How can brands robustly measure the long-term impact of advertising?

Consider it’s the late 1980s. Marketing analysts in the US are completing work on a project known as “How Marketing Works”, studying historical data across forty packaged goods companies. As part of this work, the analysts will propose that the so-called long-term impact of advertising can be considered to be, on average, twice the measured short-term uplift.
Then spring forward thirty years to today. Many marketers have been relying on this rule of thumb over this time, in doing so risking overlooking the key differences that come with variation in creative, sector, campaign KPI and media channel.
But what is everyone referring to by “long term advertising impact” and when studying a brand how can we more reliably test if this seemingly convenient ratio actually stands true?

What is long-term advertising impact?
One way to think about long term advertising impact is to imagine where some of the world’s largest brands might have been today had they never advertised. They could never have built such a large customer base without trust, awareness and repeated messaging which comes with a history of prolonged marketing activity. Therefore, we define the long-term impact of media to be the increase in a KPI which has taken place as a result of all the advertising a brand has run in the past, after any short-term response in the initial few weeks following activation have been accounted for.
Given the suggestion that the long-term media effect has the largest contribution to sales, it initially might seem odd that today marketers still talk largely in terms of the short-term impact of advertising . In fact, research by Thinkbox suggests that “58% of advertising’s profit return is overlooked when ignoring the long term” . However, marketing analysts have often focused on short-term results in part due to traditional analysis techniques being best suited for identifying an immediate response. This can lead brands into a dangerous space, using insights focused on short-term results to feed into future planning and skewing the measures of success.
But how can marketing analysts identify this effect, and what considerations do brands need to be aware of?

1. Clarity of Project Aims
Firstly, it is important to clearly set out how we are defining long term media effect. Whether we interested in the impact on sales, purchase consideration, price elasticity or otherwise should reflect the long-term business growth aims. This is crucial in how we design our methodology to get the right result and generate actionable insights.

2. Understanding the Consumer Journey
One traditional way to reliably measure long-term media effectiveness is to consider the impact of media throughout the consumer funnel. Typically, marketers will look to metrics such as brand health and social listening to measure the impact of a brand focused activity. However, assessing if these metrics also then lead to revenue uplift in the long term is important in order to identify truly cost-effective campaigns.
We can explore this by modelling the long-term movement of KPIs at each level of the consumer funnel, identifying which metrics drive growth in a KPI once short-term factors have been accounted for. This is what we call analysis of “base” drivers, long term factors which drive sales outside of changes in other short-term influences. These models can then be combined together to produce a holistic view of media impact throughout the customer journey to conversion.

Example: Sample monthly sales, split between long-term base drivers and the short-term impacts of other factors

3. Pairing Micro and Macro Data Sources
We can take our analysis of the consumer funnel a step further by pairing this analysis more granular consumer level data, offering a multifaceted approach to understanding the full long-term impact of media. Micro level data allows us to study groups of consumers based on shared attributes, which can help us make wider statements about the population at large.
Consider two examples:
• Is there a statistically significant difference in the likelihood of an induvial to purchase based on their price perception of our product?
o Assessing whether there is a significant difference between these two groups may help us understand whether a long-term increase in price perception is likely to translate into business growth.
• Following our brand’s long-term sports sponsorship, what is the difference between the purchasing habits over time of a football fan vs. non-fans?
o This may help us understand how those exposed to long term campaigns have changed compared to those who are less likely to have interacted with this media touchpoint.
We can also use customer level data to analyse retention rate using customer lifetime modelling. One way in which a brand can typically increase its natural base is to attract new consumers who go on to repeat purchase. Observing how those who engaged with the brand during a certain campaign have interacted with the brand over a successive period can help us understand the impact of different marketing channels in building a loyal customer base.

4. Trusted Analytics Partnerships
Above all, a wealth of brand context and sector specific knowledge is essential for any robust long-term media analysis. This knowledge also allows us to ensure we are incorporating a variety of information affecting business performance and ensuring correlation is not mistaken for causation. Working with analysts with a wide breadth of experience and a creative approach to analytics offers the opportunity to move away from the traditional short-term focus of large marketing studies and obtain a more accurate read on media’s true impact.


Brightblue Consulting are a London based consultancy which help businesses drive incremental profit from their data. We provide predictive analytics that enable clients to make informed decisions based on data and industry knowledge. Through Market Mix Modelling, a strand of Econometrics, Brightblue has a proven track record showing a 30% improvement in marketing Return on Investment for clients’ spend. If you are interested to find out more please contact us through email by clicking here and one of our consultants will get back to you shortly.

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