Profitability and media advertising in Greek food manufacturing industries

The effect of advertising intensity in four media (television, radio, newspapers and magazines) on profitability is examined in this paper. A profitability model is tested using a unique 1993-1996 panel data set of 350 Greek food manufacturing firms. Fixed effects results for the full model show that only television advertising increases profitability significantly. The results for eight major food categories estimated separately show important differences between consumer and producer groups; television advertising effects on profitability are positive and significant only in the consumer industries where television advertising intensity is high. These findings show that television is the only media where persuasive advertising exists in Greek food manufacturing firms.