The Technology of Advertising

Welcome to the ARF Study

If your position in the company is concerned in any way with profitability, this is an important study that you should not ignore.

The study was conducted by the Advertising Research Foundation in conjunction with the Association of Business Publishers. It is totally concerned with trade journal advertising exposure, the so-called “cutting edge” of most communications programs.

In a nutshell, here’s what they did:

Industrial advertisers put their advertising messages into trade journals where the audiences were divided into rigidly separated “cells”. The people in one cell received a different amount of advertising than the people in the other cells.

Those five cells were exposed to a weight of advertising that ranged from little or none to moderate to heavy.

The products advertised ranged from a ten-dollar item to a ten-thousand dollar item, providing a good spread of product costs.

After a period of time, a number of things about each cell were carefully analyzed.

Differences from one cell to another were carefully charted, including factory cost, cost of advertising, sales projections, total cost associated with the product, and operating income before taxes.

Here’s a summary of results:

1. Even light advertising schedules (six insertions in black and white) produced increased sales and profits, more than enough to justify the cost.

2. Moderate to heavy advertising schedules (between seven and seventeen pages), produced far higher sales and profits.

3. Above a certain level, more advertising does not produce a sufficient increase in profits to make it worthwhile.

4. Results of an advertising program take from four to six months to become fully visible.

5. Full color used in ads produced major gains in results.

6. Effectiveness keeps working for a long period after the campaign has ended.

This study will enable realists to evaluate advertising as a revenue generator and stop regarding it as a feel-good activity; the link between advertising weight and profit is now very clear.

While we see some unanswered questions, this is a major step on the road to advertising weight standards becoming just as accepted as accounting and other professional standards are today. Previous studies have been pointing quietly in this direction; this study is a major explosion.