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AU Research Studies Impact of Commodity Ad Campaigns
AUBURN, Ala. - "Got milk?"
"Beef: It's what's for dinner."
"Pork: The other white meat."
"Cotton: The fabric of our lives."
Everyone has heard these commodity slogans, but did you ever wonder what impact this kind of advertising actually has on the industry of agriculture?
Henry Kinnucan, professor of agricultural economics in Auburn University's College of Agriculture, has been conducting research on different aspects of generic commodity advertising since he first came to Auburn in 1983.
The dairy industry was the first to establish a nationwide mandatory "checkoff" program to raise funds for advertising and promotion in 1983. A mandatory checkoff program requires that a small percentage of each producer's income from a commodity will go toward the promotion of that commodity.
"This generic advertising idea took off in the mid-eighties with dairy, then beef and pork. After that, it just mushroomed," Kinnucan said. Now 75 percent of all agricultural commodities have mandatory or voluntary checkoff programs, and they spend a total of $750 million annually on generic advertising, he said.
One aspect of commodity advertising Kinnucan has studied is the impact of beef advertising on the beef industry and whether it had any spillover effects on beef's close substitutes, pork and poultry. The beef program was considered especially important because it is the third largest commodity advertising program in the U.S., behind dairy and citrus.
Kinnucan found in that study that beef advertising had a positive influence on the beef and pork industries, at the expense of the poultry industry. "There appear to be positive benefits for the beef program with a positive spillover for pork, but a negative effect was generated for the poultry group," Kinnucan said.
Another study questioned whether generic advertising and the increase in health information reaching the public about cholesterol concerns and heart disease would have a detectable influence on meat demand in the U.S. Kinnucan found that health information in particular had a positive effect on the demand for poultry and a negative effect on the demand for beef.
Kinnucan's most recent research on commodity advertising sought to determine the most effective medium (radio, television or print) for the catfish industry's advertising campaign. The U.S. catfish industry was useful for this study because it used a variety of media in its campaign, but had a relatively small advertising budget (less than $2 million per year). Based on his data through June 1996, print appeared to be the most effective medium for catfish advertising.
In fact, the total amount spent on commodity advertising is very small in relation to the income generated by these industries, making the study of commodity advertising's influence more difficult, Kinnucan said. For example, though the dairy industry spends $100 million yearly on fluid milk advertising, consumer expenditures on milk is about $ 18 billion per year.
"Trying to isolate the impact of these programs is like looking for a needle in a haystack," he said.
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News from:
Office of Ag Communications & Marketing
Auburn University College of Agriculture
Alabama Agricultural Experiment Station
3 Comer Hall, Auburn University
Auburn, AL 36849
334-844-4877 (PHONE) 334-844-5892 (FAX)
Contact Jamie Creamer, 334-844-2783 or jcreamer@auburn.edu
by Anna M. Lee
