Wednesday, 24 October 2012

How does advertising work?

It’s a good question. It implies that there is a definite objective for advertising and that an evaluation of its effectiveness will be undertaken.

In reality, few advertisers bother with a formal listing of objectives and even when these are formulated often consist of general business goals. Increasing sales, brand share, distribution and so on are not communication tasks. Advertising’s function is to inform and persuade and these objectives are much harder to articulate and monitor.

Another problem is isolating advertising contribution from the other elements of the marketing mix. Brand success may be relatively more reliant on product innovation, pricing strategy, and packaging than the advertising campaign.

Advertising in a general sense must work, but not always and often not very efficiently. The drive to make advertising more efficient is akin to the search for the Holy Grail. You will have heard the quote attributed to John Wanamaker of the USA or Lord Leverhulme:

“ I know that 50% of my advertising is wasted. The problem is that I don’t know which 50%.”

In the early half of the 20th century, Mr. Elmo Lewis developed his AIDA model for advertising. It described four stages for good advertising. Attract attention, make the advertisement relevant and engaging so as to engender interest, create desire and finally generate action in the form of a sale.

In the early 60’s, Russell Coley developed his DAGMAR model, which stands for: Defining advertising goals for measured advertising results. He postulated that customers went on a journey from unawareness to awareness and comprehension of the message. If well done, this leads to a positive attitude being formed of the brand and a conviction of its suitability.

Stephen King, the doyen of JWT’s London account planners warned that the nature of the advertising message may cause success to be measured on varying time scales. A Television commercial announcing a retail sale will have the tills ringing, or not, almost immediately. A campaign promoting Nuclear energy will need a longer time scale for the measurement of advertising success.

Most older advertising models are linear and pre suppose rational decision-making. These days we know that emotional triggers are also important. Behavioral economics is the flavour of the moment.

It seems that we have been asking the wrong question. We cannot generalise and must be specific. The question should be: How does my advertisement work?
Or even better: How do my customers use my advertisements?   

Answers to these questions will lead to less waste and more effective determination of the ideal advertising budgets. 

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