Advertising Effectiveness - Financial Services Marketing

The impact of advertising on sales is notoriously difficult to measure, as it is difficult to isolate the effect of the advertising from all the other variables that impact sales. A 2002 survey of marketers published by researcher Marketing Management Analytics found that 72 percent of respondents did not have enough data to analyze the effectiveness of their marketing programs. Nevertheless, there are qualitative and quantitative measures advertisers can apply to determine whether advertising is meeting its short- and long-term goals. Advertisers may use qualitative measures of effectiveness, such as whether an ad is noticed and whether it is recalled, aided or unaided. Attitudinal changes toward the product or advertiser can also be measured through focus groups and interviews.

Quantitative measures of effectiveness can include the following:

  • Number of inquiries or sales directly attributable to the campaign (generally used for direct response ads;)
  • Variations from previous years in market share; size of customer base; purchase frequency; average size of purchase; and percentage of total assets held (“wallet share”); and profitability and length of customer tenure (lifetime value)

Advertisers can also test campaigns in spot markets and compare results against control markets. The effect of a campaign can also be measured using multivariate regression analysis. This statistical technique examines the relationships between one dependent variable (sales, for example) and multiple independent variables (for example, the individual elements of the marketing mix). This enables marketers to estimate the relative importance of each of the independent variables and to compare the financial return from each of the various inputs with its dollar cost.

Creating Effective Creative

The classic theory of advertising is that it is based on awareness, interest, desire, and action (AIDA). First you have to get the target’s attention; then you have to provide a reason to listen to your message; the message needs to stimulate the desire for the product; and finally, the target needs to buy whatever it is you are selling. While overly simplistic, the AIDA model has some element of truth.

Effective creative (copy and illustration) should perform the first three of the AIDA functions—get noticed in a cluttered environment, be interesting, and establish a reason to buy—or at least to think of the brand the next time a potential customer is in the market for the product. The elusive “action” is usually dependent on point-of-purchase information. In the case of financial services, this is often supplied by the salesperson.

Effective advertising communicates quickly. The average person takes less than thirty seconds to look at an ad, and very few ads are noticed in the first place.

In a print ad, the headline alone should tell the whole story, mentioning both the product and the key benefit. For example, consider a Fidelity Investments ad headlined: “Want to make sure your plan is on track? Fidelity can help.” It’s not brilliantly creative, but it is perfectly pitched for a target worried about losing money in a down market.

The two most critical elements in a print ad are the headline and the visual (photo or other illustration). If neither the headline nor the visual attracts the reader’s attention, it is likely the ad will be overlooked. The headline and graphic need to do all of the following: appeal specifically to the target market, describe a need or benefit, and arouse curiosity or in some way disturb the reader so the message is read.

Below are a few tips for making sure your print advertising is noticed, read, and serves your objectives, based on classic advice from David Ogilvy.

Always use headlines and an illustration.

Relate the illustration to the headline or sub headline. Otherwise it may be misunderstood. Photos do a better job of attracting a reader’s attention than drawings. Before-and-after photos are effective. So are babies and animals and sex, though the last is probably not appropriate for most financial ads. Many financial ads show “aspirational” images, such as luxurious settings, romantic retirement travel, and well-heeled clients whose finances seem to be well looked-after.

Celebrities or well-known people will increase recognition and recall. Spokespeople do not have to be movie stars. Steve Martin was a less effective spokesman for Merrill Lynch than Peter Lynch was for Fidelity, even though Martin is better known. The ads with Lynch were effective because he was known to the target market and was closely related to the company and its message.

Avoid negative words in a headline (no, not, nothing, none). Readers skip over them and may associate the product with a negative quality.

Don’t be afraid of long copy. If the target is interested, more information is better than less. When using long copy, break up the copy with bullet points, numbers, or graphic elements. Use a call to action—a phone number or website—so the reader can act on any interest the ad has created. Don’t make ads difficult to read. Keep layouts simple. Do not use reverse type (white on black). Avoid sans serif type except in headlines. Avoid justified type with a rigid right-hand margin—or worse, centered type—for body copy. Always make headlines in upper and lower case. If the targets can’t read the ad easily, they won’t.

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