Munich Personal RePEc Archive

Information content of advertising: empirical evidence from the OTC analgesic industry

Anderson, Simon and Ciliberto, Federico and Liaukonyte, Jura (2012): Information content of advertising: empirical evidence from the OTC analgesic industry.

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Abstract

We use data from video files of all advertisements in the OTC analgesics industry from 2001 to 2005 to measure the information content in ads. We propose a simple theoretical framework to motivate an ordered probit model of information content. We find that stronger vertical differentiation is positively associated with the delivery of more product information in a brand’s advertisements: brands with higher levels of quality include more information cues. Comparative advertisements contain significantly more product information than noncomparative advertisements. Brands with higher market shares and brands competing against generic substitutes with higher market shares have less information content.

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