Whipple,Sargent&Associates:781-740-4025Fax:781-749-9474MeasuringtheImpactofAdvertisingandPromotionJanuary4,1999TableofContentsIntroduction............................................................................1Background............................................................................3ResearchMethods.......................................................................5Survey.............................................................................5Analysis............................................................................6Experiment.........................................................................6TheExperimentalMethod.................................................................7ExperimentalMethodinAdvertisingResearch................................................9ExperimentalSimulations..............................................................9StatisticalExperiments................................................................9ExperimentalTracking...............................................................12UnderstandingtheResults................................................................13MeasuringtheImpactofAdvertisingandPromotionPage1Introduction“Advertisingeffectivenessmeansdifferentthingstothegroupsresponsibleforitsdifferenteffects.Tothewriterorartist,effectiveadvertisingisthatwhichcommunicatesthedesiredmessage.Tothemediabuyer,effectiveadvertisingisthatwhichreachesprospectivebuyersasufficientnumberoftimes.Totheadvertisingormarketingmanager,effectiveadvertisingisthatwhich,togetherwithothermarketingforces,sellshisbrandorproduct.Tothegeneralmanager,effectiveadvertisingproducesareturnonhisfirm’sexpenditure.”“Infact,effectiveadvertisingmustachieveallfourgoals,deliveringmessagestotherightaudience,therebycreatingsalesataprofit.Mostadvertisershavebegunonlyrecentlytosetgoalsinallfourareasandmeasureprogresstowardthem.Someadvertisershavesetcommunicationsandaudiencegoals,andmeasuredcopyandmediaeffects,butfewadvertisershavesetdollargoalsandmeasuredsalesandprofiteffects.Theresultisthatadvertisinghasrarelybeenapartofcorporateplanning.‘Moneyiscommonlyappropriatedforadvertisingwithextremelaxity,’theNationalIndustrialConferenceBoardfoundina1962survey,‘...mostoftensimplyonthebasisofafixedpercentageofsalesorinconformancewithpastspendinghabits.’TheNCIBattributedthislaxitytomanagements’failuretoinsistonspecificobjectivesanditsbeliefthatitishardorimpossibletomeasureadvertisingeffectiveness.”CharlesRaymond,EditorEmeritus,JournalofAdvertisingResearch,fromtheHandbookofAdvertisingManagement(McGrawHill,1970)Theabovequotationwasselectednotonlybecauseitprovidesaconcisedescriptionoftheroleofadvertisingresearch,butalsobecauseitillustrateshow,thirtyyearsago,managementwasaskingthesamequestionstheyasktoday:Ismyadvertisingworkingandwhatimpactdoesithaveonmysales?Canitbemeasured?Canouradvertisingandpromotionbemadeaccountableinthesamemanneraswhichoneevaluatesalloftheotherinvestmentsbyourcompany?MeasuringtheImpactofAdvertisingandPromotionPage2TheanswertoallthreequestionisYes!Infact,thetechniquestodeliverthisdegreeofaccountabilityandcontrolhavebeenaroundformorethan50yearsandareindustrystandards.Therearemethodstotesteveryaspectofyourmarketingpromotion,salessupportandmediamix,andanalyticaltoolstoestablishadirectrelationshiptosalesforcompleteaccountability.Thekeytothisisapplyingafulladvertisingresearchcurriculum.Thisrequiresinvolvementofbothsalesandmarketingmanagementandtheadvertising/promotionssuppliercoordinatingtheireffortswiththeresearcher.Itisapartnership.Thismayexplainwhysomanyfromboththeclientandagencysidesremainoftheopinionthatitcan’tbedone.Thefactisthatafullcurriculumcanbeimplemented,isalreadyintegraltonearlyeverybrandleader,andyoucandoitaswell.Itjusttakesalittleplanningandco-operation.Let’sstartfromwhereitallbegan.MeasuringtheImpactofAdvertisingandPromotionPage3BackgroundThefieldofstandardizedadvertisingresearchbeganin1936,whentheAssociationofNationalAdvertisersandtheAmericanAssociationofAdvertisingAgencies(4-A’s)foundedtheAdvertisingResearchFoundation(ARF),asanonprofitcorporate-membershipassociationwhichis,today,thepreeminentprofessionalorganizationinthefieldofadvertising,marketingandmediaresearch.TheprincipalmissionoftheARFistoimprovethepracticeofadvertising,marketingandmediaresearch,inpursuitofmoreeffectivemarketingandadvertisingcommunications.Fromtheoutset,theARFestablishedastandardcurriculumfortheresearchdisciplinesandmethodologiesusedineveryphaseofevaluatingamarketer’spromotionalimpact;fromtheme/platformresearchandcreative/copytesting,usedindevelopingacampaign;mediaresearch,usedtotargetandbuymosteffectively;tosalesresearchandtheexperimentalmethods,usedtoevaluateeffectivenessandmaintainaccountabilitytotheadvertiser.Theexperimentalmethodswererecognizedattheoutsetaskeystandardstoallowacompleteandseamlessintegrationofdatafromallsources.WhiletheARFstandardshadanimmediateandlastingimpactonhowpublicationssetrates