How Diversity Strengthens Brand Appeal
Traditional advertising often targets specific demographics thought to be the most likely consumers. For instance, cosmetics brands often feature young women, while beer commercials tend to spotlight men. However, marketing professor Aparna Labroo and her team discovered that showcasing a diverse array of individuals in advertisements leads to notable advantages.
According to the study, consumers are willing to pay more for products from brands that highlight diversity—across age, race, gender, and nationality. This perception stems from a belief that such brands are more innovative and cater to a wider array of needs. Labroo explains, “If an ad shows people who look different, consumers spontaneously seem to think that those people must have different needs and that a company that meets such diverse needs must be more innovative and creative.”
AI-Generated Ads: Personalized and Persuasive
With the rise of generative AI, advertising is becoming more personalized than ever. Jacob Teeny, an assistant professor of marketing, explores how AI tools like ChatGPT can craft tailored ad messages based on consumers’ personality traits. In a series of experiments, participants exposed to AI-generated ads that matched their psychological profiles—such as extroversion or conscientiousness—responded more favorably than to generic content.
Even when informed that the messages were AI-created, consumers maintained a preference for the personalized ads. This scalability opens new doors for marketers aiming to make deeper connections with their audiences. However, Teeny cautions that this also demands greater digital literacy from consumers. “We’re going to be inundated with things that naturally feel like they appeal to us,” he says, urging everyone to scrutinize the sources and authenticity of such content.
High-Energy Ads Capture More Attention
Television commercials have grown more frantic and visually intense, and research from Lakshman Krishnamurthi, A. Montgomery Ward Professor of Marketing, confirms that this is an intentional strategy. By studying over 27,000 ads, Krishnamurthi and his colleagues noted a 33% increase in ad “energy” between 2015 and 2018. Using metrics adapted from Spotify, they measured the audio and visual intensity of commercials and found that higher energy levels correlated with increased viewer retention.
“Advertisers know now that they can’t increase the loudness of their ads, so they are looking for other ways to gain viewers’ attention,” Krishnamurthi explains. The shift toward higher energy content emerged after a 2010 regulation limited the volume of TV ads. The study demonstrates that advertisers can effectively hold audience attention through dynamic visuals and rapid pacing, rather than sheer volume.
Understanding the True Impact of Ad Spend
Return on Ad Spend (ROAS) is a key metric in digital marketing, but as Eric T. Anderson and Brett Gordon found, its calculation can vary significantly. In analyzing retail media networks—platforms pioneered by giants like Amazon and Walmart—they discovered that seemingly minor methodological choices can swing ROAS figures by as much as 63%.
This variability makes it difficult for advertisers to compare performance across platforms. For example, one grocery chain’s retail media network yielded vastly different ROAS depending on how exposure and attribution were defined. Gordon emphasizes, “When seemingly ordinary, defensible choices move ROAS by 63 percent, that can flip a go to a no-go.” The researchers recommend that advertisers proactively define how results should be calculated, instead of relying on platform standards.
Is Television Advertising Still Worth It?
Despite the prestige of prime-time commercials, especially during events like the Super Bowl, their financial return is often questionable. Marketing professor Anna Tuchman and her collaborators analyzed data for over 200 consumer packaged goods and found sobering results. While companies spent a median of $10.5 million annually on commercials per product, more than 80% experienced negative returns on investment.
Moreover, the median advertising elasticity—the percentage increase in sales if a firm doubled its TV ad budget—was just 1%. Tuchman suggests that consumer behavior has shifted substantially. “It looks like firms are really overadvertising, and they would be better off reducing their advertising spending,” she concludes. One key reason: many viewers now turn their attention to mobile devices during commercial breaks, reducing the impact of TV ads.
The Super Bowl: A Showcase of Creative Marketing
The Super Bowl remains a cultural moment for advertisers, drawing over 125 million viewers and commanding $266,666 per second for ad slots. According to Kellogg professor Derek Rucker, these high-stakes commercials represent some of the most creative work in the industry. “Super Bowl ads often feature ad agencies’ best and most-creative work,” he says.
However, the broader landscape of advertising has changed dramatically. From AI-driven personalization to evolving success metrics and the waning power of traditional television, marketers must adapt to stay effective. The research from Kellogg faculty offers crucial guidance in navigating this complex and rapidly shifting environment.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.