How Advertising Works
Also filed underPaid Media
Myth:Outspending competitors on media weight lifts sales.
Evidence:Across 389 BehaviorScan split-cable TV experiments, increasing budget relative to competitors did not increase sales in general - changing brand, copy, or media strategy did. Standard recall and persuasion pretests did not predict which ads would move sales.
Packaged goods in the TV era, but it remains the largest set of true ad-weight experiments ever run; its null on raw weight is why 'strategy and copy over budget' became canon.
Leonard M. Lodish et al., Journal of Marketing Research · 1995 · Academic
Channels: tv · paid · creative
How Advertising Works
Myth:If ads don't move this week's sales, they didn't work.
Evidence:Across 751 short-term and 402 long-term elasticities from 56 studies (1960-2008), the average short-term advertising elasticity is 0.12 - but the mean long-term elasticity is 0.24, double the short-term, through carryover.
How Advertising Works
Myth:Ads only work when the copy states product facts.
Evidence:In an incentivized experiment with randomized exposure, content, and price, display ads shifted beliefs about price and quality even when the copy revealed neither - and those belief shifts causally drove search and purchase.
Budget Allocation
Myth:Performance marketing should get the majority of budget.
Evidence:Across hundreds of IPA case studies, roughly 60% brand / 40% activation maximises long-term profit growth in consumer categories.
The Validity Gap
Myth:TV's ROI estimates justify current spend levels.
Evidence:Estimating elasticities and ROI across 288 brands, Shapiro, Hitsch & Tuchman find ad elasticities far smaller than the published literature suggests, negative ROI at the margin for more than 80% of brands, and positive overall ROI for only about a third.
Penetration
Myth:Loyal heavy buyers are the growth engine.
Evidence:Brand growth comes overwhelmingly from increasing penetration among light and non-buyers, not from deepening loyalty.
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