The new AMC primetime drama “Mad Men” provides a 1960s setting in which advertising agencies were all-powerful influences on the masses. In fact, the general theme portrayed is that “consumers don’t know what they want until we tell them.” The American Marketing Association’s definition of Marketing in 1960 read: “The performance of business activities that direct the flow of goods and services from producers to consumers.” It appears the 1960 definition does nothing to dispel the dramas story line as the focus of the shows (advertising executive) characters is to hypnotize American consumers through manipulative advertising campaigns.
I was born in 1959, so I do remember some interesting 1960s cereal ads. My mom used to let me choose my cereal based on the toy inside. Not anymore; now my wife makes me choose my cereal based on its fiber content. How times have changed, and I’m not just talking about my breakfast cereal! Marketing’s evolution has also been very dramatic. Most marketers have replaced their “Mad Men” approaches with sophisticated strategies that attempt to engage the consumer and build customer loyalty.
Does that mean that these new customer-centric strategies have eclipsed the need for marketing communications to be persuasive? No, just because marketers’ can get closer to customers with targeted marketing messages through the aid of sophisticated customer analytics tools doesn’t mean the need to persuade has gone away. In fact, the ability to predict and measure campaign persuasion actually helps companies predict ROMI rather than measure ROMI after-the-fact, which helps secure funding approval for marketing activities in the first place.
While thinking about and researching this perspective I had the opportunity to talk to some really smart folks at the ARSgroup. In short, ARS measures the effectiveness of marketing communications. ARSgroup developed a system for measuring the persuasiveness of advertising based on actual consumer behavior prior to the advertising being launched, and one of their major customers happens to be a global CPG company located not far from my Cincinnati campus.
What I found interesting was that after 40,000 tests and 16 million consumers, their system continues to predict the isolated impact of advertising on sales, controlling for other elements of the marketing mix, at a level of r=0.90. That level of in-market predictiveness is quite impressive. Copytesting systems that correlate to marketing measures such as brand awareness or other brand equity measures at similarly high levels provide value; however, the high correlation to actual sales provides a true measure of persuasion that is based on actual consumer behavior. And taking that angle in partnership with some of the Business Intelligence players means that advertising no longer needs to be treated as “noise” as it relates to consumer demand forecasting.