Does Advertising Work?

Some folks claim they never pay attention to advertising, yet it is impossible to escape. So the next question relates to the effectiveness of the advertising and marketing, to which I have a simple answer. You must connect emotionally to get the best return on your investment.

Now for a bunch of research that answers the question, take a look at this from Advertising Age:

Industry Unleashes Flood of Studies to Prove Its Worth

Harsh Times Demand (Even) More Concrete Evidence of Effectiveness

By Jack Neff

Published: August 25, 2008

BATAVIA, Ohio (AdAge.com) -- Want to know if advertising works? Or how it works? Or what consumers think? Chances are, you're about to find out as much as or maybe even more than you ever wanted.

A slew of media companies, agencies, research firms and even marketers themselves have ramped up efforts to churn out elaborate studies or research results as selling tools. Reasons vary from the obvious need of media to prove themselves, particularly in tough times, to the fact that data-based pitches have gained currency with the public at large.

By the numbers

+25% Direct-response TV may be accountable, but it doesn't always work as planned. +160% Average increase in unaided awareness for brands in seven package-goods and fast-food categories in a Yahoo study based on ComScore data +31% One-week lift in sales of Campbell's cream of mushroom soup in April 2006 from a Parade ad in an analysis released late last year from Information Resources Inc. Sources: Google, Yahoo, MediaVest and Parade based on data from Nielsen/NetRatings, ComScore and Information Resources Inc.

Of course, it also helps to have the numbers handy because media, agencies and marketers alike are facing a much tougher audience: finance executives.

Only a decade ago, the biggest marketers were run by executives who started their careers in marketing. Today, CEOs of such marketers as Unilever and Kimberly-Clark Corp. come from finance backgrounds. And their joint rival, Procter & Gamble Co., recently has named executives who spent most or all of their careers in finance either as global marketing officers or senior managers over more than a third of the business.

For anyone who wants to crunch numbers, plenty are available.

Parade of data
Parade, after last year commissioning Information Resources Inc. to use marketing-mix models to show sales lift and payback from advertising in the Sunday supplement, is now preparing its third wave of IRI analyses of various brands' ads and the second wave of using health-care-research firm IMS to do similar analyses of prescription-drug ads, said Mike DeBartolo, exec VP-advertising.

Parade keeps paying for expensive analytics it never used years ago because they help sell ads. Mr. DeBartolo said Parade's page volume from consumer package-goods, food and over-the-counter drug advertisers is up 36% through July compared to last year after a similar gain in 2007.

Likewise, digital media are finding they have to produce new data to tap a huge pool of media spending that up to now has been largely beyond their grasp, particularly from CPG advertisers.

Direct-response advertisers who've been the bread and butter of online media, particularly search, didn't need studies. They had their sales results.

Not so with CPG advertisers, who generate relatively few sales online and whose abysmally low click-through rates don't do much to prove effectiveness. So Yahoo, Google and MSN all have ponied up for third-party research this year to prove they're relevant to the brand marketers.

Searching for results
Google earlier this year released research from Nielsen/Net Ratings and ComScore of an online display and search campaign for Unilever's Dove deodorant estimating a $530,000 sales lift and 13-percentage-point increase in favorability ratings.

Yahoo recently set out to prove that search had a brand-building impact beyond the clicks, joining MediaVest in a study of 6,000 consumers showing that search ads generated an average 160% increase in unaided brand awareness.

Of course, media have always used data to prove impact. The difference now is that media are having to come up with new types of studies to prove they do more than just reach people, said Joel Rubinson, chief research officer of the Advertising Research Federation.

"Yahoo knows that just focusing on clicks and having an advertising model based on that may be shooting themselves in the foot," he said, "because there are these other kinds of [branding] benefits."

He pointed to Microsoft's "Engagement Mapping" study launched earlier this spring, that works with marketers and agencies including Citi Cards, Sprint, GSD&M Idea City, MindShare and Initiative to demonstrate the cumulative effect of online display or search ads in driving sales rather than just assuming the "last ad clicked" is responsible.

Publishers' data
For media where marketing-mix models and clicks don't apply or aren't practical, proving effectiveness can be harder.

Still, Brenda White, VP-director of print investment at Starcom, is seeing a growing number of publishers come to her with studies from third-party research firms, something the agency has been demanding based on client wishes.

"With the economy the way it is," she said, "publishers are going to have to do this to hold onto budgets. They're under increasing pressure from other media, too."

Since most individual titles aren't big enough to practically use marketing-mix models, Ms. White sees more publishers using studies from Dynamic Logic or Marketing Evolution that base effectiveness analysis on other metrics, such as changes in brand perceptions.

Similarly, MTV Networks has been looking to build deals around Marketing Evolution's "return on marketing objectives" system, offering guarantees based on how well campaigns deliver against marketer-chosen objectives such as increasing brand favorability.

Mind candy
Yet it's not just media getting into studies. So are agencies -- such as Ogilvy Action, which recently completed a 14,000-shopper study globally to buttress its standing as a global player in shopper marketing and build interest in the discipline.

Data can help sell beyond simply the need for validation. One motivation for an unusual print and online campaign launched earlier this month by über-researcher Nielsen was that consumers and business decision makers have developed a taste for studies as a sort of mind candy.

Nielsen ads included in a sole sponsorship of a "Play" Summer Olympics magazine in The New York Times read like a collection of study results presented pop-quiz style. "The strategy was to do something in a more dramatic-than-usual fashion to tell the marketing world that Nielsen has moved to one brand and we're a new company under new ownership and leadership," said Nielsen Chief Marketing Officer John Burbank.

A secondary strategy was to persuade the broader universe of consumers who take surveys or join panels "to think favorably about research," he said, "because we're asking them to participate in more and more ways."

Getting consumers on-board
The ads presented factoids showing people respond better to an angry face than an ambiguous one; that Austin, Texas, has the highest proportion of "early adopters" in the U.S.; and that NBC's "Heroes" had the highest viewer-engagement score of any TV show.

"We knew since we were advertising in the middle of summer that we had to have something interesting for people to read," Mr. Burbank said. "People really are interested in information, if you look at sales of 'Freakonomics' or Malcolm Gladwell's books."

So expect the studies to keep coming.

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