The Hidden Effect: Why advertising during a recession pays off
Published: 26th January 2023
A few weeks ago, a client came to us in the middle of their TV campaign. They said that while they were spending a lot of money on the campaign, it was not working— they had yet to see any uplift in sales. They wondered if they needed to change anything in their campaign and even considered stopping it completely then and there.
They asked us to figure out what the problem was. Was it the creative? Maybe the media mix? Did a competitor launch a successful campaign that stole away market share?
Utilising our single-source data, we started looking at the performance of their campaign and could not see any problems – the media mix was good, the creative performed well, and we could even see a healthy uplift in the group that was exposed to the campaign.
When looking more closely at the uplift, though, we did see something interesting. While there was a clear uplift in the exposed group, the purchase rate in the non-exposed group plummeted during the campaign period. In other words, while the exposed group increased the purchase rate, the non-exposed group reduced their purchase rate in a way that negated the effect of the exposed group.
In order to understand why the non-exposed group bought less, we looked at the sales performance of other brands in the sector and saw that the sales of all these brands went down across the board during the campaign period. We found a hidden effect.
Simply put, rather than the advertising campaign not producing results, the only reason why the sales of our client did not decline at the same rate as others in the sector is because of their TV campaign.
As a result of this analysis, our client decided to continue their TV campaign rather than stopping it partway through, something that would have immediately caused their sales to decline.
During a recession, relying on sales data as a proxy for the success of a campaign is a dangerous game. Brands need to use Single-source data to understand the granular performance of their media, find what works and what doesn’t and make smart budget decisions.
In a time where budgets are tight, it is critical to constantly monitor the performance of your campaign in-flight and make sure everything is working optimally. There may just be extenuating external factors influencing the performance of a campaign and brands should explore all the data before making sweeping decisions. During a recession, spending may be cut but at the same time brands cannot afford to make mistakes that will impact company performance further.