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Reach, Creative Drive Nearly 70% Of Sales, More Than Twice Ad Industry Perception.

Marketers and media agencies' perceptions of the degree five key elements impact sales appears to be out of whack with the actual effect of each, according to studies reported in Westwood One's latest “Everyone's Listening” blog. While research by Advertiser Perceptions, commissioned by Westwood One, shows marketers and agencies estimate creative and reach to generate 17% of sales each, actual numbers based on Nielsen research show the two contributing to 47% and 22% of sales, respectively.

“[There's] a major disconnect about what really generates sales lift,” Cumulus Media Chief Insights Officer Pierre Bouvard says. “Marketers and media agencies perceive that reach and creative only represent 34% of sales effect, [while] Nielsen’s analysis reveals the combination of reach and creative drives twice as much sales (69%) as perceived. At the end of the day, driving sales is about powerful and entertaining creative that reaches lots of people.”

According to the results of Advertiser Perceptions' survey of more than 300 brands and media agencies, conducted in January 2021, the impact of targeting, context and recency on sales is significantly overestimated. Marketers and media agencies see targeting as the largest contributor to sales, driving 22% of business, while Nielsen Catalina Solutions' “The Five Keys to Advertising Effectiveness,” based on nearly 500 studies connecting advertising to sales, shows it actually generating just 9%. “Perhaps the recent industry handwringing over the loss of mobile ad IDs and third-party cookies is misplaced,” Bouvard says. “The hubbub seems overwrought given that targeting is such a small lever, generating only 9% of sales effect.”

Likewise, while agencies say context and recency together account for 26% of combined sales effect, Nielsen shows these to drive only 7% of sales. The closest Advertiser Perceptions' panel comes to the reality of sales effect is when it comes to brand, pegging it as driving 18% of sales vs. Nielsen's 15%.

The focal point of Westwood One's analysis is the industry's underestimation of the power of reach and creative. The former, driving 22% of sales while perceived as 17% by brands and agencies, is “the number one media sales driver,” says Bouvard, citing a WARC study which concludes, “Reach is the foundation of media effectiveness.”

As to the extreme difference between creative's perception and reality – where Nielsen's research shows it drives nearly half of sales, almost three times the agency and advertiser perception – Nielsen Catalina Solutions Chief Research Officer Leslie Wood says, “All of our work shows creative is central. The quality of the message and the way it resonates with consumers is at least half the battle. First get the creative right, then advertise to the right consumers.”

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