Measuring Advertising Sales Effects

The purpose of advertising is largely to encourage consumers to buy your brand.  Controversy still reigns how this occurs, e.g. attitude shift vs salience, but it is uncontroversial that exposure to a brand’s advertising should increase the propensity (likelihood) to buy that brand – that’s what an advertiser hopes to achieve for their spend.

So this is the behavioural effect of advertising.  This is what undrerpins its sales effect.  So this is what should be measured in order to judge the advertising.

Yet this is not what is measured, hardly ever.

A little bit of this behavioural nudge shows up in a change in this week’s sales figures.  But only a tiny bit, because most of the consumers exposed to the advertising didn’t buy from the category this week.  What on earth do this week’s sales figures tell us about the total long-term affect of this bit of advertising ?  Not much, because we don’t know how much.

Also this week’s sales figures are a mis-mash of all sorts of other effects, from in-store promotions to competitor advertising.  Even if, in a pristine fantasy world, they were purely affected by your advertising alone what would they actually show about our advertising… is it measurement of the sales power of the ad? is it the quality of the media placement? is it a measure of the appropriateness of the spend (obviously the sales effect depends heavily on how many people the advertising reaches)?

Many marketers understand that sales figures are a messy, noisy indicator of advertising’s sales power.  Largely they are put off by the fact that sales figures show little or no reaction to their new advertising campaign.  So they employ proxy measures, like advertising awareness or perception shifts.  But these measures are noisy messy measures too.  Again, in a fantasy world where they were only affected by your advertising, it still isn’t clear if they are measuring the quality of the advertising, or the media placement, or whether the spend was appropriate.  And proxy measures are just that, they are not measures of the behavioural change in buying propensities.

I hope I’ve convinced you that marketers, and market researchers, have largely been barking up the wrong tree for decades.  The reason we know so little about the sales effects of advertising – and hence what is good advertising – is that we have been measuring the wrong effects.

Behaviours are what we need to measure.  But aggregate level sales receipts, like weekly/monthly sales figures, are a lousy measure of the sales power of our ads.  The solution is true single-source data capturing individual’s repeat-buying over time as well as their exposure to advertising over time.  And fortunately, single-source data is becoming increasingly available.


Please comment on this article if you wish

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s