Differentiated brands get 7x the affect

Happy to share the good news that the best international journal in marketing accepted our paper AND is giving y'all free access ?until February 16, 2023! Advertising’s Sequence of Effects on Consumer Mindset and Sales: A Comparison Across Brands and Product Categories starts with the story of three MBAs, each working as a brand manager in competing detergent companies. All three have access to data on past marketing activities for their brand and resulting sales, but also to survey-based data on consumer mindset metrics (e.g., brand awareness, liking, purchase intention). In order to decide on next year’s advertising activities, each of them thinks through the relationships between advertising, mindset metrics, and sales but they remember different elements from the marketing courses they took.

Ariane has excellent memories of her marketing communications course and understood the usefulness of the AIDA (i.e., Awareness, Interest, Desire, and Action) model. In her analysis of the available metrics, awareness (a cognition measure) comes first, interest and desire (affect) follow in sequence, and lead to action at some point. Therefore, Ariane conceives a communication campaign with a primary goal of appealing to consumers’ cognition by raising awareness of her brand. Victor took the same course but he remembers instead an article by?Vakratsas and Ambler (1999) , who conclude that there is little support for any temporal sequentiality in the consumer mindset, as the three mindset factors— cognition, affect, and experience—occur at the same time (instead of sequentially as in the AIDA model). Because he believes purchase decisions are mostly driven by emotions, Victor designs a campaign with the objective of strengthening consumers’ affective bond with the brand. Finally, Bridget took a course on marketing analytics and modeling. She digs up?Bruce, Peters, and Naik (2012) ?and rediscovers that the authors find evidence of a temporal sequentiality in consumers’ mindset, in which experience precedes cognition, which in turn precedes affect. Inspired by this result, Bridget decides to combine ads with free sampling to get consumers to experience her product with advertising focusing on the usage experience.

Which of these three approaches is more appropriate and does it depend on the brand and category? We use restricted Vector Autoregressive Models (shown above) to quantify how the mindset factors of cognition, affect, and experience mediate advertising effects on sales, using data from 178 fast-moving consumer good brands in 18 categories over seven years. We compare the models proposed in the literature and conclude that the concept of sequentiality in advertising effects holds up well. Importantly, the sequence varies across brands, with the affect?→?cognition?→?experience (ACE) sequence being the most common. Brand differentiation and the hedonic versus utilitarian nature of the product category moderate the incidence of the ACE sequence: this sequence is even more likely for utilitarian products and less differentiated brands.

The bottom line? For managers, the results show that the last mindset factor in the sequence is the most important in driving sales, with cognition being most responsive to advertising among the mindset factors. Moreover, in utilitarian categories, highly differentiated brands can expect about seven times higher advertising responsiveness of affect than less differentiated brands.