Harness the medium’s power

Editor’s note: Ramon Portilla is group president, regional account management and development, at the ARS Group (rsc), an Evansville, Ind., research firm.

Despite rising costs for TV media and advertising production - recent estimates indicate rates are up almost 19 percent in two years - TV is still the most powerful medium available to sell and build brands. But with its high cost, the pressure to manage the investment has never been greater. The stakes are even higher for direct-to-consumer (DTC) pharmaceutical brands as DTC advertising is at a turning point for most marketers. Existing government regulation and the prospect of more to come means that effective advertising - reflected as gains in brand preference, market share and market value - may be more crucial for DTC than for other industries. Therefore, the future of DTC advertising as a viable marketing communications vehicle lies in the ability to harness the power, given the costs. Fortunately, there is a wide body of empirically-based knowledge about how DTC advertising works that, when applied to the ad development and management processes, can lead to improved business performance for DTC brands.

This article will discuss how one DTC advertiser (aka Brand A) applied measurement and knowledge to more consistently contribute to the business enterprise, thus enabling it to maximize its investment in   TV advertising.

Validated measure

Early in its foray into DTC TV advertising, Brand A understood the importance of using measurements that reliably predict the selling, or business-building, power of its advertising. It sought a way to base ad development and management decisions on a validated and calibrated measure of an ad’s ability to drive scripts/call to action. It chose the ARS Persuasion metric as a measurement standard. As Figure 1 indicates, the higher the ARS Persuasion measure, the greater the in-market increase.

The predictive validity of the metric is also evident in a number of case studies. For example, one DTC brand team employed the measure when evaluating alternative advertising executions for use in controlled advertising spend test markets. The brand team assessed the business value of its advertising and found that, based on strong ARS Persuasion results, the advertising would be expected to drive higher prescriptions when incremental media spending was applied.

The ads were aired in three cells: no-spend control, low-spend, and heavy-spend markets (Figure 2). Two “elastic” ads (7+) were aired in both the low-spend and heavy-spend cells, resulting in 30-40 percent increases in both total and new prescriptions (note the decline in prescriptions in the “no advertising” cell). As Figure 2 shows, the incremental spending behind the persuasive advertising (no-spend vs. low-spend and low-spend vs. heavy-spend) drove large increases in total number of prescriptions - up to 42 percent more.

With the high correlation between the ARS Persuasion metric of ads aired and subsequent market responses, Brand A adopted this financially-based measurement for identifying business opportunities (and/or threats from competitors) related to its TV advertising and for optimizing its advertising investments.

Not meeting expectations

While early ad development work identified some strong ads for Brand A, the overall strength of the advertising was not meeting expectations. For insight on how to improve the strength of its advertising, the brand team turned to a study of the factors associated with sales-effective advertising by David Stewart and David Furse, Marketing Science Institute, and ARS/rsc. In a continuation of this work and application to DTC advertising, the importance of these factors or drivers has been verified for DTC advertising. In general, the most successful DTC ads tend to be strong strategically - with many using some type of competitive comparison - and product-focused. The weakest executions tend not to have any of the strategic drivers, to be less product focused and to have relatively late identification of the product category. Thus, brands can increase the likelihood of producing successful advertising by:

  • Focusing on a strong strategy, especially competitive comparisons and superiority claims, when possible.
  • Maintaining an uncluttered, product-focused approach.
  • Identifying the product category early in the ad.

Using a strategic review of its advertising in the context of these drivers, Brand A concluded that stronger advertising would likely result from clearly communicating its differences relative to the competition. Advertising research by ARS/rsc supported this conclusion as a brand-differentiating key message has consistently shown to be the one element most highly associated with advertising that impacts consumer brand preference (choice), sales, market share and market value.

Working with ARS/rsc, Brand A adapted traditional brand-differentiating techniques to the DTC industry and began developing ads focused on the brand’s competitive advantages. As Figure 3 indicates, the brand-differentiating advertising more than doubled the strength of the advertising among total sufferers and nearly tripled the strength among target sufferers. In addition, the ad agency was able to produce sales-effective ads more often, as nearly half of the ads developed (44 percent) performed above the brand’s benchmark, as compared to 7 percent prior to including a brand-differentiating selling proposition.

Understand its strength

Secure in the strength of its advertising, the brand worked to better understand its strength relative to the competition. The brand operates in a highly competitive category with well-established brands, both OTC and DTC. The company also knew, based on studies provided by ARS/rsc, that best-in-class advertising could help drive stronger business results over the short and long term.

Thus, Brand A evaluated the strength of its competitors’ advertising to ensure that it was maintaining a best-in-class status. The advertising based on the aforementioned brand-differentiating selling proposition turned a competitive disadvantage (approximately 25 percent the strength of its competition) to a competitive advantage (approximately 200 percent the strength of its competition).

Optimize media

With a fine-tuned ad development process consistently producing best-in-class advertising capable of driving the business, the brand turned to the ad management side of the equation to optimize media investments. Already knowing that each individual TV ad has a unique business-building value, the brand team relied on research published by ARS/rsc on how selling power is delivered to market (wearout) to manage its ads on hand and optimize TV media investments.

ARS/rsc discovered that as GRPs are spent behind an execution, its selling power decreases predictably, indicating the speed at which the advertising power is being delivered to market. The research also demonstrated that executions wear out independently, highlighting the importance of managing each discrete execution to air based on its unique business value. This knowledge regarding the delivery of selling power is rendered in an Internet-based ad management planner along with advertising models of validation and wearout. This what-if application helps optimize media allocation by determining the appropriate weight for each ad given its strength. The tool can also be used early in the ad development process to estimate the number of ads needed given planned media weight and probable strength of the advertising.

Thus, using ARS Persuasion “facts” of the business value of every ad going to air and media optimization capabilities of the Outlook planner, Brand A was able to adopt an ad management solution of putting the weight (“traffic GRPs”) behind the strongest ads for only as long as they are working. This solution helped Brand A and its agents answer some common advertising questions, including:

  • Should we shift more media weight to our :15 ads?
  • Should we air this new ad instead of the copy currently on air?
  • When will we need to refresh our advertising?
  • How could we optimize media spending to deliver the most selling power over the next business quarter?

In doing so, it filled a critical gap in further optimizing the TV component of its media plan.

Maintain an advantage

By following a few empirically-based better practices, Brand A was able to consistently deliver advertising that maintained a competitive advantage for the brand. Even in a highly competitive (and cluttered) category, Brand A’s share has grown nearly 3 points in just the first three months of airing its new, brand-differentiating advertising - to its highest TRx share level to date (Figure 4). A short-term return of over $10 million over the total TV marketing investment has also been realized - and this doesn’t yet count the residual returns which will come from new and repeat users.

While never perfect, the practices reviewed in this article can help deliver DTC advertising success more consistently and provide new solutions for ad development and ad management to meet business objectives and generate a higher return on marketing investment.