One of marketing’s greatest challenges is that its benefits are often long-term. Spend now, gain later. What is the long-term impact of advertising?
Measuring The Long-Term Impact Of Advertising
Long-term benefits can be very tough to measure. This is especially true when lots of other activity is happening at the same time. For an analogy think about eating more vegetables. This is likely to be good for your health. Still, the effects are uncertain and long-term. Plenty of people don’t eat enough vegetables. This is likely because the benefits are hard to assess. Yet, the nasty taste of Brussel Sprouts is very easily assessed. Marketers, thus, want evidence of the long-term benefits of their work. Dominque Hanssens of UCLA has put together a review of the evidence for the long-term impact of advertising. He notes six effects broken into two broad types, each with three.
The first three – immediate effects, carryover effects, and purchase reinforcement – are primarily a result of consumers’ response to advertising and the product. The remaining three – feedback effect, decision rules, and competitive reactions – depend on corporate behavior, specifically organizational learning and the development of better advertising and marketing practices.
Hanssens, 2016, page 97
Immediate Effects
Consumer response is what one might typically think of as the impact of advertising. Immediate effects are the most obvious result of adverting. Consumers see an ad and buy. Carryover effects are simply effects that happen later. People buy later from an ad now. Purchase reinforcement helps retain customers. Those who buy have their intentions supported.
Later Effects
Perhaps less obvious is the impact on corporate behavior. The feedback effect, raises advertising spending in the future. This is because of the current success which can be of benefit to the firm. (It is the equivalent of feeling better from eating your vegetables. When you see this you eat more vegetables). Decision rules are the impact of advertising on other elements of the marketing mix. For example, the firm gains increased brand strength from its advertising. This allows it to, for example, reduce price promotions. The final factor is competitive reactions. Sometimes advertisers gain from these. How?. For example, competitors increase advertising. This can enhance the entire category. A consumer thinks “oh yes I must buy some detergent”. Spending by one can help all players in the industry. The consumer may buy from any of them.
Advertising’s impact goes well beyond its simple immediate effect. If marketers are to make better-informed decisions about advertising spending we need a better idea of its full effects. Hanssens helps to provide more detail on this. There is still much to do.
Read: “What is Known About the Long Term Impact of Advertising” by Dominque M. Hanssens in Accountable Marketing: Linking Marketing Actions to Financial Performance, 2016, Routledge, MASB