Mktg – The future of advertising

John Farquhar
25 June 2009

Industry veteran, John Farquhar, looks at the findings of new research into advertising effectiveness and trends while providing some interesting rules for the future.

A research project commissioned by the Wharton School, in co-operation with the American Advertising Research Foundation (AARF), has revealed the following:

There is no erosion of TV advertising’s influence on sales
22% of word-of-mouth conversations are sparked by advertising, and they are more likely to include brand recommendations. Print advertising is the main starter and 30% of word-of-mouth recommendation is started by advertising. No mention of how the other 70% happens, but one can presume that consumers after experiencing brands, recommend them
Television advertising only benefits the big spenders. Low volume television campaigns cost more than the benefit they generate
30% of online buzz is generated by advertising
The study found no difference in the average advertising recall or likeability among households with or without DVRs (Digital Video Recorders)

DVR households watch more television than others and also watch more programmes live. Fast-forward reminds viewers of past exposures and generates more attention on advertisements than less active viewing
Online advertising works. Search generates a higher lift in online sales per consumer exposure than display
Display and search used together produces higher lift than the combined effects of either when used separately
The effect of online advertising matches – and often exceeds – that of television for packaged goods
What makes advertising work

The American Journal of Advertising Research analysed entries to the UK’s Institute of Practioners in Advertising’s Effective Advertising Awards and found that the following strategies are most likely to increase sales and profit:

Focus on hard objectives, such as specific market share gains, rather than on soft ones, such as brand awareness
Focus on price, not value
Focus on penetration (winning new customers) rather than on keeping loyal customers happy
Influence consumers emotionally, rather than rationally
Create advertising that talks value
Have a high share of voice relative to market share
Include television in the media mix
Add ambient media with a concentrated message

Advertising effectiveness

About 30 years ago psychologists decided to investigate how people reacted to advertising and developed a process that measured their eye movement when they looked at an advertisement.

The equipment then was every cumbersome. The respondent’s head had to be in a fixed position and, to achieve this, the head was placed in a frame. The value of the data obtained then was questionable.

The idea of measuring eye movement is still part of the communications armoury, but today the technology is much more sophisticated and has been brought to South Africa by Prompt Research Insights.

Now, a television screen with cameras mounted into the frame photographs the respondent’s eye movement as the advertisement is read. The time spent on each element is then recorded. The high’s are the hot spots and give an indication of what information the respondent gained from the advertisement.

It’s interesting to note that one of the hot spots in an advertisement is the product pack. The rationale for this behaviour is that people want to be able to recognise the product when shopping. Products in a supermarket are grouped by category, and it is not unusual to find a dozen for more brands on the retailer’s shelf offering the same basic product.

While this is common sense, it is quite remarkable how few advertisements display the brand pack in a large enough format so that the reader can get a true picture of what to look for when shopping. The reason for this is that creatives are more concerned with form and balance than with the structure of communication. This weakness is exacerbated when they are asked to create an advertisement for a large billboard. More often than not, the pack is the smallest visual element – impossible to read at 80kmh.

The eye movement measure should be demonstrated to young creatives at college, and novices in advertising agencies. There is a huge difference reading an advertisement 10cm from your eyes and one 50 metres away.

Unless creatives learn the lesson of effective communication, measuring eye movement is academic. Prompt Research Insights should educate marketers so that they have the knowledge to only buy advertising that really works for their brands.