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Does advertising productivity affect organizational performance? Impact of market conditions

journal contribution
posted on 14.08.2020 by Mahabub Rahman, Maria Ángeles Rodriguez Serrano, Mathew Hughes
Advertising is crucial in influencing customers’ perceptions and purchase intentions, and numerous studies have investigated whether advertising expenditure has any significant impact on financial performance. A thorough understanding remains elusive: while several studies document a positive impact, others report that advertising has either a negative or a statistically insignificant effect. Three flaws among existing studies are responsible for this problem: bundling advertising with other forms of marketing, the inadequacy of expenditure as a measure, and a failure to consider contingencies. Deviating from earlier studies, we examine the effect of advertising productivity on firm performance rather than the impact of the absolute amount of advertising expenditure. Moreover, adopting a contingency approach, we evaluate how market conditions of market dynamism, market complexity and market munificence moderate the relationship between advertising productivity and organizational performance. Drawing a multi-industry sample from the USA, this study demonstrates that advertising productivity has a positive impact on capital market-based performance measures, conditional on market conditions. We reveal new insights into when, why and to what extent advertising contributes (or not) to organizations’ financial performance.

History

School

  • Business and Economics

Department

  • Business

Published in

British Journal of Management

Citation

Rahman, M., Rodriguez Serrano, M.A. and Hughes, M., (2020). Does advertising productivity affect organizational performance? Impact of market conditions. British Journal of Management, In Press.

Publisher

Wiley

Version

AM (Accepted Manuscript)

Publisher statement

This is the peer reviewed version of the following article: Rahman, M., Rodriguez Serrano, M.A. and Hughes, M., (2020). Does advertising productivity affect organizational performance? Impact of market conditions. British Journal of Management, In Press, which has been published in final form at [Link to final article using the DOI]. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.

Acceptance date

11/08/2020

ISSN

1045-3172

eISSN

1467-8551

Language

en

Depositor

Prof Mat Hughes Deposit date: 11 August 2020

Exports