How much a brand spends on advertising can positively affect consumer perceptions of brand quality, but there are several factors that can weaken or strengthen that relationship. 

According to a study in the Journal of Advertising Research, ad spend has potential ‘signaling value’ for consumers. However, there are mitigating factors to be aware of, which will affect to what extent. These are: ad spend volatility, brand ownership, brand equity, product category age, new product launch frequency, purchase frequency, and macroeconomic conditions. 

Why it matters 

How advertising affects consumer sales and profits is of huge importance to marketers attempting to justify...