Advertising research

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Advertising research

• AE B37 - Week 9
• 5 March 2003 MM

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Lecture outline

• What is relevant to advertising research
• Media surveys
• Measures of advertising effectiveness
• SPSS application

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Advertising and market research methods

• Different objectives involve different types of
  advertising, hence different responses expected
  from the consumers
• Costs and benefit of advertising should be
  evaluated prior to the advertising campaign and
  the results should be predictable with some
  precision
• The monitoring/evaluation of the results after
  the advertising campaign will be based on market
  research and more specifically the aims will be
• To check whether the objective has been achieved
• To measure the effectiveness of the advertising
  campaign

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Examples of advertising strategies

• Steady
• Constant pressure over the whole period
• Flight
• Strong pressure alternate to silence
• Burst
• Extreme pressure very limited in time

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Steady (drip) advertising

• Lower levels of advertising weight spread over a
  long period of time.
• Main objectives
• Increases the percentage of people remembering
  the ads (but the marginal effect decreases as
  expositions increase)
• Decreases the decay speed (time necessary to
  forget the ad)
• Support brand/store loyalty

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Flight (intermittent)

• Intermittent bursts of heavy pressure.
• Periods of silence
• Maximise the memory effect
• Minimise the wearout effect
• Helps recognition

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Burst (pulse) advertising

• High levels of advertising are scheduled over a
  short period of time.
• The memory ratio is higher
• The duration effect is lower
• Risk of rising the level of arousal
• Helps positioning of new products

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Response to advertising a reference scheme

• Cognitive response
• Perception of ads
• Memorisation of ads
• Affective response
• Perception of product attributes
• Evaluation of product (attitude)
• Product/brand preference
• Behavioural response
• Purchase behaviour
• Re-purchase behaviour

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Measuring response variable definitions

• Cognitive response
• Exposure (audience)
• Perception (explicit awareness)
• Ad recall
• Ad recognition
• What level of exposure is needed to ensure ad
  perception or recalling?

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Measuring response variable definitions (2)

• Affective response
• Attribute evaluation
• Product/brand attitude
• Stated intentions
• Measures
• Changes in attitudes
• Positioning analysis
• Attitude formation

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Measuring response variable definitions (3)

• Behavioural response
• Purchase
• Information search
• Borrowing use prior to purchase
• Problems
• How to separate the advertising effect?
• Market experiments
• Response models (time series, regression
  analysis)
• Behavioural response is a dynamic phenomenon
• Carry over effects
• Habits

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Exposure

• REACH (r) Number of people (households) exposed
  to the message at least once during the
  considered period
• FREQUENCY (f) Average number of times the
  person (household) is exposed to the message
• AUDIENCE (A) Total number of exposures (gross
  contacts)
• A r f

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Audience measureGross Rating Points (GRP)

• Where TP is the number of people
  (households) in the target population
• And r/TP is the coverage ratio

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Media planning and advertising channel

• Knowledge of the favoured media for the target
  population
• Knowledge of the (qualitative) impact of
  different media
• Unit cost of the message
• Given the amount of advertising expenditure
• Number of exposures and frequency are calibrated
  by minimising the average cost for the desired
  number of exposures per watcher/reader
  (opportunity to see)
• Or the other way round (Given the objective
  frequency)

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Media research in the UK

• Broadcasters' Audience Research Board (BARB)
  http//www.barb.co.uk
• Radio Joint Audience Research (RAJAR)
  http//www.rajar.co.uk
• National readership survey (NRS)
  http//www.nrs.co.uk

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Message perception and memorisation

• Spontaneous notoriety (brand recall)
• Recalling name of brands in a product category
• Top of mind brand the first brand quoted
• Assisted notoriety (brand recognition)
• Recognising brand names in a list

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Brand notoriety effects

• It constitutes a valuable intangible asset
• Higher profit (higher prices)
• Brand extension
• Brand loyalty (high correlation)
• Sales volume (high correlation)

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Brand notoriety sample analyses

• Spontaneous notoriety for brand X

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Brand notoriety sample analyses

• Comparison between spontaneous and assisted
  notoriety

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Other analyses

• Notoriety and market shares for different brands
• Notoriety for different consumer segments
• The analysis on the effects of advertising
  require data prior and after the advertising
  campaign

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Message recognition

• Show the ad and ask the respondent whether he has
  seen it before
• Show the ad (hiding the brand name) and ask the
  respondent if he can identify the brand name
  (impact measurement)

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Message recall

• Spontaneous recall
• People remember the ad when the product and the
  advertising media are mentioned
• Assisted recall
• People remember the ad when a list of brand names
  is supplied
• Very low correlation with spontaneous recall
• Pertinent recall
• People can also describe (at least partially) the
  contents of the ad

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Problems in measuring perception and memory

• Influence of the level of involvement in the
  product category (and towards the brand)
• Level of education
• Age
• Other social and demographic characteristics
• High risk of non-sampling bias
• Relevance of the timing of survey (first/after
  the campaign)
• Effects of additional exposures
• Interviewing potential audience the day after the
  first exposure

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Advertising strategies

• Type of message
• Number of exposures
• Time frequency of messages
• Choice of media
• Quality of the advert

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Zielske model(press advertising)

• Intensive action in a limited time period (burst
  strategy) leads to a higher recall ratio
• The increase in the number of exposure has a
  marginal decreasing impact on the number of
  people recalling the ad
• The memory decay rate is also decreasing when the
  number of exposures increase
• Over longer periods (whole campaign) steady
  advertising perform better than burst strategy in
  terms of average recall ratio

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Zielske model

• St percentage of people recalling the message at
  time t
• At advertising pressure (usually measured in
  Gross Rating Points)

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Morgenzstern model (flights strategy)

• n is the number of exposures
• Sn is the percentage of people remembering the
  ad after n exposures
• b is the so-called beta factor representing the
  percentage of people remembering the message in
  the day after the first exposure

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Broadbent model

• n is the maximum duration of the advertising
  effect
• Snt is the percentage of people remembering the
  ad at time t
• r is the parameter measuring the decay of the
  advertising impact
• At is the advertising pressure (investment,
  number of messages per time period)

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Sales response to advertising

• Let us consider
• The sales at time t Qt
• The advertising expenditure at time t At
• The external (non-controllable) factors
  influencing sales at time t (e.g. income) Et

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Data and models

• Qtf(At,Et) sales response
• If competitors are included in the model, then we
  obtain a market mechanism model

At is the company advertising expenditure at
time t ACt is the competitors advertising
expenditure at time t e is the direct elasticity
of advertising h is the cross-elasticity of
advertising
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Estimating a sales response model

• Note that

Then Ordinary Least Squares will do!
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SPSS Example (week9.sav)
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Step to conduct analysis

• Transform variables into their logarithms
• Estimate a linear regression
• Examine elasticities

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Logarithm transformation
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Transformed data
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Linear regression
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LR dialog box
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Output (1)
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Output (2)
Direct elasticity
Cross elasticity