Measuring Advertising Effectiveness
It is easy to see that in most cases, advertising works. While the most popular marker to see if advertising works is sales, this is not the only one- increases in awareness, market share, consumer responses, etc. all imply that advertising works (White, 2000) But how much of those increases can be credited solely to advertising?
Years ago, researchers used to do a ‘Correlation analysis’ for the purpose of establishing a direct/indirect relationship among two variables (for example, advertising and sales), but this method was proven quite incorrect, as correlation coefficients are symmetric (correlation between variable A and variable B is the same as the correlation between variable B and variable A) (Kernan, 1964). For example, one could analyze the correlation between advertising and sales- as advertising increases, as will sales. This correlation between advertising and sales is the same as the correlation between sales and advertising, making the correlation symmetric- as sales increase, so does the advertising, but at the same time, as advertising increases, so does sales. With this method flawed, it was seen quite difficult to measure advertising effectiveness (McWilliams, 1997).
These numbers are impressive, but how much of this success can honestly be attributed strictly to advertising ROI gives very biased results, because one is unable to measure if the Salvation Army increases were due to advertising, or other reasons. An econometric model was developed to isolate the contributions made by advertising, but has critically proven inconclusive, as outside factors and possible coincidences show that effective advertising is more difficult to measure than thought. However, without advertising it would have taken a very long time to create consumer demand, trade confidence, and move Toshiba into an elite group with high brand share. Clearly Toshiba's improved range of products meant that sales would have increased to some extent even without advertising. Mainstream premium beer brands like Molson Canadian constantly need ways to differentiate themselves with their core target young male beer drinkers aged 19-24. Toshiba also planned to be the first to launch FST into the UK market (the latest breakthrough innovation in television at the time) Campaign objectives were met, and Toshiba saw dramatic increases in consumer awareness, and brand image. It is new and original (creativity is a key part of any campaign) Additionally, in order to effectively measure a major campaign, it is essential that a big advertiser spend the money to do the pre-test and post-test research and analysis (Bergvist, 2000). With a variety of measuring tools available- retail-based measures, single-source data, ad-tracking, or even an econometric model, why is it so difficult to measure advertising effectiveness Measuring the effectiveness of advertising has proven quite difficult, because advertisements function in an environment made up of many uncontrollable variables that may influence factors such as sales- advertising is only one part of the marketing mix. Drinkers deem Stella Artois as a premium and niche beer worth over 1 billion dollars a year (Brown, 2000). Ultimately, measuring advertising effectiveness is very subjective and circumstantial, but it is important to note that all effective ads are received by their respective target audiences. In Smith"tms (1986) IPA award winning case on Toshiba, Smith discusses Toshibas success as it relates solely to advertising. With that in mind, Molson launched a 5 Litre Mini-Keg under the Canadian banner in April 2002. As well, In 1988 the government attempted to increase competition in the beer market, and as a result, thousands of pubs were sold off, and huge independent chains were created. The winter campaign contacts current supporters as well as recruiting new ones.