Advertising as an intangible asset
The article Advertising as an Intangible Asset and the Value of a Multinational Corporation by Anse Balas and Halil Kaya is an investigation of if investors identify advertizing as an important intangible asset. The article set to expound on the effect of advertizing account change announcements and new account announcement on share holders’ wealth.
This article is mainly directed to the management of Multi National Corporation. It is especially targeting the advertizing departments of these Multi National Corporations. The managements of Multi National Corporations are responsible in ensuring that the value of stocks in the market remains stable to maintain their investors as well as attract new investors. It is therefore vital to acquire such information that has a possibility of affecting their stocks value either positively or negatively. Since advertizing has been recognized as an essential intangible asset in any corporations, it is important for the management to have information of the effect of the varied dimensions of advertizing on their corporation share stock value.
This article generally gives information of the effect of changing advertizing agencies and advertizing a corporation’s products afresh on the value of the share stock (Balas & Kaya, 2012). Advertizing accompanies marketing hand in hand in moving a corporation’s products. Advertizing helps create awareness of a corporation’s products or services in the market. It is thus an essential asset that can determine the success or failure of a particular corporation. This article specifically focuses on the effects of advertising account change announcements and new account announcements. The authors introduce the topic in a direct and clear manner enabling its intended audience to easily follow through. The clear definition of terms enables the audience to understand the key concepts and ideas.
The authors continue to give a step by step analysis of the two concepts after clearly stating their hypothesis. They follow through with their methodology, the results and then finally interpret the results of their findings. The identified hypothesis are either confirmed or discredited not by the authors’ assertions but by the presentation of logical and calculated data (Balas & Kaya, 2012).
The article advices managers and investors alike not only the need for advertizing, but also the manner in which this activity should be carried out. They clearly show that advertizing is not just a matter of presenting a corporation products or services to the market via various media, but should be first analyzed to determine the effect of such advertizing on the corporation’s outlook. In their research, they indicate and suggest that the two notions being studied can be used to value a corporation thus attracting or repelling investors as the two concepts in question present vital information to the potential and existing investors (Balas & Kaya, 2012).
The use of tables and graphical data helps in simplifying the topic in question in this article. Simple calculations and follow up explanation enables the audience to understand and differentiate small and bid ad agencies, new and old ad agencies as well as prestigious and less prestigious ad agencies. These the authors assert to do not have any significant effect on the stock share price irrespective of which a corporation decides to employ in their advertizing.
This article is very relevant in this course. Advertizing is a very important field of study in business management. It is in fact the back bone of any form of profit business and consequently important in the study of business management. The article though presenting only a one sided argument to these concepts is worth studying for any business student and other stakeholders in the business world.
Reference
Balas, N. A. & Kaya H. D. (2012). ‘Advertizing as an Intangible Asset and the Value of a
Multinational Corporation.’ International Journal of Management. Vol. 29, (3), 347-353.
