Elements An Advertising Company Must Evaluate In Advertising Research

In the article How To Evaluate Adverts Using Research, I talked about evaluating adverts as a means to reduce waste on marketing spend.

In today’s edition I touch on Elements An Advertising Company Must Evaluate In Advertising Research.

The idea is to give marketers a checklist to ensure that you get the most from your investment in an advertising company. When an advertising company is making a pitch for your business, you should analyze and determine whether or not the advertising company touches on the issues in this article. If the advertising company does not mention advertising research, then know that you are dealing with a novice.

You should the time to reflect on the amount of money that you spend on advertising companies. The figure that pops up in the back of your mind will make you take this article seriously.

Below are some of the reasons that make evaluating adverts mandatory:

1) Ads are going unseen
2) A lot of adverts have a low number of impressions/click-through rates
3) Ads that are not relevant are being ignored by consumers
4) Most ads that companies run do not give a good return on investment
5) Technology such as ad blockers has reduced the effectiveness of ads
6) Advertising companies are missing opportunities in channels such as mobile
7) Bot fraud results in advertising revenue being wasted

The information above can form a topic for another day.

Analysing Consumer Effects of Advertising by An Advertising Company

You can by evaluating how consumers are affected by the advertisement. The advertising company starts with obtaining verbal responses on the following elements:

How consumers respond to the advert:

1) Whether consumers recall seeing or hearing about the advert. When a customer remembers an advert, it increases the chances of product consumption as it puts the product in the customers’ minds.
2) Whether or not people liked or were influenced by the advert. If people like an advert they will watch, listen to or read it more increasing the chance of them purchasing the product. Product influence may make consumers alter their opinions and/behavior in a way that will lead to a product purchase.

How consumers respond to the product:

3) Analyze the results of social imaging. The advertising company has to establish how consumers perceive the product in relation to their surroundings. It is important to understand how consumers view a product in terms of the type of person who should use the product i.e. their social class; lifestyle e.t.c. and whether or not they themselves fit that description.

4) Marketers should evaluate the consumer’s perception of the quality of the advert, it’s likely cost, and the impact of those factors on their perception of the product being advertised.

A higher cost associated with an advert can mean more frequent runs of the advert which can either create a lasting impression in customers’ minds or annoy them. Big budget adverts tend to raise consumers’ expectations of the brand and the product in terms of quality

The next stage is for the advertising company to obtain non-verbal responses on the following element:

5) The actual behavior of the customers toward the product. The main technique used to analyze behavior toward a product is observation whether instore or in a laboratory. The observation covers inquiries, purchase decisions (product types and quantities), time spent at displays, and ways in which the product was used.

A company will gain a good idea of the impact of the advertising campaign on customers after an advertising company conducts such advertising research on its behalf.

Analysing Channel Effects of Advertising by An Advertising Company

An advertising company needs to conduct advertising research along the product’s marketing channel. The aim is to determine the impact of an advert campaign on various players along the marketing channel.

1) When an advertising campaign goes well, salesmen from your company will be more readily accepted by the channels that they target. The team can analyze the following metrics of sales calls to determine if an advert campaign has been successful:
i) The percentage of the sales team meeting the quota
ii) Average deal size
iii) Conversion rate
iv) Revenue
v) Sales funnel leakage

A successful campaign means an improvement in all of these metrics

2) The culmination of the points above is that sales figures improve. More importantly with higher profit margins than before. The idea of advertising is not only to increase cash flow but profit, as the consumers and the channel react differently to your product.

3) The distribution channel should promote the product more in terms of the number of times it advertises the product and the level at which the product is distributed. When an advertisement has struck the right chord with the distribution channel, motivation will carry sales to the next level

4) The attitude of various stakeholders in your distribution channel toward your product should change after an advertisement. Going back to the sales metrics this can be seen in fewer sales calls or sales visits being made before a deal is struck. There should be a shift in the balance between Sales Pull and Sales Push with the channel making more effort to get your product as opposed to you pushing it to them.

5) Another requirement is to evaluate the change in the price that your trade partners are willing to pay for your product. A well-executed advertisement will boost your profit margins in an instant as the advertising channel perceive your product to be expensive. If the channel is not willing to budge on its price, then your advertisement might not have been as successful as you had hoped.

There Will Be Effects Among The Competition As Well

When you advertise you should expect that there will be a reaction from the competition. Depending on the nature of the reaction you might have to make a decision whether to continue with the exercise or to drop it.

Sometimes advertising might create a worse situation as stronger competitors fight back. Make sure the agency analyzes this phenomenon always. Analyze the competition preferably before you run the advert.

Evaluate The Effectiveness Of Advertising Among Your Employees

As they say, charity begins at home. A happy employee creates a happy customer. In the same vein if an advert affects your employees positively it will reflect in how they conduct themselves internally, and how they act toward the customers.

If an advertisement is good, employees might put more effort into their work so as to support the cause. You can find salespeople being more innovative so as to justify the company spend, among other things. All of this results in a better result for the customer. It is important to evaluate this aspect in order to maximize the benefits of the ad spend or just in case the opposite happens.

The Role Of The Macro Environment In Your Advertisement

In addition, other people in society, government, financial institutions, and so on, maybe affected either positively or negatively by an advertising campaign. As a result, their anticipated and actual reactions may affect various aspects of the company’s activities.

Imagine you start an advertising campaign and research shows you that your industry regulator does not look at your campaign with too much enthusiasm. What would you do, spend more money with the risk of having it pulled down, or continue with the campaign? Let me know in the comments below.

So, there you go. Those are some of the elements that you should evaluate for an advertising campaign. Companies spend a lot on advertising campaigns so it is imperative to evaluate as many factors as possible.

In the next article, I talk about strategic considerations that internal stakeholders should make before advertising and how these considerations are linked to the type of research that needs to be conducted. The next article is related to the first piece in this series but from a less general perspective.

Cheers