Advertisers Vastly Understate The Sales Effect Of Creative And Significantly Overestimate The Impact Of Targeting
Over the last six years, the Cumulus Media | Westwood One Audio Active Group® has commissioned Advertiser Perceptions to survey brands and media agencies on the sales contribution of five advertising effectiveness factors:
- Brand
- Creative
- Reach
- Recency
- Targeting
How would you answer? What percent of sales are driven by each element? Answers should add up to 100%.
NCSolutions provides the following definitions of what they call the “Five Keys of Advertising Effectiveness”:
- “CREATIVE quality measures the influence of advertising by looking at the number of purchases it drives. What this means is two factors motivate consumer purchase decisions: the creative message and the context in which it’s delivered. Strong creative delivers higher incremental sales than weak creative does.
- BRAND refers to factors that are not changed overnight. They’re what makes a brand a brand: market share, brand penetration and the tendency to retain loyal buyers relative to the competition.
- TARGETING is the measure of how well a campaign was able to reach a particular audience.
- REACH speaks to scale. It’s how many households were exposed to advertising through the duration of the campaign.
- RECENCY is all about the timing of advertising in relation to when a consumer makes a purchase. High rates of recency mean that more impressions are being served just before store trips.”
Advertising effectiveness science reveals sales contribution
To determine what actually drives advertising effectiveness, we turn to one of largest and most prominent studies ever conducted on sales effect. The Five Keys to Advertising Effectiveness, released in August 2023 by NCSolutions and Nielsen, is based on nearly 450 sales effect studies and over a decade of experience linking advertising to sales results.
The two sales drivers with the most dramatic disconnect between marketer perception and reality are creative and targeting.
Creative: Marketers and media agencies massively underestimate the immense sales effect power of creative
Creative, according to NCSolutions, drives half of sales. This is nearly 2.5 times what advertisers perceive.
The Advertiser Perceptions February 2025 study reports brands and media agencies say creative only represents 21% of total sales effect. NCSolutions science reveals creative generates an eye-popping 49% of incremental sales.
System1, a leader in creative testing, has quantified the relationship between creative quality and market share. They find the greater the positive memories an ad campaign generates, the greater the long-term market share growth of the advertiser.
According to System1 Chief Customer Officer Jon Evans, “Creative is the number one factor in explaining the performance of your advertising and yet most marketers still don’t realize it. That means that those who focus on getting the creative right have a huge competitive advantage. Firstly, marketers need to wake up to the importance of creative and secondly realize it isn’t some dark art but something you can measure and improve to give you an advantage over the competition who haven’t realized this yet.”
Targeting: Marketers and media agencies vastly overestimate the impact of targeting
Marketers and media agencies consider targeting the number one sales driver at a 23% contribution. What does the marketing science say?
Per NCSolutions, targeting ranks a distant fourth, generating only 11% of sales effect. The sales contribution perception of targeting is twice the reality.
As to why marketers and media agencies are underestimating creative and overestimating targeting, Dave Morgan, Executive Chairman and founder of Simulmedia, posits, “I suspect that a critical factor is marketers’ belief that creativity is very hard to control (like catching lightning in a bottle), whereas audience targeting is perceived as quite controllable. If marketers concede that creativity is the most important factor then they concede that they can’t control their company’s and own destiny very well.”
The conclusion? Worry less about targeting. Spend more time improving the quality of your ad creative. For strategies on enhancing creative, download the Cumulus Media | Westwood One Audio Active Group® Audio Creative Best Practices Handbook.