April 17, 2018

   by Nigel Hollis

My post about the creativity being the variable under a brand manager’s control that had the most impact on revenue prompted Phil Herr to send me the Market Research Council newsletter which details another study of advertising effectiveness. Guess what it lists as number one sales driver?

Back in January, Edward Kim Vice President, Strategy, Nielsen Catalina Solutions, presented “Five Keys to Advertising Effectiveness”. The presentation reported on the findings of over 500 studies of CPG brands conducted during 2016-2017 that sought to understand the sales contribution of five key drivers of effective advertising, including a comparison of TV versus digital. You can find the presentation here.

The MRC newsletter lists the five keys in rank order as follows, each with a subsequent comment from me:

1. CREATIVITY – This aspect of advertising continues to contribute the most to sales. TV ads tend to have higher quality creative compared to digital ones.

It should come as no surprise that creative accounts for nearly half the variation in sales. Irrespective of the merits of the two media, or the nature of the user experience, the cost to produce and air the average TV ad is significantly higher than for digital content so more diligence goes into producing something compelling for TV.

2. REACH – This factor is still influenced more by TV than by digital or other media such as print or mobile – for now! Overall, media is playing a larger role.

This is totally in keeping with Kantar Millward Brown’s CrossMedia findings. Viewing habits are evolving and clients are spending more on digital and mobile but it is still difficult to replicate the reach of TV. And one of the biggest mistakes in marketing today is limiting reach to a specific audience and excluding potential buyers.

3. TARGETING – Advertisers are doing a much better job today than 10 years ago, in large part due to more sophisticated data analysis and targeted programming. But many campaigns still fall short of hitting their (on-buyer) targets.

Again, this is in line with our research. One way companies can improve their targeting for brand building campaigns is to measure the campaign’s performance on target audience reach, viewability and brand metrics to inform mid-campaign optimization decisions. However, if the recommendation is suggesting advertisers only reach buyers at the moment of purchase then the advertiser loses opportunity to prime people’s purchase before they shop.

4. RECENCY – Timing ads to be closer to a purchase within a cycle can boost sales, e.g. purchase of a major appliance is less frequent and has a longer sales cycle compared to weekly consumable products such as paper goods.

Rather than simply stating that recency is good maybe marketers need to better integrate their communications across the buyer lifecycle? Brand memories influence purchase not just exposure.

5. CONTEXT – This focused on the extent to which the messages were relevant to the consumer and to the product they might purchase.

This one is a little tricky to understand from the summary but I assume that it refers to the content in which the ad appears.

According to the MRC newsletter the findings that Ed presented generated one of the more animated and active discussions among the MRC audience. I wonder why? While only representative of CPG brands the findings are consistent with a far wider set of work from different companies. How about you? Please share your thoughts.

 

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