Using Single-source Data to Measure Advertising Effectiveness
How do we know if advertising works? Is there a way to directly measure the in-store sales results of an advertising campaign? Scholars and marketers have grappled with measuring advertising effectiveness for decades. The long-standing joke is that, as John Wanamaker is said to have remarked more than a century ago, “half the money we spend on advertising is wasted—we just don’t know which half.” Thankfully, we’re long past that stage in our understanding of how advertising works, but there’s no question that measuring advertising effectiveness and optimizing performance remain a challenge for advertisers and media companies alike.
In recent years, massive shopper databases have allowed the industry to develop exciting new research methods. In particular, researchers at Nielsen Catalina Solutions (NCS) have introduced a breakthrough methodology based on single-source datasets to measure the direct effect that an ad campaign has on sales. These ‘sales effect studies’ offer a powerful solution to measure changes in purchase behavior among households that saw an ad campaign and compare it to the behavior of similar households that were not exposed to it. This paper dives into the details of how those studies are put together.