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Marketing Measuring Advertising Effectiveness not enough tools many managers believe simply not possible to measure short term success; rely on promotions for short term measurable returns ● Measuring: some tools test market ● PLUS ÇA CHANGE ● Recent ad industry seminar on ‘maximising advertising effectiveness’ included sessions on setting budgets, paying the agency, using media, production; but nothing on measuring ad effectiveness... Obstacles to measuring ad effectiveness ● theory: long-term gains unlikely unless campaign generates short-term sales ● large sample of households measure TV ads: electronic devices measure number of ads for a specific brand each householder sees lack of consensus little agreement on how advertising works and time frame ● too many players often with competing agendas; stated beliefs of clients and agencies poles apart: clients think ad agencies only in it for creative awards; agencies think clients don’t appreciate their talent and often oppose measurement ● household purchases analysed ● difference between number households that bought brand after seeing ad, and those that bought without seeing the ad is the STAS (short-term advertising strength) ● focus groups ‘advertising awareness’ discussions measure only number and change of awareness or recall of TV ads neural networks claimed to be faster, more sensitive and more accurate than statistical techniques ● ● use PC-based computer systems loosely modelled on how human brain works; network ‘learns’ by being given examples ● can recognise patterns in vast amounts of data, detect subtle relationships between, say, sales trends and ad spending ● although better at identifying relationships with past data, may be just as inaccurate a predictor as old-style modelling ● even strongest proponents say this technique cannot be taken at face value or used in isolation value creation ● more integrated but more theoretical view ● clarify relationship between £ ad spend and £ economic value; set return targets similar to other capital spending ● aim for customer retention not just acquisition eg include lifetime value of customer in calculation of economic value ● ● not enough facts lack of hard, reliable appropriate information with which to measure effectiveness ● fine for large fmcg and TV; more difficult to test response in national magazines, business/trade press, or for capital items eg cars, white goods statistical techniques one way: ● too many goals often ‘change perceptions’, ‘maintain awareness’, ‘reinforce brand loyalty’, ‘influence frequency’, ‘entertain’, ‘persuade’ ‘inform’, ‘amuse’, all stated as goals at once eg TV ad in one region; compare directly sales in that region with others where no advertising sales response modelling ● must adjust for factors like weather, seasonal demand, counter-marketing by competitors, price changes, point-of-sale promotion, shelf space, placement (eg retailers stocking more or placing better in anticipation of ad) controversy raging in industry whether enough correlation between increased awareness and increases in actual purchase BMW, winner of last year’s Advertising Effectiveness Award, spent £91m on UK advertising from 1980-1993. Sales trebled over period, while European average sales fell 45%. ●●●● TEL: 01737 247357 FAX: 01737 226651 © BULLETPOINT – JULY/AUGUST 1995 Airtime costs are rising. Audiences are falling. Print prices continue to climb steeply. Companies say that ads via TV, radio, press, posters must now more than ever prove their worth. Problem remains: advertising is a very costly activity which often defies tight analysis; if a campaign succeeds or fails you don’t always know why. 11