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)

You brand is defined by the consumer, not by you – I think everyone can agree with that. In the same breath, most marketing pundits will add the fact that you can no longer control your brand – an assertion I am not sure goes hand in hand with the first one.

You brand gets defined by the UI (User Interface) of your company, the interface through which your customers and prospects interact with your company. That interface gets determined by pre-sale activities – i.e., advertising, retail layout, retail personnel attitude, telemarketing, sales people’s knowledge of the industry, etc -, as well as immediate post-sale activities – i.e., packaging, ease of use to set up the products, available help options, etc. -, and the long term post sale activities – i.e., telephone support, return policies, warranty policies, on-site support, etc. That makes up a lot of links in the chain that determines your brand in the mind of the consumers which your company controls.

So in effect, you do control the brand in the mind of the consumer. If some link in the chain is broken, meaning not supporting the overall brand promise you are trying to establish for your company, that is when you lose control of your brand. That is when people will start talking with one another about the fact that what you promise and what you deliver is different. Once that starts, you should focus on fixing the overall UI of your company instead of getting into communication fire-fighting mode or crisis communication mode.

The Online Publisher Association announced that it added Community as a category to its Internet Activity Index (IAI). So they will now measure how much time consumers spend online with Content, Communications, Commerce, Search and Community.

The OPA defines community as:

“Web sites and applications that combine user-generated content with communications in order to foster relationships between individual members and groups of members. Many Community sites are content driven, and they were previously accounted for in the Content category. However Community’s content is largely user-generated, and when merged with communication, creates a specific category of online activity.”

The IAI numbers for January show that consumers spent 42.7% of their online time interacting with content, 28.7% with communications, 16.1% with commerce, 7.5% with community and 5.0% with search.

AdAge picked up on the story, declaring “When It Comes to Time Spent Online, Content Trumps Community.”

But wait a minute here, adding community as a category at the same level as content, communications, search and commerce, is like comparing apples and oranges. Or better yet, comparing apples and oranges with air or water. Communities are combinations of content, commerce, communications and search. And communities affect the usage pattern of all the above categories and vice versa. So if I am spending time on Amazon.com, am I spending time with commerce, content, search or community? Obviously the end result is commerce if I buy something, but it could also be searching without buying or interacting with content (both user generated reviews and published content) without commerce. The fact that Amazon is a community which leverages my personal profile very well (another component of communities) is determining my interactions and time consumption on that site. The same can be said for many other sites that combine content with community. If I am spending time on the WSJ Health blog, I am spending time with content or community? If as a car buff I spend time on Carspace.com, I am spending time with commerce, content or community? Would I spend as much time conducting commerce, searching for stuff or interacting with the content on those sites if there were no community component to them?

Probably not…

Besides the fact something does not sit right with the categories, many conclusions drawn from the new numbers by AdAge and the IPA are equally flawed. Jim Nail at the Cymphony’s Influence 2.0 blog captures those flaws in detail in his post today (well worth the read). A couple of highlights include:

• The fact that page views per person in content dropped 225 pages suggests that a number of content sites were just moved to community.
• Content sites show 480 pages per month per user vs. 380 pages for community sites. So from an ad perspective, the reach may be just the same.
• Another factor not reflected in the new numbers is influence. If a third of people below 30 don’t make buying decisions before checking with their social networks, the impact of communities on the commerce is obviously not reflected in those numbers.

We should of course remember the agendas that both organizations are representing – those of advertisers and publishers.

Joshua Porter has an interesting analysis about social ads and why they are not working. The gist of his argument is summarized in these two paragraphs:

The difference, of course, is that when people go to Google, they’re actively looking for something. That something isn’t on Google. They are performing a search activity. Thus their task will be to click on a link that seems to promise what it is they’re looking for. It may be the organic results, or it may be an ad that seems close to what they want.

When people are on MySpace, the activity they’re doing isn’t search. It’s something akin to “hanging out” or “networking”. Their task is almost the opposite of search. They are already on the site they want to be on. They don’t need to click on links to take them where they want to go.

That makes sense. When I am searching for something I am clearly looking for something, making me an easy target for online advertisers. When I am hanging out on a social site, I maybe in a buying mode as well, but as a marketer you have no clue what I may be interested in. So the effectiveness of social ads may not be any better than that of TV ads or print ads – it’s a total hit or miss.

(via Wine Life Today Blog)

Business Week recently had an article on neuromarketing, and how scientists are using this new method to see how your brain responds to various messages and advertising. But does that really tell the story? Can you understand buying behavior without understanding culture and social context?

Surely, neuroscientists will pinpoint that part of the brain that light up in response to certain stimuli. But aren’t those areas going to be different depending on your cultural background and your social environment. Maybe these methods can help with targeting messages for impulse buying – but I have a hard time believing that we can explain buying behavior in various parts of the world based on the brain patterns of individual buyers…

What do you think?

This Dove spoof proves that companies cannot speak out of both sides of their mouths…

(for RSS subscribers who cannot see the video – click here)

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