Letter from the CEO
The Advertising Research Foundation (ARF) evangelizes the leaders who drive solutions into action and growth. Honoring these leaders, Gayle Fuguitt looks ahead to a groundbreaking initiative that the ARF will unveil in 2015: How Advertising Works.
How Does Earned Media Work in Advertising?
Geoffrey Precourt salutes the JAR’s founding editor, Charles K. Ramond, who died in June this year, as he introduces the current issue’s complex theme on earned media in advertising. Thanks to Ramond, Precourt says, the JAR provides “a forum for the lively exchange of ideas” between academics and practitioners on such topics.
Are You Mistaking Facts for Insights?
Lighting Up Advertising’s Dark Continent of Imagination
Gerald Zaltman (Harvard Business School) assesses the relationship between facts and insights, citing “depth deficits” and an aversion to risk that darken the industry collective imagination. Marketing insights, Zaltman argues, arise when managers apply their mental models of the world and their knowledge and experience to imbue facts with meaning. He draws on research informed by his Zaltman Metaphor Elicitation Technique (ZMET), a method used to probe how unconscious thinking drives behavior.
“Omni-Channel” Retail Insights and the Consumer’s Path-to-Purchase:
How Digital Has Transformed the Way People Make Purchasing Decisions
Marketers critically need insights into the consumer path-to-purchase if they are to assemble a coherent and effective marketing plan, writes comScore’s Gian Fulgoni. In an omni-channel world, a consumer-centric focus is vital, meaning that marketers need to create consumer-friendly digital tools and environments that clear the way for that path to purchase.
The Impact of Survey Routers on Sampling and Surveys:
Unraveling the Mysteries of Survey-Router Design and Deployment
Nancy Brigham (Ipsos), Michael Fallig (Cogenti Applied Strategies), and Chuck Miller (DM2) explore potential consequences of using survey routers—software for the real-time assignment of surveys to a continuous flow of online respondents. The use of these routers is becoming the norm in an era of opposing market forces: increasing demand for online respondents and decreasing respondent participation.
Concave or S-Shaped Sales Response to Advertising: Does It Really Matter?
A Mathematical Model Modifies Conventional Wisdom about Ad Budgeting
Advertising budgeting theory gets a mathematical overhaul by Paul D. Berger (Bentley University) and Bruce D. Weinberg (Isenberg School of Management at the University of Massachusetts). In many advertising situations, they note, the optimal decision—how much to spend and where to allocate the budget—is not sensitive to the exact functional form used in modeling the process under study. For decades, however, researchers have taken for granted the conventional theory that the major distinction is whether the “shape” of sales, as a function of advertising is concave (increasing, with diminishing returns) or S-shaped (convex to begin with, and after an inflection point, concave from then on). In fact, “shape” may not even matter, according to Berger’s and Weinberg’s model. “It may be unnecessary to allocate effort and resources to determining whether the form of a sales response to advertising function is concave or S-shaped.”
A Model for Predicting Advertising Quality as a Key to Driving Sales Growth:
How Television Advertising Quality Affected McDonald’s Sales Growth Over Six Years
Ameritest researchers Charles Young and Adam Page use a dataset of an unprecedented size—6.5 years of MacDonald’s data including 180,000 consumer interviews—to explain the link between television advertising quality and sales. During that 6.5-year-period, nearly half of McDonald’s sales growth could be explained by variables related to advertising quality, the researchers find. Marketing-mix models attempting to quantify return on investment are incomplete if they do not include a creative-quality variable, Young and Page assert.
Will I Hit My Year-End Numbers? A Brand-Performance Forecasting Model:
The Case for Benchmarking Sales and Advertising Spending
Brand managers will benefit from insights by University of Louisville’s Robert E. Carter, who has created a model that will help assess brand performance. Carter’s study investigates the sales and advertising “build” curves for 15 consumer packaged-goods categories (build curves reflect cumulative sales at any given time period divided by the 52-week sales). In identifying commonalities across category in the sales and advertising build curves, Carter says, benchmarks could be developed for brand managers to use to conduct a preliminary assessment of whether a product has a reasonable chance of meeting its year-end sales objective. Benchmarking sales and ad-spend figures, however, are not meant to replace comprehensive marketing-mix modeling, he notes.
The Role of the Accent in Radio Advertisements to Ethnic Audiences:
Does Emphasizing Ethnic Stereotypes Affect Spokesperson Credibility and Purchase Intention?
Tune in to the sounds of multicultural accents in this in-depth study of ethnicity on the radio. Will the words “tortilla,” “taco,” and “guacamole,” pronounced with a heavy Hispanic accent in a Taco Bell advertisement, increase consumer engagement? This is one of many questions explored by University of San Diego researchers Aarti S. Ivanič, Kenneth Bates, and T. Somasundaram. Marketers in this area tread in delicate waters: Highlighting similarities between a spokesperson and listener increases message recall and purchase intention. But advertisers “should be careful to avoid over-emphasizing the stereotype (e.g., Hispanics eat Mexican food), as it may result in potential backlash (i.e., reduced purchase intention) from some consumers, especially those who identify highly with the spokesperson.”
How to Advertise and Build Brand Knowledge Globally:
Comparing Television Advertising Appeals across Developed and Emerging Economies
What can a country’s gross domestic product (GDP) tell us about consumers’ awareness of and attitudes toward brands? Using a dataset of 257 television commercials from 23 countries, Lia Zarantonello of University of Bath School of Management, with Columbia Business School’s Bernd H. Schmitt and Kamel Jedidi, analyze television advertising appeals and their relationship with the core components of brand knowledge (awareness, attitude, and uniqueness). Among their findings: Experiential (emotional) appeal has a stronger relationship than functional appeal with the components of brand knowledge in countries with medium and high GDP, while global appeal has a stronger relationship than local appeal with the components of brand knowledge in countries with low GDP.
Predicting Return on Investment in Sport Sponsorship:
Modeling Brand Exposure, Price, and ROI in Formula One Automotive Competition
Determining ROI in the area of sponsorship is an evolving science, and this research contributes mightily to it. Jonathan A. Jensen (The Ohio State University) and Joe B. Cobbs (Northern Kentucky University) describe two studies they conducted utilizing data on sponsorship prices and the televised exposure of sponsors in Formula One motor racing. Results validate a strong link between team performance and sponsors’ realized brand exposure and price paid. Cost also is influenced by sponsorship levels, functional congruence and, at the lowest level of sponsorship, shared nationality. Ultimately, positive ROI is more likely for sponsors of better performing teams, for sponsors that affiliate at a high level, and for sponsors outside the automotive industry.
How Earned Media Works in Advertising
The Value of Earned Audiences—How Social Interactions Amplify TV Impact:
What Programmers and Advertisers Can Gain from Earned Social Impressions
Judit Nagy (FOX Broadcasting Co.) and Anjali Midha (Twitter) explore the value, as opposed to the volume, of the “earned audience”—users exposed to Tweets about television programs and their sponsors—on the Twitter platform, and discover an untapped potential for programmers and advertisers. Among their findings: Tweets heavily influence many aspects of television-viewing behavior among “earned audiences.” And, Tweets about brands themselves meaningfully influence behavior related to the sponsors of television programs, prompting more than half of the “earned audiences” to take a multitude of further actions across various social-media platforms or search solutions.
How Digital Conversations Reinforce Super Bowl Advertising:
The Power of Earned Media Drives Television Engagement
The U.S. National Football League Super Bowl championship game, even in its infancy, was the largest driver of earned media at a time when no one ever had heard of the term “earned media.” In this study, Harlan E. Spotts (Western New England University), Scott C. Purvis (G&R Cooperative, LLC) and Sandeep Patnaik (University of Maryland University College) investigate the interactive relationship of social-media conversation and brand television advertising during two consecutive Super Bowl games. The researchers reveal a “golden window” for social-media conversations to be an effective multiplier for television advertisements. And, they provide evidence that both media platforms work in tandem to enhance brand engagement: Pre-game and game-day social-media conversations for advertised brands enhance audience engagement, and television advertisements play a significant role in amplifying social-media conversations about the advertised brands.
Agency-Generated Research of Consumer-Generated Content:
The Risks, Best Practices, and Ethics
Australian researchers Sonia Dickinson-Delaporte (Curtin University School of Marketing) and Gayle Kerr (Queensland University of Technology) survey a Delphi panel of award-winning advertising professionals for their views on the use of social-media engagement to test, track, and evaluate advertising campaigns. Their findings suggest that the agencies use this digital data primarily as an invaluable resource for “understanding consumers and igniting insight, not as a means of testing creative ideas.” The authors consider this study as an important benchmark of agency best practice and ethics in social-media research.