Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Review of Marketing Science

Ed. by Rao, Ram C.

1 Issue per year


CiteScore 2016: 0.17

SCImago Journal Rank (SJR) 2016: 0.158
Source Normalized Impact per Paper (SNIP) 2016: 0.094

Online
ISSN
1546-5616
See all formats and pricing
More options …

The Internalization of Advertising Services: An Inter-Industry Analysis

Sharon Horsky / Steven C. Michael / Alvin J. Silk
Published Online: 2012-10-11 | DOI: https://doi.org/10.1515/1546-5616.1142

Abstract

This study investigates the extent to which U.S. advertisers use in-house rather than independent advertising agencies and examines inter-industry variation in such internalization. Contrary to the widely-held impression that use of an in-house advertising agency is more the exception than the rule, we find that vertical integration of advertising services is much more widespread than has hitherto been appreciated. Drawing on concepts from research on scale economies and transaction costs, we develop a set of hypotheses about differences in the expected depth of internalization across industries. We test these hypotheses in cross sectional analyses of data covering 69 two digit SIC industries at two points in time, 1991 and 1999. In both years, approximately half of advertisers of all sizes operated an in-house agency. Across industries, we find that the likelihood of internalization of at least some advertising services decreases as the size of advertising outlays increase but increases as advertising intensity and technological intensity increase and is greater for “creative” industries.

Keywords: advertising agencies; in-house; vertical integration; make or buy

About the article

Published Online: 2012-10-11


Citation Information: Review of Marketing Science, ISSN (Online) 1546-5616, DOI: https://doi.org/10.1515/1546-5616.1142.

Export Citation

©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston. Copyright Clearance Center

Comments (0)

Please log in or register to comment.
Log in