Timeless Truths About Advertising, Part II
How Ads Influences Consumers
In Part I of this essay series, I argued that many of advertising's most enduring truths are surprisingly simple. Reach generally beats frequency. Broad targeting usually beats narrow targeting. Consistency beats bursts. Those principles describe how advertising behaves. As I noted there, many of those ideas owe a debt to Erwin Ephron's Media Planning, one of the most influential books ever written on the subject.
This installment turns to the consumer. How does advertising actually influence buying behavior? What changes in people's minds, and why does that matter?
Several of the ideas owe a debt to themes developed by Byron Sharp and Jenni Romaniuk in How Brands Grow. Sharp is Professor of Marketing Science and Director of the Ehrenberg-Bass Institute for Marketing Science at the University of Adelaide, Australia, where he and his colleagues have built on the pioneering work of Andrew Ehrenberg to produce one of the most influential bodies of empirical research in modern marketing. The book has generated spirited debate over the years, particularly because it presents many of its conclusions as "laws." I count myself firmly among those who regard it as a seminal work that has profoundly shaped my understanding of how marketing contributes to brand growth.
Together with Media Planning and Darrell Huff's How to Lie with Statistics, How Brands Grow forms the trio of books I have most often recommended to new team members as foundational reading for anyone who wants to understand advertising and marketing measurement.
With that, here are seven more of my timeless truths.
1. Advertising effects decay
Advertising changes behavior, but rarely forever. One of its most important effects is to build what Byron Sharp and Jenni Romaniuk call "mental availability": increasing the likelihood that a brand comes readily to mind in buying situations. That simple idea underlies many of the observations that follow. Advertising builds memory structures and associations that make a brand easier to notice, recognize, and consider when consumers enter the market. But those memory structures gradually fade unless they are reinforced. Marketing mix models capture this by incorporating adstock, a mathematical representation of the way advertising's influence decays over time, recognizing that today's advertisement continues influencing tomorrow's purchases, less so next week, and eventually very little at all.
This is not a weakness of advertising. It explains why advertising works best as a continuous investment rather than a series of isolated campaigns, echoing Erwin Ephron's long-standing argument for continuity that we addressed in Part I. Brand equity is built through repeated reinforcement. When brands stop advertising, they gradually lose mental availability and, eventually, market share as competitors continue reminding consumers they exist. History has shown this repeatedly, particularly when companies slash advertising during economic downturns.
2. More advertising eventually produces less additional impact
Advertising also exhibits diminishing returns. The first exposure generally contributes more incremental impact than the fifth, and the fifth more than the fiftieth. At some point, additional impressions produce relatively little additional buying behavior. The question is no longer whether more advertising works, but whether the next advertising dollar would work better somewhere else.
This principle appears throughout marketing science: in creative wear-out, frequency-response curves, and the cascading response curves estimated by marketing mix models. It also helps explain why, as discussed in Part I, campaigns often benefit more from expanding reach than accumulating ever-higher frequency among the same consumers. As impressions naturally concentrate among heavy media users, each additional exposure tends to contribute less incremental impact than the one before.
The appropriate lookback window also depends on this relationship. A campaign's impact should be measured long enough to capture delayed response, but not so long that advertising effects have largely dissipated or become entangled with subsequent campaigns. Good measurement identifies where incremental returns begin to flatten, allowing marketers to invest the next advertising dollar where it produces the greatest additional effect.
3. Brand advertising is response advertising
The distinction between brand advertising and performance advertising is often overstated. Both seek exactly the same outcome: influencing future buying behavior. Performance advertising attempts to influence purchases occurring today. Brand advertising attempts to influence purchases occurring weeks, months, or years from now.
Importantly, brand advertising does not wait months before producing any effect. It influences purchases immediately as well, which is precisely why randomized experiments can measure its incremental impact over relatively short periods. A substantial body of evidence, including the work of Les Binet and Peter Field, suggests that the long-term commercial effect of sustained brand advertising often exceeds its short-term effect by a factor of two or more. That long-term effect reflects the cumulative impact of continuous advertising, not the notion that individual advertisements continue increasing in effectiveness with more time after their exposure.
4. Buyer acquisition beats loyalty
Every loyal customer was once a first-time buyer, but advertising's greatest leverage usually lies in creating new buyers rather than persuading existing customers to purchase slightly more often. Decades of empirical evidence, including Andrew Ehrenberg's Double Jeopardy Law, show that brands with larger market shares tend to have both more buyers and slightly higher loyalty. The higher loyalty is largely a consequence of having more buyers in the first place.
This does not mean retention is unimportant. But marketers often overestimate how many customers are truly "lost" to "churn." Most people buy multiple brands within a category and often return after periods of inactivity. The challenge is less about plugging leaks than ensuring more buyers enter the franchise than drift away.
That has important implications for targeting. If you sell dog food, it makes sense to focus your advertising on dog owners rather than the general population. But within that population, the greatest opportunity is usually reaching light buyers and non-buyers of your brand, not simply serving more ads to your existing customers. Occasionally the opportunity is even larger: expanding the category itself by introducing entirely new consumers, as happened during the early years of personal computers and smartphones.
5. Advertising should compete for every buying occasion
No brand owns its customers forever. Consumers are generally more loyal to categories than to individual brands, and every buying occasion presents another opportunity for competitors to gain or lose share. Each trip to the supermarket, streaming subscription renewal, automobile purchase, or restaurant visit is a fresh competitive contest.
The ideas of Ehrenberg-Bass and Erwin Ephron come together here. Ehrenberg and his successors argue that brands grow by reaching broadly across category buyers rather than concentrating on existing customers. Ephron argued that advertising should run continuously because buying occasions occur continuously. Together, they suggest a remarkably simple advertising strategy: reach as many category buyers as practical, and be present whenever they enter the market.
Advertising is therefore less about permanently converting customers than about consistently competing for the next purchase occasion. Yesterday's sale is history. Tomorrow's purchase must be earned again.
6. Advertising influences probabilities, not certainties
Advertising rarely determines exactly what someone will buy. Instead, it changes the probability that a particular brand will be chosen when a buying occasion arises. Millions of tiny probability shifts, accumulated across millions of consumers, become market share.
Modern digital marketing sometimes confuses prediction with persuasion. Algorithms excel at identifying consumers who are already likely to convert. But identifying existing intent is different from creating new demand. The purpose of advertising is not to predict who will buy. Its purpose is to increase the likelihood that more people will choose your brand when they otherwise might not have.
Advertising shapes buying behavior by building mental availability and competing for future purchase occasions. But that raises a vital question: How do we know whether advertising actually worked to drive sales?
That question has occupied marketers for decades, and the answers are often far less straightforward than many vendors would have us believe.
In the next essay in this series, we'll turn to that question. We'll examine more timeless truths about advertising measurement, including why advertising's true sales impact is usually much smaller than marketers imagine, why measuring people is often less important than measuring outcomes, and why the industry's biggest problem isn't fraud, but something far more pervasive.
Next: Part III, How We Know Advertising Worked.
These essays summarize only a fraction of what we cover in Central Control's training workshops. If you're looking to help your team make better advertising and measurement decisions, I'd be glad to discuss a customized workshop for your organization.