Event Marketing May Boost Young Brands

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Young brands may benefit from tapping the power of event marketing to enhance their status and drive revenue, according to a study published in the Journal of Advertising Research (JAR).

Event-Marketing and Advertising Expenditures: The Differential Effects on Brand Value and Company Revenue responds to the concern that surprisingly little empirical research has examined the effects of event marketing at the company level.

Lei Liu (Central University of Finance and Economics/Beijing, China), Jin Zhang (Tsinghua University, China), and Hean Tat Keh (Monash University/Melbourne, Australia) compared the differential effects of event marketing and advertising expenditures on brand value and company revenue.

Using a longitudinal dataset for 74 real estate companies in China, the authors found that both event marketing and advertising expenditures “had positive impacts on company revenue and brand value.

“As a brand aged, advertising expenditure continued to yield positive returns on brand value and company revenue, whereas event marketing had diminishing marginal returns on brand value and company revenue.”

The main learnings for practitioners pointed to “the differential effects of event marketing and advertising provide an empirical basis to allocate their marketing resources”, they argued.

“First, the results show that, similar to the effects of advertising, event marketing is effective at enhancing company revenue and brand value.

“Although company revenue tends to be regarded as an indicator of tangible, near-term assets, brand value often is regarded as an indicator of intangible, long-term assets. The results thus provide strong justification for companies to invest in event marketing.”

Building on this argument, the research showed that “young brands might benefit more from event marketing than from advertising, because event marketing has a stronger and larger effect on brand value creation and revenue for young brands.

“By contrast, more established brands would benefit more from advertising than from event marketing, because advertising has a stronger and larger effect on brand-value creation and revenue for established brands.

“An important caveat is that these results are based on the real estate industry in China; the extent to which they are applicable to other industries in other countries is unknown.”

Credit: WARC

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