Journal of the Academy of Marketing Science

, Volume 37, Issue 2, pp 130–143 | Cite as

Does advertising create sustained firm value? The capitalization of brand intangible

  • Fang Wang
  • Xiao-Ping (Steven) Zhang
  • Ming Ouyang
Original Empirical Research


This research inquires into the nature and degree of advertising effects on firm intangible values. Based on marketing research on consumer based brand equity, this paper challenges the prevailing decaying assumption employed in the accounting/finance disciplines to model the advertising-firm value relationship. Meanwhile, using financial data and methods, we provide new measures for the marketing discipline to evaluate the effectiveness of advertising to create brand intangible. Results indicate that advertising effects on firm intangible assets are sustainable and accumulative and support the asset/investment-like characteristics of advertising expenditures. The research provides an empirical method to assess long-term advertising performance and suggests firms’ varying effectiveness in creating brand equity through advertising. This study is the first to report negative persistence effects of advertising to firm intangible values.


Advertising Brand equity Tobin’s Q 


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Copyright information

© Academy of Marketing Science 2008

Authors and Affiliations

  • Fang Wang
    • 1
  • Xiao-Ping (Steven) Zhang
    • 2
  • Ming Ouyang
    • 3
  1. 1.Marketing, School of Business and EconomicsWilfrid Laurier UniversityWaterloo, OntarioCanada
  2. 2.Electrical and Computer EngineeringRyerson UniversityTorontoCanada
  3. 3.Marketing, Odette School of BusinessUniversity of WindsorWindsorCanada

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