TRA: TV Branding Efforts And Ads Touting ‘Lower Prices’ Are Not Enemies

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March 29, 2012 – 5:46 pm

traThere is a longstanding idea that if a consumer packaged goods marketer is trying to build brand affinity around a message of "quality," it's a bad idea to run an ad elsewhere highlighting that same product as having a "new low price." The thinking is that the messages naturally cancel each other out: either consumers are looking for "the best in class" of a product, or, they're watching their wallets.

While that may be true in a general sense, better targeting can erase that disconnect significantly, according to a joint study presented at this week's Advertising Research Foundation annual convention by TV ad data company company TRA and in-store analytics specialist Dunnhumby.

"The common sense of the last 10-, 20 years about doing a simultaneous branding campaign and one centered on temporary lower prices was wrong," said Bill Harvey, TRA vice chair and chief research officer, in an interview with TVExchanger. "We've been able to overturn that thinking because targeted advertising and granular data about shopping habits give us a closer picture of how to attune those two messages together in a coherent way. General market research gives you a best-dressed guest, it doesn’t give you details. It has often said that if you’re doing a price discount, don’t do TV advertising. If you’re trying to motivate a buy because the price is lower, while TV ads say that the product is better, it creates confusion. But that's not necessarily the case."

TRA looked at Dunnhumby's database of the anonymous household level purchase behavior data from 60 million U.S. households and matched it to its own second-by-second measurement of TV viewing habits from more than 2 million set-top box. It then plugged in CPG brands that average upwards of $20 million in TV ad spend within the categories of toothpaste, yogurt, and cereal being sold in 2,500 retail stores.

In the six case studies the two companies looked at, about half of all households exposed to TV were also impacted by the "temporary price reduction" message in print circulars and in-store displays, resulting in a sales boost when compared to the remaining 50 percent of consumers, who were reached only by TV branding ads. The study also found the temporary price reduction to be a significant driver overall with an 11.83 percent average further sales lift over what only TV achieved.

"We were looking at the combined effects of TV and in-store ads, and the finding was that if you do those two things together, there is a positive compound effect," said Matt Keylock, Dunnhumby's SVP for partnerships and business development. "For a number of brands, they use the ideas of branding and lower price advertisements in isolation. The simple message is that consumers, especially in a tough economy, care as much about brands as they do about price. The messages have multiplier effect."

While that point seems as sensible, it's hard to say whether that combination can work for other kinds of items beyond packaged goods. But as more mobile advertising emphasizes coupon-like services, a wider cross-platform analysis would be helpful in determining just where combining seemingly contradictory sets of marketing messages can work in concert. Release (PDF)

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March 29, 2012 – 5:46 pm

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