Backfires on firms' intangible assets of the casino industry in Macau and Las Vegas: investigating advertising expenditure

PurposeThis study quantifies the casino-industry-specific intangible assets and brand equity models from a different perspective (relative to Interbrand approach, or EquiTrend approach) to investigate the relationship between advertising expenditure and firms' intangible assets in the casino industry.Design/methodology/approachThis study collected the casino's data from the financial reports during the period of 2007–2018. The proposed model incorporates a brand structure moderator, and the peculiar characteristics (e.g. ΔS, HHI) of the casino industry based on previous research. We constructed three models for dependent variables using Tobin's Q−1. Model (1, 2, 3) as the primary regressions to firms' intangible assets (and thus serving as tests of hypotheses), as depicted in the diagrams of the firm's brand equity in different scenarios.FindingsThe results suggest that: (1) advertising expenditure has an adverse effect on firms' intangible assets; (2) the coefficients associated with brand structure dummy variables are both positive and significant; and the adverse effect is stronger for firms with house-of-brand's (HOB) and brand of house (BH) structure than for those with mixed branding structure (BH-HOB hybrid); (3) global brands have higher brand equity than local brands, with higher variance over time.Originality/valueThis study gives new evidence of the negative effect of advertising on the casino industry, which primarily reports the adverse effect of advertising in a sinful industry. Meanwhile, the proposed FBBE models can be an efficient tool to monitor a firm's annual brand equity performance with respect to their major competitors in the market.

Frenemies: Corporate Advertising Under Common Ownership

In this paper, we investigate the impact of ownership structure on corporate advertising expenditures. Using mutual fund mergers as an exogenous shock to ownership structure, we find that competing firms owned by the same institutional blockholders experience a significant reduction in advertising expenditure. The reduction in advertising expenditure is more likely to occur in the presence of higher coordination benefits or lower coordination costs. Specifically, this effect is more pronounced for firms in more competitive industries, in higher advertising-intensity industries, with greater common ownership, with more concentrated institutional ownership, and with headquarters located in the same state. Overall, our empirical evidence indicates that ownership by common institutional investors significantly affects corporate advertising strategy. This paper was accepted by Matthew Shum, marketing.

Inversión en publicidad: Un análisis de los ingresos del sector automotriz en la provincia de Tungurahua

A nivel mundial, las empresas buscan insertarse o mantener un buen posicionamiento dentro del mercado de consumo. Constantemente, las industrias investigan nuevas estrategias de marketing para promocionar y publicitar sus bienes o servicios, con el fin de obtener mayores réditos económicos; en Ecuador, la industria automotriz es uno de los sectores productivos que mayor aporte realiza a la economía. El objetivo del estudio fue determinar la incidencia de la inversión en publicidad, mediante el rubro gasto promoción y publicidad sobre los ingresos totales registrados por las principales empresas comercializadoras de vehículos de la provincia de Tungurahua. Con base a lo expuesto, se aplicó un modelo de regresión lineal para correlacionar los ingresos en ventas y el gasto en publicidad- promoción de las concesionarias de vehículos de la provincia de Tungurahua, durante el periodo 2016 – 2019. A través del estudio cuantitativo se analizaron los datos de las empresas seleccionadas y se comprobó que existe una relación del 79% entre el rubro gasto publicidad y los ingresos totales obtenidos. Mediante la ecuación lineal se corroboró que por cada dólar que se suma por concepto de publicidad los ingresos incrementan en $73,83. Finalmente, se pronosticó para el año 2020 una reducción tanto en los ingresos como en el gasto de publicidad. Palabras clave: Inversión, promoción y publicidad, pronóstico, sector automotriz, ventas. orldwide, companies seek to insert or maintain a good position within the consumer market. Industries are constantly looking for new marketing strategies to promote and advertise their goods or services in order to obtain higher economic returns. On the other hand, in Ecuador the automotive industry is one of the productive sectors that makes the greatest contribution to the economy. The objective of the study was to determine the incidence of investment in advertising through the promotion and advertising expense item on the total income registered by the main vehicle marketing companies in the province of Tungurahua. Based on the above, a linear regression model was applied to correlate sales income and advertising-promotion spending of vehicle dealerships in the province of Tungurahua during the period 2016 - 2019. Through the quantitative study they were analyzed the data of the selected companies and it was found that there is a 79% relationship between the advertising expenditure item and the total income obtained. Using the linear equation, it was confirmed that for every dollar added for advertising, income increased by $ 73.83. Finally, a reduction in both revenue and advertising spending was forecast for 2020. Keywords: Investment, automotive sector, promotion and advertising, sales, forecast Víctor

Customer relationship management: a new dimension of managing customers

CRM or Customer Relationship Management is a system that caters to the management of a firm’s interactions with past, present,and future customers. Since the beginning of the new millennium, traditional marketing practices have not been effective in yielding good returns. Companies have turned reluctant to spend huge advertising expenditure and marketing research –the potent tool of getting deeper insights of customer has lost its charisma. Due to enigmatic customer behavior, it becomes inevitable for the companies to develop new marketing strategies. CRM has emerged as a new marketing strategy in that tenor.This article deals with importance of CRM and customer modeling. Further it extends the constraints of CRM and how it affects the organizational change.

The promotional culture of social media and search platforms: an original article by Tom O’Regan and a commentary by Nicholas Carah

As the Australian Competition and Consumer Commission’s (ACCC) Digital Platforms Inquiry was at pains to point out, social media and search platforms now capture unprecedented shares of Australian media advertising expenditure. However, this loose collection of media forms and the advertising that supports them are some distance from traditional forms of media and advertising. While much has been written about these differences, the nexus between social media and search media forms and their advertising and promotional settlements had received comparatively little attention until the ACCC made it the front and centre of its inquiry. Our concern here is to take up the invitation the ACCC offers: to reorient our scholarly and public discussions of platforms towards the promotional culture of social media and search platforms. We consider the implications for advertiser-supported media, the unique form of advertising they have created and their challenge to public accountability.

Optimal marketing policy for managing new generation products in the presence of forward-looking customers by considering product diffusion

Purpose The effect of customers’ forward-looking behavior on firms’ profit has been highlighted by many researchers and practitioners. This study aims to develop a mathematical model for new generation products to analyze the optimal pricing and advertising policies in the presence of homogeneous forward-looking customers. A firm that produces and sells a new generation product was considered. This firm aimed to determine the optimal pricing and advertising expenditure by maximizing the total profit. Design/methodology/approach The demand was presented as a diffusion model inspired by the Bass diffusion model. This paper used Pontryagin’s maximum principle to analyze the proposed model. The presented model was implemented in some numerical examples by proposing a heuristic solution method. Numerical examples confirmed the theoretical results. Findings This paper found a threshold on the optimal advertising policy depends on customers’ forward-looking behavior, advertising coefficient (both direct and word-of-mouth advertising) and discount rate. The funding showed that the optimal pricing path of the first generation was monotonically decreasing or increasing and, then, decreasing. Results revealed that, by increasing the customers’ forward-looking behavior, the firm should reduce the price and advertising expenditure. Also, the price was shown to be negatively affected by the discount rate and word-of-mouth advertising. The profitability will improve if the firm spends more budget on advertising by increasing the discount rate and advertising effectiveness. Further, when the word-of-mouth advertising effect is high, the firm should increase the advertising expenditure first and, then, decrease it. Originality/value Nowadays, forward-looking customers’ anticipation for releasing a new generation can harm the firms’ profit. In this regard, this research analyzed optimal pricing and advertising policies for a new generation product in a market populated by homogeneous forward-looking customers. To the best of the knowledge, this is the first study that investigated these two marketing policies jointly in the presence of forward-looking customers.

Exposure to e-cigarette TV advertisements among U.S. youth and adults, 2013–2019

Introduction E-cigarette advertising has been shown to increase e-cigarette awareness and use. Although e-cigarette marketing in the early 2010s has been well-documented, little is known about how it has changed in recent years in response to the regulatory scrutiny from the FDA and the Congress to combat youth vaping epidemic. This study aims to examine the exposure to e-cigarette TV advertising among youth and adults in the U.S. from 2013 to 2019, overall and by media market and brand. Methods Quarterly data on e-cigarette TV advertising exposure, measured by target rating points (TRPs), and expenditures from 2013 to 2019 were compiled from the StradegyTM of Kantar Media. Trends of quarterly e-cigarette advertising TRPs were reported by age group, market, and brand. Results Over the study period, overall exposure to e-cigarette TV advertising was higher among adults than among youth. E-cigarette advertising TRPs and expenditures were relatively stable, despite intermittent fluctuations, between 2013 Q1 and 2017 Q1 except for a one-time dip in 2015 Q3, followed by a sharp decline in 2017 Q2 and stayed low till the end of 2018. A resurgence of e-cigarette advertising TRPs occurred in 2019 Q1, led by the advertising from JUUL, Blu, and Vuse, which peaked in the third quarter of 2019, with quarterly TRPs reaching 316.8 for youth and 1,701.9 for adults, and quarterly advertising expenditure totaling $31 million. Conclusions Significant variations, both over time and across media markets and brands, were observed for e-cigarette televised advertising between 2013 and 2019. Following a lull in TV advertising in 2017/18, major e-cigarette companies have substantially increased advertising of their products on American television since early 2019, resulting in a surge in exposure to e-cigarette advertising among both youth and adults. Our findings highlighted the importance of continued monitoring of e-cigarette advertising in the U.S.