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Advertising Trends That Might Impact Your Bottom Line
Monday, November 21, 2016 6:45 AM

David England, Senior Research Analyst, Cornerstone Credit Union League

Ad spending continues to rise.
Total ad spending in 2015 is estimated at $190 billion in the USA. The 200 largest national advertisers spent a record $143 billion, a 3.6 percent increase over 2014. Social media marketing has risen to 11.7 percent of total marketing spend, up from 3.5 percent seven years ago.

Previously, pundits predicted even higher increases during that timeframe, but they did NOT materialize. This is likely due to the lack of ROI measurements for social media. Too many companies have been unable to demonstrate the benefits social media has provided to their businesses. Regardless, social media is everywhere and on the rise. Traditional media budgets often suffer, as dollars shift to digital media ads. With this flow of digital media advertising dollars comes growth in the number of ads or commercials aired. It would be nice to know that the strategy change is resulting in better ads and higher ROIs. But, for too many companies, this is not known.

The rise in “likes” on Facebook and the increasing numbers of followers on Twitter is not resulting in higher brand and advertising awareness in many companies that are measuring/tracking these important outcomes.
Is it possible that digital media is less effective than traditional media? Online space is cluttered space. And clutter renders ads less effective or not effective at all. New ads are inexpensive and can be brought in quickly, which adds to the clutter problem. It seems that it all streams in so swiftly that no one stops to analyze the results of these efforts. By not tracking ad effectiveness, you leave a void in marketing management.

Research to develop great ads and track their performance declines.
The inability to measure the performance of these new ads is undeniably related to the fact that FEW digital ads are pretested before airing. Is the ad grabbing attention? Is the ad memorable? Does the ad relay the intended message? Does the ad increase purchase intent? Does the ad move the target audience emotionally in the intended way? Does the ad boost the company’s brand image or the product’s image? Too often these and other questions are not known prior to a campaign’s launch. How do you know if the ad is going to be effective according to your target audience? 

And companies that have never used or have abandoned ad tracking research will never know the actual impact of their ad dollars.

The building blocks of marketing and advertising campaign success did not change due to the digital revolution. Rather, they most likely became more important. Why? Marketing and advertising have short- and long-term effects. These effects have to be measured. Only accurate, consistent research will allow companies to measure and manage advertising effectiveness.

Best practices that maximize marketing efficiency and long term profitable growth.
First, conduct developmental research with your target audience. You want to develop intelligence that is based on your target markets and will guide future messaging and strategies. This work will result in multiple concepts and ideas.

Next, pretest and test ads before they go live. This will help you sort out the best concepts/ideas with which to move forward. This testing procedure should be consistent over time, so that a body of knowledge about advertising is formed and grows as you move from one ad to the next.

Spending money on poorly conceived or woefully executed advertising is a great waste of marketing dollars.

Third, track your advertising within each of your target markets. Consider tracking these critical areas: brand awareness, ad awareness, ad message recall, ad recognition, brand image, usage and trial events, and demographics.

Few competitors know this information about their target audiences/customers. However, these few competitors know if their messages are reaching the intended audience, if the ads move them toward purchase, if the ad impacts brand/product image, and more.

If you can measure how effective each advertising campaign is (as above) and you know how much you spend on each campaign, you can measure the ROI of your ad campaigns. With this intelligence, you will improve your bottom line in the short- and long-term.