Believe it or not, your advertising might be performing better than you think
With brand equity and differentiation at all-time lows, many advertisers from multiple categories are on the defensive. For example, CPG food brands found in the center aisles of the supermarket, having launched back when convenience and price were more important to consumers than fresh ingredients and healthy eating, are in decline.
Thanks to category trends and emerging consumer preferences, many brands can expect the threat of extinction to remain constant. But there is a big chance that even endangered brands are doing better than they think. And they need look no further than advertising measurement to find out if they are.
Of course brands look at the numbers. But how many of them are tracking how their advertising is helping slow losses which would otherwise be more severe? Surprisingly few.
Some only analyze sales trends to gauge performance. But even when sales are in decline, advertising might still be enabling the brand to hold onto vital consumer segments that would otherwise be lost to competitive brands. If this is the case, the advertising is delivering significant defensive impact. Lack of awareness of such dynamics can mean a lack of robust data and insights informing future advertising plans.
One well-known, established spirits brand saved itself based on defensive impact insights. With a legacy of strong brand image and household name recognition as a premium brand, a combination of category trends and shifting consumer preferences hit their business hard. Newer brands – which appeared to be independent but were owned by major corporations – won over consumers with their craft beverage images and hipster appeal. Millennials of legal drinking age, a key growth target for the spirits industry, tend to love trendy brands like this – because they, too, want to be seen as cool.
The established brand’s reputation and sales suffered significantly. The brand team, to their credit, knew they had more than just an immediate sales emergency on their hands. Indeed, the long-term, uphill struggle in consumer perceptions and loyalty was undeniable.
The spirits brand’s team dug deep into the data to see at whether – and how – their advertising was working for them. They knew they were fighting not just for sales, but for the very survival of their brand.
To do this, they deployed a different approach: longitudinal research into who was seeing their ads, and how the ads resonated with those people. This revealed that only a small segment of their target consumer audience had actually seen their advertising. But within that segment, the advertising was helping to offset declines in their reputation – deterioration that was clearly occurring among the larger group who were not seeing the ads. So the advertising was working, even if sales figures and overall brand health measures implied otherwise.
How are your brand’s wellbeing and sales changing compared to what its performance would be in the absence of advertising? Not many brand teams know the answer to that. Is the advertising keeping you alive? Is it working surprisingly well in the face of strong headwinds? Or is it simply whistling in the wind?
The traditional view is that if sales are strong, the ads are strong. But the belief that weak sales are undoubtedly a result of weak ads represents flawed thinking. In an ideal world, advertisers would be able to disentangle the performance of the ads from the overall performance of the brand.
What’s needed is a way to answer the “What would be happening without advertising?” question without having to pull advertising from some markets to find out. It’s possible to model these results using innovative research designs, but first someone needs to ask the right questions. The contrast between what you think is happening and what actually is happening can be stark – and it’s an insight that is almost always undetectable by the measurement protocols most brands use.
Without being able to illuminate insights flying under the radar of overall trends, a brand could mistakenly believe their advertising isn’t working when it is. Basing strategy on such erroneous beliefs only leads to more loss – as well as errors like ditching a campaign, scrapping an agency, or firing the CMO.
How many brands are unaware of the true effectiveness of their advertising? That’s immeasurable right now. But if yours is one of them, it’s one too many. Neither sales figures nor brand health measures can reveal the truth. Unless you’re using the right measurement protocols, the only honest answer to “How well is your advertising working?” is “I don’t know.”
Jeri Smith is chief executive of Communicus