How can retailers differentiate between the short and long-term effects of advertising?
Marketers have to make their budgets work harder than ever before and retailers need to know they are spending their money wisely.
Making the most of the resources available requires an understanding of how it’s all working, over both the short and long term.
There are well-established ways to measure short-term effectiveness. Jon Webb, deputy managing director of global marketing effectiveness consultancy Ohal, explains: “Existing techniques allow retailers to collate and analyse all their data, giving a clear picture of how advertising is working over short periods.”
Webb says the problem with these models is they are sometimes not sophisticated enough. “They don’t measure all the factors at play over long periods and don’t take into account whether an impact now will lead to a sale later on,” he says.
But there are ways to overcome these problems, he adds. “There are subtle shifts in consumer tastes and preferences that must be looked at, taking into account the invisible but vital impacts of your advertising over months and years.”
It’s all about taking an evolutionary approach to the way sales develop. For a retailer, this might relate to the successful communication of a promotion or pricing strategy, for instance, which encourages new footfall, which in turn leads to some proportion of new customers staying with the brand.
“Previously the best anyone could do would be to multiply the short-term effects, akin to making an informed, but vague, guess,” Webb says. “This didn’t allow you to look at the short versus the long term, as the data sets were the same. Now retailers can get a clear picture.”