Have you ever wondered why some luxury watch brands sell for such high prices at auctions? While paid advertising helps make these brands more desirable, new research from SC Johnson College of Business shows that nonpaid media coverage-like news articles and reviews-also plays a significant role.
The researchers found that brands perform better when they're mentioned alongside other brands that are frequently grouped with many others-regardless of how prestigious those brands are. This may seem surprising since in crowded markets, brands usually try to stand out. They argue that there's value in being seen as part of a well-connected group of brands.
The researchers analyzed a comprehensive dataset from the luxury watchmaking sector, covering media reports from January 2001 to December 2009 and auction data from January 2002 to December 2010. They also constructed networks based on co-mentions of firm names in the media, allowing them to assess these relationships against auction prices.
Read the full story on the Cornell SC Johnson College of Business website.
Sarah Magnus-Sharpe is director of public relations and communications at the SC Johnson College of Business.
