The long-term impact of advertising on essay sales. Advertising activities and the impact of advertising on sales performance

Advertising effectiveness is the degree of influence of advertising media on consumers in the interests of the manufacturer or intermediary. Determined before and after the transmission of the advertising message. Determining the impact of advertising on sales results (economic efficiency) is carried out by relative comparison of advertising costs and product sales volumes based on the results of past activities. The accuracy of the latter method is low, since sales results are influenced by many other factors in addition to advertising (“Dictionary of Advertising Terms”).

The need to promote goods to the market in a highly competitive environment encourages manufacturers to choose and use new and increasingly effective ways of transmitting advertising information to consumers. The already traditional methods of transmitting advertising information, such as television, radio, press and others, are complemented by the use of methods that allow us to work with each customer more individually. Accordingly, the costs of transmitting this information increase, which necessitates efficiency analysis and cost optimization.

Assessing the effectiveness of advertising and advertising investments is one of the most important and most difficult issues when planning advertising events. At the moment, a lot of work has been devoted to the study of advertising effectiveness, but there is no single method that allows us to evaluate the effectiveness of advertising investments with absolute accuracy.

It is possible to calculate the economic efficiency of advertising campaigns only indirectly due to the large number of different market factors, the influence of which is sometimes difficult to calculate. It is impossible to separate the impact on the effectiveness of advertising or consumer contacts with other buyers, as well as the influence of factors such as seasonality, price changes, actions of competitors, etc.

The result of an action can be assessed using various indicators. The most commonly used are the following:

1. Sales volume.

Based on this indicator, the stock is valued as follows:

• sales volume is measured before, during and after the promotion on the same days and hours;
• is compared with the sales volume in the same period for previous periods;
• changes in demand for goods are taken into account, which may be due to seasonality, specifics of the product and other factors;
• the volume of sales of competing products in a given market is taken into account (valuation in a specific market allows you to evaluate the stock more accurately).

2. Knowledge of the brand.

Surveys are conducted at retail outlets before, during and after the promotion. In addition to knowledge of the brand, surveys during the promotion allow you to evaluate the attractiveness of its idea, the visibility of the promotion and advertising materials, etc.

3. Brand loyalty.

The degree of commitment to the brand, customer satisfaction with the product, and the desire to continue consuming your product are assessed.

But the assessment of the results of the action cannot be complete without analyzing the costs of its implementation. How much will an attracted buyer cost?

In our work, we have repeatedly encountered the fact that our clients, when planning promotions, compared promotions in the Pyaterochka and Karusel networks with placement on traditional media - TV, radio, outdoor advertising, advertising in the metro, transport, etc. . And often the comparison was not in favor of point-of-sale advertising because the following question arose: what should be considered the main criterion for assessing the effectiveness of point-of-sale advertising? Sales growth? At this specific point during this specific period of the promotion? But buyers purchase goods not only in our stores; moreover, these people see and hear advertising placed on traditional media. There was no doubt about one type of BTL advertising - a promotion, the effectiveness of which can be measured with a relative error, at least in a clearly defined period of time (during the promotion).

However, now, in conditions of fierce competition, when consumers have the opportunity to choose from a huge number of virtually similar products, manufacturers often began to work with each buyer in a more personalized manner - every year an increasing percentage of advertising budgets are distributed in favor of advertising at points of sale. That is why we decided to show how we compare advertising effectiveness and what indicators we rely on when making calculations.

In this article, we compared the types of advertising most commonly used to promote FMCG products with similar types of advertising at points of sale. All calculations presented in this article were made based on data from the Pyaterochka and Karusel networks.

Why is the issue of performance evaluation so important?

• by 2008, the volume of the media market is projected to increase to $8 billion (according to the Federal Agency for Press and Mass Communications);
• advertising costs will grow - in Russia in 2005, advertising costs were $24 per year per person, in the USA - $557 (according to a 2005 Publicis Group study);
• companies spend up to 50% of their budget on advertising, and they are interested in the effectiveness of their investments.

Key indicators affecting advertising effectiveness:

• number of contacts - the total number of contacts of the target audience with the advertising message;
• receiving attention is the fact of paying attention to advertising transmitted by the media. Because the consumer typically pays attention to items related to his needs, position, or beliefs, attention is selective.
• advertising noise (clatter - disturbing stories) - a mass of advertising and information stories broadcast in short (up to two minutes) periods of time. Moreover, each of them competes for the attention of the listener or viewer, and together they reduce the perception of each of them. Multiple advertisements may be inserted into any given advertising time slot.
• Contact cost (CPT - cost per thousand - cost per thousand contacts) is an index of cost per thousand contacts among potential clients (or the cost of reaching a thousand people from the target audience). In other words, the unit cost of advertising. The indicator is used to compare the cost of advertising when using different advertising media. This indicator is determined by multiplying advertising costs by 1000 and then dividing by the total audience size;
• contact duration - the time of consumer contact with the advertising message;
• the period of time from contact with advertising to making a purchase decision.

There are other, no less important indicators - product quality, distribution, design of advertising materials, actions of competitors - promotions carried out by them in the same period, text of advertising materials, etc.

Let's consider and compare the types of advertising that are familiar to us with advertising at points of sale - outdoor and indoor. When comparing the effectiveness of advertising and calculating CPT at points of sale, the tables below used data on the traffic and cost of advertising campaigns in the Pyaterochka and Karusel retail chains. Of course, these indicators differ from similar indicators of other retail chains, but the difference is small and uncritical.

Regular TV/radio - internal TV/radio in stores

Conclusion: internal radio in stores is more effective - it cannot be turned off, one video attracts more attention than an advertising block, the period before making a purchase is minimal.

Outdoor advertising / highway billboards - billboards in parking lots, near stores

How many images does the driver see? The main disadvantage of shields placed on highways is speed. The duration of contact with advertising information placed on highway billboards is short. A person remembers only one object or main idea. Advertising on similar billboards near stores will undoubtedly receive more attention from customers.

Subway posters - posters, light boxes, etc. in the store

Of course, advertising in the subway is significantly ahead of posters in stores in terms of duration of contact and is most effective if these posters are informative, that is, they contain not only an image of the advertised product, but a lot of text - for example, the terms of promotions, store addresses, etc. At the same time, advertising in stores is more effective in terms of time before purchase, since it is placed directly next to the product - at the point of sale.

Subway posters - posters, light boxes, etc. in the store

Conclusion: posters in stores (banners, stoppers, lightboxes, etc.) are more effective in terms of “Getting attention” and “Time/period before making a purchase.”

The last type of advertising that will be discussed in this article is two types of BTL events. But one of them has long become traditional and has been successfully used for many years, while the other is relatively young and is currently used only in the Pyaterochka and Karusel networks. These are promotions and a check program. The peculiarity of these types of advertising is working with each buyer personally. In both cases, customers receive a gift for their purchase immediately after making it.

Promotions - check program

Promoters. The promotional staff explains the conditions and gives out prizes.

Check program. The cash register registers the fulfillment of a condition - the purchase of a certain product in the quantity required to receive a gift. An inscription appears on the buyer's cash receipt informing about the receipt of the gift. The cashier gives out the prize.

Promotions - check program

Conclusion: the check program is more effective - the number of contacts is incomparably greater, and the cost of the contact is low.

• more contact time;
• attracts attention more;
• less advertising noise;
• lower cost of contact;
• the time from contact to purchase decision is minimal.

Of course, no type of advertising is universal. Only by using various methods of delivering advertising information can you achieve the greatest effect of an advertising campaign and optimize the costs of working with each specific customer.

The topic of the long-term impact of advertising has received a lot of attention recently. Participants in the discussions agree that the “long-term” effect of an advertising campaign is not only important, but also fundamentally different from the results measured immediately after its completion.

Famous advertisers Forest Bynet(Les Binet) and Peter Field(Peter Field) formulated the conclusions of their analysis of the work of the winners of the prestigious award: IPA Effectiveness(awarded for developing and executing effective advertising campaigns - R&T): “The way in which the long-term effects of an advertising campaign are generated is fundamentally different from the way most short-term effects are achieved. Although long-term effects are always accompanied by some short-term effects, the converse would not be true, since the mere accumulation of short-term effects does not produce long-term effects by itself.” (The Long and the Short of It: 2013)

These conclusions are extremely important, because, as they write in their famous article Matt Clary(Matt Clary) and Paul Dyson(Paul Dyson) “Many econometrics studies have shown that the short-term return on advertising is often less than the investment made... and there is clear evidence from published econometrics that the long-term impact of advertising is 2 to 5 times greater than the short-term impact.” (The Case for Long-Term Advertising: Admap February 2014)

These data serve as a reminder of a topic we have debated for years. Almost 25 years ago, in 1990 Gordon Brown Gordon Brown, one of the founders of Millward Brown, said at the seventh annual ARF Copy Research Workshop: “I am very concerned that current trends in measuring the impact of advertising on sales are clearly biased towards short-term effects. But isn’t the main value of advertising to change long-term brand trends?” (Copy Testing Ads for Brand Building)

We have returned to this topic many times over the years. As I said Andy Farr(Andy Farr) of Millward Brown in 1996, “given extensive shopping scanning data, it is reasonable to expect that we can easily identify the short-term impact of advertising on sales for most consumer products. The problem is that this approach will most likely only demonstrate the inability of most commercials to justify themselves in terms of short-term payback. However, our own experience...shows that advertising has a long-term impact on a brand...Marketers need proof that today's advertising investments will pay off in the long term." (Advertising and Brand Equity: Admap April 1996)

In 1998, at the Admap Conference on Advertising Effectiveness, a speaker from Millward Brown voiced the thesis that “most commercials created in the last 15 years did not generate enough profit to pay for themselves in the short term.” (Justifying the Advertising Budget).

Like Bynet and Field, we recognized that the short- and long-term effects of advertising differ. In 1997 Nigel Hollis, global analyst Millward Brown wrote in a report for the Canadian Advertising Research Foundation: “Some commercials can be extremely persuasive in generating significant short-term sales impact, while others can act as brand boosters, helping it can grow on the natural switching of consumers that occurs over time in any category. Some particularly effective videos I can do both.” (Looking to the Future: the Search for Long-Term Advertising)

Over the years, we have identified several parameters that relate to short-term and long-term impact on sales. In 2007 Dominic Twose(Dominic Twose) and Dale Smith(Dale Smith) of Millward Brown commented on the short-term effect: “How effectively can ad research predict sales” (Admap, 2007): “There is a significant correlation between advertising effectiveness measured by such parameters such as ad awareness and persuasiveness, and the ad's ability to generate sales... It is important to note that the Predictive Awareness Index and Persuasion measures different aspects and there is no relationship between the two." The article also showed the relationship between long-term impact on sales and the Awareness Index.

However, while the long-term impact on sales is important, predicting it with high accuracy is difficult because the magnitude of the long-term impact can depend on many factors. As Clary and Dyson, already quoted above, write, “the ratio of DS/KS factors (long-term/short-term) depends on a number of parameters - brand size, category, level of competition in the market, purchasing cycle, media channels, creativity of the advertising message, as well as seasonality factor products. In particular, products with longer purchasing cycles tend to show higher LT (long-term effects), while seasonal products tend to have short-term effects (SR). After all, it has less opportunity to form a habit of use until the moment these products are “out of season”... Brands with a significant market share are also more likely to show a higher DS/KS ratio.”

Significance, Distinctiveness, Visibility

So we came to the conclusion that the best way to understand these complexities is to measure brand equity. In 1996, Millward Brown launched a method for measuring this indicator - BrandDynamics™, which has become widely known. Later, based on an extensive database of over 100 thousand brand reports, we developed the Meaningfully Different Framework, which can quantify brand equity more accurately and comprehensively than before. It builds on the Millward Brown BrandDynamics database, which shows that the most successful brands tend to have the following common qualities:

1. Significance. Shows how brands are able to build an emotional connection, and are perceived by consumers as able to meet their functional needs.

2. Distinctiveness . Shows how brands stand out from other brands in their category by offering something (tangible or intangible) that others don't have, and act as first movers.

3. Visibility : How quickly and easily brands come to mind.

These three qualities (in some combination) are present in those brands that have the highest sales, can command the highest price premiums, and generate the most share price growth over the next year.

Average indices of the share of sales, prices and share price growth (%)

We put a lot of effort and research into developing questions for our Link™ ad testing tool, which identifies both functional and emotional elements to better assess a commercial's likely impact on long-term brand equity across these dimensions. Together they create the basis for " Power Contribution" (advertising's contribution to brand strength), our measure of the likely long-term impact of advertising.

Incorporating long-term assessment parameters into the Link methodology

After several months of collecting data on these measures, we began to examine their validity. Initially, it was important to ensure that the Power Contribution measure measured something different than the existing short-term sales likelihood tool. Short-Term Sales Likelihood(STSL), which refers to short-term sales performance. The spread of data shown below looked encouraging. A relationship was noted between these two indicators, which seemed logical. As Bynet and Field said, if there is no short-term sales dynamics, then one should not expect a long-term effect. On the other hand, the chart shows that even strong STSL performance does not guarantee a long-term effect. This is also logical because (as Twose and Smith showed) the proportionality of short-term sales effects is determined by the persuasiveness of the advertisement, and the persuasiveness of the advertisement is strongly influenced by the novelty of the information in the advertising message (and news gets old very quickly).

Parameter of the probability of growth of short-term sales Short-Term Sales Likelihood (STSL)(based on 2855 videos of global advertising campaigns R 2 = 0.75)

Everyone knows that contextual advertising helps increase sales. In the end, contextual advertising almost always helps attract additional traffic from visitors to the site and some of these visitors become customers.

In 2011, Google conducted a study of contextual advertising and search results, which showed that 89% of site traffic comes from contextual advertising. However, it's important to understand that Google's research focuses on visits, not sales. It is logical to assume that the more visits, the more sales, and, accordingly, a decrease in the number of visits leads to a decrease in the number of sales.

However, not all visitors are equally interested in purchasing the product. The following research conducted by Google shows the true value of contextual advertising.

But before we move on to the study, let us draw your attention to the plate below. Here is a good example of e-commerce in search results.

About 80% of the screen is taken up by ads, including promotions from numerous competitors.
Let's face it, it's not that easy to compete in such conditions. Several sellers often sell the same thing, often at different prices. Thus, if you want to tell the consumer about your product in Yandex or Google results, contextual advertising becomes almost a necessity.

Experiment

What were the results of the experiment?

Both traffic and sales increased

Using contextual advertising website traffic increased by 17%.

And this is not surprising.
The surprising thing is that with the use of contextual advertising, sales increased by as much as 136%.

This data refers to total visitors and sales, not just those generated through contextual advertising. It can be assumed that the increase in the number of buyers was achieved through other channels, sites, and not only through contextual advertising.

Buyers often visit a website several times before purchasing.
They may learn about you from contextual advertising and visit the site, but not buy for the first time.
They can come back later from organic search and sign up for an email newsletter, then come back to buy via email.

Buyers brought in through PPC advertising are more valuable than those brought to your site from search or other sources.

This statement is substantiated by research, which found that customers who came from contextual advertising or contacted an organization's advertising campaign at some point prior to purchase made a purchase on average 21% more expensive..

It is obvious that with the help of contextual advertising it was possible to increase the cost of orders.

Results after turning off Contextual Advertising

Interestingly, the number of site visitors did not change even after the advertising campaign was suspended.
There could be many reasons for this: perhaps people found the site from other sources. Those searching by brand likely arrived at the site through organic search. Seasonality could also play a role.

The number of visitors remained steady, which would suggest that the number of sales remained unchanged. But that's not true.

Sales fell after contextual advertising was suspended.

The ratio of online orders to customers per visitor (conversion rate) decreased by 23% due to the switching off of contextual advertising, although the number of visitors remained the same.

If the number of visitors remained the same, regardless of the source, then why did sales fall? Shouldn't we assume that traffic will decrease when content advertising stops, and if this is not the case, then what makes sales stable?

The reason for the decline in sales comes down to conversion. If you look closely at the graph above, you will notice that the overall conversion rate on the website was very low at less than 1%.

Conclusion

What did we learn from this experiment?

• In e-commerce, paid placements dominate the search results, so contextual advertising is very important.
• Contextual advertising can increase not only the number of site visitors, but, more importantly, increase the number of sales.
• Visitors who come through contextual advertising are more valuable in terms of profit from sales.

Submitting your good work to the knowledge base is easy. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Similar documents

Characteristics and role of elements of communication policy (advertising, public relations (PR), personal selling, sales promotion tools). The importance of media planning in product promotion. Development of a media plan for advertising placement for a month.

test, added 09/30/2010


Consideration of the theoretical foundations of advertising. Assessing the effectiveness of advertising activities, methods for determining it and their practical application. Studying the development of this business in the Russian Federation. Study of the influence of advertising on the Russian consumer.

course work, added 10/27/2014


The essence and concept of advertising. Advertising strategy and planning. Film production and film promotion. Artistic thinking of an advertising scriptwriter. Formation of budgets for advertising films. Promoting the film and working with different target audiences.

course work, added 12/22/2014


Types of Internet advertising. Types of online advertising promotion. Advantages of Internet advertising. Ethical problems of advertising on websites. Opportunities and features of advertising of the future. Forecasts of advertising experts. Advertising development trends.

course work, added 06/04/2015


The role of advertising in a market economy. Dynamics of development of the volume of the marketing communications market in Russia. The concepts of unreliable and unfair advertising. The role of advertising in the promotion of goods. Promotional events as one of the elements of advertising services.

abstract, added 12/23/2014


The key factor in marketing is communication. The relationship between the terms “promotion” and “marketing communications”. Promotion as a specific combination of advertising, personal selling, sales promotion and public relations.

course work, added 04/15/2009


Research into advertising strategy and planning. Film production and film promotion. The artistic thinking of an advertising scriptwriter. The role of advertising in promoting films on the market. Formation of budgets for advertising films. Working with target audiences.

abstract, added 12/25/2014


Analysis of the Internet space as a channel for advertising distribution. Studying the impact of advertising on network users and brand promotion. Sociological research on the topic "Specifics of Internet advertising, its varieties and impact on the consumer."

thesis, added 07/16/2017


Organization of advertising activities at a trading enterprise. Analysis of the Russian advertising market. Identification of the impact of advertising activities on its sales volume using the example of Nestle. Study of the impact of costs on product promotion and demand volume.

course work, added 03/09/2015


Rules of evidence-based medicine. Advertising in pharmaceutical marketing, its main goals. Features of the drug market, its parameters. Restrictions on advertising of pharmaceutical products. The concept of false advertising of drugs.

Market infrastructure today continues to develop continuously. Due to the sharply increased level of competition, there is also an urgent need to find and use the most rational ways to increase sales and, as a result, increase profits. There are quite a lot of such methods. One of the most popular and effective is advertising as a way to increase sales.

This method itself implies presenting a certain product from the most advantageous side for the buyer. The description of the product should most clearly emphasize all its positive qualities, advantages, bypassing the disadvantages, if any. High-quality advertising can motivate the buyer to purchase a given product, eliminating any doubt about the correctness of his choice.

The impact of advertising on sales and what are its functions?

Before dwelling directly on the functions of advertising, it should be noted that this method allows you to most accurately determine the circle of people “interested” in purchasing a product, as well as produce advertising in such a way that it addresses the topical problems of a potential consumer and motivates him to purchase the advertised product.

So, how does advertising influence product sales? The functions of advertising are:
Attracting attention. The product is presented in a favorable light, constantly or periodically appearing in the field of view of the potential consumer.

The emphasis is not on unconscious memorization. By repeating for a certain period of time, presented graphically or auditorily, advertising promotes involuntary memorization of information and, thus, pushes the consumer to purchase the original product.

Stimulating retrieval. Constant or periodic repetition of advertising allows the consumer, when the need arises to purchase a product or service, to contact you.
Knowledge of the distinctive features of advertising allows you to significantly increase the level of product sales in the shortest possible time and thus increase the level of profitability of the enterprise.