising appropriation decision and, faced with this situation, the manager must be pragmatic.

The present paper aims to understand the underpinnings of the variations in brand level direct‐to‐consumer (DTC) advertising through a two‐part study. First, it seeks to examine the various influences on advertising intensity (operationalized by advertising to sales ratios) in the context of DTC advertising. Second, it aims to analyze how changes in share of voice impact changes in market share.

Data on brand level advertising as well as sales were collected from different government and industry sources. This is used to compute the ratio of DTC advertising to sales as well as changes in share of voice, market share and average drug prices. A log‐log model is used to find parameter estimates based on OLS regression.

Market share has a negative influence on the ratio of advertising to sales. Drugs which have a greater degree of innovation (as judged by the FDA) appear to spend more on DTC advertising relative to sales. The paper also finds that an increase in share of voice is not associated with increased average drug prices, but is related to a growth of market share because of a change in the share of total prescriptions dispensed.

The paper is one of the few to examine the factors influencing advertising to sales ratios in the context of DTC advertising. It is also one of the first to investigate the relationship of changes in the share of voice with changes in market share.