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The holiday season brings with it television holiday programmes and of course, hundreds of seasonal advertisements urging consumers to spend even more money. Those who are to busy to view programmes in real time tend to record their favourite programmes and it has always been assumed fast forwarding when it comes to the advertisements.

But research by a trio of academics in the December issue of the Journal of Marketing Research has found that far from sounding the death knell for television network advertising as had been predicted, despite its ad-skipping feature, owning a DVR would not appear to influence demand for advertised products.

The researchers gave a group of consumers DVRs and then studied the results over a two-year period. They discovered that over this period purchases of advertised products did not alter significantly and in fact only a small percentage of advertisements were fast forwarded by the study sample.

The academics say that many households do not watch most of the programmes that they record. In fact they discovered that only 5 per cent of recorded programmes were subsequently watched. They suggest that of those who do watch their recorded programmes and then skip advertisements, the “relatively low rate of watching recorded shows means that there is effectively only a small reduction in exposure to ads.” They say that this is perhaps too small to make a difference in households’ shopping behaviour”.

The research was conducted by Jean-Pierre Dube from the University of Chicago Booth School of Business, Bart Bronnenberg from Tilburg University in The Netherlands and Carl Mela from Duke University

All companies are aware of the importance of their reputation. How they are perceived by their customers is a source of competitive advantage, allowing them to charge higher prices and attract both investors and employees.

Internal corporate reputation is also important, how an employee feels about the company for which they work will ultimately translate into cheerful staff who offer good service which in turn influences the behaviour of external stakeholders.

New research however, suggests that of equal importance is the gap between the two and if companies wish to maintain a sustainable reputation they need to pay attention to this and ensure that any reputation gap is a positive one.

Rosa Chun, a professor of corporate reputation, ethics and marketing at IMD in Lausanne, describes the repuation gap as the difference between the internal and external reputations. When employees are significantly more positive about their company than their customers then a positive reputation gap occurs, but if employees see their company in a poor light and are more negative about it than customers, then a negative reputation gap occurs.

This gap matters say Prof Chun. A positive reputation gap will have a significant impact on the bottom line she says and states that those businesses with a positive reputation gap tended to average a higher year-on-year sales growth than those companies with a negative gap. Prof Chan suggests that companies pursuing a growth strategy should not try to align employee and customer perceptions but should endeavour to ensure that their employees have a more positive outlook of the business than their customers.

Copyright The Financial Times Limited 2019. All rights reserved.

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