The Schizophrenic Strategist

The Schizophrenic Strategist

Newly published research gives us insight into how advertising works over both the short and long term. Scanner data quantifies a commercial's influence on immediate sales, while tracking and modeling measures how much flows to brand equity and its longer-term effect. As a consequence, media planners now have to develop strategies that address both the short and long term effects of advertising. At first glance, it seems like these strategies might not be compatible.

Immediate Return

Scanner data and newly released information from Media Marketing Assessments reveals that on average roughly 70% of a commercial's influence flows to an immediate sale. While advertising is a weak force in promoting immediate sales, accounting for less than 10% of that sale (promotion and brand equity account for the rest), the 10% is pretty powerful stuff. It tells us that if advertising is scheduled correctly, it will be present to always influence a sale and in effect help pay for itself. To enhance the chances of a greater immediate return, a continuity strategy is recommended. This is called recency planning and it holds that an advertiser should schedule media to collect continuous reach, every week of the year when sales are likely. So the right brain of a media strategist whispers plan for continuity. What does the left-brain do?

Schizophrenic Strategies

Current research estimates that on average 30% of a commercial's influence flows to brand equity (long-term sales). In turn, brand equity accounts for 70% of any sale, the most powerful force in moving products. Of course, equity is comprised of the collective powers of the brand's reputation, cache, performance, word of mouth, price and public relations and among other elements, including past advertising. It is this element of advertising that has yet to be addressed in any modern forum since the release of the research.

It would seem that in order for advertising to be a powerful force within the context of brand equity, it would have to have some lasting value. One could easily argue for impact scheduling, heavy frequency, ie. all the elements of media planning that we have just abandoned with the advent of recency planning. If that is the case, how can a short-term continuity strategy coexist with an impact strategy, given these guidelines? A media strategist could develop a good case of schizophrenia. However, as in the case of John Forbes Nash, which has been well documented in the book about his life by Sylvia Nasar and the movie by Ron Howard (both called A Beautiful Mind), sometimes we see things that aren't really there. In this case the need for impact scheduling does not exist.

Continuity:Recency as Consistency:Equity

Given the well documented effects of advertising decay, brand equity could never really enjoy the compounding effects of good advertising unless that advertising were consistently in the mind's eye. Flighting and frequency are not the twin parents of consistency, unless the media budget is unusually large. A weekly reach of 90% in prime time and fringe time television over the course of a year, every week, would cost about $1 billion. A more modest weekly reach of 50% costs about $50 million annually. These are obviously unaffordable levels for most advertised brands.

Advertising decay does not occur to any severe degree as long as advertising remains in the mind's eye. When advertising is consistent, it has a better chance of remaining in the mind's eye (top of mind awareness) and compounding with past advertising to form a bigger base of brand equity to sell products in the future. So a lower, but more continuous weekly reach that compounds over a month to fairly high numbers is a very effective way to schedule advertising. This form of consistency is also very compatible with recency planning and today's budget constraints. Bottom line, the two forms of short and long range planning strategies can coexist and the strategist needn't turn to schizophrenia.