Social interactions, Networking, Social multiplier, Peer effects,

Presidential elections provide both an important context in which to study advertising and a setting that mitigates the challenges of dynamics and endogeneity. We use the 2000 and 2004 general elections to analyze the effect of market-level advertising on county-level vote shares. The results indicate significant positive effects of advertising exposures. Both instrumental variables and fixed effects alter the ad coefficient. Advertising elasticities are smaller than are typical for branded goods yet significant enough to shift election outcomes. For example, if advertising were set to zero and all other factors held constant, three states' electoral votes would have changed parties in 2000. Given the narrow margin of victory in 2000, this shift would have resulted in a different president.

No abstract

Many advertisers are reluctant to shift a large proportion of their advertising budgets to the Internet because they still view television advertising as the main vehicle for building a brand. Using a unique and rich data set comprising 20 campaigns across a variety of industries, this study demonstrates that Internet ads perform on par with television ads on the brand-building metrics that advertisers use and trust. The authors extend traditional brand–message recall measurements to facilitate comparisons between Internet formats and television by supplementing brand–message surveys conducted during the campaign with a set of precampaign surveys to control for preexisting brand knowledge. They find that accounting for differences in preexisting brand knowledge is paramount in obtaining valid comparisons across advertising formats because people who are exposed to Internet display ads have significantly lower levels of preexisting brand knowledge than television viewers. Without considering the differences in these “initial conditions,” television advertising seems to be more effective than advertising on the Internet, but when the preexisting differences among media formats are taken into account, the brand recall lift measures for Internet ads are statistically indistinguishable from comparable television lift measures.

We present a demand system for tied goods incorporating dynamics arising from the tied nature of the products and the stockpiling induced by storability and durability. We accommodate competition across tied good systems and competing downstream retail formats by endogenizing the retail format at which consumers choose to stockpile inventory. This facilitates measurement of long-run retail substitution effects and yields estimates of complementarities within, and substitution across, competing systems of tied goods. We present an empirical application to an archetypal tied goods category: razors and blades. We discuss the implications of measured effects for manufacturer pricing when selling the tied products through an oligopolistic downstream retail channel and assess the extent to which retail substitution reduces channel conflict.tied goods, retail competition, dynamic discrete choice, durable good replacement, endogenous consumption, long-run effects, vertical channels, razor blade market