July 2004   

New Products See Higher Impact in Online Advertising

New research from Dynamic Logic's MarketNorms® (Q1, 2004) reveals that advertising is effective for both existing and new products, but higher scores are exhibited on average for new products. This is the case in each of the four standard metrics (Aided Awareness, Message Association, Brand Favourability, and Purchase Intent), but it is most pronounced in Awareness where it is almost double.

To measure the effectiveness of ad campaigns for both new and existing products, we compared the average difference (or delta) between consumers who were exposed to the ads and those who were not (control group). The chart demonstrates that ads for new products show a greater increase in Brand Awareness, Message Association, Brand Favourability and Purchase Intent than those for existing products.


There are three possible explanations for this:
1) Newer products would have lower baselines in awareness and persuasion metrics. It is easier to "move the needle" with lower baselines than higher ones. That said, existing products still show impact on average. 2) New product advertising may be brand and message focused; after all, their goal is to introduce people to the brand/product/service. Existing products may assume their brand is well established and focus their advertising on lower-funnel persuasion metrics such as favourability and purchase intent. For these metrics, existing products perform similarly to new products. 3) There are many cinema launches in the "new product" category within MarketNorms, and these tend to be aggressive campaigns using rich media. If existing brands used similar tactics, their impact might be higher on average.


Tips for Marketers and Advertisers:

• New products should consider the Internet as a launch vehicle that can quickly raise awareness of new products through large reach buys.
• Existing brands with already high awareness levels should look to exploit online's ability to build association with the brand and a specific message - perhaps take advantage of cheaper, smaller ad units that can only fit the logo and tagline.
• Established brands should use rich media to focus on the harder to move persuasion metrics, pushing the brand further down in the advertising funnel.
• Factor for frequency. While higher exposure levels can have a strong impact on consumers, capping the ad frequency can further stretch your online media dollar while still performing effectively.