Measuring the Effectiveness of Corporate Advertising

As you can tell from our discussion of the controversy surrounding corporate advertising, there need to be methods for evaluating whether or not such advertising is effective:

• Attitude surveys. One way to determine the effectiveness of corporate advertising is conducting attitude surveys to gain insights into both the public's and investors' reactions to ads. The Phase II study conducted by market research firm Yankelovich, Skelly & White is one of the best-known applications of this measurement method.47 The firm measured recall and attitudes toward corporate advertisers and found that corporate advertising is more efficient in building recall for a company name than is product advertising alone. Frequent corporate advertisers rated better on virtually all attitude measures than those with low corporate ad budgets.

• Studies relating corporate advertising and stock prices. The Bozell & Jacobs study is one of many that have examined the effect of various elements of corporate advertising (position in the magazine, source effects, etc.) on stock prices. These studies have yielded conflicting conclusions, indicating that while the model for such measures seems logical, methodological problems may account for at least some of the discrepancies.

• Focus group research. Focus groups have been used to find out what investors want to see in ads and how they react after the ads are developed. As with product-oriented advertising, this method has limitations, although it does allow for some effective measurements.

While the effectiveness of corporate advertising has been measured by some of the methods used to measure product-specific advertising, research in this area has not kept pace with that of the consumer market. (One study reported that only 35 of the Fortune 500 companies ever attempted to measure performance of their annual reports.48 The most commonly offered reason for this lack of effort is that corporate ads are often the responsibility of those in the highest management positions in the firm, and these parties do not wish to be held accountable. Interestingly, those who should be most concerned with accountability are the most likely to shun this responsibility!

Continue reading here: Motivating the Sales Force Not an Easy Task

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