The Effect of Media Advertising on Brand Consideration and Choice

Terui, Nobuhiko; Ban, Masao; Allenby, Greg M.

doi:10.1287/mksc.1100.0590

Cited by 64 publications

(27 citation statements)

References 59 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Among the set of articles that explicitly acknowledge and model the different stages of the consumer shopping process, a crucial distinction relates to the data and identification strategy used. A first group of articles models at least two stages, usually consideration and choice, and uses purchase data for estimation purposes (e.g., Allenby and Ginter, ; Siddarth, Bucklin, and Morrison, ; Chiang, Chib, and Narasimhan, ; Zhang, ; Goeree, ; Van Nierop et al., ; Terui, Ban, and Allenby, ). A second, smaller group of articles, also models at least two stages, but makes use of available data on each of the shopping stages by incorporating it directly in the estimation (e.g., Franses and Vriens, ; Lambrecht, Seim, and Tucker, ; Abhishek, Fader, and Hosanagar, ; Chintagunta and Lee, ; De los Santos, Hortaçsu, and Wildenbeest, ; Honka, ; Moraga‐González, Sándor, and Wildenbeest, ).…”

Section: Related Literaturementioning

confidence: 99%

Advertising, consumer awareness, and choice: evidence from the U.S. banking industry

Honka

Hortaçsu

Vitorino

2017

The RAND J of Economics

133

View full text Add to dashboard Cite

How does advertising influence consumer decisions and market outcomes? We utilize detailed data on consumer shopping behavior and choices over bank accounts to investigate the effects of advertising on the different stages of the shopping process: awareness, consideration, and choice. We formulate a structural model with costly search and endogenous consideration sets, and show that advertising in the U.S. banking industry is primarily a shifter of awareness as opposed to consideration or choice. Advertising makes consumers aware of more options, search more, and find better alternatives. This increases the market share of smaller banks and makes the industry more competitive.

show abstract

Section: Related Literaturementioning

confidence: 99%

Advertising, consumer awareness, and choice: evidence from the U.S. banking industry

Honka

Hortaçsu

Vitorino

2017

The RAND J of Economics

133

View full text Add to dashboard Cite

show abstract

“…A key feature of our model is that it admits any choice set formation process, including any mixture process, subject only to Assumption 2.2(II). Choice sets may be formed by internal processes, such as simultaneous or sequential search (Stigler 1961;Weitzman 1979;Honka et al 2019) or elimination-by-aspects or attention or attribute filters (Tversky 1972a,b;Masatlioglu et al 2012;Kimya 2018;Cattaneo et al 2020), or by external processes, such as advertising (Chamberlin 1933;Goeree 2008;Terui et al 2011) or choice architecture (Thaler and Sunstein 2008;Johnson et al 2012;Gaynor et al 2016). Whether internal or external, the choice set formation process can admit any dependence structure, without restriction, between agents' choice sets and their observable attributes and, conditional on observables, between agents' choice sets and their unobservable attributes.…”

Section: A Random Utility Model With Unobserved Heterogeneity In Choimentioning

confidence: 99%

Heterogeneous choice sets and preferences

Barseghyan

Coughlin²,

Molinari

et al. 2020

View full text Add to dashboard Cite

We propose a robust method of discrete choice analysis when agents' choice sets are unobserved. Our core model assumes nothing about agents' choice sets apart from their minimum size. Importantly, it leaves unrestricted the dependence, conditional on observables, between agents' choice sets and their preferences. We first characterize the sharp identification region of the model's parameters by a finite set of conditional moment inequalities. We then apply our theoretical findings to learn about households' risk preferences and choice sets from data on their deductible choices in auto collision insurance. We find that the data can be explained by expected utility theory with low levels of risk aversion and heterogeneous choice sets, and that more than three in four households require limited choice sets to explain their deductible choices. We also find that the data are consistent with some models of choice set formation, but not others.

show abstract

“…A first group of papers models at least two stages, usually consideration and choice, and uses purchase data for estimation purposes (e.g. Allenby and Ginter 1995, Siddarth, Bucklin, and Morrison 1995, Chiang, Chib, and Narasimhan 1998, Goeree 2008, Van Nierop et al 2010, Terui, Ban, and Allenby 2011. A second, smaller group of papers, also models at least two stages, but makes use of available data on each of the shopping stages by incorporating it directly in the estimation (e.g.…”

Section: Relevant Literaturementioning

confidence: 99%

Non-Informational Advertising Informing Consumers: How Advertising Affects Consumers' Decision-Making in the U.S. Auto Insurance Industry

Tsai¹,

Honka²

2018

SSRN Journal

View full text Add to dashboard Cite

We investigate the relationship between both advertising content and quantity and several stages of consumers' decision-making, namely, unaided and aided awareness, search (consideration), and purchase. Understanding how the amount and content of advertisements affect consumers' decision-making is crucial for companies to effectively and efficiently use their advertising budgets. Our unique individual-level data contain information on consumers' purchases, consideration and awareness sets, demographic variables, and perceived prices for consumers between 2008 and 2016. We supplement these data with data on advertising quantities for all and advertising content for the main three media channels (TV, Internet, and magazines). We account for the endogeneity of the advertising decision using the regression discontinuity approach suggested by Shapiro (forthcoming). Our results reveal that advertising quantity significantly increases consumer (unaided and aided) awareness, but has no effect on consideration and choice. This finding is consistent with the informative role of advertising. Interestingly, the advertising content that leads to consumers' increased awareness is of non-informational nature (brand name focused and funny/entertaining content) implying that the effect on awareness is coming from non-informational content leading to better brand recall. And lastly, our preliminary results show no systematic evidence of vulnerable consumer groups (racial minorities, low education or low income consumers) being adversely affected by advertising.

show abstract

The Effect of Media Advertising on Brand Consideration and Choice

Cited by 64 publications

References 59 publications

Advertising, consumer awareness, and choice: evidence from the U.S. banking industry

Advertising, consumer awareness, and choice: evidence from the U.S. banking industry

Heterogeneous choice sets and preferences

Non-Informational Advertising Informing Consumers: How Advertising Affects Consumers' Decision-Making in the U.S. Auto Insurance Industry

Contact Info

Product

Resources

About