How advertising influences sales over time

By Nigel Hollis

My article last week proposed that a brand acts as a heuristic, or mental shortcut for decision making, built up over time from direct and indirect learning. When you think of a brand as a mental shortcut it explains a lot about the way that advertising works to influence purchase decisions, not just immediately but long after exposure.

Brand impressions anchor future decision making

In my previous article I stated that new learning from cognitive science may not change our understanding of how brand-building marketing activity works, but it does confirm why advertising is important to generating longer-term sales growth. I said,

“By creating a set of positive, motivating, and memorable impressions of the brand, marketing activities create an anchor for future decision making, not just among current category buyers but among those that might buy the category in future.”

I used the word “anchor” as an explicit reference to the anchoring heuristic, a cognitive bias which causes peoples’ subsequent decisions to become too dependent on initial information. Brand memories gained because of incidental exposure can anchor peoples’ expectations, so that during the buying process new information that is consonant the initial impression will have a disproportionate influence on choice compared to information that contradicts the initial impression.

Jam today and jam tomorrow

Before I go any further, however, let me make one thing clear, I am not saying that brand-building advertising is a “jam tomorrow, never today” practice. Rather it is jam today and jam tomorrow. Most advertising – whatever form it takes – will have some immediate effect. However, that immediate effect will always be limited to the people who are actively considering a purchase and have been exposed to the campaign. This is why market mix modeling often finds the short-term payback from advertising is less than its costs, even when it takes account of carryover effects.

Influencing future purchase decisions

The way advertising really pays for itself is by seeding positive impressions that will influence people when they are ready to buy the category, at some point in the future. These impressions then help create a positive, intuitive response to the brand, either sidelining consideration of alternatives or giving the advertised brand the upper hand in any deliberation. However, the likely sales response will be constrained by the number of people ready to buy at a specific point in time, and that number will vary by product category, seasonality, brand size and advertising task.

The disconnect between ad exposure and choice

People rarely reflect on advertising encountered as part of everyday life, just as they rarely consider or care about brands until they come to make a purchase. When people have no vested interest in justifying their own behavior, they passively absorb and integrate impressions into their memory of the brand; there is no instinctive resistance to being “persuaded.” The consequence of this disconnect between exposure and choice is that a positive impression absorbed in the past can have a disproportionate effect on future purchase behavior. This said, the challenge then becomes to keep the brand memories easily accessible in peoples minds and trigger them at the point of decision. This is why it is so important to create and maintain distinctive assets that can act as a brand signal across touchpoints, and to refresh peoples brand memories on a regular basis.

The unique value of brand-building advertising

Viewed in this light, brand-building advertising has a unique value to the marketer, because it can portray a positive view of the brand, without any of the negative associations that invariably come with real-life experience. Advertising can ensure that potential customers have a clear idea of what the brand looks like, associate it with specific needs and occasions, seed expectations of what it will be like to use, and even help them anticipate how they will feel because of using it. Provided the actual experience lives up to the portrayal, expectations created by advertising can focus attention on positive aspects of the experience, strengthening user’s predisposition to choose the brand again.

Successful advertising shortcuts decision making

Along with increased investment in sales activation at the expense of brand-building, marketers are now increasingly turning to behavioral economics to sway people’s decision making. I suspect one reason for this is that behavioral economics promises the ability to reliably influence people’s behavior without undue persuasion. The right nudge and people behave as you want. But I would argue that most effective marketing has never involved persuasion (or at least, not the sort of conscious “argument” that tries to persuade with facts). Rather, successful advertising creates a series of nudges, seeding positive, memorable impressions that will shortcut later decision making. But what do you think? Please share your thoughts.
Published by

ABOUT AUTHOR:

Nigel Hollis

Analyst, author and “energetic speaker” regarding brands, media and marketing communications.