How effectively can ad research predict sales?

Dominic Twose and Dale Smith

A result of an increasing demand for short-term sales, coupled with an astonishing rate of media fragmentation, is that the advertising industry is under huge pressure to demonstrate its effectiveness. This is where market research can help.

Tracking studies that measure advertising recall and brand health might identify what is going on in the consumer's mind, but they do not identify the precise impact that advertising has on sales. With today's complex campaigns, sales-response modelling rarely identifies sales effects at the individual-ad level. And while virtually all consumer-based brands buy sales and market share data, sorting out how advertising alone influences sales is incredibly difficult.

Advertising can affect sales in a number of different ways. The assessment of the likely sales effectiveness of any ad therefore needs to be made subject to how the advertising was meant to work. This is in terms of both the time frame (short vs long-term), and the ad's objectives (whether it was trying to generate impact, persuasion, communication or imagery). While an ad has not necessarily 'failed' just because indications are that sales do not immediately or dramatically rise, it very often is an important indicator, especially because long-term changes will usually start to show up in the shorter term.