Rival-benefiting effect of advertising: experimental extension and empirical investigation

Abstract

The present study provides an experimental extension for and empirical investigation of the rival-benefiting effect of advertising, which refers to the positive effect of a brand advertisement on the attitude towards or even actual sales of a rival brand. First, the authors experimentally present that the rival-benefiting effect of advertising is more likely when the rival brand is a major one. Second, for external validity, they present a methodological framework for the estimation of the rival-benefiting effect and empirically investigate the effect by applying the presented framework to real market data. Consistent with the experimental finding, the empirical investigation found that the rival-benefiting effect was stronger when the rival brand of the advertiser was a major brand. Finally, the study concludes with a summary on the limitations of the approach, along with future research opportunities.