Myth busting series: no.5: The aim of advertising is to sell a product or service

In this blog post we debunk the myth that the aim of advertising is to sell a product or service

There’s a common misconception that advertising’s main purpose is to remind people of a product/service and its benefits and get them to go out and buy it. Whether this is done in an information-heavy DRTV style ad or a creative, artistic print ad – people assume the focus should always be on the product and making a sale. But this short-term tactic, termed activation, is only one of the two key tactics within advertising; and as marketers argue, the less important of the two. The other type of activity, termed brand building, is focused on the long-term development of a brand identity, with the aim of creating positive mental brand equity in the minds of the public. And this is what marketers suggest we should be focusing most of our attention on.

The table below, from the IPA’s “Media in Focus” illustrates the key differences between brand building and activation.

advertising

This is not to say a budget should solely be dedicated to brand building. Rather, it has been found that brand building and activation work in synergy; boosting each other. The stronger a brand is the higher the response rate from its activation channels, and companies that use activation well make more money which in turn grows their brand.

That being said, marketers argue the balance of the two should be slightly skewed towards brand building; specifically, that 60% of marketing activity should be focused on brand building and 40% on activation. This is because activation appears to be very effective in the short-term – within the first 6 months of a campaign it provides the greatest sales response. However, this tends to decay quite quickly and not build up over time – rather, it produces a series of sales spikes correlating with when marketing is released, which always return to the same base level once it’s finished. Brand building can’t create the same magnitude of sales spikes but those it does create decay away more slowly, and so repeated exposure can cause the base level of sales to rise. Therefore, in the long-term, brand building is the main driver of growth, as illustrated in the graph below.

advertising

The 60:40 rule came about from analysing a wide range of IPA case studies. Instead of the usual method of just looking at media type to determine whether activity is brand building or activation (where TV is assumed to be brand-building, ignoring the fact that DRTV is very much activation-focused), a more accurate method was developed. IPA authors were asked to split their budgets into brand and activation themselves; making no media assumptions. They then split the case studies into 4 different groups: the campaigns that grew shares, the most efficient campaigns, the strongest brand building campaigns and the largest profit growing campaigns. As illustrated in the pie charts below, the most successful campaigns in all 4 categories seemed to follow a very similar pattern: around 40% of their channel share was for activation and 60% for brand building.

Although there are significant benefits to focusing most marketing activity on brand building, there is also a downside: it makes success very hard to measure. As marketers are becoming increasingly interested in campaign effectiveness and modifying campaigns accordingly, encouraging them to focus on a less tangible outcome won’t be popular. That being said, this excessive focus on effectiveness is encouraging a dangerous trend, coined as “short-termism”: prioritising the easily measured, large, immediate measures of marketing activity over the longer-term, arguably more important measures. As the evidence points towards brand building being key for brand growth and increased market share, we need to keep coming up with different ways to measure success, such as knowledge of and attitude towards a brand and price elasticity, rather than merely purchasing behaviour or digital tools like click-through rates.

So, there you have it – both activation and brand building are important tactics in marketing. However, activation will not provide brands with the long-term growth they’re craving while brand building will. So, regardless of how difficult this might be for campaign tracking, it’s time to dedicate more time to building a brand identity and less time to selling its products.

Sources:Media in Focus