Advertising expenditures by professionals: an exploratory investigation of dental practitioners.

Advertising Expenditures by Professionals: An Exploratory Investigation of Dental Practitioners

While interest in the advertising activities of professionals has grown over the past decade, evidence of their advertising behavior has been limited primarily to sporadic, anecdotal pieces in

the trade literature. This article presents the findings of an exploratory survey of dental practitioners. It provides baseline data on the proportion of dental professionals who advertise, and on the level of their advertising expenditures. Great heterogeneity is found within the profession. The probability of using advertising and the amount spent on advertising vary with the characteristics of both the practice and the individual practitioner.

Over the past decade, interest has been mounting in the advertising and promotional activities of professionals. Those activities began to grow after the landmark Bates (Bates v. State Bar of Arizona) decision of 1977 in which the Supreme Court decided that prohibitions imposed on advertising by professional associations violated First Amendment free speech guarantees. The Federal Trade Commission also attacked bans by professional associations on competitive grounds.

The American Dental Association changed its "Code of Ethics" in 1979 to remove restrictions on advertising by either the ADA itself or by any of its constituent (regional) bodies ("ADA Agrees to Lift Restrictions..." 1979). That advertising by dentists is still controversial can be seen by current concerns over identification of specialization in dental ads ("Economist Says ADA Rules are Procompetitive" 1988; "We Will Protect Our Standards" 1988). Additionally, as formal social control of advertising by professional associations has diminished, the importance of informal social control may have risen. Numerous articles have appeared in professional/trade journals questioning the effectiveness or moral integrity of advertising (Shavell 1985; Barry 1988).

The purpose of this paper is to make an initial effort to provide solid evidence on the advertising activity of dentists. Specifically, we will report the results of a survey, one objective of which was to develop baseline data on advertising expenditures by dental practitioners.

This paper represents exploratory research based on inductive, rather than deductive, reasoning. Although tests of statistical significance are presented, the principal intent is not the testing of formal hypotheses. In the absence of any body of theory, or of substantial empirical work, the purpose of this research is to identify patterns, which in turn may lead either to empirical replication or directly to theory development.

Literature Review

A great deal of research has been reported on the attitudes of professionals toward media advertising (e.g., the recent review by Hite and Fraser 1988). The seminal empirical work on attitudes of professionals (accountants, attorneys, dentists, physicians) toward the use of media advertising is that of Darling (Darling and Bergiel 1982, 1983; Darling and Hackett 1978; Darling and Taylor 1987), who describes changes over a ten-year period. While a complete discussion of Darling's findings cannot be presented here, the outcome of his work is clear--attitudes of professionals are becoming more favorable towards the use of advertising.

Not all research supports the picture portrayed by Darling and his colleagues, however. Swerdlow and Staples (1980) found little interest in advertising among Iowa dentists, a majority of whom believed that advertising would neither increase the demand for services nor assist the public in making better decisions in evaluating dentists. Majewski and Shapiro (1984) found that consumers in Lowell, Massachusetts, had attitudes far more favorable towards advertising than did dentists. Hite and Bellizzi (1986), using Arkansas consumer panel data, found consumers had favorable attitudes towards professional advertising in general. In a recent study, Hite, et al. (1988) again found evidence supporting the proposition that consumers are significantly more favorable towards advertising than are dentists. Even more recent work, using some of Darling's own research questions, (Kinney and King 1988, Becker, Kaldenberg, and Hartman 1989), brings his findings of improved attitudes of professionals toward advertising into serious question. Both Kinney's study (of physicians) and Becker's study (of dentists) present findings which conflict with Darling's perception of a positive trend, suggesting either that the trend has reversed itself, or that some error existed in Darling's research method. The bloom may be off the rose; a honeymoon period between professionals and advertising may be turning toward a period of greater introspection and doubt.

It is curious that, while something is now known about the attitudes of professionals toward advertising, very little is known about their actual behavior. Except for sporadic, anecdotal pieces in trade journals, our knowledge of the advertising practices of professionals is fragmentary, at best. Milone, et al. (1982), for example, estimated in 1982 that between 12 and 30 percent of dentists used advertising. Marsh (1986) estimated in 1986 that 25 percent of dentists used advertising; Wilson (1986b) reported the results of a survey which found that 46 percent of dentists used advertising. The survey discussed here was designed to cast greater light on the advertising practices of dental practitioners.

Method

Data were collected in spring 1988, as part of a larger survey designed to study the economic conditions of the dental industry and the attitudes of dental practitioners towards a number of practice management and public policy issues.

The population under study consists of all (2084) dentists licensed to practice in the state of Oregon. A list of names and current addresses was obtained from the State Board of Dentistry. It should be noted that the sampling frame is dental practitioners and not dental practices, a distinction to which few studies of professionals attend. By "dental practitioner" we mean any individual licensed to practice dentistry; a "dental practice" is an organization, including one or more licensed dentists, which is in the business of providing dental services. This distinction is important. One can generalize, perhaps, to all dental practices by drawing a sample from the Yellow Pages. Such a sample, however, will not be an unbiased representation of all dental professionals, many of whom (e.g., those not in private practice, or those who are members of large practices) may not be listed individually in the directory.

Procedure

Prior to mailing, the survey (a copy of which is available from the author) was pre-tested on a sample of dentists in the local community who had not been selected for the main sample. Sixteen of the nineteen pre-tested responded. One question was revised to eliminate ambiguity discovered in the pre-test.

A pre-notification letter was mailed a few days prior to the mailing of the main survey. Ten days after the first survey mailing, a post card was sent, both to thank those who already had responded and to jog the memories of those who had not. A second wave of questionnaires was sent to non-respondents a week after the thank you/reminder post card. These procedures resulted in a response rate, using Dillman's (1978) correction for ineligibility (eliminating those not in practice, such as recently deceased or retired), of 72 percent (Table 1). The composition of the respondents, by type of practice setting, is shown in Table 2.

Respondents to the first and second wave of questionnaires were compared on all relevant characteristics: 1) gender ([X.sup.2] = 0.58, p = 0.44); 2) specialist versus general practitioner ([X.sup.2] = 1.04, p = 0.30; 3) region ([X.sup.2] = 0.60, p = 0.74); 4) year of graduation ([X.sup.2] = 6.79, p = 0.34); 5) gross income ([X.sup.2] = 6.67, p = 0.24); 6) used media advertising, yes or no ([X.sup.2] = 1.00, p = 0.31); 7) advertising expenditures (t = 0.69, p = 0.49). No significant differences were found, and data from the two waves were pooled.

Results

Overall Results. Table 3 shows advertising expenditures for dentists in Oregon in 1987. The average level of spending across all respondents who identified their level of expenditure (N = 374), including those who spent nothing, was $1,403 (range = $0 to $100,000). If that average is projected to the 2,084 licensed dentists in the state of Oregon for 1987, one can estimate a total expenditure of $2,928,352 on dental advertising. While a heroic assumption of representativeness is required, projecting that average to the approximately 140,770 dentists in the United States (U.S. Department of Health and Human Services, 1986) yields an estimated $197,500,000 nationwide expenditure on dental advertising in 1987.

Of all licensed dentists responding (N = 411), 51 percent reported some expenditure on media advertising in 1987 (Table 4). Dentists not in private practice (N = 25), including those who engaged full-time in activities such as teaching, public health dentistry, and military dentistry, clearly have no need for advertising. None of them engaged in any advertising and, for that reason, they are excluded from further analysis. The inclusion of their responses in the disaggregated analyses that follow simply would introduce "noise," and would increase the error of all estimates. Factoring out those dentists not in private practice, the proportion reporting expenditures on advertising increases to 54 percent.

The remaining private practitioners can be divided into two practice settings: 1) solo or "shared-solo" practitioners (N = 325); 2) employees of other dental practices/practitioners (N = 61). The proportion reporting use of media advertising was 52 percent for dentists in solo and shared-solo practices, and 66 percent for those employed in other practices. Dentists in the first and most traditional practice setting had average advertising expenditures of $793 (range = $0 to $21,000), while those dentists in the second practice setting reported average expenditures of $6,071 (range = $0 to $100,000). Dentists in the latter category, largely members of group practices, also will be excluded from the following analyses. In most cases it is impossible to determine whether the level of expenditure reported was for the individual's proportional part of the practice, or whether the figure was that for the group practice as a whole. Without knowing the number of practitioners in the group practice, it is impossible to allocate a total expenditure to individual dentists. Disaggregated Results--Likelihood of Using Media Advertising. Dentists in solo or shared-solo practice are far from homogeneous with respect to their probability of using media advertising. Several characteristics of the individual or practice affect the likelihood of using advertising.

Table 5 shows that general practitioners are significantly more likely to use media advertising than are specialists. Primary care health providers must appeal to a wide market as compared with dental specialists, who receive many of their patients through referrals from the general practitioners ("Statistical Highlights: New Patients in a Dental Practice" 1987).

The data in Table 5 support the inference suggested by Bloom and Stiff (1980), that there is a strong negative relationship between the number of years in practice and likelihood of using media advertising. Older, established dentists are well-known and may rely on their existing pool of patients and on word-of-mouth for attracting new patients. New practitioners cannot afford the luxury of so passive an approach to marketing. Further, there may be a "generation gap" in the attitudes of professionals to advertising; older dentists may be more reluctant to use advertising, even were they to find it necessary or useful. The relative importance of "economic" and "values" effects cannot be distinguished using the data at hand. If the level of advertising increases in the future, as younger cohorts replace the older, additional inferences may be possible.

Table 5 also demonstrates the relationship between the dentist's gross production income and likelihood of advertising. Those most likely to advertise have either the smallest or largest practices in the sample. One may hypothesize that dentists in the smallest practices believe they need to advertise to build the practice up to a viable level. Those aggressive practitioners at the highest income level may advertise for any of several reasons, none of which can be exclusively identified from these data. They may have high-volume practices, which continually need to attract new patients. Or, conversely, they may be spending advertising monies in the belief that they can attract patients for expensive procedures. Finally, they may be following the "affordable amount" advertising budget decision rule, spending money simply because it is available. The dentists least likely to advertise were those of the second highest income level, who may be practitioners satisfied with their high incomes and indisposed towards the use of advertising.

Dentists in the suburbs are significantly more likely to use media advertising than are those in the city or in rural areas. As evident in Table 5, there was no difference between the urban and rural dentists. The limited use of advertising in rural areas may reflect both the relative lack of media and the relative conservatism of rural communities. Additionally, the clearly higher levels of advertising in the suburbs may reflect both a high level of competition and a less stable population. With a substantial proportion of the suburban population moving each year, there is a constant need to find new patients.

Finally, female dentists are significantly more likely to use advertising than are male dentists. This result probably is attributable to one principal characteristic of female dentists; they are significantly (p [is less than] .001) younger than are male dentists. The average age of female solo practitioners is 35.5, as compared to 48.7 for males. The average income of female dentists, largely in consequence of their age, is also significantly (p [is less than] .001) lower than that of their male counterparts. Thus, early in their professional careers, female dentists are likely both to be struggling to find patients and to be less opposed to using advertising because of traditional (age-related) values. Disaggregated Results--Levels of Advertising Expenditures. We now turn to data on advertising expenditures by dentists who spent money on media advertising and reported actual levels of spending (Table 6). Respondents have been classified into two groups--those spending less than $500, and those spending $500 or more. Five hundred dollars was chosen as the referent point because of its proximity to the mean ($793) for all solo/shared-solo practitioners, providing a fairly even split of respondents.

While general practitioners are more likely to use media advertising than are specialists, well over half of those general practitioners spent less than $500 (Table 6). Conversely, fewer specialists advertised than did general practitioners, but those who did tended to spend more money.

Dentists who graduated in 1964 or earlier were not only less likely to advertise, but also were less likely to spend much money if they did (Table 6). Dentists who graduated between 1965 and 1974 were more likely both to advertise and to spend at relatively higher levels. Dentists who graduated since 1975 were relatively likely to advertise, but unlikely to spend large amounts.

Table 6 suggests a clear correspondence between gross income and advertising expenditures. While dentists earning the lowest gross incomes are very likely to use advertising, they tend to spend very little. At the opposite extreme, dentists with the highest incomes are both most likely to advertise and to spend relatively large amounts.

Table 6 also shows that dentists in the suburbs were far more likely to use advertising, and those who used advertising were likely to spend more than their counterparts in the city or in rural locations. Finally, gender of the practitioner had no impact on the level of advertising expenditures.

While some patterns do emerge, there is evidently great heterogeneity within categories of dental practitioners, as well as across categories.

Discussion

Summary of Results. The principal purpose of this research was to provide a benchmark with regard to the level of advertising expenditures by dentists. It is unfortunate that a similar study was not done and reported earlier, so as to allow better evaluation of trends since the "legalization" of professional advertising.

For purposes of projection to the entire profession, we found an average expenditure for 1987 of $1,403 per licensed dentist in the state of Oregon. The average figure for solo/shared-solo practitioners (79 percent of respondents) was $793, while dentists in other (largely group) practices (15 percent of respondents) reported an average of $6,091.

Of all respondents, 51 percent reported some expenditure on media advertising. In the case of private practitioners, 54 percent reported advertising expenditures; that further disaggregated into 52 percent for solo/shared-solo and 66 percent for those in other practice settings.

This study points out the heterogeneity of professionals with respect to advertising activity. Among solo/shared-solo practitioners, advertising activity is more likely for: 1) general practitioners than specialists; 2) females than males; 3) younger practitioners than older; 4) suburban practitioners than either urban or rural; and 5) lowest and highest income practitioners rather than those in the middle income range. This heterogeneity is worthy of note, as studies of professionals often fail to disaggregate the findings along characteristics either of the individual or of the practice.

Limitations/Extensions. This study admittedly is an exploratory one. It examined only one profession, dentistry, within one geographic market. Are dental markets similar elsewhere? Evidence suggests that the Oregon dentists are representative of national data (Anderson 1987) with regard to gross income and number of hours worked. Additionally, the socialization process in professional education tends to produce practitioners with homogeneous value systems (Becker, et al. 1961; Carroll 1971). On the other hand, markets for professional services tend to be local in nature, and it is well-known that there are variations in the structure and competitive conditions in different geographical markets for professional services. For example, fees for dental services vary across regions; higher in New England, Middle Atlantic, and Pacific states, and lower in the West North Central and East South Central states (Wilson 1986a, 1987). Further, while individuals may be socialized to professional values, those values nonetheless may be influenced by the regional subcultures in which the professionals are embedded (Kahle 1986). Finally, other professions, of course, may share some similarities with dentistry, but are likely to manifest some differences as well, limiting the generalizability of the results presented here.

The present study used a list provided by the state licensing agency as a sampling frame; such lists are available for many professions and provide unbiased samples. Given an unbiased sampling frame, one then can use screening questions to disaggregate respondents. Other commonly used sampling frames, such as telephone directories and professional association membership lists, may be useful in some cases; however, they clearly will produce biased samples that are neither representative of the entire universe of professionals, nor strictly comparable to surveys using other sampling frames.

Some Tentative Hypotheses. The most intriguing research question emanating from this work derives from the seemingly interactive effects of practitioner age and income on advertising activity. The likelihood of using advertising increased almost monotonically with year of graduation. On the other hand, the most recent graduates were likely to spend less money on advertising. A difference in personal values between age cohorts was found to affect the advertising decision, as was the level of maturity of the practice. Income, obviously, constrains the ability of the practitioner to devote resources to advertising, regardless of how desirable or useful one may perceive advertising to be. As suggested earlier, the impact of the gender difference was largely artifactual, attributable to female dentists, being both younger and of lower income than male dentists.

[H.sub.1]: The decision regarding whether

or not to advertise is influenced

by 1) the practitioner's personal

values, and 2) the number of

years in practice, particularly at

a given site.

[H.sub.2]: The subsequent decision

regarding the level of advertising

expenditure, reflecting either a

"percentage of sales" or an

"affordable amount" budgeting

decision rule, is a positive

function of gross income.

The greater likelihood of advertising by general practitioners than by specialists is easily explained by the necessity of the former to seek out patients; the latter relying heavily on referrals from general practitioners. The higher level of expenditures by those specialists who decide to use advertising is primarily the outcome of their higher income, again reflecting the use of "affordable amount" or "percentage of sales" decision rules.

[H.sub.3]: General practitioners are more

likely to use media advertising

than are specialists.

[H.sub.4]: For those who employ

advertising, average advertising

expenditures will be greater among

specialists than among general

practitioners.

The greater likelihood of advertising and the higher level of advertising expenditures by dentists in the suburbs reflect a necessity of business in relatively unstable markets. To a much greater extent than their colleagues either in the city or in rural areas, dentists in the Portland suburbs must replace lost patients and attract those who recently have moved into their market areas.

[H.sub.5]: The likelihood of using

advertising is greater for practitioners

in the suburbs than for those in

urban or rural locations.

[H.sub.6]: The level of advertising

expenditures is higher for practitioners

in suburbs than for those in

urban or rural locations.

This study has focused on data collected from practitioners in a single profession--dentistry. The most obvious replication of this study would evaluate dentists in other regions, preferably those in which income levels, mobility levels, and personal values might be expected to differ from those on the West Coast. The reader can observe, however, that Hypotheses 1 through 6 intentionally do not contain the word "dentist." A powerful test of these hypotheses would be their ability to predict differences, not only among dentists, but among attorneys, optometrists, accountants, and other professionals as well. [Tabular Data 1 to 6 Omitted]

Boris W. Becker (Ph.D., University of California) is professor of marketing, College of Business, Oregon State University. Dennis O. Kaldenberg (Ph.D., Iowa State University) is research associate, College of Business, Oregon State University.