Resumen de Advertising spending efficiency among Top U.S. advertisers from 1985 to 2012: : overspending or smart managing?

Yunjae Cheong, Federico de Gregorio, Kihan Kim

• The current study tests two competing predictions of long-term adspend efficiency: the �overspending perspective� predicts continued high inefficiency, while the �smart manager perspective� predicts improved efficiency. Longitudinal analysis of efficiency among top 100 U.S. advertisers from 1985 to 2012 using data envelopment analysis reveals that inefficiency has increased over time. Approximately 61% of top advertisers are inefficiently using their ad dollars and are overspending by an average of 34%. Findings also indicate that the Internet, a medium highly praised and utilized for the amount and depth of consumer data it generates, has not impacted overall efficiency in any meaningful way.