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

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

Abstract

We model comparative advertising as brands pushing up own brand perception and pulling down the brand image of targeted rivals. We watched all TV advertisements for OTC analgesics 2001-2005 to construct matrices of rival targeting and estimate the structural model. These attack matrices identify diversion ratios and hence comparative advertising damage measures. We find that outgoing comparative advertising attacks are half as powerful as self-promotion in raising own perceived quality and cause more damage to the targeted rival than benefit to the advertiser. Comparative advertising causes most damage through the pull-down effect and has substantial benefits to other rivals.

Suggested Citation

  • Anderson, Simon P & Ciliberto, Federico & Liaukonyte, Jura & Renault, Régis, 2012. "Push-Me Pull-You: Comparative Advertising in the OTC Analgesics Industry," CEPR Discussion Papers 8988, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8988
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    Cited by:

    1. Alexander E. Saak, 2012. "Dynamic Informative Advertising of New Experience Goods," Journal of Industrial Economics, Wiley Blackwell, vol. 60(1), pages 104-135, March.
    2. 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.
    3. Dubois, Pierre & Griffith, Rachel & 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.
    4. Maria Alipranti & Emmanuel Petrakis, 2013. "Comparative Advertising in Markets with Network Externalities," Working Papers 1306, University of Crete, Department of Economics.
    5. Alipranti, Maria & Mitrokostas, Evangelos & Petrakis, Emmanuel, 2016. "Non-comparative and comparative advertising in oligopolistic markets," DICE Discussion Papers 231, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Barton, Jared & Castillo, Marco & Petrie, Ragan, 2016. "Negative campaigning, fundraising, and voter turnout: A field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 121(C), pages 99-113.
    7. 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.
    8. Maria Alipranti & Evangelos Mitrokostas & Emmanuel Petrakis, 2013. "Comparative versus Informative Advertising in Oligopolistic Markets," Working Papers 1301, University of Crete, Department of Economics.

    More about this item

    Keywords

    advertising targets; analgesics; attack matrix; comparative advertising; diversion ratios; push and pull effects;

    JEL classification:

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

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