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Despite the large body of research that has investigated the effect of ad appeals of television advertisements on consumers' internal responses and behavior, our understanding of how different ad appeals are processed remains limited. Complementing existing literature with novel insights from neuroimaging techniques can be valuable, providing more immediate insights into implicit mental processes. The present study explores the neural responses to functional and experiential executional elements in television advertisements by using functional magnetic resonance imaging (fMRI). Comparing a unique set of different commercials for the same brand enabled examination of the influence of differences in ad appeal on brain responses and subsequent advertisement effectiveness. Findings show that functional and experiential executional elements engage different brain areas, associated with lower- and higher-level cognitive processes, and that the extent to which these particular brain areas are activated is associated with higher ad effectiveness.

One of the pressing issues in marketing is whether loyalty programs really enhance behavioral loyalty. Loyalty program members may have a much higher share-of-wallet at the firm with the loyalty program than non-members have, but this does not necessarily imply that loyalty programs are effective. Loyal customers may select themselves to become members in order to benefit from the program. Since this implies that program membership is endogenous, we estimate models for both the membership decision (using instrumental variables) and for the effect of membership on share-of-wallet, our measure of behavioral loyalty. We use panel data from a representative sample of Dutch households who report their loyalty program memberships for all seven loyalty programs in grocery retailing as well as their expenditures at each of the 20 major supermarket chains. We find a small positive yet significant effect of loyalty program membership on share-of-wallet. This effect is seven times smaller than is suggested by a naive model that ignores the endogeneity of program membership. The predictive validity of the proposed model is much better than for the naive model. Our results show that creating loyalty program membership is a crucial step to enhance share-of-wallet, and we provide guidelines on how to achieve this. (c) 2007 Elsevier B.V. All rights reserved.