25 October 2022
Strategist’s Digest: Different ad rules for young and old brands /
Contagious digests the most interesting and relevant research from the world of advertising and beyond, because there’s just too much to read and too little time
Should You Change Your Ad Messaging or Execution? It Depends on Brand Age. /
By Koen Pauwels, Bharat Sud, Robert Fisher and Kersi Antia. Published in Applied Marketing Analytics.
Give it to me in one sentence.
Old brands should keep their ad messages consistent but young ones are free to follow consumer preferences.
Give me a little more detail
The researchers sought to understand how changing ad messages and executions affect sales as a brand ages.
They collected 14 years worth of data about 20 minivan brands in the US, including information on sales, advertising budgets and message content. Then they devised a framework for analysing the 554 unique ads produced by those minivan brands during the study period. In particular, the researchers looked for changes in ad messages (claims about acceleration, braking distance etc) and changes in ad executions (different background colours, text etc).
A statistical model separated the effects of changes in advertising execution and message, and compared them to sales numbers and with consumer preferences.
The results showed that when young brands switched their advertising messages to cater to customer preferences, sales increased. But when old brands did the same, it could actually hurt sales. Conversely, while young brands didn’t appear to benefit much from varying their ad executions, older brands did.
Why is this interesting?
As the authors write in the paper, marketing scholarship has two contrasting theories on how beneficial it is for brands to adapt their message to reflect consumer preferences. Some believe that marketers should stick to their guns and remain consistent with their ad message in the face of changing consumer behaviours. Others argue that brands ought to ‘change with the times’ and alter their message as the market evolves.
By quantifying how ad messaging and ad execution affect each other and brand sales over time, this study provides a framework to settle this debate. It finds that, for younger brands, changes in both ad execution and message are important, but only the latter has a significant positive impact on sales. However, the significance of these two elements fluctuates substantially over a brand’s life. As companies age, tailoring ad messaging to new consumer preferences can negatively impact sales. Conversely, changing ad execution is increasingly valuable.
It's worth noting that the researchers’ findings indicating that changing ad executions has no significant impact on sales for young brands goes against prior studies on the subject – such as a highly cited paper by Lodish et al. For this reason, the authors told Contagious that they don’t think their own results should overrule the existing literature. They add that, although the effect of changes in ad executions on sales is not statistically significant in their findings, it still has a positive slope.
The study was limited in that it only looked at one product category that doesn’t generalise well. The researchers themselves highlight that vehicles are an infrequent purchase for most households, and that further research is needed to determine the results’ applicability to lower-cost categories, such as B2B services and FMCG.
What’s more, the study only examines message and execution variations in print ads. Although the researchers mention that messages disseminated in print media are expected to be consistent with other advertising channels, it’s important to note that the dataset didn’t represent brands’ holistic advertising practices.
Where can I find the whole report?
Here and it’s free to read.