Marketing’s credibility: A longitudinal investigation of marketing communication productivity and shareholder value
Abstract
Practitioners and scholars have questioned marketing communication's credibility because it has not been linked to firm shareholder value. Using secondary longitudinal data, the authors show that the impact of marketing communication productivity (MCP) on shareholder value is positive and nonlinear. In particular, the influence of MCP on the forward-looking performances of Tobin's q and stock return is curvilinear with an inverted U shape. The authors also investigate the moderating role of research-and-development investment and competitive intensity. The findings have implications for marketing managers regarding how to model and benchmark MCP and the dangers of blindly improving the productivity of advertising and sales promotion expenditures.
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By adopting an effective marketing communication approach, firms should be able to gain high market share and brand reputation with less investment in advertising and promotion.
“By adopting an effective marketing communication approach, firms should be able to gain high market share and brand reputation with less investment in advertising and promotion (Luo & Donthu, 2006).”
From Setting the future of digital and social media marketing research: Perspectives and research propositions (2021) · cites this paper as Luo & Donthu, 2006
Cites
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Hausman, J. A. (1978) · Econometrica · doi:10.2307/1913827 · Cited by 18,820 · see citing works
Strategic Factor Markets: Expectations, Luck, and Business Strategy
Barney, J. B. (1986) · Management Science · doi:10.1287/mnsc.32.10.1231 · Cited by 5,548 · see citing works
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Dwivedi, Y. K., Ismagilova, E., Hughes, D. L., Carlson, J., Filieri, R., Jacobson, J., Jain, V., Karjaluoto, H., Kefi, H., Krishen, A. S., et al. (2021) · International Journal of Information Management · doi:10.1016/j.ijinfomgt.2020.102168 · Cited by 2,620 · see citing works
“By adopting an effective marketing communication approach, firms should be able to gain high market share and brand reputation with less investment in advertising and promotion (Luo & Donthu, 2006).”
BackgroundLuo, X., & Bhattacharya, C. B. (2009) · Journal of Marketing · doi:10.1509/jmkg.73.6.198 · Cited by 962 · see citing works
Self-citationEnough Is Enough! The Fine Line in Executing Multichannel Relational Communication
Godfrey, A., Seiders, K., & Voss, G. B. (2011) · Journal of Marketing · doi:10.1509/jmkg.75.4.94 · Cited by 153 · see citing works
- Authors
- Luo, X., & Donthu, N.
- Affiliations
- The University of Texas at Arlington (US)
- Georgia State University (US)
- Corresponding author
- Luo, Xueming
- Donthu, Naveen
- Venue
- Journal of Marketing
- Publisher
- SAGE Publications
- Published
- 2006-10
- Volume
- 70
- Issue
- 4
- Pages
- 70-91
- ISSN
- 0022-2429 (ISSN-L)
- 1547-7185
- OpenAlex
- W2001600850
- Cited by
- 211
- References
- 2
- Citations by year
- 2026: 4 · 2025: 5 · 2024: 12 · 2023: 7 · 2022: 8 · 2021: 11 · 2020: 16 · 2019: 7 · 2018: 12 · 2017: 8 · 2016: 10 · 2015: 10 · 2014: 11 · 2013: 13 · 2012: 17
- FWCI
- 36.20
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Marketing (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Marketing and Advertising Strategies
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Identity and Reputation
- Keywords
- shareholder value, Tobin's Q, stock returns, nonlinear effects, inverted U-shaped relationship, R&D investment, competitive intensity, advertising expenditure, sales promotion
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