The role of national culture in advertising's sensitivity to business cycles: An investigation across continents

B. Deleersnyder, M.G. Dekimpe, J.E.B.M. Steenkamp, P.S.H. Leeflang

Research output: Contribution to journalArticleScientificpeer-review

Abstract

The authors conduct a systematic investigation into the cyclical sensitivity of advertising expenditures in 37 countries, covering four key media: magazines, newspapers, radio, and television. They show that advertising is considerably more sensitive to business-cycle fluctuations than the economy as a whole. Advertising behaves less cyclically in countries high in long-term orientation and power distance, but it is more cyclical in countries high in uncertainty avoidance. Furthermore, advertising is more sensitive to the business cycle in countries characterized by significant stock market pressure and few foreign-owned multinational corporations. The authors provide initial evidence on the long-term social and managerial losses incurred when companies tie ad spending too tightly to business cycles. Countries in which advertising behaves more cyclically exhibit slower growth of the advertising industry. Moreover, private-label growth is higher in countries characterized by more cyclical advertising spending, implying significant losses for brand manufacturers. Finally, an examination of 26 global companies shows that stock price performance is lower for companies that exhibit stronger procyclical advertising spending patterns.
Original languageEnglish
Pages (from-to)623-636
JournalJournal of Marketing Research
Volume46
Issue number5
DOIs
Publication statusPublished - 2009

Fingerprint

National cultures
Business cycles
Industry
Stock price performance
Business cycle fluctuations
Advertising expenditures
Long-term orientation
Stock market
Uncertainty avoidance
Power distance
Multinational corporations
Private labels

Cite this

@article{2abd23c5e81f4c2bb5d8ef372eddcf2c,
title = "The role of national culture in advertising's sensitivity to business cycles: An investigation across continents",
abstract = "The authors conduct a systematic investigation into the cyclical sensitivity of advertising expenditures in 37 countries, covering four key media: magazines, newspapers, radio, and television. They show that advertising is considerably more sensitive to business-cycle fluctuations than the economy as a whole. Advertising behaves less cyclically in countries high in long-term orientation and power distance, but it is more cyclical in countries high in uncertainty avoidance. Furthermore, advertising is more sensitive to the business cycle in countries characterized by significant stock market pressure and few foreign-owned multinational corporations. The authors provide initial evidence on the long-term social and managerial losses incurred when companies tie ad spending too tightly to business cycles. Countries in which advertising behaves more cyclically exhibit slower growth of the advertising industry. Moreover, private-label growth is higher in countries characterized by more cyclical advertising spending, implying significant losses for brand manufacturers. Finally, an examination of 26 global companies shows that stock price performance is lower for companies that exhibit stronger procyclical advertising spending patterns.",
author = "B. Deleersnyder and M.G. Dekimpe and J.E.B.M. Steenkamp and P.S.H. Leeflang",
year = "2009",
doi = "10.1509/jmkr.46.5.623",
language = "English",
volume = "46",
pages = "623--636",
journal = "Journal of Marketing Research",
issn = "0022-2437",
publisher = "American Marketing Association",
number = "5",

}

The role of national culture in advertising's sensitivity to business cycles : An investigation across continents. / Deleersnyder, B.; Dekimpe, M.G.; Steenkamp, J.E.B.M.; Leeflang, P.S.H.

In: Journal of Marketing Research, Vol. 46, No. 5, 2009, p. 623-636.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - The role of national culture in advertising's sensitivity to business cycles

T2 - An investigation across continents

AU - Deleersnyder, B.

AU - Dekimpe, M.G.

AU - Steenkamp, J.E.B.M.

AU - Leeflang, P.S.H.

PY - 2009

Y1 - 2009

N2 - The authors conduct a systematic investigation into the cyclical sensitivity of advertising expenditures in 37 countries, covering four key media: magazines, newspapers, radio, and television. They show that advertising is considerably more sensitive to business-cycle fluctuations than the economy as a whole. Advertising behaves less cyclically in countries high in long-term orientation and power distance, but it is more cyclical in countries high in uncertainty avoidance. Furthermore, advertising is more sensitive to the business cycle in countries characterized by significant stock market pressure and few foreign-owned multinational corporations. The authors provide initial evidence on the long-term social and managerial losses incurred when companies tie ad spending too tightly to business cycles. Countries in which advertising behaves more cyclically exhibit slower growth of the advertising industry. Moreover, private-label growth is higher in countries characterized by more cyclical advertising spending, implying significant losses for brand manufacturers. Finally, an examination of 26 global companies shows that stock price performance is lower for companies that exhibit stronger procyclical advertising spending patterns.

AB - The authors conduct a systematic investigation into the cyclical sensitivity of advertising expenditures in 37 countries, covering four key media: magazines, newspapers, radio, and television. They show that advertising is considerably more sensitive to business-cycle fluctuations than the economy as a whole. Advertising behaves less cyclically in countries high in long-term orientation and power distance, but it is more cyclical in countries high in uncertainty avoidance. Furthermore, advertising is more sensitive to the business cycle in countries characterized by significant stock market pressure and few foreign-owned multinational corporations. The authors provide initial evidence on the long-term social and managerial losses incurred when companies tie ad spending too tightly to business cycles. Countries in which advertising behaves more cyclically exhibit slower growth of the advertising industry. Moreover, private-label growth is higher in countries characterized by more cyclical advertising spending, implying significant losses for brand manufacturers. Finally, an examination of 26 global companies shows that stock price performance is lower for companies that exhibit stronger procyclical advertising spending patterns.

U2 - 10.1509/jmkr.46.5.623

DO - 10.1509/jmkr.46.5.623

M3 - Article

VL - 46

SP - 623

EP - 636

JO - Journal of Marketing Research

JF - Journal of Marketing Research

SN - 0022-2437

IS - 5

ER -