Advertising Effectiveness

Many researchers are of the opinion that effectiveness refers to whether the cost of advertising is returned back to the advertiser in the form of current or potential sales revenue, thus focusing on sales.

There is often an indirect link between advertising and sales.

The main “actors” related to the effectiveness in the advertising activities are consumer, advertisement, product/service, medium, and environment. The advertising effectiveness can be studied from the different manifestations of these actors.

Consumers are audience of the advertisement and potential purchasers of the product or service. Many models of consumer behaviour have been developed to measure the advertising effectiveness.

For example, the effects of advertising on consumers can be described as a sequence of stages or steps that begins with an awareness of the existence of what is being advertised, through the knowledge on what the product or service has to offer, favourable attitudes, preference over all other possibilities, and the conviction that the purchase would be wise, and finally culminates in the actual purchase of the product or service.

Advertisement in a traditional sense can influence the consumer behaviour. For example, clickthrough rates of a banner advertising on the web can be used to measure its effectiveness.

Product/service represents the motivation of the advertising. Advertising is often used to try to increase sales of a product or the use of a service, to improve the firm’s “corporate image”: to persuade people that the company is benevolent and trustworthy, or to change people’s behaviour such as anti-smoking. So the advertising effectiveness can be also measured through the achievements of the motivation, such as the profit and the brand value.

Medium is the carrier of the advertising message. The principal media may be classified as newspapers, magazines, radio, TV, direct mail, Internet, outdoor and so on. The first criterion for effectiveness is that sufficient numbers of the target audience should get to see or hear the advertisement, which is mostly decided by the nature of the medium. For example, a TV advertising at peak-time like 6:00pm to 10:00pm, or a banner advertising on a famous web page like Yahoo with millions of visitors a day, can be considered to be more effective.

Environment includes other factors around the medium that can effect the advertising. The environment can influence the audience attention and involvement level. For example, not all the people in front of a TV is watching TV let alone TV advertising.

Broadly speaking, the advertising effectiveness is achieved through the interactions of these actors, and factors in consumers, advertisement, product/service, medium, and environment are all related to the advertising effectiveness. In a narrow sense, the advertising effectiveness means only the effectiveness of the advertisement, which considers only the interaction between the consumer and advertisement excluding factors of product/service, medium and environment.

There are many techniques for advertising effectiveness measurement, such as test based on memory, opinion and attitude ratings, projective testing, laboratory tests and content analyses, and inquiries and sales measures. The problems in the evaluation of advertising effectiveness can be grouped into four major classifications. Not all of these problems are, however, explicitly identified in each of the approaches used in advertising evaluation.

Specification of goals

Goals can be diverse especially in different advertising research, which decide all other research processes. The specification of a goal can include issues/hypothesis, examples and possible deliverables.

Acquisition of data

The problems of data availability are common to all approaches to evaluating advertising. Traditional methods include questionnaire, sampling, inquires, interviews, group discussions, and so on.

Development of framework

This is the kernel to explain how to exploit the data, through

analytical procedures, to achieve research goals.

Procedures of analysis

Many analytical techniques are developed. For example, correspondence analysis can examine the interdependence relationships among variables.

Though some of the computer techniques such as database have been used in the advertising research, further applications have not been found. This work introduces an agent-based modeling and simulation approach, which can be used to develop a unified computer modeling and simulation environment to assist the advertising effectiveness research to solve different kinds of problems.

The main benefits to the media research industry include:

Low Cost

Once the computer environment is established the research cost will be much lower than the traditional advertising research approaches.

Quick Response

Once the models are founded, computers can implement complex simulation processes in several minutes at most. And the research results can easily retrieved from the simulation data according to different requirements.

Unification

The software system can be implemented to be so flexible that it can meet almost all kinds of requirement of advertising effectiveness research.

Extensible

The simulation environment for advertising effectiveness evaluation can be extended to meet high-level requirements such as strategic planning and tactical decisions.

Reusable

The consumer models can be reused to meet different research requirements, which is difficult to achieve in other approaches.

In short, using computer simulation technology can make advertising effectiveness research much cheaper, faster and easier.

Source: Internet