Advertising remains one of the most popular marketing instruments, and many studies have studied its sales effectiveness. However, prior research has either looked at the total spending of a brand/firm, or has focused on the most popular media, especially TV advertising. Even though huge amounts are also spent on “smaller” media such as billboards and cinema, little is known on their effectiveness. While many brands never use them (which could be a missed opportunity), others allocate a substantial part of their advertising budget to these media (which could represent spoiled arms in case of insufficient effectiveness). In this study, we conduct a large-scale empirical investigation, using close to seven years of monthly data on over 250 brands of consumer packaged goods, to quantify the sales elasticity of these often-neglected media. Even though a significant long-run elasticity is found for a number of brands, we obtain a substantially lower proportion of significant effects for billboard and cinema advertising than for the more popular TV medium. Also meta-analytically, and after correcting for the brands’ self-selection of media on which to spend their advertising budget, no evidence of a significant short- or long-run sales elasticity is found for these two media, while significant effects are obtained for both TV and magazine advertising. In addition, little evidence of systematic synergy effects with the more traditional media is found. Hence, from a sales-response point of view, investments in billboard and cinema advertising appear to act as spoiled arms for most mature CPG brands.
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