NEW YORK: A study published in the Journal of Advertising Research (JAR) offers fresh insight into the relationship between a brand’s sales and its paid and digital owned media.
Rob Jayson (US International Media/USIM), Martin P. Block, (Northwestern University) and Yingying Chen (Michigan State University) analysed 838 brands in 14 product and service categories.
A central idea tested in their study, entitled How Synergy Effects of Paid and Digital Owned Media Influence Brand Sales: Considerations for Marketers When Balancing Media Spend, was the advertising-intensive curve.
This concept “relates market share to advertising share of voice” and suggests “that paid-media investment is correlated to the brands’ market position in the repeat-purchase packaged-product category,” the academics wrote.
One valuable learning: across the featured categories overall, as sales grew by 1%, brands needed to boost their share of voice by 0.61 percentage points, and their owned media share by 0.53 percentage points, to “stay with the market benchmark”.
Among the other core findings was that “brands with smaller market share tended to have their share of voice and share of owned media exceed their market share”.
Products with a bigger market share, by contrast, “tended to have their share of voice and share of owned media lower than the market share”.
Further insights from the research involved advertising elasticity – a gauge of campaign effectiveness in driving new sales, as established by dividing the percentage shift in demand with the percentage shift in adspend.
“The advertising elasticities for both paid and owned media reduced as a brand’s market share increased,” the trio of academics revealed.
“This indicates that the big brands still can maintain the same market share as they reduce the share of voice and share of owned media to below the levels of their market share.”
Such findings should help marketers navigate a rapidly changing ecosystem in which the old assumptions do not always apply, according to the authors.
“That disruption has prompted questions about how brands’ investment in paid and digital owned media affects brand sales,” their study argued.
Sourced from Journal of Advertising Research; additional content by WARC staff