Advertising Effectiveness during the Great Recession: the Case Study of Three FMCG Italian Food Categories

The present study is concerned with the reactions of consumers and firms to economic downturns. Specifically, it investigates to what extent the advertising has been used as marketing instrument to support brand sales during the downturn in business cycle (Great Recession 2011-2015) and whether advertising expenditures has significantly increased sales. The focus is on three Fast Moving Consumer Goods (FMCG) Italian food categories. We use Auto-Regressive Distributed Lag models (ARDL). As a whole, our results support the presence of significant effects of own advertising for a selection of brands, not the whole, within the three analyzed categories. Moreover, advertising spending by competitors acts negatively in two categories out of three.