For years, the advertising industry has put a great deal of time and effort into understanding and tracking the effect advertising can have on measures such as brand awareness and brand attitude. While these are relatively “soft” measures, they are undoubtedly useful indicators. However, advertisers are seeking more “hard-nosed” evidence. What return is the advertiser getting for his investment? The impact of advertising on in-store sales is as hard nosed as it comes – which is what makes the new “Radio: The Sales Multiplier” research from the Radio Advertising Bureau stand out.
The research was conducted with customer marketing consultancy Dunnhumby, which has full access to the Tesco Clubcard database. Using simple test and control regions, Dunnhumby was able to measure the effect radio advertising was having on the sales of 17 well-known packaged goods brands, including Fairy, Jaffa Cakes and Nescafé. The results were in line with expectations and show that, on average, radio advertising lifts sales by nine per cent – although results varied from nought per cent to 31 per cent. Also, Dunnhumby calculated that on average there was a sales uplift of 2.2 per cent for every 100 gross ratings points.
This type of marketing research is not perfect – comparative regional studies are always open to the suspicion that the marketing mix won’t have been 100 per cent like for like. However, the focus here, on actual sales via a single retailer, provides hard evidence of radio’s accountability, as well as creating useful benchmarks for advertisers and agencies.
This research also raises other questions. How do these results compare with other media? Which media mix will give the best results?
Answering these questions is difficult, as comparable research in this area is sparse. The challenge to other media, particularly to media owners, would have to be to demonstrate in a similar way the return that advertisers can expect from their investment. This will also go a long way to answering the question of optimal media mix.
Of course, broad research studies only give broad answers. Specific answers for individual brands requires bespoke research solutions, ideally full econometric modelling run in conjunction with an understanding of brand image and how communications are affecting those perceptions. Bespoke research also requires investment from advertisers, and while some may resist the notion, a good research programme is money well spent. Improving the efficiency of a &£5m media spend by five per cent is worth &£250,000, which would cover the most elaborate of studies.
Radio has stolen a march on other above-the-line media in demonstrating its effectiveness at driving sales. It has challenged the perceptions of how far the measurement of advertising effectiveness can go and we look forward to similar work from other above-the-line media.
Phil Reddaway is head of communications planning at Carat