MARKETING Rx
‘If advertising won’t raise sales, why advertise at all?’
By Ned Roberto, Ardy Roberto
Philippine Daily Inquirer
First Posted 04:23:00 05/16/2008
Question: Last year, we attended the senior Marketing Rx-er’s seminar on monitoring advertising and promo effectiveness. He explained why we can’t expect advertising to raise sales.
Recently, our big boss just decided to change advertising agencies. He favored this other agency to take care of the account of our major snack brand. His basis is about ad’s sales effectiveness.
During the pitch, the new agency said it has the track record of creating ads that not only win awards but also sell. It guaranteed to us that they will do the same for our leading snack brand. Our big boss was impressed and so commissioned them as our new ad agency. Can this new ad agency of ours really deliver on its advertising’s sales generating promise?
Answer: We start our diagnosis by recalling the senior MRx-er’s warning that you should be cautious about any claim that advertising will generate increased sales.
It’s a given in marketing (one of the few really true immutable marketing laws) that sales comes from all of the marketing mix elements, all the four Ps, working together. Sales are not a function of one, two or even three of the four Ps but of all four of them. Now, advertising happens to be not even one full P but just half of a P, which is promotion. The other half of this P is sales promotion.
It’s for this reason that marketing practice refers to promotion as “A&P.” The connective “&” is not trivial. The “A&P” concept says you can’t get advertising’s full benefit without sales promo. That’s because it’s sales promo that pressures consumers to buy now what you’ve advertised and to do so without delay. Similarly with sales promotion. You won’t get the participating numbers in your sales promo if you don’t advertise it so that a lot of consumers become aware.
When an ad agency claims that its advertising will sell, that’s not entirely wrong. Consider the case where the other marketing mix elements like pricing, placement or distribution, sales promo, selling and positioning are all in place but just maintained and not changed. In this case, it’s only advertising that is changed. For example, let’s say that it was raised. In such a case, you can logically expect and conclude that any resultant sales increase must have come from the marketing mix element that was changed, namely, advertising. Of course, if sales stays unchanged or else, falls, you can also trace the cause just as ambiguously as coming from advertising. The entire underlying logic is simple: An effect is a change (here, increased, unchanged or decreased sales), and its cause can only come from another change (here, the increased advertising budget or new copy) that was however still working together with the other but just maintained marketing mix Ps.
Was this kind of marketing mix configuration ever tested and validated in practice?
It was, and it was Prof. Leonard Lodish of the Wharton School of Business, who did the testing over a period of four years starting in mid-’90s. Based on the results of his 10-year long “meta-analysis” of 389 “real-world, split-cable TV ads,” Professor Lodish persuaded Frito-Lay, a snack food manufacturer, to open its advertising program to the experiment and to also fund the testing. (Isn’t this an interesting coincidence that your company and Frito-Lay are both in the same product category?) Professor Lodish published the details of his “meta-analysis” of the sales effectiveness of 389 TV ads in a 1995 issue of the Journal of Marketing Research.
After learning of Professor Lodish’s meta-analysis, Frito-Lay was persuaded that it should develop its own research-based guidelines for managing its big-budget TV advertising and for helping it set the correct priorities for its ad campaigns. At that time, Frito-Lay was getting more and more disappointed with its use of conventional but unvalidated advertising “heuristics.” There were four of these “rules-of-thumb.” These are still alive and well in the advertising and advertiser circle. It takes a long time to kick a habit. Here are those rules:
1. To increase market share, be sure that your TV advertising’s share of voice is more than your current share of market.
2. To make a significant impact, go for at least three exposures per TV viewer.
3. More TV advertising is always better than less.
4. It takes a long time for TV advertising to work; it’s a slow burn stimulus.
Professor Lodish’s analysis of 389 TV ads together with his four-year long Frito-Lay experiment challenged and disputed all four advertising decision rules. His major findings and recommendations (or new but research-based ad decision rules) may be summarized as follows:
1. You’ll find it easier to gain a sales change for less established and smaller brands than for well-established brands.
2. Among established brands, you’ll get more sales response with less entrenched brands.
3. You won’t raise sales when you follow flighting ad media plans where advertising is cycled “on” for some weeks and then “off” for succeeding weeks.
4. You’re more likely to get sales effectiveness with big ad weight increases rather than with periodic flights.
5. When product category purchase occasions have increased, you can influence consumer brand switching in favor of a new brand.
6. You’ll have a sales advantage particularly with new product intros if you resort to concentration of advertising as against dispersion.
7. For larger and more established brands, it’s dangerous to maintain ad copy as against frequently and regularly changing ad copy. That’s because maintaining lulls customers into boredom and complacency. So, for the larger and established brands, the benefits of constant ad copy changes outweigh the risks.
8. For established brands, you’ll get more out of post testing your ad than relying on ad pre-testing in terms of ad recall or persuasion, or both.
9. For new product intros, high intro ad weight and prime time TV ad generates larger sales increases.
10. For lesser brands to gain sales, advertise against some form of “brand or product news.”
11. For larger brands, “news” does not work in the same way: “News” does not drive sales.
12. If sales effect is to occur at all, TV ads do not take time to work. When it works, it does so quickly. It will also last when it works.
We end with some cautionary note. These research-based rules are over 10 years old. Over this period, the advertising landscape, especially media has experienced dramatic changes and innovations. Some or perhaps most of the above rules will still apply but the others may not be as relevant as when they first came out in the mid-’90s. Which others, we don’t know. It’s time to have a replication of Frito-Lay’s experiment.
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Send questions to MarketingRx@pldtDSL.net. You can now catch our past columns and more at www.marketingRx.org. God bless!
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