Advertising - is it really working?
Starting with the premise that advertising is always designed to increase consumer awareness and to persuade users that the brand is superior, a new research study by a team of researchers from by Stanford University tested the impact of advertising on both awareness and perceived quality. What they found is that “advertising has consistently a significant positive effect on brand awareness but no significant effect on perceived quality.”
An interesting side finding from the study is that share-of-voice does not impact brand awareness - in fact, if you outperform your competitors with advertisement it will have a slightly negative impact on your brand awareness.
The research paper also mentions empirical studies that show that advertising lowers price sensitivity - again confirming that pricing may be controlled more by the supply side rather than the demand side.
All that being said, the study confirms that advertising has little effect on sales.
(via Strategy+Business)
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April 30th, 2008 at 11:02 am
And it’s economically inefficient (http://tinyurl.com/3cn6js). So maybe we should take out an ad to let people know? Because the only ones looking AT the ads are the ones who created them in the first place.
May 28th, 2008 at 11:19 am
Unless there is some sort of third-party media auditing in place, getting the right people to see the right ads is going to be a guessing game. In my mind, this study confirms that not enough people are seeing the ads that are directed at them. Our team just built http://www.buysafemedia.com, which talks more about issues like this and offers up why many advertising campaigns miss their targets.