Branding Strategy Insider

Ad Copy Testing Defined

Today we're taking a marketing research question from James in Dallas, Texas. He asks...

"Please define Ad Copy Testing and other relevant measures for advertising performance."

James, Thanks for asking. As you likely know, this has been a perennially controversial area of marketing research. The importance and effectiveness of and the most productive approaches to copy testing have been much debated over time. For instance, many have questioned the usefulness of advertising recall as a measure. Current methodologies are fraught with issues. I am providing a simple summary of a fairly comprehensive approach to this below, however, the chosen approach will vary greatly depending on what specifically is to be tested.

More sophisticated approaches have been used (galvanic skin response, MRI, etc.), however these tend to be quite expensive. People have also used pulse and heart rate, facial expression and other physiological indicators of mental states as measures of advertising effectiveness. Some research orgnizations like Millward Brown and Ipsos-ASI will argue the importance of validated predictive metrics and normative databases in this area of research because they have these.

Ad Copy Testing
More aptly named pre-testing, copy testing is the study of advertising (print, TV, radio, billboards, Internet, etc.) prior to launching it. It predicts how effectively an ad will perform, based on the analysis of feedback gathered from the target audience. Each test will either qualify the ad as strong enough to meet company action standards for airing or identify opportunities to improve the performance of the ad through editing.

How Far Can The Marlboro Brand Stretch?

Today another question from the BSI Emailbag. Martin, a graduate student at Johns Hopkins University's Carey Business School writes...

"Dear Mr. VanAuken, before I ask my TWO questions (I hope I’m not being greedy) I’d like to thank you and your co-authors for Branding Strategy Insider – this is what I check first thing in the morning with the coffee (I read my emails on my Blackberry in the car). Here come the questions:"

Question 1

"Is there a way for a brand such as Marlboro to extend to products that are socially acceptable? A line of outdoor lifestyle products probably? Would that create outrage? What would be the way to go about it?"

This is a very interesting question, Martin. Given its strong image and personality (masculine, rugged individualism, independent spirit, etc.), I suspect the Marlboro brand is capable of being extended into a variety of new product categories. For instance, I could imagine Marlboro jeans and hats and belts could be successful. There are several things I would consider before I pulled the trigger on this, however. First, I would perform typical brand extension research to understand how the brand’s associations transferred to the new product categories and vice versa.

I would also try to understand current Marlboro consumers, the consumers of the intended new product categories and the general public felt about moving the Marlboro brand into those product categories. It would also be important to determine if extending the brand into new product categories would be perceived to be a move to market Marlboro tobacco products to youth, and if it would actually make the brand more appealing to youth. If so, there would likely be a public backlash, not to mention possible legal actions against such a move. I suspect that these brand extensions would be much more palatable should Phillip Morris decide to discontinue tobacco-related products under the Marlboro brand first. Having said all of this, I think the Marlboro brand is quite strong and could be extended into a variety of product categories for which Marlboro’s distinct brand image and personality would seem to be a draw.

Question 2

What Are Brand Attributes?

Today we're taking another branding question. Feyza, a marketer in Istanbul, Turkey asks...

"What are brand attributes? Please describe the difference between brand essence and brand attributes!"

Feyza thanks for your question. Attributes are more often used when referring to products than brands. A product's attribute might be a function or a feature. These functions and features often lead to consumer benefits. However, brands can have attributes too. The attributes may be personality attributes or they may be derived from the brand's products' attributes.

A brand's essence, on the other hand, has a very specific meaning. A brand's essence is its "heart and soul," its timeless quality. It describes who it is at its core. I like to express a brand's essence as [adjective adjective noun], so for Nike, it is "Authentic athletic performance" and for Starbucks it is "Rewarding everyday moments." Disney's essence is "Fun family entertainment."

Feyza, we also have a whole category on brand essence here.

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How Do I Judge Marketing Firms?

Today we take another question from a BSI reader like you...

Roy, an executive in St. Louis asks...

"I am on a search committee to select a company to help our organization with Branding. What are the questions or insights needed in judging various companies?"

Roy, thanks for your question. Different companies have different types of branding expertise. For instance, we (a brand consultancy) primarily focus on market research informed brand positioning, strategy development and brand equity measurement. We want to help organizations differentiate themselves in meaningful ways. That requires a deep understanding of marketing research, consumer behavior and marketing strategy as it relates to business strategy.

Some companies focus on brand identity development. For the majority of people, this translates to names, logos and taglines.These deliverables require strong graphic design and copy writing abilities. They also require deep brand identity experience if the name, logo and tagline are to work in all situations over time. Some companies  call themselves branding houses, but they are primarily good at developing creative (graphics and copy) for marketing communications materials and campaigns. At their core - they are advertising agencies. Many of those agencies are better in some media than others, for instance print versus television versus web-based. Few agencies have the strategic abilities needed for the development of robust brand strategies based on deep consumer insight. Other branding companies (mainly consulting firms) focus on brand equity measurement (quantitative research), brand asset valuation or inside-out branding, all of which require an entirely different set of skills, including OD (organization development/design) skills for inside-out branding.

So how does one determine which organization would best serve your needs? First, you must carefully assess your needs so that you know what you are seeking. Once you have done that, you should make your selection based on the following:

Economic Downturns and ROI Scrutiny

Dave, a Strategy Director in Eindhoven, The Netherlands asks:

"As in previous downturns, any campaign or promotion proposal has to stand up to ROI scrutiny if it is to make it beyond the concept stage. Do you have any advice for the setting up and measurement of ROI in the current climate?"

Dave, we appreciate your question. As you probably know, it is very difficult, if not impossible, to measure ROI for most brand equity building activities, which tend to have a slow, integrated and cumulative impact over the long-term. Luckily, it is much easier to measure ROI for many shorter-term brand and product marketing activities, which tend to focus on triggering a sale or at least a sales lead. Here is what I would focus on:

•    Highly customer-targeted Internet marketing activities such as keyword searches and other measurable actions
•    Direct marketing of any type including online newsletter-related offers, email campaigns and direct mail – you can measure ROI for all direct marketing activities
•    Any highly targeted lead generation actions such as trade show offers (providing that you carefully track the progress of the leads throughout the sales process)
•    Publicity-related actions – while these are not always measurable, they are relatively inexpensive (usually incurring just a PR person’s time) with potentially big impact and the added benefit of being more believable than ads
•    Customer appreciation events and activities, especially if you can incorporate add-on sales and encourage customer referrals through them
•    Online guerilla marketing activities – like publicity, these are mostly time- not cost-intensive

Finally, I would caution you that companies that continue to invest in brand building activities during economic downturns emerge from those downturns with greater brand awareness and sales momentum than do competing brands that have cut back on their brand building activities during the downturns. What P&G did in 1929 is enough proof for most.

I wish you much success with your recession marketing efforts.

We share more on Recession Marketing here and here.

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How are Brands Impacted in Economic Downturns?

Craig, an executive with a brand acquisition company in New York City writes...

"I've been a reader and fan of your blog for some time now.  I've occasionally commented on some of your entries and I've found your discussions very interesting. My question is timely - Do you think that brands are more or less - important - during down economic climates in general ?  Do you think brands are more or less - valuable - during down economic climates in general?  Is there anything about this climate in particular that effects those answers in general?  Have you ever seen any deep datasets about customer behavior in relation to brands for changes in economic climates? I'd love to get reactions from other BSI readers as well."

Craig, thanks for the compliment and for a very interesting question. I have not poured through deep databases regarding brands, customer behavior and changing economic climates. Your best bet for that type of data and analysis is to peruse the Nielsen website. For instance, I know that they recently published a report entitled Advertising Builds Confidence for Financial Brands in Crisis. Having said that, here is what I have come to believe about brands and economic downturns:

* the asset value of most brands will decrease as the stock market declines
* those brands that continue to invest in brand building during the downturns will have more momentum coming out of the downturns than those who don't
*luxury brands (such as Neiman Marcus or Nordstrom's) typically are harder hit than other brands during economic downturns, but that depends on which consumer segments are buying those brands and to what extent the economic downturns are affecting them personally
* small indulgence brands (such as premium ice cream brands, Starbucks coffee, etc.) tend to do better than higher ticket luxury brands during economic downturns
* downscale and discount brands (such as Wal-Mart) tend to fare better than many brands during economic downturns
* brands with which people are very familiar and comfortable do better than newer, unproven brands during economic downturns

Given the breadth and depth of this economic downturn, including the breadth and depth of the socio-economic segments affected, it is quite likely that most brands are suffering to one degree or another. Interestingly, our business is doing as well as it ever has. For that, I am quite grateful.

We share more on Recession Marketing here and here.

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Exploring Price Segmentation

Today we take another question from a BSI reader like you...

Laura, a Marketer in Montreal asks:

'What are some disadvantages of price segmentation?'

Laura, thanks for asking. Generally, I am an enthusiastic supporter of price segmentation. Done thoughtfully, it will result in additional revenues and profits. The trick is to segment the prices based upon real consumer need segments. The only conceivable downside is if the price segmentation is designed in such a way so as to encourage and enable price down trading. But this can be largely avoided if the price segmentation scheme is well designed.

I share more on Price Segmentation here.

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Discounts in Trials: Good or Bad?

Today we take another question from a BSI reader like you...

Jeff, a Marketer in New York City asks:

'What are your thoughts on using discounts in trials?'

Thanks for asking Jeff. If the product cost is relatively low, I recommend distributing free samples. That indicates that you are so confident in the product’s acceptance that you are happy to give it away for free.  Price discounts almost always devalue a brand and may even encourage changes in consumer behavior, training consumers to wait to purchase until there is a sale. A better way to offer a discount is to provide a value added product, service or quantity for the full price, essentially delivering a discount, but in a way that does not devalue the brand. Having said that, it is possible to offer a slight discount on a first purchase after a free product trial, as long as the discounting isn’t continued on a regular basis, reinforcing that the product is not worth its full price.

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What are the Measures of Brand Value?

We're happy to answer marketing questions from BSI readers like you...

Robert, a CEO in Dallas writes:

'What are the measures of brand value (in dollar terms)- is it the same across the board or are there different ways of developing this number?'

Robert, happy to help. I assume that you are asking about measuring the financial value of a brand as an asset. Brand valuation has been made possible by the following financial approaches – Activity Based Costing (ABC), Discounted Cash Flow (DCF), and Economic Value Added (EVA) and by several other more recent customer purchase tracking techniques, especially online. Interbrand is best known for its depth of experience in brand valuation, which leads to its list of Best Global Brands published by Businessweek each year. Don E. Schultz, Ph.D., professor of integrated marketing communications at Northwestern University and president of Angora, Inc. also has studied and applied the concepts of brand valuation and return on marketing investment. David Aaker, in his book, Managing Brand Equity covers the following approaches to brand valuation: price premiums generated by the brand name, brand name and customer preference, replacement cost, brand value based upon stock price movements and brand value based on future earnings. Another resource worth investigating is Millward Brown's process aand BrandZ report on the financial power of brands. It's considered by some as the new standard of brand valuation.

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Can Marketers Increase Share Price?

We're happy to answer marketing questions from BSI readers like you...

Maria, a Marketing VP in Australia writes:

"I have a question for you relating to the correlation between brand value and share price. Do you think that marketers could aim at increasing share price directly through marketing campaigns? I recognise that PR definitely can but I do not understand where marketing fits in."

Maria, thanks for asking. Indirectly, brand marketing affects share price, especially over time. For instance, by building brand awareness or reinforcing a unique and compelling brand benefit, marketing can increase three items that can lead to higher share price in the future:

•    Customer loyalty
•    Product/service sales
•    Ability to charge a price premium

Strong brands also help attract and retain competent employees, sometimes at a salary discount, if the brand’s reputation is strong enough.  This, in turn should lead to increased sales and profitability in the long run.

I think it is overly ambitious to think that a brand marketing campaign could increase share price in the short term unless its message was similar to that of a press release targeted at the financial community. But, that would be more of a financial analyst campaign then a traditional brand marketing campaign.

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