Advertising efficiency in the Spanish beer industry: spending too much?

Abstract

Purpose - The main goal of this paper is to estimate advertising efficiency in the Spanish beer industry and to analyse the effects of several environmental variables and brand portfolio scope on advertising efficiency scores. Design/methodology/approach - A two-stage double bootstrap procedure is employed. In the first stage, advertising efficiency is estimated using a bootstrapped Data Envelopment Analysis on a multiple input-output model of advertising. In the second stage, a bootstrapped truncated regression model is estimated in order to identify the determinants of advertising efficiency. Both stages are estimated simultaneously. The empirical application is carried out on a sample of Spanish brewers between 2007 and 2014. Findings - Results show low advertising efficiency scores and highlight the effects that environment and brand portfolio scope have on these estimates. Originality/value - For the first time, this paper analyses the effect of environmental variables and the brand portfolio scope on advertising efficiency in the beer industry.