| dc.description.abstract | The growing increase of choice for online advertising channels in the current marketing environment calls for firms to better understand their effectiveness in the real market competitive setup. And while immediate effects are important, the effectiveness of online channels' persistent effects should not be ignored as these are crucial for the correct evaluation and managerial implications. We develop a multivariate time series model to investigate the direct and persistent response of a firm’s sales to own and competitor advertising.
For the relatively newly launched online grocery store, the authors find out that only two online channels, search and banners, employ positive significant effects on revenue with search holding the strongest and longest effect, unlike other studies. Social and video advertising of the company on the contrary are influencing sales negatively. As for the competitive advertising, only online and radio confirmed significant influence on the focal firm’s revenue, while TV and OOH appeared to be insignificant. Interestingly, competitive radio advertising was found to be beneficial for the focal company revenue both immediately and with some persistence thus important for media mix optimization.
Keywords: online advertising, advertising elasticity, marketing-mix models, vector autoregression, competitive advertising, immediate (short-term) effects, persistent (long-term) effects | |