“ We know that half of all Advertising doesn’t work, the trouble is we don’t know which half!” Presented by: Salil Bhat – ...
Earlier Models <ul><li>As Strong (1925) points out, the earliest and still the best known hierarchical model, AIDA, was re...
John Wanamaker (1838-1922) <ul><li>Considered to be, creative a innovator, merchandising and advertising genius and  there...
Traditional Measurement Methods of Advertising effectiveness <ul><li>According to Lucas and Britt (1963), following method...
Limitations of the Traditional Methods (Dixon & Shapiro,2006) <ul><li>Predictability – Low  in rapidly changing environmen...
Marketers under Pressure <ul><li>Accountants department and the CFO want to see that marketing campaign  contributes ‘X %’...
How can modern marketers be accountable?(Zealey,1996; Rosenwald,2005;White,2007) <ul><li>Advertising objectives should be ...
<ul><li>Need for ‘True ROI’. </li></ul><ul><li>Short term advertising objectives are vital as they are indicators of the p...
Brand Actional Advertising (Haggin,2006):Measurable Sales <ul><li>Transactional Media: Immediate Response and Measurable R...
The Kraft Approach to Measuring the Impact of Advertising (Stone & Duffy,2003) <ul><li>In-market Tests: Detailed marketing...
Empirical Model Fig 1.1: Relationship between sales and advertising (Source: Stone & Duffy,2003)
Finding the Optimum Spend Level & ROI <ul><li>By quantifying sales responses to various levels of advertising, we can calc...
New Thinking: Cognitive Tracking (Beirne et al.,2003) <ul><li>Key Dimensions: Consumer-centric, Segment Based & Holistic <...
Case Study: Kit Kat Chunky  Sun Special Edition Fig 1.3: Kit Kat and Sun in partnership (Source: Beirne et al.,2003)
Background <ul><li>Kit Kat Chunky launched in April 1999. </li></ul><ul><li>2 million advertising budget and 200 million b...
Cognitive Tracking Results <ul><li>Sun’s  Impact on Brand Perceptions </li></ul>Fig 1.4: Sun’s Impact on Brand Perceptions...
<ul><li>‘ Kit Kat Chunky really satisfies my hunger’ </li></ul>Fig 1.5: Impact of Managed and Unmanaged Communications on ...
<ul><li>‘ Chunky is a Man’s Bar’ </li></ul>Fig 1.6: Impact of Managed and Unmanaged Communications on Brand Perceptions (S...
Sun,  Kit Kat Chunky: Conclusions <ul><li>Sun  delivered on Nestlé's to build perceptions among young chocolate snackers t...
“ We know that half of all Advertising doesn’t work, the Trouble is we don’t know which half?” <ul><li>We disagree with th...
To conclude… <ul><li>“ Detective work caught Saddam Hussein, marketing needs more of it” (Cowan,2004). </li></ul><ul><li>M...
Moving down the path to Marketing Accountability Fig. 1.7: Moving down the path to Marketing Accountability (Source: Adapt...
References <ul><li>Beirne, H., Drummond, A. & Dodd, M. (2003), “Measuring the outcome of marketing activity”,  Admap Magaz...
References  <ul><li>Rosenwald, P. (2005), “ROMI: Putting the marketing 'M' into ROI”,  Admap Magazine , May, No.465. </li>...
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Half Of All Advertising Doesnt Work, The Trouble Is We Dont Know Which Half!

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Half Of All Advertising Doesnt Work, The Trouble Is We Dont Know Which Half!

  1. 1. “ We know that half of all Advertising doesn’t work, the trouble is we don’t know which half!” Presented by: Salil Bhat – 21121931 Adnan Galabhai – 21077819 .
  2. 2. Earlier Models <ul><li>As Strong (1925) points out, the earliest and still the best known hierarchical model, AIDA, was reputedly conceived by St. Elmo Lewis in 1898 as a guide to salesmen. </li></ul><ul><li>Attention -> Interest -> Decision -> Action </li></ul><ul><li>The first model to assess measures developed by Daniel Starch and George Gallup in 1920s </li></ul><ul><li>*Noticed -> Read -> Understood -> Desired -> Action </li></ul><ul><li>*(STARCH MODEL) </li></ul>
  3. 3. John Wanamaker (1838-1922) <ul><li>Considered to be, creative a innovator, merchandising and advertising genius and therefore ‘ Father of Modern Day Advertising ’ </li></ul><ul><li>Opened the first ‘ Departmental store ’ in Philadelphia but also had multiple stores in US </li></ul><ul><li>Quoted – “Half the money I spend on advertising is wasted; the trouble is I don’t which half!” </li></ul><ul><li>Triggered the need for research in area of advertising (Scott W.D 1903; Lucas and Britt 1963; Krugman 1971; Brown 1985) </li></ul>
  4. 4. Traditional Measurement Methods of Advertising effectiveness <ul><li>According to Lucas and Britt (1963), following methods are applied before the final advertisement </li></ul><ul><li>Test Based on Memory- Recognition test(s) and Recall and association test(s) </li></ul><ul><li>Opinion and Attitude ratings </li></ul><ul><li>Projective methods </li></ul><ul><li>Auditorium and Laboratory Tests (Pre-testing) </li></ul>
  5. 5. Limitations of the Traditional Methods (Dixon & Shapiro,2006) <ul><li>Predictability – Low in rapidly changing environments </li></ul><ul><li>Granularity – Lack the ability to capture media planning realities </li></ul><ul><li>Relevance – Failure to consider full impact of marketing programmes </li></ul>
  6. 6. Marketers under Pressure <ul><li>Accountants department and the CFO want to see that marketing campaign contributes ‘X %’ to the profit. (Return on Marketing Investment) </li></ul><ul><li>The problem is not a new one, but has been inflated by the increasing influence of CFOs to be convinced that the money spent. </li></ul>
  7. 7. How can modern marketers be accountable?(Zealey,1996; Rosenwald,2005;White,2007) <ul><li>Advertising objectives should be specific, measurable, achievable and consistent </li></ul><ul><li>Marketers need to decide what to do and know what percentage of ROMI (Return on Marketing Investment) will be achieved as a result. </li></ul><ul><li>Advertising effectiveness will be much significant when marketers have an accurate understanding of the target market. </li></ul>
  8. 8. <ul><li>Need for ‘True ROI’. </li></ul><ul><li>Short term advertising objectives are vital as they are indicators of the possibility of achieving long term objectives. </li></ul><ul><li>Econometric analysis (marketing mix modelling) will help to explain short-term and long- term sales trends and attribute value to communications </li></ul>How can modern marketers be accountable?(Zealey,1996; Rosenwald,2005;White,2007)
  9. 9. Brand Actional Advertising (Haggin,2006):Measurable Sales <ul><li>Transactional Media: Immediate Response and Measurable Results through Direct Response Element </li></ul><ul><li>Continuous Improvement Marketing(CIM): Immediate Return on Advertising Investment </li></ul><ul><li>CIM is the proverbial ‘tortoise’ : Adds value to the buyer-seller relationship </li></ul><ul><li>Top-down Approach: Prospective customers ‘vote’ on effectiveness </li></ul><ul><li>Dell: Measurable marketing programs responding to customer feedback </li></ul>
  10. 10. The Kraft Approach to Measuring the Impact of Advertising (Stone & Duffy,2003) <ul><li>In-market Tests: Detailed marketing data, store sales, etc. </li></ul><ul><li>Empirical Analyses: Quantifying the relationship between marketing and sales </li></ul><ul><li>Model: Sales is a function of a series of coefficients behind marketing efforts, competitive actions and other factors like weather and commodity pricing. </li></ul>
  11. 11. Empirical Model Fig 1.1: Relationship between sales and advertising (Source: Stone & Duffy,2003)
  12. 12. Finding the Optimum Spend Level & ROI <ul><li>By quantifying sales responses to various levels of advertising, we can calculate profits and hence, ROI. </li></ul><ul><li>Reach a level that maximizes profitability. </li></ul>Fig 1.2: Advertising Elasticity Index used by Kraft Foods (Source: Stone & Duffy,2003)
  13. 13. New Thinking: Cognitive Tracking (Beirne et al.,2003) <ul><li>Key Dimensions: Consumer-centric, Segment Based & Holistic </li></ul><ul><li>Associative Networks: Consumer-Brand Relationship for each segment </li></ul><ul><li>Exposure Study: </li></ul><ul><li>Relative strength of brand associations ( Recognition Tests) </li></ul><ul><li>Experience with brand through both managed and unmanaged communications </li></ul><ul><li>Modeling: Statistically tests how exposure to advertising has reinforced or undermined any attitudes or perceptions. </li></ul>
  14. 14. Case Study: Kit Kat Chunky Sun Special Edition Fig 1.3: Kit Kat and Sun in partnership (Source: Beirne et al.,2003)
  15. 15. Background <ul><li>Kit Kat Chunky launched in April 1999. </li></ul><ul><li>2 million advertising budget and 200 million bars sold within a year </li></ul><ul><li>Two years on, impulse sales were feeling the squeeze </li></ul><ul><li>Nestle wanted to talk directly to young chocolate snackers and hence, Sun created a dedicated supplement for the Chunky brand. </li></ul><ul><li>Objectives: Understanding key differences between the sub-brand and parent brand, isolating the impact of all forms of Kit Kat communications on the Chunky brand & putting the contribution of Sun into context. </li></ul><ul><li>Cognitive Tracking was used since it would assess the true impact of the Sun, as part of the total communication mix. </li></ul>
  16. 16. Cognitive Tracking Results <ul><li>Sun’s Impact on Brand Perceptions </li></ul>Fig 1.4: Sun’s Impact on Brand Perceptions (Source: Beirne et al.,2003)
  17. 17. <ul><li>‘ Kit Kat Chunky really satisfies my hunger’ </li></ul>Fig 1.5: Impact of Managed and Unmanaged Communications on Brand Perceptions (Source: Beirne et al.,2003)
  18. 18. <ul><li>‘ Chunky is a Man’s Bar’ </li></ul>Fig 1.6: Impact of Managed and Unmanaged Communications on Brand Perceptions (Source: Beirne et al.,2003)
  19. 19. Sun, Kit Kat Chunky: Conclusions <ul><li>Sun delivered on Nestlé's to build perceptions among young chocolate snackers that Chunky can deliver satisfaction on the move </li></ul><ul><li>Sun had a positive impact for Kit Kat Chunky on a similar scale to Kit Kat’s TV activity </li></ul><ul><li>Had the biggest impact on the perception “Chunky is a man’s bar” as compared to all other forms of managed and unmanaged communications. </li></ul>
  20. 20. “ We know that half of all Advertising doesn’t work, the Trouble is we don’t know which half?” <ul><li>We disagree with this viewpoint. </li></ul><ul><li>Scenario different when quote was made. </li></ul><ul><li>Now, increasing technology and credible metrics available to marketers. </li></ul><ul><li>Modern day marketers have proven that advertising expenditure can be effectively measured and justified. </li></ul><ul><li>For ex. Kraft Foods, Nestle, etc </li></ul><ul><li>However, only a few companies have been successful. </li></ul><ul><li>It takes commitment and patience. </li></ul>
  21. 21. To conclude… <ul><li>“ Detective work caught Saddam Hussein, marketing needs more of it” (Cowan,2004). </li></ul><ul><li>Marketing’s financial accountability growing louder </li></ul><ul><li>Companies need to re-invent themselves in the new media landscape </li></ul><ul><li>According to Association of National Advertisers (ANA), only a fraction of senior management surveyed displayed knowledge of credible marketing metrics. </li></ul><ul><li>Brand Marketers heavily focusing only on the creative side of marketing </li></ul><ul><li>Marketers need to justify advertising ROI like Kraft, Nestle; otherwise marketing’s role as a top-level strategic driver of the firm will diminish. </li></ul>
  22. 22. Moving down the path to Marketing Accountability Fig. 1.7: Moving down the path to Marketing Accountability (Source: Adapted from See,2007) Risk Taking Transformation Visibility and Financial Controls Senior Level Sponsorship Cross Functionality Marketing Accountability
  23. 23. References <ul><li>Beirne, H., Drummond, A. & Dodd, M. (2003), “Measuring the outcome of marketing activity”, Admap Magazine, February, No.436. </li></ul><ul><li>Brown, G. (1985), “Tracking studies and sales effects: A UK perspective.” Journal of Advertising Research , Vol.25, No.1, pp.52–64. </li></ul><ul><li>Cowan,D.(2004), “Detective work caught Saddam Hussein: Marketing needs more of it”, Market Leader, No.27. </li></ul><ul><li>Feldwick, P. (2002), “How can you tell if advertising is working?”, WARC Monograph. </li></ul><ul><li>Haggin, J. (2006), “Brand actional advertising: Building brands by driving sales”, Admap Magazine, June, No.473. </li></ul><ul><li>Krugman, H. E. (1971), “Brain wave measurement of media involvement”, Journal of Advertising Research , Vol.11, pp.3-9. </li></ul><ul><li>Lucas, D.B. & Britt, S.H. (1963), Measuring advertising effectiveness, McGraw-Hill Inc, U.S.A. </li></ul><ul><li>Olson D., (2001), ‘Principles of measuring ad effectiveness’ , American Marketing Association , Chicago. </li></ul>
  24. 24. References <ul><li>Rosenwald, P. (2005), “ROMI: Putting the marketing 'M' into ROI”, Admap Magazine , May, No.465. </li></ul><ul><li>Scott, W. D. (1903), The psychology of advertising , Boston: Small, Maynard & Co. </li></ul><ul><li>See,E.(2007), “Marketing accountability-are you ready?”, Admap Magazine, June,No.484. </li></ul><ul><li>Starch, D. (1923), Principles of advertising , Chicago: A.W. Shaw Company. </li></ul><ul><li>Stone, R. & Duffy, M. (1993), “Measuring the impact of advertising”, Journal of Advertising Research, Vol.33, No.6. </li></ul><ul><li>Strong, E. K. (1925), “Theories of selling”, Journal of Applied Psychology , Vol.9, No.1, pp.75-86. </li></ul><ul><li>White, R. (2006), “Campaign evaluation - measuring advertising performance”, Admap Magazine , February, No. 469 </li></ul><ul><li>— (2007), ‘Accountability and practicality’, Admap Magazine , June, No.484 </li></ul><ul><li>Zealey, J. (1996),'Setting advertising objectives', Monitoring Advertising Performance Seminar. </li></ul>

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