ARF reveals new findings on how advertising works [INSIGHT]

by Nigel Hollis / Millward Brown

Over the past year, the Advertising Research Foundation and its industry partners have conducted an investigation of how advertising works today, combining meta-analysis and projects designed to investigate specific aspects of the topic. Today we got to hear the results of analysis focused on the effectiveness of multi-channel campaigns.

The results of the analysis were presented by Jasper Snyder, EVP Cross-Platform and Media, at the ARF. He reported conclusions drawn from a wide spread set of projects and analysis from companies like the Analytic Partners, IRI, TiVo, ComScore and, of course, Millward Brown. Many of the findings will be very familiar to Millward Brown clients, particularly the ones who use our CrossMedia solutions, but the ability to step outside a specific category to look at industry level patterns is a welcome addition to our understanding of how advertising works.

I found three inter-related findings particularly noteworthy.

  •     The presentation referenced work by IRI that examines the impact of different communication channels on new and retained customers. Social, paid search, WOM and TV all over-indexed against new customers. Out of home, coupons and online display all over-indexed against retained customers.  This confirmed findings Millward Brown and General Mills presented at the ARF’s 2012 conference, based on a single-source measurement approach.
  •     Work by the Analytic Partners finds that the impact of category involvement has a huge influence on digital’s ROI. Where people feel brand choice is an important decision, e.g. the cost or perceived risk is high, the return on investment is highest for a combination of TV and paid search. When category involvement is low, the return on paid search is weak. The analysis suggests that dollars spent on digital for low-involvement category may provide a slightly higher return than TV, but does not warrant the same proportion of the budget being deployed in digital as a high involvement category.
  •     In a different spin on the data,  Analytic Partners found  that digital has a better return on investment for established brands than new ones, warranting very different levels of investment in digital versus TV. The presentation concludes that new brands in low involvement categories need TV.

Multichannel

In my mind, these findings confirm that when constructing an effective multi-channel campaign marketers really need to assess what the different channels add to the mix. All too often reach is the only criteria used to make a recommendation but different channels play to different strengths. TV does not just have the highest daily reach it also cues interest in brands that people might otherwise ignore. Paid search is critical in some categories and unrewarding in others. Social can be a great channel to reach new buyers but display is better targeted to existing buyers (and you need to reach out to both).

My only concern about the ARF findings is that people may take them too much at face value. Generally these findings are what happens in-market, but that does not mean that good planning cannot produce a different result. Can you launch a brand without TV advertising? Yes, but only when you make sure each channel works effectively.

 

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