Metrics that Matter

What makes a good ad? A million-dollar question. With Nobel laureates Kahneman and Thaler leading the rise of applied behavioural economics, the field has spread its wings and is revolutionising the commercial sector from product development through to advertising and sales strategy optimisation. It’s no surprise marketers are increasingly looking to behavioural science to understand the murky inner workings of advert efficiency. So what can behavioural science tell us about the perfect ad?

Innumerable studies have been conducted to pinpoint the determinants of an effective advert. Creativity consistently tops the charts. One HBR study claimed a highly creative campaign could almost double the sales impact of a non-creative campaign. Emotional valence and intensity are often cited as key, with one study finding that positive emotional valence facilitates positive ad evaluation, while negative emotional valence debilitates it.

We know various criteria are important to success, but how important are they and how should they be prioritised? We collected detailed evaluations of 166 ads across 5,734 people in one single study to answer just this.

Methodology

Marketing managers primarily have two core intentions in advertising: stimulating action and enhancing brand-liking. As such, our research focused on predicting success in these core intentions.

Action represents the influence the advert has on the consumer’s subsequent behaviour, specifically, how likely they were to think about, talk about, and consider the brand or product in future. Brand-liking is defined as the impact on overall brand health and covers a range of brand metrics including Price, Quality, Trust, and Familiarity.

Respondents were shown an advert before rating it on a series of image statements. The statements covered eight key dimensions; Attention, Relevance, Branding, Arousal, Valence, Clarity, Informative, and Credible. The predictive power of these dimensions on driving Action and Brand-liking was assessed using a logistic regression model.

Action

Within action-seeking adverts, Relev­ance – whether the ad appropriately targets viewers – was by far the biggest driving factor, followed by Attention and Credibility. Attention assesses the extent to which the ad is distinctive and memorable, while Credibility indicates the trustworthiness of the ad’s message.

*Solid bars are statistically significant at 95% confidence level

The multi award-winning John Lewis ‘Monty the Penguin’ Christmas ad is one example of an effective action-driving advert, scoring highly on Relevance, Credibility and Attention. The advert delivered a record £175m sales week for John Lewis, with sales up 5.5% year-on-year.

Brand-liking

For companies looking to use advertising to increase brand appeal, the findings differ considerably. An advert needs to be strongly branded and deliver an informative, clear and credible message to drive brand-liking, where Informative indicates whether something new is learned about the brand or product. Interestingly, an ad doesn’t necessarily need to be relevant to drive brand liking. This is great news for advertisers, as it means they don’t need to tailor adverts for different audiences.

*Solid bars are statistically significant at 95% confidence level

An advert eliciting strong brand-liking is this Thatcher’s ad, designed to generate national brand awareness as well as communicate their long history and family values. It is strongly branded throughout, both visually and verbally, which is reflected in consumer ratings, who also saw it as highly informative as well as clear and credible.

Ideally an advert would score highly on all dimensions, but it is very difficult to achieve. The emphasis should be to deliver on the metrics that achieve your goals. For instance, a brand-focused ad needs to drive brand-liking whereas a trade ad needs to evoke action. While you don’t necessarily need a strong performance across the board, it’s crucial you know the metrics that matter to your objectives and to have a robust ad testing tool to measure performance.

Ask us about our ad test suite for further information.