Of the five key factors driving advertising effectiveness – creative, brand, targeting, reach, and recency – which drives the largest percent of incremental sales?
The answer, as reported in Westwood One's weekly blog, comes from an August 2023 study from Nielsen and outcomes-based marketing firm NCSolutions, based on nearly 450 sales effect studies and more than a decade of work linking advertising to sales results.
That answer is, creative, which based on NCSolutions' studies drives sales by both an ad's creative message and the context in which that message is delivered. In fact, compared to the other four drivers, it's not even close: creative generates nearly half (49%) of sales, compared to 21% for brand, 14% for reach, 11% for targeting, and 5% for recency.
For the other four factors, NCSolutions defines brand's drivers as “market share, brand penetration and the tendency to retain loyal buyers relative to the competition;” reach as the total households exposed to advertising during a campaign; recency as “the timing of advertising in relation to when a consumer makes a purchase;” and targeting as how well a campaign was able to reach a particular audience.
When it comes to creative and targeting, brand marketers' and media agencies' estimates of share of sales effect differ most from NCSolution's findings, based on Advertiser Perceptions’ annual survey commissioned by the Cumulus Media/Westwood One Audio Active Group. For creative, it's a significant gap between perception and reality, as the past five Advertiser Perceptions studies show that marketers peg its share at between 19% and 21%, vs. the actual 49%.
Meanwhile, marketers are giving the most credit for driving sales to targeting, with Advertiser Perceptions showing their share estimates in the 23%-to-27% range over the past five annual surveys, compared to its actual 11% contribution to sales effect.
“The sales contribution perception of targeting is twice the reality,” Cumulus Media/Westwood One Audio Active Group Chief Insights Officer Pierre Bouvard says, while noting that “compared to January 2020's 27%, marketers believe targeting’s effect on sales has dropped [to] 24% in 2024. Perhaps due to the looming cookie depreciation?”
The side-by-side comparison for the results of Advertiser Perceptions' 2024 survey shows that the only factor marketers are reasonably correct on is brand, given their average 23% estimated share vs. NCSolutions' 21%, while their estimates for both reach and recency also come in much higher than the reality.
When it comes to advertising, then, “creative quality should be the top priority,” Bouvard says. “Don’t overstate the value of targeting – it is a small lever.”