The Pitch: It's time to question advertising's golden rules

By HOWARD RUSSELL

We know some advertising works wonders. We know some is a waste of effort.

Most of the time, however, we are unsure about whether our ads work or not.

Within the client, agency and academic communities there are varying opinions about how to achieve effective advertising.

Unfortunately, most advertisers make no real effort to understand what works and why, opting instead to rely on conventional TV advertising rules of highly questionable veracity. Rules such as:

* To increase market share, TV advertising share and voice must be larger than the status quo.

* At least three exposures per person are required to make a significant impact.

* More TV advertising is better than less.

* TV advertising takes a long time to work.

United States snack food firm Frito-Lay decided the "pig in a poke" approach to advertising wasn't good enough. There had to be a better way.

It was unprepared to risk the bulk of its marketing budget, mostly TV advertising, on "the rules".

Frito-Lay set out to nail down which of its ads worked and why.

As a control for benchmarking its results, Frito-Lay mimicked the work of a large study by Information Research (IR), which recorded by scanner supermarket purchases of 3000 households. Apart from selecting these for demographic spread, IR also chose households receiving only cable TV, thus allowing it to control the advertising going into the 3000 homes.

Among the findings of the IR study are these:

"There appears to be no relationship between the change in the target gross rate point (GRP) level and the change in sales volume that is attributed to advertising. There is also no relationship apparent [between sales] and other measures of advertising weight including GRP's, share of voice, and other competitive measures.

"Only 33 per cent of established brands and 55 per cent of new brands showed a statistically significant increase in sales as a result of increased TV advertising.

"The study demonstrates compelling evidence, therefore, that TV advertising weight alone is not enough to drive incremental sales. There is no simple relationship between changes in TV advertising weight and changes in sales."

Additional findings from the study included these:

* The status quo is not enough for brand or copy strategy. An increase in sales effect is more likely when the brand's objective is to increase penetration, where copy strategy has changed, or where copy is intended to change attitudes.

* New brands or line extensions are more responsive to TV advertising than larger, well-established brands.


* When TV ads worked, they produced big-volume effects - a mean increase of 18 per cent in sales. The effects lasted for more than two years, and they emerged quickly - within six months in most cases.

The study contradicts the so-called rules mentioned earlier.

And, unfortunately for those clinging to the rules, the research found just under half the advertising had no significant effect on sales.

From the combined findings of both studies, Frito-Lay now employs three guiding principles for TV advertising development:

* For small brands, always have something new to say.

* Acknowledge that advertising on big brands, especially if not saying something new, is unlikely to drive sales directly.

* While there may be other reasons to advertise brands - sales force motivation, retail trade support - there's little chance advertising will directly affect consumer purchases.

Everyone should note the overall conclusion: "The conventional TV spending rules are severely contradicted by this data."

You may even want to reflect on your firm's whole belief system about the whys, whens and hows of your advertising.

Why? Because most companies are irrational in their advertising budget cuts. This is most likely because of the lack of demonstrable cause-and-effect data in advertising.

Advertising is often the first victim when revenues and profits fall short of expectations. This is rational behaviour when poor advertising has generated poor sales performance.

But most advertising budgets are cut with little or no proof of advertising effectiveness.

Why? Mainly because the other aspects of the marketing mix are analysed with greater rigour.

TV advertising gets the early chop not because it's inherently less effective, but because its effectiveness is more difficult to assess.

If you spend most of your marketing budget on advertising, what are the shared beliefs held about advertising in your company?

For a quick assessment, complete these basic sentences:

* We advertise because ...

* We advertise in other media because ...

* Our advertising is most effective when we ... and when we ...

* The advertising that hasn't worked in the last five years has become ineffective because ...

* Our main principles for advertising development are ...

If the answers about your basic advertising beliefs leave you less than convinced, hunker down quickly with your agency before your chief executive discovers what's going on.

* Howard Russell, of Strategic Insight, is a marketing commentator.


* The Pitch is a forum for those working in advertising, marketing, public relations and communications. We welcome lively and topical 500-word contributions.
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