Imagine you are approving a TV plan for a laundry detergent brand sold through a Chicago supermarket chain. Matching rivals' advertising feels safer. Should you match their weight or seek weeks and markets where fewer rivals advertise?
Competing advertising is linked to a smaller sales response to your advertising.
Data chart
Estimated long-term increase in weekly sales for All laundry detergent, in percent, when All runs twice its usual weekly television advertising, from fitted-model scenarios for a Chicago grocery chain in 1991.
At the same total rival advertising, All's modeled sales lift is larger when fewer rival brands advertise that week.
Fitted-model scenarios, not a field test, for All at 50 audience rating points, twice its weekly average of 25. Rating points sum the audience ratings across television spots and measure advertising weight. Exact sales lifts are 4.4%, 6.5% and 8.4%, respectively (paper p. 221 and Figure 3, p. 222).
Data chart
Long-term percent change in Cheer's sales for a 1% increase in its own television advertising, at its median rival advertising and with no rival advertising, from the same fitted model.
Cheer's modeled sales response at its median level of competing advertising is much smaller than its potential response with no rival advertising.
Same-model comparison for Cheer, including effects that persist beyond the advertising week. Exact responses are .068% at Cheer's median rival clutter of 151.7 and .179% with no rival advertising; the standard model gives .080% (paper p. 220 and Figure 2, p. 221). These are model estimates; exclusive advertising would be difficult to achieve (p. 221).
Key takeaway
Less competing advertising is associated with a larger sales response to your advertising.
The evidence covers 1991 detergent and raisin bran sales at one Chicago grocery chain and spot TV ads, measuring sales response, not profit. Interference also occurs on spot TV, so switching from network TV does not guarantee avoiding it.
Source
Danaher, P. J., Bonfrer, A., & Dhar, S. (2008). The effect of competitive advertising interference on sales for packaged goods. Journal of Marketing Research, 45(2), 211–225. https://doi.org/10.1509/jmkr.45.2.211
Exact values behind the rounded figures: Cheer's long-term sales response is .068% per 1% more own advertising at its median rival advertising and .179% with none; its standard-model response is .080%; All's no-rival response is .160% and its standard-model response is .076%; All's scenario lifts are 4.4% with five rivals at 150 total rating points, 6.5% with three at the same total, and 8.4% with five at 50 total; the matched three-brand scenario gives 6.1% average weekly lift, versus approximately 11% under exclusive rotation.