Many brands are still tilting their expenditure significantly towards incentives – such as price promotions – rather than advertising, a trend that frequently reflects a failure to keep pace with evolving consumer habits, but also mirrors a need for change in terms of measurement.

Megan Clarken, chief commercial officer, Nielsen Global Media, discussed this subject at the Advertising Research Foundation’s (ARF) 2019 AUDIENCExSCIENCE conference.

“Through the mixed modeling that we’ve done over many, many years, we've captured what is going on in terms of marketers’ spend on media,” she said. (For more, read WARC’s in-depth report: Nielsen: Sales promotion continues to outweigh advertising.)

As a case in point in the fast-moving consumer-goods space, she cited a real (but anonymous) major brand that is investing only 21% of its marketing spend on advertising. The balance is directed to below-the-line incentives.

When Nielsen conducted a comparable analysis for an automotive brand, the results were even more heavily weighted towards sales promotion.

Speaking on behalf of advertising, Clarken told the ARF assembly, “This was even worse, with only 14% spent on advertising and 86% on incentives.

“What are incentives? They’re pricing promotions; they’re couponing; they’re [displays] at the end of supermarket aisles; they’re those brochures that you get in your letterbox.”

And, whatever else they are, they’re not exciting. TV spots – be it on living-room screens or mobile devices – are “talkable. It’s something that we do: We stop in front of a water cooler and talk about that new ad that you saw during the Super Bowl.

“You never stand at the water cooler and talk about the pamphlet that appeared in your letterbox last night,” continued Clarken. “You just don’t.”

Audio spending is another example. “Even though audio has stayed pretty flat, [its engagement numbers] are a display of how powerful it is as a medium – and as an advertising medium – particularly in the car,” Clarken said.

Similarly, from time-shifted TV to subscription- and advertising-supported video on demand, there is a clear “change in behaviour” on television screens that marketers have not always kept pace with.

There’s a “problem of trust” that Clarken identified among brand stewards when it comes to measuring the results of their expenditure, and this is something media owners need to resolve.

“It’s a problem of trying to work out what it means to advertise and spend a lot of money there,” Clarken asserted. “That is really scary.”

Sourced from WARC