Does advertising build awareness, or belief? What the panel data says

Advertising buys familiarity. Whether people believe you is decided somewhere else, and a brief that confuses the two spends money on the wrong one.

Written by the Colleviate Strategy desk

What did the study measure?

Clark, Doraszelski and Draganska built a panel of more than three hundred brands. For each one they had annual advertising spend, and survey measures of brand awareness and perceived quality from a large consumer survey. They treated advertising as an investment in two separate stocks, one of awareness and one of perceived quality, and asked how much each moved when spend changed. Because they followed the same brands over time, they could set aside the fixed differences between brands, and they used dynamic panel methods to deal with the fact that firms choose their ad spend for reasons that aren't random.

Their finding is short. Advertising had a consistently significant positive effect on brand awareness. It had no significant effect on perceived quality.

What that does and doesn't say

It's one study, on annual data, using survey measures, across the brands and categories in that survey. It doesn't prove that no advertisement has ever changed what anyone thinks of a product. It's a fair account of what the money does on average: it makes more people know you exist.

That's more useful than it sounds, because it's the cleaner of the two jobs to measure and to buy. Awareness can be bought with reach. Belief can't.

Split the brief in two

Awareness without proof produces visits that don't convert. Proof without awareness produces a library nobody opens. Most budgets fund one and hope for the other. The practical answer is to give each job its own owner, its own measure and its own money.

• The awareness job. Reach, frequency and the share of people in the category who know you. A cheap, public way to watch it is share of search, which is our own proxy for awareness, not part of the study.
• The belief job. Reviews you didn't write, case studies with real numbers, independent coverage, and a product that does what the page says. PR worth paying for and reputation as a search result are about earning exactly this.

What to change on Monday

Look at the last campaign brief. If it says “build trust” and the only deliverable is reach, the brief has asked for something the money doesn't buy. Rewrite it so reach is the awareness target, and add a separate line, with a different budget, for what proves the claim. For the long-run balance between the two, see the brand and performance split.