Market Valuation Models of the Effect of Advertising and Promotional Spending: A Review and Meta-Analysis

A narrative review is presented, within the organizing framework of a meta-analysis, of econometric models reported in the business literature that estimate the effect of advertising and promotional spending on the market value of the firm. Results from published market valuation models are aggregat...

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Bibliographic Details
Published inJournal of the Academy of Marketing Science Vol. 33; no. 4; pp. 445 - 460
Main Authors Conchar, M. P., Crask, M. R., Zinkhan, G. M.
Format Journal Article
LanguageEnglish
Published New York Springer Nature B.V 01.09.2005
Subjects
Accounting
Advertising
Advertising expenditures
Econometrics
Efficient markets
Expected values
Financial statements
Investments
Management decisions
Market value
Marketing
Meta-analysis
Present value
Prices
Profits
Sales promotions
Securities markets
Shareholders wealth
Social sciences
Statistical analysis
Stock exchanges
Stock prices
Stockholders
Studies
Systematic review
Valuation
United States > US
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Summary:A narrative review is presented, within the organizing framework of a meta-analysis, of econometric models reported in the business literature that estimate the effect of advertising and promotional spending on the market value of the firm. Results from published market valuation models are aggregated, and various model specifications are appraised. In brief, the meta-analysis finds support for a positive relationship between levels of advertising and promotional spending and the market value of the firm. That is, marketing activities (represented here by observed advertising and promotions spending) are generally expected to deliver future cash flows and produce increases in shareholder wealth. The review seeks to enhance understanding among the community of marketing scholars of the properties of market valuation models published in the literature and serves as a springboard for ongoing investigation of a crucial question for marketing theory and practice. [PUBLICATION ABSTRACT]
ISSN:0092-0703
1552-7824
DOI:10.1177/0092070305277693