NEW YORK: Advertising can have a positive long-term impact on sales, but the "short-term effects" of ads, and the marketing activity of a brand's competitors, are key factors in achieving this result, according to a new study published in the Journal of Advertising Research.
The latest issue of JAR aims to assess "what is currently known about advertising", and many of the papers it contains are being discussed at the ARF's Audience Measurement 4.0 in New York. (To view WARC's daily reports from this event, click here.)
The Total Long-Term Sales Effects of Advertising was written by Kate Newstead, Jennifer Taylor, Rachel Kennedy and Byron Sharp, from the Ehrenberg-Bass Institute at the University of South Australia.
It was based on the analysis of several previous studies of single source data, which monitored consumers' purchase behaviour and exposure to advertising over an extended period of time.
Overall, the authors argue that advertising works by effectively "nudging the propensity to buy the brand of the individuals who saw the commercial."
Isolating the impact of a specific "nudge" such as a single TV spot is difficult, as a range of other factors – from the brand's other marketing activities to media placement – also play a vital role.
The effects of advertising on sales are also "spread out over time", as "only a fraction" of consumers who have viewed a particular commercial will then go on make a purchase in the relevant category in the following few days.
However, the research published in JAR suggests that single source data offers one way of overcoming this problem, and also shows that advertising does not work like a "time bomb."
Rather, a truly effective ad campaign starts to work immediately, and continues to deliver over an extended period of time, instead of witnessing a delay when it comes to producing visible results.
The exact impact of advertising on sales depends on media strategy and spending – which influence the number of consumers that are exposed to ads – and other influences like competitor expenditure levels.
Scheduling can also play an important role, and while using "bursts" can quickly build sales in the short-term, continuity results in more regular purchases being made in the long-term.
Subscribers to WARC can view this paper in full by clicking here.
Data sourced from Journal of Advertising Research; additional content by WARC staff