DP8988 Push-Me Pull-You: Comparative Advertising in the OTC Analgesics Industry

Author(s): Simon P Anderson, Federico Ciliberto, Jura Liaukonyte, Régis Renault
Publication Date: May 2012
Keyword(s): advertising targets, analgesics, attack matrix, comparative advertising, diversion ratios, push and pull effects
JEL(s): L13, L65, M37
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8988

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.