With global ad spending projected to soar to $884 billion by 2024, you’d assume companies have cracked the code on whether their ad investments pay off. However, as evidenced by the jaw-dropping $7 million price tag for a mere 30-second Super Bowl spot in 2023, the age-old CEO lament, “I know fifty percent of my advertising works, I just don’t know which fifty percent,” still holds true.
Why are we stuck in this quandary, decades after the era of slick, charismatic Mad Men advertisers? The answer might lie in what we measure. Often, we focus on metrics like ad clicks or web visits without definitively answering the ultimate question: Did the ad drive someone to make a purchase? And if it did, who in the demographic responded best, when, and via which channel?
This is the elusive question of advertising effectiveness.
What if we shifted our approach and measured the effectiveness of a creative campaign solely based on its impact on pricing and customer willingness to pay? Imagine if we could determine which message, product feature, or celebrity endorser not only sold the most products but also supported a higher price point.
Picture a scenario involving an unnamed men’s running shoe with numerous variables like weight, color, cushion, durability, celebrity endorser, pronation, and joint health. Imagine a savvy assistant brand manager armed with a testing platform to explore how these variables affect price and customer willingness to pay, breaking it down into various customer segments—all within hours.
This capability is now within reach, thanks to a combination of factors: Advanced Technology, the precision of massive online databases for targeted testing, and the convenience of SaaS platforms. It can all be done in-house for a fraction of the cost, typically under a few thousand dollars per month.
Case in Point: “Child-Proof” Drives 10% Price Increase
The process involves real prospects who meet the client’s qualifying criteria. They respond to separate questions about various messages, product features, and more, revealing which elements have the most significant impact on pricing. In one test, simply including the term “child-proof” as a product descriptor led to a 10% higher price for prospects who were mothers of children under 18.
While there may never be a foolproof test that perfectly mimics real-world purchase intent, our approach, developed by a team that includes a former WPP executive, has already succeeded in over 1,000 projects with some of the world’s largest brands. Clients find it valuable, and many return for additional projects. At the very least, the results offer crucial insights into the ever-elusive realm of advertising effectiveness, guiding companies toward optimal messaging.
At PriceAgent, we firmly believe that we’ve eliminated the guesswork from the strategic and messaging aspects of creativity. We invite you to see for yourself.