Leaving the value of brand advertising on the table
Or why everyone's doing brand lift wrong.
Much TV and digital inventory comes bundled with a brand lift study. These provide a simple comparison of the exposed and the control groups with a measure of how much more aware the exposed group is of the brand than the control group. To quote a CMO, “I’ve never seen a negative result in a brand lift study,” and therein lies the problem. They are entirely unactionable.
What started as a simple tool to ensure we’re capturing the total value of a brand campaign has turned into a rubber stamp that doesn’t help anyone in the industry. So, what should we be doing differently?
There are multiple problems with the current approaches:
By definition, the people we target in our campaigns are the people who are more likely to have positive attitudes towards the brand.
Brand campaigns tend not to be isolated to a single channel, so most people in the target audience will be exposed to multiple channels during the same campaign. This causes spillover for brand lift studies, assuming exposure on only one channel.
Defining control groups that aren’t exposed often ends up being out-of-target for the brand, artificially inflating the brand lift signals in the results.
The biggest problem, however, is that upper funnel measurement isn’t generally linked to what’s delivering revenue to the bottom line. It makes for uncomfortable conversations when CMOs talk to their CFOs about why they’re investing in brand advertising when performance advertising appears to be driving sales.
What CFOs care about.
Brand advertising works because it moves people down the brand funnel. If people aren’t aware of your brand, they can’t be interested in it; if they aren’t interested in it, they can’t consider it a purchase option. Dollars spent on brand advertising lead directly to conversions at a later date, and we need to start quantifying the impact of upper-funnel advertising in those terms.
As consumers move down the funnel, they become more favorable towards the brand, and, at some stage, they become sufficiently interested in the brand that we can classify them as “favorable.” These favorables are the consumers who are significantly more likely to purchase the brand based on their previous experiences and exposure to branded advertising.
We can quantify how valuable a “favorable” is and how many we have created in our brand advertising campaign. Consider an example of online mattress sales. Suppose your average consumer has a 10% chance of buying Brand X when they are in the market for a new mattress and a 50% chance of choosing it. In that case, a favorable consumer has a value of converting, and keeping this consumer as favorable is roughly 40% of the value of an actual conversion. If our margin on the mattress sale is $200, then the value of our favorable is around $80, providing they stay favorable through their next mattress purchase.
Quantifying the value is not a massive leap from our current Brand Lift studies, but no one is discussing it.
Why not? I think it’s because, most of the time, Brand Lift is provided as a standalone service by a research company commissioned by the agency, and research companies don’t usually have access to the other essential datasets in linking favorability with dollars: conversion data.
Enter the conversions.
CFOs are keen on performance advertising because the world is awash with conversion data. Most brands readily have access to online sales, in-app purchases, credit card data, and other forms of data. We combine that with survey data about favorability to get the result we need.
The steps are pretty straightforward:
Survey consumers in the target audience for the campaign during the campaign and establish favorability through questions
Measure conversions and impressions through behavioral data and link that to the survey data.
Quantify the value of favorables through the increased conversions in that segment.
Quantify the uplift in favorables based on the increase in favorables in those exposed to the campaign.
Let’s say we survey 2000 people in our target audience during a four-week campaign. Throughout the campaign, we can identify favorable conversion rates, compare them to those of non-favorables, and calculate the value of the favorables. As the size of the exposed segment builds over the campaign, we can also measure the change in the proportion that we identify as favorable.
This gives us the quantifiable value for our campaign's upper funnel impact—the silver bullet every CMO needs to avoid those awkward conversations.
We are under-measuring the value of advertising.
With marketing effectiveness so heavily tied to the bottom of the funnel, I’m convinced we are underestimating the value of advertising, particularly media like TV, which is so strong at building brand awareness. When we focus solely on conversions, we miss the value being driven by the upper funnel. When we focus exclusively on survey data, we miss the value that brand advertising has on conversions.
As an industry, we cannot afford to ignore that. We must break away from the status quo and start measuring effectiveness across the whole funnel.
DM me if you want to try a test.