TV ads have branded the big names on our brains

By Richard Tomkins

Published: May 28 2004 5:00 | Last Updated: May 28 2004 5:00

Shocking news in adland: television advertising does not work.

Oh well, commercial TV was nice while it lasted. Now, I suppose, we go back to whatever we were doing before it arrived: singing around the piano, talking to each other, going out of our minds with boredom or, in Britain's case, watching the BBC.

Before continuing, however, I had better qualify that opening claim. Clearly, TV advertising can work. But according to a provocative report from Deutsche Bank in the US (Commercial Noise: Why TV Advertising Doesn't Work for Mature Brands), the sort of advertising we tend to associate with TV, promoting well-known brands of consumer packaged goods, is usually a waste of money.

How does Deutsche Bank know? Andrew Shore, an analyst, spent two years monitoring the advertising and sales of 23 big packaged goods brands in the US. He found that, although TV advertising increased sales over the next six to 12 months, in most cases it produced a negative return on investment. In other words, the gross profit generated by the extra sales was exceeded by the cost of the advertising.

Things have changed since the golden age of marketing, the 1950s to the 1970s, when commercial TV allowed packaged goods companies to introduce their products to vast numbers of consumers. Today, media fragmentation has undermined television's power and many packaged goods are close to market saturation. Meanwhile, remote control ownership has risen from zero in 1965 to 97 per cent, and TiVo-style digital video recorders make it easy for viewers to skip commercials altogether.

Yet can we really be sure that brand advertising is such a waste of money?

Since I own a TiVo recorder and have hardly seen a TV commercial in more than two years, I have no idea why I would want to defend TV advertising (unless, of course, it is to preserve my access to free content). Yet somewhere at the back of my mind I hear the insistent voice of Philip Wrigley, son of William Wrigley, founder of the chewing-gum company, addressing this question of value for money. Asked during a transcontinental flight why Wrigley went on spending so much on advertising when its products were already successful, he replied: "For the same reason the pilot of this plane keeps the engines running when we're already 29,000ft up."

Mature brands, by definition, face the prospect of decline, so perhaps the miracle of TV advertising is that it sustains them year after year when they might otherwise fade slowly into oblivion. In any event, what a study should surely be measuring is not just the increase in sales delivered by TV advertising, but the difference between the increased level and the level to which sales would have declined if there was no TV advertising.

I have another quibble. Reluctant as I am to take issue with Deutsche Bank's intriguing study, I cannot help feeling that, by focusing on relatively short-term increases in sales, it takes an outdated view of the way brand advertising works.

Once, people used to see advertising as a means of persuading people consciously to choose one product over another. The advertisement was a sales pitch, and it was vital to get the consumer's attention in order to get the message across.

More recently, however, a British marketer named Robert Heath has drawn on neuroscience and psychology to offer a different explanation.

In an influential monograph called The Hidden Power of Advertising (Admap Publications, 2001), he said people regarded most reputable brands as performing similarly and paid little attention to advertisements. However, this did not mean the advertisements did not work.

People absorb information both actively and passively. Some knowledge you seek, other knowledge you absorb through "implicit" learning without even knowing it is happening. According to Heath, brand communications fell mostly into the second category: although often ignored at the conscious level, they were absorbed through an automatic, subconscious mental activity known as low involvement processing.

The way long-term memory worked, the more often an idea was processed alongside a brand, the more it became associated with that brand. "And because implicit memory is more durable than explicit memory," Heath said, "these brand associations, once learnt, are rarely forgotten."

So, even more shocking than the revelation that TV advertising does not work is that it does - and without our even knowing it. Just as we always suspected, we are being brainwashed.

Correction.You are being brainwashed - I have a TiVo. But the point is, it is already too late for me, too. Even today, every time I choose a product on a supermarket shelf, I am expressing brand preferences influenced by advertisements I saw when I was six. The payback from a TV commercial cannot be measured over six months or a year: it is for life.

I know, I know, TV is not the only means of advertising and other media offer better value: perhaps Coca-Cola gets more effective brand associations from its sponsorship of music and sport than it does from its TV advertising. But the fundamental asset of successful brands is fame, and there is something almost magical about television's ability to deliver it.

Sheer voodoo it may be, but it is a brave packaged goods company that stops advertising on TV while its competitors carry on. This is the age of celebrity and brands desperately want to be stars. Somehow, I think commercial television is going to be with us for a while yet.

This column returns on June 11.richard.tomkins@ft.com