MMO3 : Advertising & Sales promotion

Prepared By: H. Ramananda Singh

Department of Business Administration
Assam University
Unit-III(First part)
2.5. Measuring Advertising effectiveness

Why to test? (The rationale of testing)

We can estimate taxes, depreciation, sales cost, return per share. Even though most of the
advertisers spent as much as 1 crore to12 crores per year, we do not have an idea what we
are really getting from the money.
Marketing research provides information such as, who the consumers are? What they need
and want? What is the buying behaviour? What is the product quality? Where the products
are bought? Who are the competitors? What is the extent of competition?

This information is useful in planning the advertising programme and in seeking the type of
media.

And moreover, several experts are involved, money is involved. That is why testing is
needed.

a) Rational-1: to come to understand other

How well a particular a particular advertisement or campaign performs is largely

determined by the knowledge and skill of the people preparing. People who are sensitive to
the marketing situation and proficient in the art of communication are more likely to
produce effective advertising. Even the most successful copy writer sometimes forget that
they may be more sophisticated than their audience that their frame of reference are often
vastly different those they may be targeting to reach.

Often jargons are used by the copy writers without fully realising that the average person
may not recognise the fine nuance in the written words.

The copy writers often seek and find small differences that seem important to them but are
of little consequence to anyone else. The way they look at the world and lead their lives
may be quite different from those they are attempting to reach.

Good testing at any level can add valuable insights into how other people have reacted and
that can be useful the next time around to even to most skilled copy writers, art director
and TV producer.

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b) Rational-II: to avoid costly mistakes

It is obvious that the product advertisers would want every assurance available that she or
he is getting maximum results.

But the cost of running inferior advertisement is greater than actual money spent on
advertisement. The additional sales that would have been generated by superior ad would
be lost, a competitive advantage would be lost, the time would be lost and ultimately the
profit would be lost. The cost of opportunity to do the job better can be reckoned as a part
of the cost of advertising.

a) Rationale-III: to add structure

Advertising is only one of the numbers of controllable and non controllable factors that
could influence the outcome of the firm’s effort.

Product Preference
Advertising Decision
Action of
Promotion Making some Brand Preference
Packaging Process Sort
Competitors of the Company preference
Socio-economic Individual
Condition Channel Preference

These actions of Sort:

Was it by the celebrity used?
Was it by the coupon?
Was it by the factual advertising? Or
Was it by the sale and distribution?

As a matter of fact, the cause of these actions of sort is an ambiguous area. The advertiser
who utilises testing may add some structure to this ambiguous area.

It may be limited or even wrong, but it provides something to hold on, to guide, and to
assure. The psychological quest for structure is an important consideration in
understanding the reasons for advertising testing.

When to test?

The testing of the ad effectiveness can be done before, during and after the advertising
campaign has been launched. The testing which is done before the campaign is called pre-
testing, during is called concurrent and after the campaign is called post testing.
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What to test?

Effectiveness of ad is measured in terms of dependable variables as weight is measured in

terms Kilogram. In the case of advertising the ultimate criteria is sales. But a sale is the
ultimate action as a result of either change in consumer awareness, knowledge of the
product, and change in the attitude or development of certain motivating factors.

Most of the managers believe that advertising directly affects the sales volume. When the
advertising objectives are defined in terms of sales, it is desirable to measure the
effectiveness of the advertising campaign on sales.

As it is very difficult to measure the direct effect of advertisement on sales, some firm rely
heavily on indirect measure such as consumer awareness, customer recall, and change in
attitude. Assumption is that favourable increase in awareness, recall and change in attitude
will lead to the attainment of greater sales.

2.5.1. Direct measurements of advertising effectiveness

Under the direct measure of advertising effectiveness, a relationship between advertising

and sales is established. A comparison of sales of two periods may be done in which in one
period an advertising is introduced and in the other period there is no advertising and the
corresponding change may be noted.

Similarly, a comparison of two markets may be done in which in one market an advertising
is introduced and in the other market there is no advertisement and corresponding change
may be noted.
The two most popular methods are discussed below:

a) Historical sales method

Under this method, the correlation r is calculated between the chronically arranged sales
data and advertising expenditure. If r is positive, and the testing of it found to be significant,
then we say that more the advertising expenditure the more is the sales of the firm. It is
used in post testing.

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b) Experimental control method

It helps in establishing the causal relationship between the sales and the advertising
expenditure.
It is expensive, yet it can isolate the advertising contributions on sales. It can be used as a
pre-testing technique to aid advertiser in choosing between alternative creative designs,
media schedules, and expenditure levels.

The most popular experimental control design is Before-After with control group design.

In this design, two identical cities are selected. One city acts as test city in which the
advertisement that is to be tested is introduced and the other city acts as a control city in
which advertisement is not introduced. A sale of the product for which the advertisement is
made is recoded as given below:

Test city control city

Pre campaign measure of sales yes(X1) yes (Y1)

Advertising campaign introduced yes no

Post campaign measure of sales yes(X2) yes (Y2)

Now, in the test city, X2-X1= It is the result of advertisement and all other factors that
affects the sales.
In the control city, Y2-Y1= It is the result of all other factors except advertisement.

Therefore, Effect on sales by advertising campaign= (X2-X1)-(Y2-Y1)

2.5.2. Indirect measurements of advertising effectiveness

These measures do not evaluate the effect of the advertisement directly on sales but all the
factors such as customer awareness, customer recall, change in attitude, etc. Assuming that
favourable change in awareness, attitude, and recall will lead to the attainment of greater
sales.

This assumption is based upon universal behaviour that is by no means firmly established.

For instance, a housewife may be aware of the brand but not necessary immediately buy
the product. Even if they buy, it may not be due to advertisement.

Despite the uncertainties about the relationship between the intermediate effect of
advertising and the ultimate results, there is no other alternative but to use indirect
measures.

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The most commonly used measures are given below:

a)Exposure to advertisement

Advertising must gain exposure. Advertising is concerned about the number of target
audience who sees or hear the message in the advertisement.

Advertiser may obtain an idea of exposure generated by examining circulations (for

newspapers/magazines) and audience (no. of persons passing the billboard/no. of persons
listening to radio or no. of persons viewing TV). Thus, the advertiser can estimate the
approximate no. of target consumers that are exposed to advertising message.

Another method of measuring exposure is readership or listener survey in which

interviewer asked the listener or reader whether they have read or viewed the
advertisement.

b)Attention or recall of advertising message content.

This method is widely used. Under this measure, recall of the message content among a
specified group or group of prospective customers is measured within 24 hours of the
exposure of the advertisement.

Attentive value is the chief quality of advertising copy. The advertisement cannot be said to
be effective unless they attract the attention of the target consumers.

c) Brand Awareness

The marketers who rely heavily on advertisement often appraise its effectiveness by
measuring the consumer’s awareness about the particular product or brand. The
assumption of this type of measure is that there is direct relationship between
advertisement and awareness.
d) Action
One objective of the advertisement is to stimulate action/behaviour from consumers.
The action or intention to take action may be measured on the consumer’s intention to
buy.
Here the consumers are asked to respond why they are interested in purchasing the
product/brand.
The response may include
i) I already own it
ii) I have no intention to buy the product.
iii) I hope to buy it soon or within a year
iv) I will probably buy it sometime in future
v) I am sure I will never buy it.
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The classification and analysis of such responses will show the extent of the intention of
consumer towards the action they had in mind about the product and are indication of
the expected future purchasing activities.

e) Attitude change

Since advertising is considered to be one way of influencing the state of mind of audience
towards a product, service or organisation, the results are very often measured in terms of
attitude among groups exposed to advertising communication.

The attitude of the customers towards the product or service or organisation is measured
both before and after the appearance of the advertisement. Some of the techniques used
are semantic differential scale, Thurston scale and Likert scale.

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