Research Recaps

Does the Hierarchy of Ad Effects Still Work?

Key Takeway

The influential Hierarchy of Effects (HoE) model proposes that advertising can trigger Cognition, Affect or Experience. This study validates the basic HoE model but finds that the operating sequence varies across brands, with the predominant one being affect → cognition → experience (ACE).

Advertising influences purchase behavior when it changes how consumers think and feel about brands. The Hierarchy of Effects (HoE) has been the most influential framework to analyze intermediate effects of advertising both in academia and practice. This framework has been widely used with the objective of optimizing advertising decisions on copy content, media plans, and budgeting. The HoE framework proposes that advertising triggers one of the three intermediate factors Cognition, Affect, or Experience—which capture consumers thinking, feeling, and memories, respectively— to move customers along the remaining two factors. Different hierarchies have been proposed in the literature depending on the sequential order of the three intermediate factors. However, other frameworks have also been proposed, implying that advertising triggers simultaneously the three intermediate factors which in turn drive brand sales. Surprisingly, there are no comprehensive empirical examinations comparing the proposed frameworks across different brands.

In this report, Koen Pauwels, Albert Valenti, Shuba Srinivasan, Gokhan Yildirim and Mark Vanheule analyze how cognition, affect, and experience mediate advertising effects on sales, using data from 178 fast-moving consumer goods brands in 18 categories over seven years. They compare the models proposed in the literature and conclude that the concept of integrated HoE, which signifies sequentiality, holds up well. Importantly, the operating sequence varies across brands, with the predominant one being affect → cognition → experience (ACE). Furthermore, category and brand characteristics such as the hedonic versus utilitarian nature of the category, brand differentiation, and brand market share moderate which HoE sequence is more likely to hold for a brand. The incidence of ACE is stronger for utilitarian products and less differentiated brands. For managers, the results show that the last factor in the HoE sequence is most important in driving sales while affect is the intermediate factor most responsive to advertising.

Put Into Practice

This study’s conclusive evidence that advertising triggers a sequence of effects in customers’ minds and hearts, has important implications for managers. While the research demonstrates that the integrated HoE is relevant as a framework to guide advertising decision-making, its operationalization is more challenging than previously believed. Given the complex interactions among the intermediate factors, the authors encourage brand managers to investigate the operating hierarchy for their specific brands and the actionable recommendations that arise from this knowledge.

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