The Technology of Advertising

How can we measure the effect of advertising, and how many advertising insertions are required to do the job? The Westinghouse study.

Westinghouse devotes considerable time and treasure to marketing communications activities for their many divisions. Because of this, they commissioned a tightly controlled study aimed at measuring the effects of communications variables that were devised across thirteen product lines. The product lines involved ranged from shelf items to the highly technical.

The study was based on fifteen-thousand, twenty-minute interviews of plant supers, purchasing agents, contractors, architects, and owners, i.e., the people who bought from Westinghouse and from its major competitors:

Here are the variables studied:

1. When buyers are exposed to no salespeople and no advertising
2. When buyers are exposed to salespeople but no advertising
3. When buyers are exposed to salespeople and advertising

Here are the results:

1. When buyers are exposed to no salespeople and no advertising
The study found that, with no sales calls and no advertising, 12.5% of buyers still bought from that supplier. They concluded that those buyers continued to be influenced by sales calls or advertising that occurred long before the study.

2. When buyers are exposed to salespeople but no advertising
With a salesperson calling, the percent of buyers making a purchase from the same company went to 23.6%, i.e, personal sales calls increased the percentage of buyers by 11.1%.

3. When buyers are exposed to salespeople and advertising
With buyers being exposed both to salespeople and advertising, the percent of buyers went to 29.1%, a gain of 5.5%. The positive effect of advertising is a bit masked because one of the four competitors ran very little advertising. Time and again, Westinghouse found that you cannot measure the advertising effect when the number of ads falls below five pages per year in a single magazine. Five pages seem to be the minimum for gaining any measurable impact.

In terms of the payback calculated for advertising, Westinghouse concluded that each dollar of advertising investment contributed an average $45 in sales. In fact, for every product line studied, where there was a significant amount of advertising, the resulting sales per dollar of advertising ranged from a high of $154 to a low of nine dollars.