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Westwood One Blog Makes Case for Brand Building


Cumulus Media and Westwood One
Cumulus Media and Westwood One

Advertisers can generate stronger sales growth by pairing promotions that reach shoppers ready to buy with campaigns that build familiarity among future customers, according to a review of advertising effectiveness research by the Cumulus Media | Westwood One Audio Active Group.

Chief Insights Officer Pierre Bouvard cites a WPP Media study of 1.2 million purchase journeys across 47 countries that found 84% of purchases were effectively decided before shopping began. He also points to the Ehrenberg-Bass Institute's 95/5 rule, which holds that only a small fraction of potential buyers are in the market at any given time. For advertisers, the two findings point to the value of being known before a customer needs the product or service.

The blog draws on research by Les Binet and Peter Field showing how sales promotions can produce a short-term lift that fades once the offer ends. Bouvard says relying too heavily on those campaigns can leave sales flat and raise the cost of acquiring customers as existing demand is used up.

A WARC analysis cited in the post found that an even split between brand building and performance marketing generated 27% more revenue growth after one month than spending entirely on performance tactics. The advantage reached 40% at up to six months and 50% beyond six months.

Bouvard also urges advertisers to track customer growth, revenue and profit alongside return on investment. A small campaign can generate a high rate of return while adding little to overall profit, he writes. The post also cites Ehrenberg-Bass research showing that sales for small brands fell by half by the second year after they stopped advertising.

The post is the first in a two-part series on advertising effectiveness. The second installment will examine what makes advertising creative effective.

Read the full blog post here.

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