Advertising Research White Paper

Dark Energy in the Digital Age

The advertising media landscape is aglitter with new possibilities. Websites are universal. Social media is everywhere.

Mobile devices are pervasive. Massive shifts of media dollars away from traditional media (television, radio, print) to the new digital media are evident everywhere.

Advertising budgets are often reduced as brands transition to greater use of digital media. Along with the great migration to digital media is a frantic increase in the pace of creative development and rapid growth in the number of ads or commercials “aired.”

Many advertising tracking surveys were abandoned as a result of the Great Recession and its aftermath—on the eve of the greatest change in media since the widespread adoption of television in the 1950s and 1960s. This means that the macro effects of many brands’ shift to digital media have gone largely unmeasured and uncharted.

The few brands that are still doing survey-based advertising tracking are increasingly suspicious that something is not right, that something is missing (like the missing energy in the universe, the so called Dark Energy, or the missing matter in the universe, Dark Matter). Many companies are seeing brand awareness and advertising awareness numbers remain stagnant or even decline—in spite of a rising tide of “likes’’ on Facebook and growing numbers of followers on Twitter. Could it be that digital media is less effective than traditional media? Some hypotheses to consider:

• Few of the digital ads are based on upfront research or are pretested before “airing.’’ No one knows if the ads will attract attention. No one knows what these ads are communicating. No one knows if these digital ads are effective.
• Most of the online space is a cluttered world; clutter tends to reduce the effectiveness of most ads.
• Digital ads are frequently short-lived. New ads can be created quickly and inexpensively, so a digital campaign might include many different ads. Too many different ads can reduce advertising effectiveness.
• The reach of most digital media tends to be narrow; a small percentage of heavy online users tend to dominate the traffic.
• Many sites, if not most, are plagued with imaginary or inflated traffic statistics. The reach and frequency promised are seldom realized in actual practice, and reliable measuring systems are not yet in place.
• The role of digital media in the marketing plan must be carefully researched and planned to be effective. Rarely are these steps taken.
• Most digital ads can be deleted or interrupted by actions of the viewer.

Okay, so how is a brand to really know if its digital advertising is working? The ultimate measuring stick is survey-based ad tracking. Perhaps at no time in the past 75 years has survey-based advertising tracking been more important than it is right now, given all the turmoil in media technology and media choices.

A best practice is to track advertising by surveying the target audience and monitoring brand awareness, advertising awareness, advertising message recall, ad recognition, brand image, and related usage and trial data, along with demographics. Ad tracking is the acid test, the ultimate macro measure of overall advertising success or failure. Most importantly, the ad tracking must be consistently pursued year after year so that there is an unbroken chain of measurements.

Few companies have achieved this level of consistency in tracking their advertising. Good advertising tracking is an essential advertising management tool. Today’s companies need to ask themselves if they are spending enough to maintain awareness, if their primary messages are getting through, if their competitors are outflanking them, whether their advertising is having positive effects on the brand’s image, and whether the media mix is optimal.

Without advertising tracking data, brands are adrift on dark and stormy seas. What are some other best practices to help companies navigate the rocks and shoals of digital advertising and digital media?

Perhaps the most important best practice is solid, upfront research among the target audience so that development of advertising is guided by target audience needs, perceptions and motivations. Strategic positioning, marketing strategy, and messaging should be based on research facts and evidence, not whim and intuition. Good qualitative research (focus groups, depth interviews, ethnography) is almost always a component of this upfront research, followed by testing of strategic positioning and advertising concepts. The goal is a blueprint to guide development of the creative.

Another best practice is to test—or pretest—the commercials and ads before they are aired. No one is smart enough to guess how consumers are going to respond to a given commercial or ad. Clear communication is a very difficult thing to accomplish; we even fail at communicating with our spouses at times. Commercials often convey hidden messages that even their creators do not notice. The only way to ensure that the advertising creative is effective is to test it among target-audience consumers. Every commercial or ad should be tested so that a body of knowledge about the advertising grows from commercial to commercial.

Spending media money on poorly conceived and poorly executed commercials is perhaps the single greatest waste of marketing dollars.

The final best practice is media mix modeling. What type of media is most effective for your brand, or what mix of media is most effective? Which spending levels generate the greatest return on investment? Good advertising tracking data is a part of the media mix modeling data set. Multivariate statistical techniques are used to implicitly measure the effects of different media, different spend levels, and different media mixes or combinations. The ultimate goal is to tease out cause and effect so that the return on advertising investment can by optimized by type of media and other variables. Marketing mix modeling is not easy, and it is not inexpensive, but it can help improve the returns on advertising investments.

The fundamentals of marketing and advertising success have not changed because of the digital revolution. If anything, the fundamentals are more important than ever. We must always remember that advertising has short- and long-term effects. Only with good, consistent research can both the short- and long-term effects be measured and managed.

Dark Energy may be a sufficient explanation for what’s missing in physics, but Dark Energy has no place in the world of marketing and advertising.

Jerry W. Thomas

Chief Executive Officer

Jerry founded Decision Analyst in September 1978. The firm has grown over the years and is now one of the largest privately held, employee-owned research agencies in North America. The firm prides itself on mastery of advanced analytics, predictive modeling, and choice modeling to optimize marketing decisions, and is deeply involved in the development of leading-edge analytic software. Jerry plays a key role in the development of Decision Analyst’s proprietary research services and related mathematical models.

Jerry graduated from the University of Texas at Arlington, earned his MBA at the University of Texas at Austin, and studied graduate economics at SMU.

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