Abstract
The authors study how ad cues affect consumer behavior in new versus well-established markets. The authors use theoretical insights from consumer information processing to argue that the same ad cues can have different effects on consumer behavior, depending on whether the market is new or old. The authors then test these hypotheses in the context of a toll-free referral service, using a highly disaggregate econometric model of advertising response. The results indicate that argument-based appeals, expert sources, and negatively framed messages are particularly effective in new markets. Emotion-based appeals and positively framed messages are more effective in older markets than in new markets.
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