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At a recent seminar in May 2014 on Out-of-Home advertising efficiency, OOH was shown to be a valuable medium for advertising strategies both in the long and short term.
In their latest publication "The Long and the Short of It" Les Binet, Head of Effectiveness at communications company Adam & Eve DDB and Peter Field, Marketing Consultant explore the tension between long and short-term advertising strategies.
This study points out that there is an increasing tendency to use very short-term (around 6 months) online metrics as primary performance measures which leads to dangerous implications for long-term success. The study provides evidence-based recommendations on how best to approach investment in advertising for brands and also looks at a vital new area: How campaign results develop over time.
Binet analyzes the purpose of advertising from two points of view: (A) The Marketing Approach and (B) The Consumer Response. Both sides find their middle ground in advertising but Binet then goes further and introduces the effectiveness of OOH in relation to each and shows how OOH is the perfect medium to efficiently answer the very different needs associated with both.
(A) The Marketing Approach to Advertising
Marketing in advertising has two purposes: Sales Activation and Brand Building. The former is a short term process which targets people who are looking to purchase on the spot or aims to trigger a purchase impulse. The latter is a long term process and targets people who do not yet feel the need to purchase a product by trying to educate them about a brand or reinforce their engagement with the brand.
Sales activation triggers short term sales uplifts by encouraging people to purchase a product right there and then but does not build long term growth and loyalty towards a brand. Brand building on the other hand triggers more long term sales growth by strengthening loyalty and attachment to a brand, which reduces the consumer's price sensitivity to the brand's products.
(B) The Consumer Response to Advertising
Binet refers to Daniel Kahneman's "Thinking Fast and Slow" in taking the consumer approach to brands and advertising. Kahneman's book's central thesis is a dichotomy between two drivers of thought, which influence one's choices in life and which are referred to as System 1 and System 2.
System 1 is the fast, instinctive and impulsive side of the brain, which will react and make decisions based on emotional feelings. It represents the biggest part of our brain that associates with reflexes and short term decision making. System 2 is the more rational, thought out side of one's personality. It is a much smaller and more cautious part of the brain and takes its time in decision making processes.
System 1 would typically be more responsive to emotional advertising while System 2 would be targeted by rational advertising.
Connecting Marketing Approach with Consumer Response through Out-of-Home advertising
According to Binet, in order to maximize profit a brand needs to dedicate 40% of its advertising budget to the shorter term sales activation strategy and 60% to the longer term brand building strategy.
In relation to the above statement, Outdoor advertising excels at brand building but is also crucial in activation. As the medium that has the broadest reach (source: IPA touchpoints 5), it enables brands to target existing and potential consumers, impulse buyers and long term followers.
In the case of Sales Activation, when exposed to an attractive visual, System 1 would trigger an emotional response and therefore the desire to purchase while System 2 would need rational information such as product, price and place of purchase in order to back-up System 1's impulse.
Sales Activation with Out-of-Home Advertising
Out-of-Home's ability to be in close or direct proximity to Point of Sale in supermarkets, malls, city centers, rail stations or on the way to the airport offers the opportunity to target people in the right location, in the right state of mind.
In the example of Brand Building, System 1 would be mostly targeted with more emotional messages and creatives in order to create a deeper relationship with the brand and what it conveys. This build-up will lead to stronger and deeper feelings towards the brand as well as a longer lasting desire to purchase products from that brand, no matter the price. System 2 would need a very strong rational piece of information such as proof that a product from brand "B" works better for less money in order to interfere with System 1's deep and long lasting relationship with brand "A."
Brand Building with Out-of-Home Advertising
In addition to the highly numerous strategic locations, Out-of-Home offers unique and impactful formats that offer space for creativity and flexibility for ever more appealing brand building campaigns.
JCDecaux North America, Inc. is part of JCDecaux Out-of-Home Media Group, an international media and communications company founded in 1964. It is the number one outdoor advertising company in the world, as well as the market leader in Asia Pacific and Latin America. For more information visit www.jcdecauxna.com.
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