One Simple Test For Effective Advertising

David StewartAugust 29, 20223 min

John Wanamaker, a successful retailer and merchant, is reputed to have said that “half of my advertising is wasted, I just don’t know which half.” Such sentiments have oft been repeated in the years since Wanamaker’s death. There is no doubt that advertising, with its strong focus on creativity and the use of ever evolving media technology, remains a bit of a mystery. Yet the things that make advertising effective are well known. They have been well documented in academic literature and articulated by creative directors with remarkable clarity. This is not to suggest that there is a “formula” for effective advertising as there will always be a place for the creative big idea. Nevertheless, there are guidelines that can increase the likelihood that an advertisement will be successful.

In thinking about effective advertising, it is important to first begin with realistic expectations for what advertising can accomplish. Research among academics and industry analysts has repeatedly demonstrated that in mature product categories about half of any changes in sales can be accounted for by history and the market structure arising from that history. Market share, the number of competitors, and the rate of shifts among brands in a category explain a great deal of the short-term changes that occur on the market. Consider a factor as simple as market share: A product with a 70% market share starts with twice as many customers that can switch to another brand as potential customers that might switch to it. In such a scenario, advertising might be very effective if it just focuses on keeping current customers. For a company’s whose product has a lower share, it may be necessary to focus on competitors’ customers who can be convinced to make the switch.

Random factors that are not easily predicted – including weather, competitive activities, behavior of distributors and retail partners – may also have an impact on shifts in the market. What this means is that in most cases advertising is likely to influence only about a quarter of the short-term variability of sales.

So, what type of advertising has proven effective?

Product-focused advertising is one approach. The number of times a product is shown or mentioned and the amount of time or space devoted to it both influence effectiveness. Conversely, filling an advertisement with “creative clutter,” distractions like irrelevant characters, humor unrelated to the product, and other “creative” devices that take the consumers’ attention away from the product or message are sure routes to failure. Such devices may be entertaining, but the objective of advertising is to persuade and sell.

Product demonstrations are also powerful devices for making an advertisement effective. Such demonstrations may show the product in use or provide evidence of the benefit delivered by the product. Novelty – whether the ad is for a new product, an improved product, or a new piece of information – can also improve outcomes. Finally, giving consumers a reason to buy the advertised product, a point of differentiation relative to competitors has been found to be the single most effective executional element in advertising, both in the short and longer–term. What remains consistent in all these strategies, however, is that effective advertising is about the product (or service) and the benefit(s) it provides the consumer.

An inexpensive and simple test for determining whether advertising is likely to be successful is to examine the degree to which an advertisement is product focused and whether it gives the customer a reason (a benefit, point of differentiation) to make a purchase. It is surprising how many advertisements fail this simple test, but those that do pass produce real benefits for the company. As it turns out, there really is no mystery behind achieving positive advertising outcomes.

Contributed to Branding Strategy Insider by: David Stewart, Emeritus Professor of Marketing and Business Law, Loyola Marymount University, Author, Financial Dimensions Of Marketing Decisions.

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