NPS and Advertising: A Message from the President

A Frequently Asked Question I get about the Net Promoter Score (NPS) is about the relevance of NPS to marketing, particularly advertising.

And the answer lies in the findings of one of the most influential studies on advertising ever conducted – a study on the impact of advertising on Presidential Election campaigns by Columbia University.

To cut to the chase, the implication of the Columbia advertising research for NPS is that successful advertising is advertising that targets Promoters and gives them a reason to recommend your product or service to friends and acquaintances. Rather than inform the uninformed, persuade the unpersuaded, or remind the un-reminded, the essential task of advertising should be to activate Promoters into recommending.

A little background perhaps? The research in question was conducted by Elihu Katz and Paul Lazarsfeld way back in the 1940s. The Columbia University team was trying to resolve, once and for all, the thorny problem of marketing effectiveness, taking the 1940 Presidential Campaign as a case study. Specifically, did all the money poured into advertising the virtues of the two Presidential candidates, Democrat Franklin D. Roosevelt and Republican Wendell Willkie, actually make any difference to who people voted for?

Ever since the US department store mogul John Wanamaker lamented, "Half the money I spend on advertising is wasted; the trouble is I don't know which half" (a quote also attributed this side of the Atlantic to Lord Leverhulme), this question of advertising return on investment has been a thorny business problem. But what the Columbia University research found was that advertising had absolutely no influence on the vast majority of voters – most people were far more likely to be influenced by the people they knew than by advertising.

However, the Columbia research did find that for a small minority of voters, advertising was highly influential and highly effective – but not for the people or the reason we might think.

This small minority (later quantified to represent about 10%) of voters who were influenced by the Presidential Campaign was what we would call today "Political Promoters", people highly likely to offer their personal opinion on political matters, including who to vote for. The advertising worked, not necessarily by influencing *who* these Promoters would vote for, but by influencing *what* the Promoters would say to influence others. In other words, advertising works by stimulating Promoters to promote by giving them compelling reasons to recommend.

This two-step flow model (see image at left; click to enlarge) of mass media influence transformed the ad industry forever, and became known, naturally enough, as the two-step flow model of advertising. Validated by a number of subsequent studies in a broad range of categories, the two-step flow model is now the dominant model in advertising science, and has all but replaced the old Victorian, "hypodermic needle" or "magic bullet" model of direct advertising influence.

So, what is the relevance of NPS to advertising? Simple; good advertising should help your promoters articulate what's so great about what you sell.

Comments

[J Clampitt]

So - the answer to the question about which half of an advertising budget is wasted remains elusive. Should advertising budgets be cut down to 10% of what has been spent in the past? Using the voter population for presidential elections, how could that 10% of voters who are political promoters be identified? How can the advertising budget be directed to them?

[Paul Marsden]

Great point! The half of advertising that is wasted is the half that tries to talk directly to your main target audience - the half that works is the half that is targeted at your existing promoters and gives them a reason to recommend!

On identifying political promoters, there are at least two solutions:

1) The Ultimate Question - ask voters how likely are you to recommend voting for [candidate] to a friend or colleague?

2) If that is too expensive, I'd simply use membership (or donors) of Democrat/Republican party as a proxy for promoters.

The point is that smart political campaigns should target promoters - not passives or 'undecideds'.

[John Calkins]

My new start up web based company is receiving thousands of hits per day. But it is not generating action for new sales, until the product is received by new customers. “Hotcookies.net / Better Way Mail” our vision is the web site to develop a cost effective and simple efficient operation for sales and marketing associate to send mail from any location with a laptop or phone. The business is being built with the goals of giving back, feed children in need and Green policy. Twenty percent of all profits are being given back and the concept of corporation using a central printing and mailing format will save on the use of paper. http://hotcookies would love to know our net promoter score?

[Net Promoter Community]

Numerous companies calculate their own Net Promoter Scores. Here is a link to the Net Promoter Conference blog with a number of case studies:

http://netpromoter.typepad.com/npc_miami_2008/

Other resources for embarking on your own Net Promoter program include the Net Promoter blogs:

http://www.netpromoter.com/blogs/index.php

And discussion forums (search on topics by using the "find" tab):

http://netpromoter.groupee.net/groupee/forums