Listen to the authors present their findings (source: February 2019 JM Webinar)
“Be authentic!” is the watchword of today’s social sharing era. Consumers broadcast their feelings, perspectives, and secrets to friends and followers, and brands are expected to follow suit. In fact, a recent survey found that 87% of global consumers said it was more important for companies to be authentic than innovate (72%) or deliver unique products (17%).
Small wonder that brand managers, marketers, and creative directors all believe that authenticity is the key to a brand’s success, especially in the cutthroat world of TV advertising. Whether it is ad messages that are highly credible, hiring consumers, not actors for commercials, parodying common behaviors, or being sympathetic to rites of passage and issues most individuals experience, brands pride themselves on keeping it real. But is authenticity truly a driver of product sales?
In a new article in the Journal of Marketing, our research team digs deep into the rise of authenticity, a trend that has been heavily hyped in social media and influencer marketing, but is not, in fact, empirically research-based. Previous studies have focused on consumer interpretations of authenticity, rather than actual market impact. Furthermore, there is no common industry understanding as to what constitutes an authentic ad execution. Says Markus Macioszek, head of marketing at Gerolsteiner mineral waters, “different interpretations of authentic advertising impair communication between managers and creatives.”
Our team studied 323 television ads across 67 brands and four years to measure the impact of authenticity on the sales of fast-moving consumer goods (FMCG), using weekly scanner, retail panel, and media data. We also reviewed academic and business literature, interviewed practitioners, and conducted two consumer studies. For the purpose of this study, we defined an authentic advertisement as one that is genuine, real, and true with regard to one or more executional dimensions.
Based on our study, we derived four key dimensions for authentic ads: preserving the brand essence; honoring brand heritage; showing a realistic plot; and presenting a credible advertising message. We then assessed to what extent each authenticity dimension influenced the relationship between ad spending and sales and whether these effects depend on the consumption purpose (hedonic versus utilitarian) and the brand’s size.
Key findings include:
- In our study, advertising had a small impact on sales of FMCG, with an immediate effect of .0027 and a cumulative effect of .0042. The magnitude of individual ad elasticities varied significantly across ads.
- Some 64% of the cumulative effect was achieved within the first week of ad airing.
- Authenticity does not generally enhance sales performance, but instead provides more nuanced effects that depend on the dimensions and type of brand.
- Preserving the brand essence is generally important to increase ad effectiveness. Thus, marketers should provide very clear guidelines to ad agencies and carefully communicate their brand’s values, image, and style.
- Stressing brand heritage is only beneficial when advertising small brands, which contrasts with the advice given by brand literature.
- Amusing and enchanting ads are often more effective than slice-of-real-life ads. Thus, marketers should encourage agencies to be creative and take risks.
- Utilitarian brands should strive to be truthful, as consumers are unforgiving when claims about product performance are untrue.
- In contrast, hype helps hedonic and small brands, which can get away with vague, subjective, or even inflated claims.
In summary, marketers shouldn’t blindly follow the mantra “be authentic” when developing advertising. Instead, they should fully consider different executional aspects that evoke authenticity, given that only some enhance performance whereas others have a negative impact.
From: Maren Becker, Nico Wiegand, and Werner Reinartz, “Does It Pay to Be Real? Understanding Authenticity in TV Advertising,” Journal of Marketing, 83 (January).