Author Abstract
What is the effect of pre-release advertising on the demand for a product? And does the magnitude of that effect vary according to the quality of the good? We empirically examine these questions in the context of the motion picture industry. We make use of a unique, proprietary data set that covers weekly television advertising expenditures, weekly expectations of the market performance, and quality measures for a sample of nearly 300 movies. We find that advertising affects the updating of market-wide expectations prior to release, and that this effect is stronger the higher the product quality. The latter suggests that advertising plays an informative--and not simply a persuasive--role.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: September 30, 2005
- HBS Working Paper Number: 05-060
- Faculty Unit(s): Marketing; Strategy