The effects of advertising and brand value on future operating and market performance

Li Li Eng, Hean Tat Keh

Research output: Contribution to journalArticleResearchpeer-review

36 Citations (Scopus)

Abstract

This paper examines the joint effects of advertising and brand value on the firm s future operating and market performance. We operationalize future operating and market performance as future accounting returns and future stock returns, respectively. Our results show that both advertising and brand value improve future accounting returns at the firm level. The impact of advertising and brand value on future stock returns is minimal. We find that spending on advertising results in better brand sales and brand profitability. Brand value is also a good predictor of brand performance. Thus, we conclude that advertising and brand value benefit the brand and the firm through improved accounting performance.
Original languageEnglish
Pages (from-to)91 - 100
Number of pages10
JournalJournal of Advertising
Volume36
Issue number4
DOIs
Publication statusPublished - 2007
Externally publishedYes

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