Alvin J Silk

Aggregate Advertising Expenditure in the U. S. Economy provides evidence that over the period 2000 through 2018 nominal aggregate advertising spending in the U. S. as a share of nominal GDP has been falling. The elasticity of advertising with respect to nominal GDP appears to have increased substantially since the late 1990s. The authors further show that nominal aggregate advertising spending has become more responsive to changes in real GDP and GDP price inflation. Finally, the monograph considers the implications of ongoing developments in the management of advertising campaigns and pending public policy issues surrounding controversial digital advertising practices for how advertising’s macroeconomic role may evolve in the future. The authors stress the development of media-specific and aggregate media mix prices indices as being the critical next step in advancing understanding of the sensitivity of aggregate spending on advertising to cyclical and secular shifts in total economic activity and the components thereof. Following a short introduction, section II provides some historical background on the twin problems of defining advertising in the face of its ever-changing boundaries and measuring its output as a service industry. Section III sketches the vertical structure of the U. S. advertising industry and describes the set of four time series assembled that measure nominal aggregate advertising spending by advertisers and the related revenues of two sectors who function as service providers to advertisers -- advertising agencies and media firms. Section IV reviews the media price indices available from private sector sources and the BLS. Section V presents the double log constant elasticity model that serves as the conceptual framework underlying the analysis of the relationship of nominal aggregate adverting spending to GDP. Section VI reports extensive analyses of autocorrelation and partial autocorrelation coefficients calculated in order to assess whether the measures of nominal advertising spending exhibit stationarity and guide our choice of the order of moving average autoregressive function specifications. Section VII presents the results indicating that a structural shift in the sensitivity of nominal aggregate advertising to GDP occurred around the turn of the century when, in nominal terms, aggregate ad spending became more responsive to not only changes in nominal GDP but also to changes in real GDP and to changes in GDP inflation. Section VIII discusses implications of changes in the management of advertising campaigns accompanying the ascendancy of digital media and the resolution of public policy issues surrounding digital advertising practices. Section IX summarizes the main conclusions.

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This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work was reproduced from the original artifact, and remains as true to the original work as possible. Therefore, you will see the original copyright references, library stamps (as most of these works have been housed in our most important libraries around the world), and other notations in the work. This work is in the public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. As a reproduction of a historical artifact, this work may contain missing or blurred pages, poor pictures, errant marks, etc. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.

This book explores what marketing is and how an enterprise can differentiate itself from others in attracting and retaining customers. The book is organized according to the design of the first-year marketing course in the two-year MBA program at the Harvard Business School. Each chapter of the book is written by HBS faculty and used by MBA students in preparation for classroom participation. The book consists of three parts: the analysis of marketing opportunities, the formulation of marketing strategy, and the execution of that strategy.

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