04 how adv works

7/27/2019 04 How Adv Works

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HOW ADVERTISING WORKS

JOMC 170

04HowAdvWorks.ppt


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Readings How Advertising Works: A Planning Model

Revisited By: Vaughn, Richard. Journal of Advertising Research,

Feb/Mar86, Vol. 26 Issue 1, p57. How Advertising Works: What Do We Really

Know? By: Vakratsas, Demetrios; Ambler, Tim. Journal of

Marketing, Jan99, Vol. 63 Issue 1, p26-43.

Advertising's Role in Capitalist Markets: What DoWe Know and Where Do We Go from Here? By: Tellis, Gerard J.. Journal of Advertising Research,

Jun2005, Vol. 45 Issue 2, p162-170.


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How Advertising Works:

A Planning Model Revisited Classic model used by Foote, Cone &

Belding.

First proposed in 1980.

Notes that context determines effects.


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FCB Grid (Richard Vaughn, 1980)THINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

2

3 4

1


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FCB GridQuadrant 1:

THINK / HIGH INVOLVEMENT

INFORMATIVE (economic)

Classical hierarchy-of-effects:

Awareness

KnowledgeLiking

Preference

Conviction

Purchase

LearnFeelDo.


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FCB GridQuadrant 2:

FEEL / HIGH INVOLVEMENT

AFFECTIVE (psychological)

Products fulfilling self-esteem,

subconscious, ego-relatedimpulses.

Requires perhaps more emotional

communication.

FeelLearn Do.


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FCB GridQuadrant 3:

THINK / LOW INVOLVEMENT

HABITUAL (responsive) Routine consumer behavior.

Learning occurs most often after

exploratory trial purchase.

Learning by doing.

Do Learn Feel.


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FCB GridQuadrant 4:

FEEL / LOW INVOLVEMENT

SATISFACTION (social) Personal taste

Lifes little pleasures

Peer-oriented items. Do FeelLearn.


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FCB GridTHINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

2

3 4

1


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FCB GridTHINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

INFORMATIVE

(economic)

LearnFeelDo 2

3 4


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FCB GridTHINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

AFFECTIVE

(Psychological)

Feel LearnDo1

3 4


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FCB GridTHINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

HABITUAL

(Responsive)

Do LearnFeel

21

4


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FCB GridTHINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

SATISFACTION

(Social)

Do Feel Learn

21

3


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FCB GridTHINK FEEL

HIGHINVOLVEMENT

LOWINVOLVEMENT

SATISFACTION

(Social)

Do Feel Learn

INFORMATIVE

(economic)

LearnFeelDo

AFFECTIVE

(Psychological)

Feel LearnDo

HABITUAL

(Responsive)

Do LearnFeel


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FCB Grid

We may not now, or ever, know

definitively how advertising works.

But we do know it works in somedefinable ways well enough to make

more effective advertising.


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How Advertising Works:

What Do We Really Know? Reviews 250+ articles / books

7 types of models & findings

Example: FCB Grid would be an integrative

model ([C][A][E])

5 generalizations about how advertising

works Directions for future research


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Generalization 1

Experience (E), affect (A), and cognition

(C) are the three intermediate

advertising effects, and the omission ofany one can lead to overestimation of

the effect of the others

Demonstrated in the evolution ofmodels from simple (C) to more

complex ([C][A][E]).


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Generalization 2

Short-term advertising elasticities are

small and decrease during the product

life cycle.Lower than promotions

Weaker than product usage (E) effects

Greater for new brands


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Generalization 3

In mature, frequently purchasedpackaged goods markets, returns to

advertising diminish fast. A smallfrequency, therefore (1-3 per purchasecycle), is sufficient for advertising anestablished brand.

Diminishing returns

First exposure is most influential.


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Generalization 4

The concept of a space of intermediate

effects is supported, but a hierarchy

(sequence) is not.Significance of intermediate effects (C,

A, and E) depends on context.

Hierarchy framework does not allow forinteractions between effects.


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Generalization 5

Cognitive bias interferes with affect

measurement.

Affect can be more important thancognition.

Cognitive bias understates the role of

affect and misreports reality.


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Advertising's Role in Capitalist

Markets: What Do We Know and

Where Do We Go from Here?

9 misconceptions about advertising.

Advertising is essential for free markets. Where do we go from here?


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Misconception 1: Advertising is a powerful

force in shaping consumer preferences.

Some advertisements are.

Potential is there.

Most advertising is lost in the noise (orworse, adds to the noise).

Even success is quickly imitated.

This is the nature of a free, competitivemarket.


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Misconception 2: Even if advertising does

not work immediately, repetition will ensure

its ultimate effectiveness.

Consumers havent seen it, they need

more time, etc.

Escalation of commitment

If advertising doesnt work in a

reasonably short time it is unlikely toever work.


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Misconception 3:

Advertisements take time to wearin.

Wearin = improvement of

effectiveness during first few weeks.

Wearout = decline in effectiveness ascampaign ages.

Wearin is short or nonexistent andwearout starts right away.


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Misconception 4: The effects of advertising

last for years and even decades.

We remember old ads.

Old research used inappropriate data.

Effects of advertising are rather fleeting.


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Misconception 5: Even if advertising seems

ineffective, stopping would be dangerous.

Argue that suspension could be

disastrous.

Or that competitors ads would be moreeffective.

Argument is not tested.


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Misconception 6:

Weight (or intensity or frequency) is critical.

The most expensive item in the ad budget isthe advertising buy expressed as weight.

Big changes in weight may not result in evensmall changes in effectiveness.

Changes in target segments, media,

message, and especially creative contentresult in biggest change in effects.

Ad response is highest for productimprovement or new products.


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Misconception 7:

Advertising is highly profitable.

Spurious correlation between

advertising intensity and market share.

Because of the competitive activity,

much advertising cancels out.

Beware over-advertising: adding tocosts more than to profits.


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Misconception 8: Logic or argument is the

most effective advertising appeal.

Consumers like to think of themselves

as rational decision makers who make

good if not wise decisions.

Emotional ads are more interesting,

more easily remembered, more prone tolead to action, and less likely to arouse

consumers defenses.


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Misconception 9: Advertising is amoral in its

practice, corrupts peoples values, or is

unnecessary for free markets.

As a relatively weak market force (see

misconceptions 1-8), advertising

probably has little effect on values.

Essential for free markets: the means

by which an innovative firm can

communicate its brands competitivesuperiority to consumers.


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Where do We Go from Here?


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Effects on mental processes

Multiple routes to persuasion

ELM (central vs. peripheral processing)

Power of emotional appeals.

Consistency of cues enhances

persuasion.

Difficult translating/integrating labresults to the field.


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Effect on sales / market share

Move away from aggregate data.

Focus on content, message, cues, and

creativity rather than message weight.


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Versus sales promotion

Misses two key points:

1. How to use both jointly.

2. Discount price may be competitive

price.


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Advertising and pricing

Advertising may

1. Increase price competition.

2. Lower prices.

3. Increase consumers price elasticity.


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Advertising and brand equity

How and when does this process work?

04 how adv works

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