What is the Media Halo Effect?
When you advertise, hopefully, the featured brand or product will benefit, seeing an increase in sales, quotes, contracts, etc. But is that where it ends? If someone decides to purchase after seeing an ad, will they only be interested in buying the featured product? Or will they consider other variants of the same brand or other brands that address the same need? All of these are possible.
The advert might have featured a premium product. Once in-store, some customers might choose to purchase a cheaper product of the same brand. This might be instead of, or in addition to, the premium product. There might be other variants, formats, pack sizes, flavors, scents that are more appealing, or address a similar need, for example, with cleaning products someone might purchase a liquid, a spray and wipes.
Perhaps the advert persuades you to try a new brand or product, and after having a positive experience you might be encouraged to purchase other products from this brand. Or the advertising might remind you that you need another of their related products, e.g. renewing an insurance policy.
These are all examples of a media halo effect within a brand. Some brands really capitalize on this effect, featuring common imagery and music in adverts used across their portfolio. When people see or hear one of their adverts, it reminds them of the rest of the range.
Occasionally you also see halo effects within a category, across different brands. Sometimes an advert increases awareness of a category, in addition to that of the featured product, attracting new buyers. When in-store, the expectation is that they will purchase the advertised product, but this isn’t always the case. For example, with nicotine replacement therapy products, many of the brand names start with “Nico”, making it easy to confuse them. When one advertises, all brands in the category see an increase in sales.
As well as having a halo effect, there is also the possibility that the opposite might happen – cannibalization. This is where marketing causes people to switch from one of your products to another, or to an alternative brand.
How does it apply to marketing?
It is now generally accepted that we need to understand the impact of our advertising and what returns it generates. But is it enough to just analyze the impact on the featured product or service? Well, it is certainly a good place to start, but it might not be giving you the full picture.
Let’s assume Company X runs an advert for one of their products, Product ABC and it generates an ROI of 2.5. They know that an ad for their product GHI only gave an ROI of 1.2. If they are looking to get the highest ROI, based purely on this information they might decide to focus all their advertising on Product ABC.
However, if they were to evaluate the impact that both campaigns had on the rest of their portfolio, they might see a different picture. Here the net effect of the GHI campaign was greater than that for the ABC campaign.
Understanding the full, or net, effect of your marketing activities, can help you make better, more informed decisions.
How does it impact clients?
To understand the full effect of advertising, it is important to capture the impact across the full brand portfolio. But how should we approach this task?
One way is to model the total sales of a brand. Only one model needs creating, as all the halo and cannibalization effects of the advertising and other marketing will have been netted out. However, it can be more difficult to confidently measure the effects, and you don’t gain an understanding of the nuances of how the marketing works on each part of your portfolio. For example, you don’t know which parts of your portfolio benefit from which piece of marketing activity. This could be important information if you need to make cuts or are looking to extend the range.
Alternatively, you can model each product separately. This gives more insight into the performance of each marketing activity on the individual products, helping you to understand the interactions between the products - both, positive and negative. This can be vital information when deciding how best to allocate your budget. Of course, creating several models is more time-consuming and you’ll still want to aggregate the results to establish the net effects.
How are we supporting clients with this?
With our marketing mix modeling software, strataQED, it is quick and easy to create multiple models and test for interactions between products. With a couple of clicks, you can aggregate the results from all your models to see what impact each activity has across the portfolio and the net effect of each marketing lever.
Brand Painting of total Sales
Which software are our clients using to measure the Halo effect?
We have a variety of software to support our clients, depending upon their requirements and the questions that they need to answer. Many users start with our MMM tool, strataQED, and one of our forecasting and optimization solutions. These make it easy to test different scenarios and assess the impact of your marketing plan across the whole of your portfolio. Link these with our online reporting and dashboard tool, MMM Platform, to have your data, models, and reports refreshed regularly.