The Effect of Perceived Advertising Costs on Brand Perceptions

Abstract

How, why, and when consumers use their perceptions of advertising costs as cues to a new brand's quality-related attributes is examined. It is proposed that consumers perceive advertising costs as deviations from expectations about typical costs in the product category. Perceived costs are hypothesized to affect brand perceptions in an inverted-U fashion, with extremely high costs leading to negative perceptions. The level of involvement and informativeness of ad content moderate this relationship. An experiment in which subjects are exposed to an ad for a new product provides evidence for the proposed model.