Speculations on the Future of Advertising Research David W. Stewart The last decade has witnessed profound changes in advertising and the profession that supports it. These changes have important implications for research on advertising. This paper discusses the changes in adver- tising and the implications of these changes for research on advertising. It suggests that future research in advertising must address the following questions: 1) does advertising work, and, if $0, when and why; 2) should advertising effects be determined with absolute or relative measures?; 3) how are the media related to advertising response?; 4) how is advertising related to the langer marketing mix of which it is a part?; and 5) how can research support advertising’s inherent creative function? While these questions have been the focus of much of the advertising research to date, the paper concludes that the type of research that can answer these questions in the future may be quite different from research in the past in that it will need to focus more on advertising within context than on advertising in isolation from the larger environment of which it is a part, David W. Stewart, Ph.D., holds the Robert E. Brooker Chair in Market- ing in the School of Business at the University of Southern Californi ‘The author gratefully acknowledges the contributions of three anony- ‘mous referees, George Zinkhan, and umerous present and former colleagues and students who have influenced the ideas expressed in paper. Journal of Advertising, Volume XX1, Number 3 September 1992 Iti fitting that in the twentieth anniversary year of the Journal of Ad- vertising there be occasions for assessing the contribution of the Journal and the state of the field to which it contributes. Muncy (1991) has recently offered a useful retrospective on the Journal by examining its content dur- ing the first twenty years of its existence. Such retrospectives provide useful anchors by indicating where the field has been and the direction of change over time. A more difficult, but equally useful task would involve an analy- sis of the future of the field and the Journal. Unfortunately, prophecy is not a gift that is widely distributed in the population, and those who do claim such a gift are not accorded much eredibility by some portions of the larger population. While prophecy may be difficult and of dubious relevance, an alternative approach to examining the future is the identification of forces ‘that presently exist which may shape the future. The objective of the present paper is the identification and discussion of some powerful forces now affecting advertising as both a profession and research discipline. These forces have important implications for the types of research that are likely tobe useful in the future. These forces are also pushing advertising research, in new directions that may require a different focus from that in the past. A Discipline in Crisis? Even a cursory reading of the popular and trade press suggests that advertising is in a state of transition, Mergers and acquisitions have created large mega-agencies at the same time that agencies have reduced personnel and advertisers have become increasingly skeptical of the efficacy of adver- tising as a marketing tool. Criticism of advertising has reached new levels during the past several years. Indeed, a story about one particular advertising study reported in the Wall Street Journal in February of 1989 concluded that “TV exposure has very minimal offect...difficult to find at all.” “The most important factors affecting consumers’ choices...were in store displays and coupons.” “TV advertising wasn't even effective over the long run....” Recent articles in The Economist (1990) and in the Journal of Advertising Research (Light 1990; Clancy 1990) have suggested that the role of adve ing within the marketing mix, and perhaps even the definition of advertis- ing, must change. Horst Stipp, Director of Social and Development Re-Journal of Advertising search for the National Broadcasting Company, has recently addressed the “crisis in advertising.” Even Advertising Age, the respected weekly trade publica- tion for the advertising industry, ran a front page headline on February 27th, 1989, that read, “The Party's Over.” Questions about the effectiveness of advertising are not new, of course. What is new is a change in the behavior of advertisers. Recent concerns about the efficacy of advertising came at the end of a decade that saw marketers shift from spending two dollars on advertising for every dollar spent on promotion to spending almost two dollars on promotion for every dollar spent on advertising (Naber 1986). A.C. Nielsen. reported that over the decade ending in 1989, expen- ditures for advertising among consumer packaged goods companies in the United States increased only nine percent, while expenditures for consumer pro- motions increased seventeen percent and trade pro- motion expenditures increased by thirteen. This shift represents more than rapid growth in promotion ex- penditures. Indeed, much of the increase in advertising, expenditures came early in the last decade. Even before the recession of 1991, advertising ex- penditures as a percent of the United States’ Gross National Product had declined for three consecutive years (Garneau 1991). Not surprisingly, real expen- ditures on traditional advertising also declined in 1991 (Burgi 1991), Such declines mask even more funda: mental changes in the allocation of marketing com- munications budgets, however. Spending on tradi- tional media as a share of total communications budgets has declined Burgi 1991) and almost half of media expenditures now involve so-called “unmeasured media,” which include direct mail, catalogs, co-operative advertising, special events, and in-store media, among others (Endicott and Brown 1990). If behavior is any indication, marketers appear to believe the headlines about advertising, Indeed, the empirical research on advertising ef- fectiveness does not offer immediate encouragement. Abraham and Lodish (1989) report a comprehensive split-cable study of the effectiveness of advertising for more than 800 frequently purchased consumer products. They found that only forty-nine pereent of the ads examined produced an increase in sales and the percentage of ads that actually paid out was even lower. Drane (1988) reported finding that advertising had little or no effect on product sales in three-quarters of the cases he examined. Sunoo and Lin (1978) found that only 13% of the sales of mature products could be attributed to the effects of advertising. Although Adams and Blair (1989) found immediate sales gains ‘associated with advertising, they also found that gains peaked after only a few weeks, then started to slip back. Likewise, Arbitron (Harvey, Norman, and Losey 1989) found that sales gains associated with adver- tising tend to fall back after 8-12 weeks. ‘At the same time that questions have arisen about whether advertising has any effect, advertising has become more difficult to execute. The once ready ac- cessibility of consumers has been diminished by an increasingly fragmented media. The attention span of consumers has been taxed by an explosion of in- formation and an environment that is increasingly cluttered by advertising that may not even be relevant for many in the audience. Client organizations have also reduced the compensation of agencies with the inevitable effect of reducing the time and resources agencies can devote to the creative function. Alllof these events have had both direct and indirect effects on advertising research. The direct effects are ‘manifest in the reduction (and sometimes elimination) of professional research staffs within both agency and client organizations. They are also manifest in di- minished funding for advertising research, whether conducted by academic researchers, by agencies, or by client organizations. The indirect effects are more difficult to define and measure, but they include re- duced interaction among academic advertising re- searchers and advertising professionals and dimin- ished opportunities for support of advertising pro- grams of all types. A potential long term result of all of these effects is a likely shift of interest among academic researchers, particularly Ph.D. students and younger faculty to research issues that provide greator opportunities for generating resources. It is not un- reasonable to ask whether there is a future for ad- vertising research and, if there is a future, what its shape may be. Lest pessimism become the order of the day, it is worth noting that current concerns about advertising are nothing new. The history of advertising is a history of change. In little more than a hundred years, the discipline of advertising has changed in profound ways, Ithas evolved from a discipline concerned almost exclusively with the placement of media for retailers and makers of patent medicines to a discipline of tremendous creativity that pioneered marketing re- search and much of modern marketing. It has adapted to and grown with the emergence of a host of new media including radio and television. Much of this evolution occurred prior to 1960 and ultimately led to what some have called the “decade of advertising” in