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Push-Me Pull-You: Comparative Advertising in the OTC Analgesics Industry

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  • Simon P. Anderson
  • Federico Ciliberto
  • Jura Liaukonyte
  • Régis Renault

Abstract

We derive equilibrium incentives to use comparative advertising that pushes up own brand perception and pulls down the brand image of targeted rivals. Data on content and spending for all TV advertisements in OTC analgesics enable us to construct matrices of dollar rival targeting and estimate the structural model. Using brands. optimal choices, these attack matrices identify diversion ratios, from which we derive comparative advertising damage measures. We find that comparative advertising causes more damage to the targeted rival than benefit to the advertiser. We simulate banning comparative advertising to find industry profits rise.

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  • Simon P. Anderson & Federico Ciliberto & Jura Liaukonyte & Régis Renault, 2015. "Push-Me Pull-You: Comparative Advertising in the OTC Analgesics Industry," CESifo Working Paper Series 5418, CESifo.
  • Handle: RePEc:ces:ceswps:_5418
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    3. Anderson, Simon & Ciliberto, Federico & Liaukonyte, Jura, 2010. "Getting into Your Head(Ache): The Information Content of Advertising in the Over-the-Counter Analgesics Industry," MPRA Paper 24916, University Library of Munich, Germany.
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    6. Yenipazarli, Arda, 2024. "Strategic incentives for comparative advertising investments in non-zero-sum competition and economic consequences," European Journal of Operational Research, Elsevier, vol. 312(3), pages 1059-1073.
    7. Brett R. Gordon & Mitchell J. Lovett & Bowen Luo & James C. Reeder, 2023. "Disentangling the Effects of Ad Tone on Voter Turnout and Candidate Choice in Presidential Elections," Management Science, INFORMS, vol. 69(1), pages 220-243, January.
    8. Griffith, Rachel & Dubois, Pierre & O'Connell, Martin, 2014. "The Effects of Banning Advertising on Demand, Supply and Welfare: Structural Estimation on a Junk Food Market," CEPR Discussion Papers 9942, C.E.P.R. Discussion Papers.
    9. Yi-Lin Tsai & Elisabeth Honka, 2021. "Informational and Noninformational Advertising Content," Marketing Science, INFORMS, vol. 40(6), pages 1030-1058, November.
    10. Bart J. Bronnenberg & Jean-Pierre Dubé & Chad Syverson, 2022. "Marketing Investment and Intangible Brand Capital," Journal of Economic Perspectives, American Economic Association, vol. 36(3), pages 53-74, Summer.
    11. Maria Alipranti & Emmanuel Petrakis, 2013. "Comparative Advertising in Markets with Network Externalities," Working Papers 1306, University of Crete, Department of Economics.
    12. Dubois, Pierre & Majewska, Gosia, 2022. "Mergers and Advertising in the Pharmaceutical Industry," CEPR Discussion Papers 17658, C.E.P.R. Discussion Papers.
    13. Alipranti, Maria & Mitrokostas, Evangelos & Petrakis, Emmanuel, 2016. "Non-comparative and comparative advertising in oligopolistic markets," DICE Discussion Papers 231, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    14. Qiang Liu & Thomas J. Steenburgh & Sachin Gupta, 2015. "The Cross Attributes Flexible Substitution Logit: Uncovering Category Expansion and Share Impacts of Marketing Instruments," Marketing Science, INFORMS, vol. 34(1), pages 144-159, January.
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    16. Anderson, Simon P. & Ciliberto, Federico & Liaukonyte, Jura, 2013. "Information content of advertising: Empirical evidence from the OTC analgesic industry," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 355-367.
    17. Bambauer-Sachse, Silke & Heinzle, Priska, 2018. "Comparative advertising for goods versus services: Effects of different types of product attributes through consumer reactance and activation on consumer response," Journal of Retailing and Consumer Services, Elsevier, vol. 44(C), pages 82-90.
    18. Maria Alipranti & Evangelos Mitrokostas & Emmanuel Petrakis, 2013. "Comparative versus Informative Advertising in Oligopolistic Markets," Working Papers 1301, University of Crete, Department of Economics.
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    21. Kurt P. Munz & Minah H. Jung & Adam L. Alter, 2020. "Name Similarity Encourages Generosity: A Field Experiment in Email Personalization," Marketing Science, INFORMS, vol. 39(6), pages 1071-1091, November.

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    More about this item

    Keywords

    comparative advertising; advertising targets; diversion ratios; attack matrix; push and pull effects; analgesics;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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