CLOSE-UP: LIVE ISSUE/IPA ADVERTISING EFFECTIVENESS AWARDS - IPA awards shine a light on consumers' behaviour. The advertising industry is richer for the IPA's research bank, Tim Broadbent says

The IPA Advertising Effectiveness Awards celebrates its 20th anniversary in the millennium year 2000. At this point, it seems appropriate to review what the awards have achieved. What would our world be like if the awards did not exist?

Consider the world in which the awards were launched. In the 70s, it was intellectually respectable to claim that it was impossible to prove that advertising worked, which amounts to admitting that it does not work.

Even leading practitioners said it was 'nonsense' to believe ad effects could be isolated.

This was the context in which Simon Broadbent initiated a new kind of advertising competition. The objective was to create a collection of published case histories to show that research, properly used, could isolate what advertising had contributed over and above other elements of the mix, and that advertising was a contributor to profit and not just a cost.

There are now more than 700 case histories in the IPA effectiveness databank covering almost every advertised category. There is nothing in the world to match this body of learning and the UK has become the global centre of excellence for evaluation.

The cases provide performance benchmarks for agencies and clients and demonstrate general methods for isolating ad effects that anybody can use.

The original goals have been met. No reasonable person, faced with this mountain of evidence, could claim that ad effects cannot be measured.

Yet the awards persist. Why? Because of the continuing fascination with what is meant by saying that an ad 'works'.

The person in the street, or even the finance director in the boardroom, thinks an ad works when it sells more. We instinctively look for a return in terms of how many extra boxes leave the factory. In so doing, we unconsciously reflect a philosophy of advertising that is at least 80 years old.

In 1923, advertising was defined as 'salesmanship in print' by the advertising pioneers Claude Hopkins and Daniel Starch. They did not only mean that advertising should be persuasive. Supermarkets did not exist and many household products were distributed by armies of door-to-door salesmen. Advertising was being justified as an alternative distribution channel. Ad effectiveness was defined in terms of distributive efficiency: rate of sale per ad compared with rate of sale per salesman.

The reference to 'print' is revealing. Most newspapers in the US were local, as they still are. Mass communication was in its infancy: 1923 saw the first 'sound on film' movie and the first transatlantic wireless radio broadcast, while commercial television was a generation away. What has become the standard model of how advertising works is, in actual fact, based on direct response ads in local press.

The cases in the early years of the awards tfollowed this model. They showed advertising's effects on short-term sales volumes. But this did not reflect all the ways in which advertising can be a serious business proposition. A new awards criterion was introduced in 1990, beginning the search for 'longer and broader' effects.

Rather than just considering the sales effect of a single campaign, authors began to examine the 'longer' effects of years of investment in the brand.

The returns can be extraordinary. Some papers estimated that adspend paid back 20 times over. Advertising 'worked', but in a different way. By creating loyal customers who were willing to pay a premium price, advertising was shown to be a machine for delivering quality earnings at high margins.

A further development took place in the late 90s. Authors were encouraged to examine advertising's 'manifold' (or 'broader') effects. Unlike direct mail, for example, broadcast ads are overheard beyond the consumer target. Is this wasteful? Or does reaching non-consumer audiences bring unique benefits?

It appears that manifold effects can be profitable. Most companies do not sell directly to consumers but to intermediaries such as retailers.

Advertising's effects on intermediaries can account for a third or more of its total return. There are also profitable effects among other stakeholders such as trade partners and the City. These returns are invisible to consumer research but are nonetheless real.

The development of astronomy offers an analogy. People have studied the skies for millennia but observations were restricted to what could be seen with the naked eye. It was not until Galileo picked up his telescope that it became possible to discover the universe to be vastly bigger than had ever been imagined.

Now it is known that most stellar objects broadcast energy on wavelengths beyond the spectrum of visible light, and astronomers use radio, ultraviolet, X-ray and gamma ray telescopes too. New ways of looking have shown that there is more to see than human eyes could ever know.

Similarly, the awards have shown that advertising can pay back in more ways than is dreamt of in the standard model. It is to be hoped that more advertising researchers will lift their eyes from short-term sales alone and develop new techniques that, like new kinds of telescopes, look broader and deeper. Advertising creates value in places where conventional research does not go.

The awards have stimulated new thinking about what advertising does for clients and encouraged new ways to measure its effects. The work continues, but our world would have been poorer without them.

Tim Broadbent is the executive planning director of Bates UK and the convenor of judges of the 2000 IPA Advertising Effectiveness Awards.

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