A Theory of "How Advertising Works"

Effective Advertising = Delivering the Right Message to the Right Consumer at the Right Time to 1) make a sale or 2) increase awareness of the brand.

Because all of these components of advertising need to work or the process will break now, we can rewrite this formula as :

A = E (exposure) x M (message) x C (consumer) x T (time).

This formula was taken from discussions in Dr. Leckenby’s Graduate Seminar. This formula is the basis for the -101+ Theory of Advertising. E, M C and T are coded as 1 or 0. To go a bit further and to get a more accurate theory of how advertising works, two components are added: rating 1) ad likeability, 2) consumer’s past experiences and 3) consumer’s habits. These three factors introduce the (+) and (-) part of the theory. The 1 and 0 denote whether the advertising got through to the consumer, 1 being effective and 0 being not effective. The (+) and (-) denote the most likely behavioral response to the advertising. Plus (+) being a move toward purchase and (-) being a move away from purchase. Using this standard definition of effective advertising (above), this paper will deconstruct this statement: [Advertising = E (exposure) x M (message) x C (consumer) x T (time)] to arrive at an understanding of how advertising works.

Practitioners of advertising are faced with a personal decision about what they do for a living. They must evaluate advertising and decide if they believe it has 'strong' effects or 'weak' effects. Most people working in the business today believe that advertising is a relatively weak force, but that was not always the case. In the not too distant past, many practitioners believed that advertising followed a linear consumer path, from thinking about a product, to developing a desire for a product that led to purchase of a product. This is commonly referred to as hierarchy of effects and was borne out of the days of personal selling. With the advent of mass communication, many versions of this hierarchy model were put forth, and it has endured largely because of its commonsense appeal.

Today, however, the thinking is that advertising’s effects are not linear processes, but rather nonconsecutive, overlapping events, many of which are beyond an advertiser's control. This paradigm shift has invigorated advertising research by challenging old assumptions of how advertising works.

The Right Message (M)

It all starts here. An agency pitches an idea. They win an account. Now what? Well, after several meetings with the client, the agency walks away with a creative brief. This short document contains the main point of what the client wants to communicate to the consumer. It may be a USP (unique selling point). If a product is lucky enough to be unique in some way, most agencies will try to capitalize on this.

It may be awareness. If a product is in the introduction stage of the product life cycle (PLC) the task for the agency is to make consumers aware of the product's existence. If a product is reaching the maturity stage of the PLC, then the agency may have to communicate a new feature of some value-added characteristic of the product. Whatever the situation, the agency must focus on the single most important message to be communicated. Trying to deliver many messages in one ad can result in the consumer not comprehending any message at all.

There are cases when the client has no clear idea of what he needs to communicate to the consumer. This is where the agency can be of tremendous value in ascertaining how the consumer perceives the client's product and if advertising can or should try to correct the consumer's attitude toward the product.

Advertising researchers have many tools available to them. They can sample the population with carefully constructed questionnaires to determine consumer attitude or they can employ focus groups to learn if there are significant problems that need to be addressed in the research process.

Once the message is determined, the process is handed over to the creative department. Here the creative's are given as much information as possible to help them execute the desired message. The hardest part of this job is delivering the message in a unique way that gets the consumer's attention and so that the consumer will retain the message and associate it with the correct brand. There is a lot of advertising 'clutter' in media vehicles, so it is in large part the creative department's task to find a way to effectively break through the clutter with their message. Unfortunately, in an effort to grab attention the product may get lost in the process and viewers of the ad cannot remember the brand being advertised.

Another factor for the creative team to consider is if the product is low-involvement or high involvement. This is an important distinction to make because it often determines the type of creative execution. Will the ad be straightforward and informational, as in the case of high involvement products, or will it be highly creative with an emotional appeal for low involvement products? These different types of execution can determine a product's brand image, which is carefully cultivated over the lifetime of the product. Many times agencies employ both strategies over the course of a product's life span.

Now that the message has been determined and several ideas have been presented on its execution, how does the agency decide which one to choose? The process is again given to the advertising researchers who may conduct copy testing or focus groups to determine if the consumer comprehends the message in the way the advertiser desires. They walk away from this process with information on what needs to be done to make the ad more effective. Oftentimes, the ads are given back to the creative department to go through another iteration. This process may cycle through several times before the agency is confident enough to run the ad. This painstaking process is employed because running advertising is a costly proposition and the agency's reputation lies in the fact that they can create effective advertising.

There's the rub. No one can seem to agree on what constitutes effective advertising. Does effective advertising translate into an increase in sales or does it simply serve to remind the consumer of a brand's existence? Advertising is a highly specialized part of the larger process of marketing. Some experts think that holding advertising responsible for increasing sales is unrealistic given all the other factors that go into promoting a product, such as price, distribution, competition, consumer's wants, needs and past experiences and the quality of the product itself. Advertising can also play a significant role in molding a consumer's attitude toward a particular brand. If the proper research is done, advertising can be very effective in reversing or enhancing consumer's attitudes.

The Right Consumer (C)

Consumer Attitude and Behavior

It is the advertising researcher's task to find out what makes consumers tick. The art in discovering this lies in getting consumers to communicate how they really feel. This is not an easy task. Many times, for various reasons, consumers misrepresent their true feelings or are not in touch with their true feelings. Advertising researchers and account planners are constantly devising strategies that will result in accurate consumer information gathering techniques. These include perceptual maps, consumer diaries, indirect observations, questionnaires, focus groups and using pictures to elicit information. After all the data was been gathered, researchers try to objectively analyze the information to get a clearer picture of what motivates consumers.

Consumers are not automatons who will buy something just because it is advertised. In order to make sense of their world; people develop attitudes toward just about everything. It is important for the advertiser to understand what attitude a consumer has about product attributes in general and about their product in particular. If consumer attitude is measured correctly, it can produce great insights in how to effectively advertise a product.

Message Screening

Just because a consumer is exposed to a message does not guarantee that he will absorb it. Consumers employ selective attention and generally only pay attention to things that hold interest to them. This goes back to recency planning, which states that in order for the message to be effective it has to be delivered at the time the consumer is interested in hearing it.

According to Managing Director Steve Sjoblad of Fallon McElligott, every man, woman and child in the U.S. are exposed to 1,600 advertisements per day. Of that 1,600, 217 break through to the consumer's consciousness. Of that 217, 34 are remembered for 24 hours with aided recall. Of that 34, 9 are remembered negatively, leaving 25 messages that are remembered positively.

One-sided Communication

Many advertisements have just a few seconds to make their impact; this is especially true of TV commercials that are generally 30-seconds long. The trend is for commercials to be even shorter, 15- and 10-seconds. One concise, clearly defined message is all that can be conveyed in this short period of time. As a result of these time constraints, many messages are one-sided. They focus on the positive aspects of the product only.

Some research indicates that people have lower believability rates for such one-sided communication. That people, especially those with some college education, are more likely to believe a message if the negative, as well as the positive, aspects are pointed out. Advertising does not usually have the luxury, nor the inclination, to practice what is called ‘two-sided’ communication. This could be why so many people are skeptical of advertising messages and another reason that ads are frequently ignored.

Early Adopters

The Theory of Diffusion of Innovations (Rogers, 1962) states that there is a certain subset of the population (13%) that serve as opinion leaders. These opinion leaders are the people that inadvertently decide which products are worthy to purchase. Since other people look to these opinion leaders for direction in their purchases, advertisers have always been interested in this group.

However, there are many problems in identifying this group. The same people are not opinion leaders for every product category. It would be a costly exercise to determine every opinion leader for every product category and aim advertising just at this elite group. While advertisers believe this theory in general, it has proved impractical to put it into practice.

Delivering the Message (E)

So now we have the 'right' message and we 'know' the consumer type that is most likely to be interested in our product. How do we expose them to our message at the time they are considering purchase?

There are two schools of thought on how consumer exposure to advertising works. The 3+/80 Model preaches a frequency of 3+ and reach of 80 using pulsing or flighting media schedules. Pulsing and flighting call for months of no advertising followed by months of heavy advertising.

Another method is the newly advanced notion called recency planning. This method aims to expose the consumer right before the purchase decision. This calls for a continuous media schedule with low frequency (1+ exposures) and high reach (85). Continuous media schedules expose consumers to advertising constantly throughout the year at the same weight.

The 3+/80 Model

Michael Naples 1979) wrote about 3 opportunities-to-see. His work eventually led to the 3+/80 Model, which has been in use at most large agencies for decades. The premise is that consumers must be exposed at least 3 times to a message if that message is to make an impact. A reach of 80 ensures that 80% of the targeted market with hear the message at least 3 times. This method uses a pulsing or flighting media schedule to keep costs from being too prohibitive.

Media planners use complicated formulas, computer programs and personal experience to arrive at effective frequency and reach numbers. In 1982, Joseph Ostrow developed a model (Ostrow's Model) to systematically determine effective frequency. It evaluates 3 factors -- marketing, copy and media -- on a 19-item scale scored from -.2 to +.2.

To determine what media vehicles to use, media planners rely on published reports of audience ratings for TV and radio and on circulation numbers for magazines and newspapers.

Planners need a strategy that lets them pick media vehicles effectively. They can do this in several ways: by demographics, geographics, psychographics or based on where the competition is advertising. A media planner may try to match demographics and consumer buying habits to media vehicles. For example, it may be ascertained that single women 25-34 (demographic) buy 60% of all salsa (the product) and that 40% of single women 25-34 read Cosmopolitan magazine (the media vehicle). So, a media planner may conclude that Cosmopolitan magazine is the right vehicle in which to place an ad for salsa to increase sales.

They continue this process for TV, radio and other publications. They then determine the numbers for effective frequency using various formulas and determine how many and how often they can run an ad within their allocated budget. At this point pulsing and flighting choices are determined. Planners often try several different combinations before arriving at a final media schedule that yields the maximum gross rating points for the money allocated.

The Recency Model

John Philip Jones (1995) empirically observed that one exposure right before purchase was more effective than 3 exposures during randomly selected, short periods of time. This led to recency planning and the idea of continuity scheduling. The basic premise of recency planning states that: a single exposure in close proximity to purchase occasion exerts a powerful influence on sales. Since advertisers can not predict when a consumer is in the market he must advertise constantly and, therefore, increase the likelihood of a 'direct hit,' i.e. getting the message to the consumer right before they buy the product.

Advertising works by serving as a constant reminder right before a consumer activity is to take place. It is analogous to the wife asking the husband to take out the garbage. If the husband is already heading out the door, he is more likely to take out the garbage if his wife asks him at that moment. But, if the wife asks when the husband has already settled comfortably on the couch, her chances of success are dramatically lower. The clever wife will be on the lookout for these opportunities and expose her husband to her message at the appropriate times. As a result of this strategy, divorce court will be avoided and equity will grow in the marriage.

The Right Time (R)

It is nearly impossible to know at what precise time any one consumer in a given market is about to make a purchase. It is the luck of the draw and the way advertisers improve their odds is through media planning, using either the standard 3+/80 Model or the newly advocated Recency Model.

The 3+/80 Model works on the principal that advertising works on repetition. It states that a consumer is more likely to buy a product after 3 exposures, not 1 or 2, but 3. Much research has gone into arriving at the number 3. After 3 exposures there is a diminishing rate of return which means advertisers may be wasting their money if they go too far above the 3 point benchmark. With this approach, planners try to advertise in time periods or media vehicles based on rating points, circulation figures and where or where not the competition advertises. They run advertise heavily for short periods of time.

Recency planning states that by having a constant presence in the marketplace chances will improve that any one consumer in the market for a product at that time will see your message right before purchase. This approach argues that in reality different consumers are purchasing different products at different times as opposed to the 3+/80 Model that uses flighting or pulsing. It is almost as if 3+/80 theory of media planning expects consumers to suddenly all rise up from their couches at once and buy whatever is being advertised during the flighting schedule. Three-plus/80 planning is superb for seasonal products, when advertisers can accurately guess when consumers are buying, but not all products are seasonal in nature.

Another form of 'timing' is point-of-purchase displays, commonly used in grocery stores. This strategy positions a product right before the consumer's eyes in the exact moments before a buying decision is made.

Case Scenarios

Remember our formula from the beginning? Let's see how it works under a variety of scenarios.

Effective Advertising = Exposure (E) x the Right Message (M) x the Right Consumer (C) x the Right Time (T)

E x M x C x T

1 = Effective, 0 = Not Effective

Scenario 1:

A man has a radio on that is playing an ad for a new restaurant in town. At the same time the ad is playing, the man is having a conversation with his co-worker about where to eat lunch. As they slowly walk away from the radio, they run many suggestions by each other and finally the man says, "I wish we could think of a new place to go. I am tired of all the other places." If they had been listening to the radio instead of being engrossed in their conversation, they would have had an answer to their problem. They are the right consumers, at the right time and the message was right, but THEY WERE NOT EXPOSED.

As the formula states:

E x M x C x T

0 x 1 x 1 x 1 = 0

The ad is not effective.

Scenario 2:

A husband and wife are sitting home watching television surrounded by brochures for a vacation they are planning. An ad comes on the TV for Club Med showing two single women planning a vacation and they choose Club Med. The husband says, ‘That looks like fun, why don’t we just sign up for a Club Med vacation?’ The wife looks disapprovingly at her husband and says, ‘That’s for single people. We wouldn’t fit in.’ The husband and wife were exposed to the ad, they were the right consumers at the right time, but THE MESSAGE WAS WRONG.

As the formula states:

E x M x C x T

1 x 0 x 1 x 1 = 0

The ad is not effective.

Scenario 3:

An elderly couple is in the process of moving out of their house and into a retirement community. As they are driving with their daughter, they pass a billboard for U-haul. The daughter asks if they are all set to move. They respond, ‘We still need to find a mover.’ The daughter suggests they use U-haul, referring to the billboard. They laugh, ‘Goodness, no!’ They were exposed, the message was right and the timing was right, but THEY WERE THE WRONG CONSUMERS.

As the formula states:

E x M x C x T

1 x 1 x 0 x 1 = 0

The ad is not effective.

Scenario 4:

A college student in advertising has long yearned for a scanner to hook up to her computer. As she is logging on to AOL, an ad pops up for an incredible deal on a scanner. However, she realizes her tuition is due in one week and that money is tight. The consumer was exposed, the message was right, she was the right consumer, but the TIMING WAS WRONG.

As the formula states:

E x M x C x T

1 x 1 x 1 x 0 = 0

The ad is not effective.

Now we have seen examples of how difficult it is to get the correct advertising to the right consumer. But what if a successful ad emerges? Does that guarantee its success? As we shall see, the answer is maybe.

Scenario 5:

Let’s take the first example of the two co-workers discussing where to eat lunch with a slightly different outcome. One of the co-workers hears the message and suggests the new restaurant to his colleague. The colleague thinks it is a good idea, so they go to eat there. However, one of the diners was dissatisfied with the service. The next times he makes plans for lunch do you think he will eat there? Probably not. The factor of a minus is introduced to the 1 leaving a —1, which is below 0.

As the formula states:

E x M x C x T

1 x 1 x 1 x 1 = 1 (the consumer goes to the restaurant)

add (+) or (-)

(the consumer has a bad experience there)

The next time he hears the message, the end result will be —1

The second ad was not successful.

The only way the advertiser might rectify this situation is with new ads that possibly could change this consumer’s mind. This is the factor of ad likeability. Let’s look at the next scenario.

Scenario 6:

Time has passed. The consumer has not gone back to the restaurant where he had the bad experience. One day he hears a new ad for the restaurant that sounds friendly and emphasizes the good food found at the restaurant. The consumer rethinks his decision. Maybe he got a bad waitress that day and he will try his luck again.

As the formula states:

E x M x C x T

1 x 1 x 1 x 1 = 1

add (+) or (-)

(the consumer likes the new ad)

Add a (+) to the 1

The third ad was successful.

Now, let us look at consumer habits. We are creatures of habit, right? How does this effect advertising according to the theory of -101+ advertising?

Scenario 7:

The last aspect of this theory deals with consumer habits as a powerful factor that affects advertising. No matter how much a consumer likes an ad or how many past experiences they have with a product, if the product does not fit their habit pattern they will not buy it. Let us revisit our diligent employee who seeks lunch. Lunch time during the work week is often a habit: where one goes to eat, what one eats. Since time is a crucial element and lunch is a daily routine, people seek to minimize the need to make new decisions regarding eating lunch. Our friend may develop a habit of going to the same place. He knows what to expect. He knows the quality of service, etc. Against the backdrop of this highly developed habit, advertising may be useless. No matter what advertising our friend hears, he may never try a new place, and if he does, he will most likely revert back to his old habits.

So, let's go back to the office and listen to the conversation. They have heard the ad on the radio for the new restaurant.

Employee 1: "That sounds like a good restaurant."

Employee 2: "Ready to go?"

Employee 1: "Let's go."

Employee 2: "OK"

They walk to the cafeteria.

As the formula states:

E x M x C x T

1 x 1 x 1 x 1 = 1

add (+) or (-)

(the consumer has developed the habit of eating lunch at the same place)

Add a (-) to the 1

The ad was not successful.

Evaluating Some Ads

Now I am going to participate in an experiment. Assuming I am the (1) consumer and not the (0) consumer, I am ready to buy something. I am using myself in this experiment since I know my own preferences and habits, but the reader can just as easily do this exercise. I am sure we would both get different answers.

Ad 1: Blimpie

I like this ad. It is fun and doesn't take itself too seriously. It also makes the food look good. I have had good experiences with Blimpie in the past and I count among one of my many habits to eat submarines on occasion, though it is not an ingrained habit. I would buy this product. Vote: (+) for likeability, (+) for past experience, (+) for habit.

Ad 2: Special K

I like this ad. I think it is clever. However, I have had bad past experiences with this cereal. The chemical make-up of my mouth makes the flakes stick to my teeth like cement. Also, my habit is to buy Cheerios. I would not buy this product. Vote: (+) for likeability, (-) for past experience, (-) for habit.

Ad 3: Sorel Boots

I like this campaign. It has attitude. It doesn't talk down to me. I think it effectively gets across a message: these boots are durable and cool. These are two important attributes I look for in boots. I also like the way shoes look. I have no past experience with this product. I would buy this product. Vote: (+) for likeability, (+) for habit.

 

Ad 4: Southwest

This ad is advertising flights with no stop-overs. I don't particularly like this ad. I am confused about what the basketball means. I have had good experiences in the past with Southwest, but no stop-overs is not something I look for in an airline. I am more interested in price, that is my habit. This ad would give me a slightly bad impression of Southwest. Vote: (-) for likeability, (+) for past experience, (-) for habit.

 

 

Ad 5: Target

This ad is pretty to look at but I am not sure what it means. Do they sell forks and jewelry? Forks and jewelry is not the reason I shop at Target. I go elsewhere for those things. That is my habit. I have had good past experiences with Target. This ad would give me a slightly bad impression of Target. Vote: (-) for likeability, (+) for past experience, (-) for habit.

 

 

 

 

Ad 6: Money Magazine

These ads are obviously targeting older people with money and children. If I were one, I would like this campaign. It is simple and direct. I can't think of any magazines that are comparable to Money, so I have not developed a habit of buying a certain magazine for financial advice. I would pick this up at the newsstand and puruse a copy. If my experience was good, or if it had a particularly indepth and relevant article in the issue, I would probably buy it. Vote: (+) for likeability, (+/-) for past experience, (+) for habit.

Ad 7: GM Truck

I like this ad. It is visually interesting and gets across the message: people do use cars as a kind of home on wheels. This ad denotes to me the unique relationship that people develop with their cars. I have no bad past experiences with GM, since it is not my habit to buy this brand of vehicle. I would need more information before I would buy this product. Vote: (+) for likeability, (+/-) for past experience, (-) for habit.

Conclusion

While this paper takes a rather simplistic and mechanical look at effective advertising, it does underscore the difficulty of achieving successful advertising. The chances of getting all four components right is very low. Looking at the problem purely from a numbers standpoint: if one is right and three are wrong that is a 75% chance, and if one is wrong, the advertising is not effective. However, professionals in advertising make it their business to try to get as many components as right as possible. That is essentially their job. Advertising is a profession that hedges its bets with information and research. But there is widespread disagreement among practitioners and academicians as to what is correct information.

For the purposes of simplicity, this paper has left out a lot of the concerns that center on how advertising works. Advertising is a strange beast. For one thing, it is very hard to understand the dynamics of advertising. So far, there exists no time-tested scientific theory that can tell us what is effective advertising. Advertising is very much a ‘soft’ science and there may never be such a theory. Most of the newer research being done today in the field centers on the consumer and if advertising is a strange beast, human nature is even stranger.

From the early days, advertising concerned itself with a hierarchy of effects. This idea states that consumer behavior follows a linear progression (cognitive, affective and behavioral) and that advertising aids consumers along this process. This developed into the field of persuasive communication that considered cognitive and attitudinal effects to be of paramount importance in effective advertising strategies. This area of study borrowed heavily from the social sciences, in particular social psychology.

As advertising matured and much money was being spent, marketers entered the picture and looked at advertising purely in terms of market response. This approach looked at consumers as a group (price, market share and brand choice) and the group’s behavior was evaluated to determine successful advertising policies. This method borrowed heavily from the field of business and developed into a practice called marketing.

The latest trend in evaluating advertising uses a postmodernist perspective and borrows heavily from the fields of anthropology and semiotics. Yet another new area emerging is information processing and how the brain works. This last approach borrows from the field of neuroscience. No research that involves data collection and analysis has yet been done related to advertising in regards to the last two perspectives mentioned above.

Advertising, as a body of research, borrows heavily from diverse areas of human inquiry. This lends to the study of advertising a fertile area of investigation. This uncertainty as to how to advertising really works makes this field at once fascinating and frustrating. But as advertising effectiveness is being debated, it is interesting to note that no one has yet dared to stop advertising.

Researchers who study how advertising works are reluctant to disregard any theory that may lead to clarity and rightly so. Any scholarly work on advertising must pay tribute to all of these theories and recognize the important contributions of each unique path of research.

Reference : Dr. John D. Leckenby's Theories of Persuasive Communication