Research Insights 12.3 Exploring Advertising Equity

Digital and Social Media Marketing

Source: Rosengren, S. and Dahlén, M (2015), ‘Exploring advertising equity: how a brand's past advertising may affect consumer willingness to approach its future ads’, Journal of Advertising, 44 (1), 1-13.

Abstract: This article introduces “advertising equity” to denote consumers’ cumulative perceptions of the global value of a brand's past advertising. In five empirical studies we show that advertising equity is a distinct facet of brand equity, not fully captured by established measures of brand equity in terms of brand communication effects and brand loyalty. What is more, advertising equity is found to affect consumer willingness to voluntarily approach advertising for a brand. The findings indicate that advertising equity captures an aspect of brand equity which has not yet been studied and that further research to better capture the concept and its effects is warranted. We conclude by discussing potential implications of advertising equity in terms of advertising budgeting and forecasting, pretesting and evaluations of advertising, as well as negotiating media and co-branding partnerships.

Insight: This paper investigates what drives consumer willingness to pay attention to advertising. Based on empirical studies of more than 1,700 consumers and 100 brands in more than 12 different product categories it shows how adding value in advertising is vital to succeed in digital environment where consumers are increasingly in charge of their own media consumption.