A research study was sanctioned late last year regarding the "crisis" in advertising. With the invention of the DVR, were consumers still viewing television? Was word-of-mouth the only advertising that worked? What unforeseen problems would crop up when the newspapers went out of business? Were we, unknowingly, the last defenders of Babylon?
The Wharton School, in cooperation with the Advertising Research Foundation (ARF), launched an exhaustive study that culminated in 21 papers that will be published in the ARF Journal in June 2009. The study, aptly named "The Future of Advertising Project," was launched to refute what ARF Chief Research Officer called:
"a lot of mythology from an echo chamber I was hearing about how TV isn't working because of DVRs and the Long Tail and declining audiences" when he assumed his post last year. "It just sounded like a lot of assumption without being factually informed," he said.
The collected research does bear some bad news, one nugget being that "empirically." TV advertising is a loss for most companies. In contradiction, the study also shows that TV performs at the same or higher levels, than it did ten years ago for the heavy TV spenders. Other learning’s include the fact that 22% of word-of-mouth marketing stems from traditional advertising, DVRs have little impact in regard to ad recall or brand favorability, and that magazines are more effective than TV commercials and online ads at creating "intent to purchase."
The main item the initial studies uncovered is that more research is necessary, especially in the face of rapidly growing social networks. Yoram "Jerry" Wind, Lauder Professor of Marketing at Wharton, stated "The major concern about the decreased impact of TV advertising is not founded," he said. "TV is still very effective. At the same time, there are a lot of things we don't know."
With that, it does not seem that we know significantly more today with research, than we did yesterday without research. Check back later, hopefully we’ll have something for you…