SPOTS: CHEAPER IS MORE EFFECTIVE

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Expensive commercials are less effective than cheap ones.

That's the stark conclusion of a new study that is sure to gladden advertisers while chilling agencies and production houses.

The study, conducted by Research Systems Corp., claims to have found a statistically significant inverse relationship between the cost of production and the sales effectiveness of spots.

The Evansville, Ind.-based research company took 56 new and established commercials and compared their production costs with their relative effectiveness, based on its proprietary ARS Persuasion measurement. That 30-year-old test has proved 91% accurate in predicting the success of advertising.

Advertisers supplied production cost information.

"In many cases, people have been trying to use heavy production values to compensate for not having anything to say," said Mark Gleason, exec VP at Research Systems.

Mr. Gleason said the company was intrigued by a contention of famed adman David Ogilvy, who wrote in "Ogilvy on Advertising": "I have no research to prove it, but I suspect there is a negative correlation between the money spent on producing commercials and their power to sell products."

"Being an empirically driven organization, we wanted to test that hypothesis," Mr. Gleason said. Several clients also encouraged the company to undertake the yearlong study.

The results are compelling, suggesting more effective commercials cost about 40% less than those rated inferior. Of the 56 spots studied, 17 scored "inferior" on the ARS Persuasion level while costing about 17% more than the $148,000 average in the study; 26 scored "at fair share" while costing just 3% more than average; and 13 scored "superior" but cost 28% less than average to produce.

"Clearly, ads with brand differentiation as the main message, that demonstrated the product, proved most effective and appeared to be the most cost-efficient," Mr. Gleason said.

Spots using expensive celebrity presenters or eye-popping special effects simply to grab attention don't necessarily sell, he said.

"Previous studies have found that recall, by itself, isn't a good predictor of effectiveness," Mr. Gleason said. "It has only a 50-50 accuracy rate."

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