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Debunking the Myths That Surround Advertising

AdAge’s Jack Neff recently posted an article on the industry publication’s site that gave a preview of the results of The Future of Advertising project, a bold initiative taken on by the Wharton School in cooperation with the Advertising Research Foundation (ARF). The results? Well, in short, they found that the commonly understood threats posed by DVRs and clutter to TV ads are entirely overblown; that print and online advertising are still—and will continue to be—effective forms of marketing; and word-of-mouth brands are largely driven by paid media ads (see our previous posting about Viral Marketing).

Some other highlights of this fascinating article include:

Each 1% increase in advertising produces a roughly 0.1 point change in sales or market share. As a result, an optimal ad budget is about 10% of gross profits. That rule doesn’t necessarily hold for all marketers (it would, if followed strictly, have Procter & Gamble cut its global ad spending by half or more). More effective advertising, or ads for new products, produce as much as 250% greater lift than average and justify correspondingly larger outlays.

Store redesigns and other factors that make it easier and faster to shop actually increase purchases, contrary to the old strategy that making things hard to find boosts sales by making people spend more time in the store.

Though most campaigns cluster ads in a short period of time, consumers retain information better if it’s spaced out over longer intervals.

Obvious branding works in ads. The more often a brand appears in a TV ad, the more likely consumers are to remember what brand it was for.

But obvious brand placements in TV shows are more likely to backfire. They’re better remembered, but more likely to be remembered negatively. Even brand placements consumers don’t consciously remember, however, can have a favorable impact on brand awareness and attitude.

All of the results—in far greater detail—will be published later this month in the ARF Journal of Advertising. It should be noted, though, that this first round of studies need more in-depth research to be done, particularly when it comes to consumer use of search engines and social networks.

 

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