This paper describes the structure and main features of a tool aiming at understanding the role played by advertising within the marketing environment. A special focus is on the question how explanatory variables are selected and related according to their semantic status.
The 'Strong' theory of advertising receives widespread support and is characterized by the beliefs that advertising increases peoples' knowledge, changes peoples'attitudes and, as a result, is capable of persuading people who have not previously bought a particular brand to start buying it and to persuade others who already buy it to do so with greater frequency and in preference to other brands on offer. Advertising is seen as being capable of increasing sales not only of brands but also of complete product categories and is a prime mover in the capitalist system. There is another theory, the 'Weak' theory, developed especially in Europe and strongly rooted in empiricism. Derived from Andrew Ehrenberg's Awareness-Trial-Reinforcement hypothesis, the 'Weak' theory argues that advertising is capable of increasing peoples' knowledge but actually communicates not very much: advertising is not strong enough to convert people whose beliefs are different from those championed in an advertisement: most advertising is employed defensively: members of the public frequently claim that they are not influenced by advertising and they are probably right. In general, according to the 'Weak' theory, consumers are apathetic and rather intelligent. The two theories are at opposite ends of the spectrum. It is easy to produce a great deal of circumstantial evidence to demonstrate that the Strong theory of advertising does not accord with reality. Research can make a major contribution towards providing the evidence which will help us all to better understand how advertising really works.
LWT's interest has been to encourage greater use of television advertising by financial institutions. To provide a link between ourselves and potential advertisers, we launched a Financial Marketing Review in December 1985 to bring to wider attention the potential of television advertising for promoting awareness and understanding of financial products and services that have traditionally been the preserve of the press. As an input to the Review, we commissioned NOP Market Research Ltd to conduct a series of surveys. The first concentrated on Stocks and Shares and related issues such as privatisations and takeovers, and the second concentrated on unit trusts and personal equity plans. A third study is now in the offing to assess the impact of Black Monday when the bottom fell out of the equity market last October. Many new investors saw their holdings plummet in value even faster than they had soared in previous months. For most, the loss of assets was on paper and did not materially affect their income or lifestyle, but the psychological impact may well have been far reaching.
We are living in a time in which consumers consider brands and products as more or less interchangeable. In this context, advertising offers a solution to marketing executives how to avoid this dilemma. It allows for instance to differentiate brands and products, to stand out against competitors and to develop a brand personality as well as an advertising property. But in many cases, advertising success means higher sales, that is, it influences consumer behaviour. Experimental micro-test-market systems, for instance BehaviorScan - are available. In order to measure actual consumer buying behaviour as a reaction to different marketing alternatives, including TV-advertising. These systems enable the decision-maker to vary the individual marketing components step by step, and thus to find out which strategies will later be successful on a national basis. This experimental work in the micro-test-market helps marketing executives to put together a complete picture of the effects of their marketing measures by combining different components. Advertising continues to be a decisive mainstay in the mix of marketing tools - and it is above all TV-advertising which occupies the most important rank. Therefore we are confronted with some decisive questions when thinking about the use of advertising - TV-advertising - in a test-market system.
Selling more units at lower cost is one of the tasks advertising should perform. There is ample proof that advertising, if perceived, if read or listened to and especially if recalled does cause purchasing. Getting consumers to so react to advertising largely depends on the quality of ads and commercials. Spending money in the creative area therefore is even more important than buying space and colour. Producing attractive advertising does help to increase perception levels. The single most deciding criterion is shown to be the interestingness of advertisements. Interest causes both perception and sales effects. In auditing the effects of advertising measures of interest aroused should take its place alongside recognition, proved recall and registration of buying intentions (or if at all possible: buying behaviour). Measures of interest are particularly useful in connecting pretest to post-test-data. Findings from various ad hoc surveys and continuous post testing are reported. A plea is made to audit advertising effects in much the same way as a companys profits (or losses) are being checked. Advertising and every single ad or piece of copy should be viewed as just another product that should perform the functions it is designed for. Poor advertising should be discontinued just as quickly as unsuccessful product lines.
The paper shows clearly that previous advertising theories were too often based on unwarranted assumptions. It raises as questionable many points of view which previously seemed convincing. The emotional, reinforcing roles of advertising are emphasised in this paper. It is not all destructive, though ground-clearing is perhaps its main function.
If one wishes to study the effect of advertising, a concise definition of the concept of advertising is essential. In business-circles, the function of advertising is often defined: advertising must sell. Although it cannot be said that this definition is incorrect, it is certainly inadequate. Quality, presentation, distribution, merchandising, etc, should also be of a kind that stimulate sales. This particular definition therefore does not adequately describe the concept of advertising. Advertising should influence the attitude of the consumer towards a product or service in such a manner, that he is not only favourably influenced with regard to such a product, but also wants to acquire it. A very attractive definition, which in turn provides the market researcher with a workable framework, is Martin Mayers: "Advertising, in addition to its purely informative /unction, adds a new value to the existing values of the product or service". The merit of this definition is that its elements not only give an almost complete description of the task of advertising but the terminology used also defines exactly the scope of its field of activity.
This paper brief reviews some evidence often quoted in relation to quantitatively evaluating advertising expenditure. The need to relate quantitative methods to facts and theories of consumer behaviour is emphasised. A view of consumer buying behaviour is discussed and related to three possible kinds of advertising effects which are distinguished; immediate, medium-term and long-term effects. It is suggested that medium- and long-term effects may be intermittent and questions are raised as to whether they are currently able to be measured by econometric analysis. A recent hypotheses that long-term effects, even if ignored, are unimportant is discussed and questioned. It is finally proposed that some important aspects of advertising strategy are best approached via area experiment. A longitudinal approach to studying the role of advertising in a brand's development is suggested to cover the investigation of the effects of different levels of advertising early in the development of advertising and for very long periods of time.
The object of this study is an attempt to answer this fundamental question, and to try to grasp and define the changing role of advertising campaigns. The first part will consist of an analysis of the changes in the 1970's, which can be understood through observations of certain advertisements presented as examples. The second part deals with the causes for these changes, which can be observed in the mechanisms of advertising campaigns. These transformations have important consequences on the attitudes of multinational corporations, political parties and administrative agencies. And finally, in the last part, we look at the results of these changes in a more long-term perspective and analyse the significance of this evolution in advertising as a cultural phenomenon in a turbulent environment in times of economic crisis.
This seminar revealed the gulf between the passionate non-verbalists who believe structured verbal response is inadequate to describe meaning (for them the Black Box, the Group Discussion, the indirect inference) and those who seem to believe that thoughts can be put into words and measured, and that the resultant words lead to ideas. So, though we would never have guessed it, we turn out to be not just market researchers, but two schools of philosophers.
I think seminars are of two kinds - there are those which confirm one's prejudices, and those which enable one to re-organize and rearrange one's prejudices, and I would say that this is certainly of the second kind - that I have rearranged all of my prejudices and dusted them up a little. Certainly, being serious, this seminar has made me think, and I have found it very valuable. I'd like today to speak under four headings, which I hope will do justice to most, though not all, of the topics that we've discussed. I'm not going to refer back to all of the papers in the seminar, by any means.
I want to stress the fact that the ultimate objective of an advertiser is not sales but profit. Some advertisers will be delighted and we may even earn a lot of money as profit-measurers. But then, an advertising campaign should be dismissed as ineffective, only because, for example, the firms buying department happens to have been so stupid as to purchase raw materials at a far too high price. And on the other hand, we should praise an advertising campaign as very effective, not for the large sales it produces but all the way to the large profits.