Advertising exposure effects under a microscope
New research has produced a controversial conclusion - that effective frequency is provided by a single exposure
This paper builds on the author's work described in the September 1994 issue of Admap, which made the point that advertising is capable of generating a powerful short-term sales response. The author's research shows that the first exposure generates the highest proportion of sales from a media burst and additional exposures add very little to the effect of the first - ie, effective frequency is provided by a single exposure. If, and only if, a campaign demonstrates an immediate effect on sales, can it also generate a long-term response. The forces working for long-term effect are summarised by the 'Jones Catechism': 'If you want your advertising to benefit your brands in the long term, demonstrate its ability to sell your brands in the short-term'.THE TITLE of this paper is taken from an observation made by Michael Naples, President of the Advertising Research Foundation (ARF). The ever-provocative (although hardly novel) subject of effective frequency has been given a fresh lease of life by the Association of National Advertisers (ANA), with a second edition of its book Effective Frequency, updated by Colin McDonald and scheduled for publication later this year; and a symposium in New York City on November 2, 1994, which was attended by most of the best known professionals in the field.
This article is based on some of the findings I presented at this symposium, and it should be read as a continuation of my paper 'Advertising's woe and advertising accountability' (Admap, September 1994). I shall not repeat in detail my description of the pure single-source method on which my research was based, but readers can refresh their memory from the summary of the main features of the Nielsen technique, in the box at the end of this article.
The most important series of points I made in 'Advertising's woes and advertising accountability' was that my research (a) demonstrates quite ambiguously that advertising is capable of generating a powerful short-term sales response measured by the STAS Differential, which can most usefully be described as the immediate - and temporary - market share change stimulated by advertising (STAS stands for Short-Term Advertising Strength). But, (b), this effect differs widely according to campaign. However, (c), the statistical tool STAS makes it possible to identify the winners and to measure how strong a short-term effect they trigger.
The purpose of the present article is to reveal three additional findings. The first of these relates again to the short-term and was the focus of the presentation I made to the ARF symposium in November. The second and third findings are concerned with advertising's ability to stimulate positive results in the long term, and what is necessary to turn a short-term effect into a long-term one.
ADVERTISING WORKS FROM THE FIRST EXPOSUREThe STAS analysis provides reliable data on the amount of media exposure necessary to increase short-term sales. A startling conclusion from the research is that the first exposure generates the highest proportion of sales from a media flight/burst, and additional exposures add very little to the effect of the first. (Exhibit 1). The advertising response function demonstrates diminishing returns in the clearest possible way. Effective frequency is provided by a single exposure. It is wasteful to concentrate media money in flights to provide an average of more than one OTS. This - to put it mildly - is a controversial finding.
Exhibit 2 describes an analysis of the brands into quintiles ranked by the size of their STAS Differential (ie, the short-term effectiveness of their campaigns). This shows that the effect of the first exposure is strongest for the most effective campaigns (first quintile). And the first exposure of the least effective campaigns has the greatest negative effect (fifth quintile).
Exhibits 1 and 2 are based on hard data. Exhibit 3 is speculation. In Exhibit 3, I make a different quintile analysis in which I have assumed that each of the groups of brands is composed of a mixture of campaigns, some effective and some less so. The first group has got the highest proportion of effective campaigns; the second, third and fourth groups have progressively declining proportions; and the fifth group has the lowest proportion; so that the five groups represent a continuum ranked by the number of effective campaigns in each group.
I hypothesise the range of advertising response functions illustrated in Exhibit 3.
Note that the curve for the fifth group of brands is an approximation of the response function produced by Colin McDonald's pioneer study dating from 1966 (McDonald 1970). My research suggests that this curve can be explained by there being a substantial number of ineffective campaigns in McDonald's sample (which was not large enough to isolate individual brands or groups of brands).
The advertising industry has incorrectly interpreted McDonald's research to mean that all brands have similar response functions; and the aggregate response function that emerged from his research pointed to the necessity of more than one exposure to achieve a sales effect. My findings (based on very large samples) suggest that what McDonald's research really shows is a substantial number of ineffective campaigns, whose negative influence on sales counteracts the positive influence of the smaller number of effective ones. The policy that my conclusion leads to is that we should isolate the effective campaigns and dump the ineffective ones. And with an effective campaign, a single advertising exposure will boost sales. Such campaigns should be advertised at a generally low pressure to avoid diminishing returns.
THE LONG TERMLong-term effects, like short-term ones, are selective. But to work in the long term, a campaign has to surmount two barriers. First, it must pass through the short-term barrier, by producing an immediate sales response. As a fairly firm rule, a campaign is unable to work in the long term unless it generates an immediate effect first. My research shows a virtually total absence of a 'sleeper' effect - the delayed response that some people believe will manifest itself once advertising passes a threshold of cumulative exposure.
If, and only if, an advertising campaign can demonstrate an immediate effect on sales, it might possibly also generate a long-term response. But the second barrier it must now pass is the countervailing effects of the advertising for competitive brands. When a brand is unadvertised, its sales will suffer from successful competitive campaigns. The only way in which a brand can be protected is to be on the air fairly continuously - to have an advertising schedule with very few gaps. Protection is provided by continuity in the schedule that blocks out the influence of competitors, and generates a repetition of short-term sales effects.
Advertising yields diminishing returns to incremental pressure. To avoid diminishing returns, we should advertise at a low concentration: a policy that leads us to flatten the amplitude of flights/bursts. This conclusion, taken in conjunction with the argument for media continuity, demonstrates that we should redeploy media funds towards continuous advertising at relatively low pressure, in preference to concentrated bursts with gaps in between. This new strategy would of course be as unorthodox in the United States as in Britain.
On the assumption that the advertising produces enough short-term effect to start the campaign working - a sufficient impulse to get the show on the road - we can now discern two orders of long-term effect.
The first is measured in sales, and in particular by an improvement in market share over the course of a year. This effect follows the pattern described in this section. It is characterised by short-term sales growth, in a repetitive pattern resulting from media continuity. In other words, this first order of long-term effect is no more than an accumulation of short-term effects.
This is not all. The second order of long-term effect, which can make itself felt over very extended periods, can have a profound influence on a brand. It can produce not only sales, but also improved value perceptions, manifested by the brand's ability to command high effective prices, with diminished reliance on profit-draining promotions.
This second effect comes from what I call the internal momentum of a brand - the interaction of the consumer's satisfaction with the brand's functional qualities, and the non-functional added values which come from both the consumer's personal experience of the brand and from the advertising. This mutual reinforcement (a pattern mapped out in Andrew Ehrenberg's ATR theory) is cumulative, or 'virtuous' - assuming that all elements of the mix are working as planned. Note that the dynamism of internal momentum differentiates it from the more static concept of brand equity - the concept favoured by most analysts.
The working of these forces is illustrated in Exhibit 4, which (for obvious reasons) I have entitled the Arrow of Effects. Note that I have described the end product of the successful marketing stimuli as a behavioural effect, which encompasses both sales volume and other measures (eg, price effects). Note also how the arrow thickens. This is intended to represent the synergy between the different stimuli. This brings me to the third finding I presented at the ARF conference in New York.
SYNERGY BETWEEN MARKETING INPUTSOne of the remarkable conclusions from my research is the powerful synergy between (a) advertised inputs (campaign quality plus media continuity) and (b) promotional price stimuli. The sales-generating effects are multiplied when these inputs work in co-operation with one another. This point is demonstrated in two separate analyses.
First, I concentrated on brands with a positive STAS Differential, irrespective of their long-term growth, positive or negative. I analysed the campaigns into quintiles ranked by their long-term effectiveness. I then indexed the average advertising expenditure in each quintile, and also the average amount of promotional price stimulus. This enabled me to calculate elasticities for advertising and price.
In Exhibit 5, the left-hand column shows the average short-term advertising elasticity and price elasticity using data taken from published econometric studies. The right-hand column gives my own long-term figures for these two measures. The long-term effect of progressive amounts of advertising is boosted by a factor of eight (over the short-term coefficients) when advertising is supported by promotions; and the long-term effect of progressive amounts of promotional price stimuli is boosted by a factor of three when promotions are supported by advertising.
As in Exhibit 5, my second analysis also examines all campaigns with a positive STAS Differential. We see the results in Exhibit 6, where the figures are index numbers based on 100 (= no marketing stimulus).
EXHIBIT 5. COMPARISON OF ADVERTISING AND PRICE ELASTICITIES
|Average of alpha brands
EXHIBIT 6. EFFECT OF DIFFERENT SALES STIMULI ON ALL BRANDS WITH POSITIVE STAS DIFFERENTIAL
|No. of brands||Average STAS differential||Average share growth index|
|Positive STAS alone||14||155||98|
|Positive STAS plus above-average advertising intensity||21||117||96|
|Positive STAS plus above-average price stimulus||12||147||110|
|Positive STAS plus above-average advertising intensity plus above average price stimulus||9||152||150|
- There is no long-term effect from a positive STAS Differential on its own unsupported by other marketing stimuli.
- A positive STAS Differential plus above-average price stimulus on its own produces a small effect in the long term.
- A positive STAS plus above-average price stimulus plus above-average advertising weight (ie, media continuity) boosts sales by 50 per cent in the long term.
EXHIBIT 7. EFFECTS OF DIFFERENT SALES STIMULI ON ALL BRANDS WITH NEGATIVE STAS DIFFERENTIAL
|No. of brands||Ave. share growth index|
|(negative) STAS alone||7||92|
|STAS plus above-average advertising intensity||11||106|
|STAS plus above-average price stimulus||3||91|
|STAS plus above-average advertising intensity plus above-average price stimulus||1||109|
I have taken this point and developed it into what I hope will be remembered as the Jones Catechism: If you want your advertising to benefit your brands in the long term, demonstrate its ability to sell your brands in the short-term.
As a footnote to this article, let me mention briefly the strategy of Integrated Marketing Communications (IMC), which has generated much publicity in the United States during recent years. The ideas of planning all marketing activities as expressions of a single or combined strategy has an obvious appeal to common sense. Yet regrettably, as any informed observer of the American marketing scene will confirm, the various interested parties (clients, advertising agencies, sales promotion companies, the retail trade) all tend to march to different drum beats, with the result that IMC has nowhere near fulfilled its promise.
However, it is difficult to imagine a more persuasive piece of evidence for the wisdom of IMC than the facts revealed by my research on the synergy between advertising and promotions. I trust that manufacturers will not ignore the operational lessons to which my research is so clearly pointing.
REFERENCES1. Harvard Business Review (January - February 1995). Editorial on Business Review - John Philip Jones's research.
2. John Philip Jones (1994). Advertising woes and advertising accountability. Admap, September pp 24-7.
3. John Philip Jones (1995). When ads work: new proof that advertising triggers sales. New York: Simon & Schuster - Lexington Books.
4. Colin McDonald (1970). What is the short-term effect of advertising? Proceedings of the ESOMAR Congress.
5. Colin McDonald (1995) Effective frequency. 2nd edition. New York: The Association of National Advertisers.