Comparing the role of traditional and digital advertising expenses in generating firm value
Main Article Content
Abstract
The primary objective of this research was to examine the effects of both traditional and digital advertising expenses on a firm’s ability to generate value. The researcher also investigated the influence of customer satisfaction on the associations that both traditional and digital advertising expenses have with firm value. The data set comprised the advertising expenses of 67 public companies in United States from 2012 through 2016. There were 332 firm-year observations in the data set. The research procedures analysis was the descriptive statistics, the inferential statistics, and multiple regression analysis with the significance level
of 0.05.
This study’s results showed that both traditional and digital advertising expenses were positively and significantly associated with firm value. In addition, digital advertising did not contribute to a firm’s value more than traditional advertising does. This study’s findings also indicated that customer satisfaction moderated the associations that both traditional and digital advertising expenses have with firm value.
Businesses can use advertising as one of the factors for contributing firm value. Many businesses currently focus on digital media advertising; however, a large number of people still emphasize on traditional media. Management needs to decide how to balance investments in digital and traditional advertising media to work best for the business.
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