Empirically distinguishing informative and prestige effects of advertising

This article introduces techniques to empirically distinguish different effects of brand advertising in nondurable, experience-goods markets. I argue that advertisements that give consumers product information should primarily affect consumers who have never tried the brand, whereas advertisements that create prestige or image effects should affect both inexperienced and experienced users. I apply this empirical argument to consumer-level data on purchases of a newly introduced brand of yogurt. Empirical results indicate that th advertisements for this brand primarily affected inexperienced users of the brand. I conclude that the primary effect of these advertisements was that of informing consumers.