Advertising Expenditure as a Driver of Sales Performance: A Data-Driven Analysis

Abstract

Advertising expenditure has a significant influence on the visibility of brands, as well as on the way that people make purchase decisions about these brands in competitive environments. This research study intends to quantify quantitatively the manner in which an organization's investment in various types of advertising (e.g., radio, television, and print media) directly impacts its sales results. This will demonstrate how much advertising (in addition to other investments) contributes to an organization's success. The study uses a sample of 199 units, including television, radio and print media advertising expenditures. The study will use a quantitative (i.e., statistical) method to establish a correlation between the various forms of advertising that an organization uses and its sales results. A multiple linear regression analysis will be performed to determine the extent to which each form of advertising (i.e., radio, television, print) impacts sales; therefore, the analysis will provide a basis for evaluating the effectiveness of each advertising medium.

The study identified a statistically significant and strong link between advertising expenses and sales performance, with the regression analysis covering nearly 75% of the variation in sales. The use of television advertising, followed by radio advertising, indicated a higher level of influence on sales compared to the weaker and less influential effect of newspaper advertising. The study confirmed that advertising expenses are an important driver of sales performance and that not all forms of media result in comparable levels of sales performance. The research shows that a data-driven approach to evaluating advertising spending can allow managers to more effectively allocate their marketing budgets and make strategic decisions that improve their sales performance.