As easy as it may be for stations to focus on advertisers with a clear 'buy now' strategy, where the messages in copy veer toward sales events, promotions and often limited time offers, this week's Westwood One blog serves as a reminder of the other and arguably more important phase of most ad campaigns: long-term brand building to create future demand, especially when converting the existing demand reaches a low point.
“The sales event machine stops working when the supply of in-market consumers aware of a brand has been exhausted,” Cumulus Media and Westwood One Audio Active Group Chief Insights Officer Pierre Bouvard says, citing research showing just 5% of consumers are in the market for a product or service at any point in time, as “sales event ads only work on the small group who are ready to buy.”
Looking specifically at the auto market, where that immediately available market drops to 3% during a three-month period, “for those not in the market, sales event ads are ignored or seen as irritating,” Bouvard says, pointing to Automotive News figures showing 24% will purchase a vehicle over the next two years, meaning auto future demand is eight times bigger than existing demand.
“Creating future demand is about mass reach to attract that much larger group who are not yet ready to buy,” Bouvard says, noting key differences in ad strategy. “[While] the creative approach to convert existing demand is rational and promotional, creating future demand ad copy is emotion-based creative designed to be memorable, entertaining and create positive feelings.”
The major difference between the two approaches: creating future demand takes time and patience. “When a business primarily driven by sales events begins brand building advertising to create future demand, there is a period when flat sales persist while future demand is being created,” Bouvard notes. “It takes time for future demand to build over time. Eventually, sales pick up when sufficient future demand has been created. When future demand is created consistently, sales growth can be maintained.”
Additional research cited by the blog suggests the ideal ad budget mix should allocate 40% for sales events and 60% to create future demand, adjusted based on whether the product is purchased offline vs. online, the size of the business and product pricing.
“Brands that create future demand will reap the benefits when new inventory arrives and shoppers return,” Bouvard says. “In times of tight inventories, it is wise to dial down sales event ads to convert existing demand. After all, current demand outstrips supply. However, now is the perfect time to ramp up the creation of future demand via brand-building advertising [which] results in long-lasting business outcomes.”