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Project Apollo pilot data indicates that marketers can identify consumer groups whose sensitivity to price depends on their exposure to advertising.
This is the latest in a series of marketing case studies developed from Project Apollo, the pilot for a new, single-source marketing research service under development by Arbitron and Nielsen.
The analysis found that exposure to advertising appears to decrease a consumer’s tendency to react to price changes. Pricing sensitivity is reduced even at low TV exposure levels compared to no exposures. Audiences with four or more exposures showed even less sensitivity, with behavior changes tapering off at between seven and eight exposures among viewers of “Brand X” advertising.
The results of the study also indicated in the aggregate that advertising and price elasticity are inversely related. This relationship was observed across various levels of TV exposure. Purchasers of “Brand X” who had not been exposed to TV advertising were the most sensitive to price. Those with low exposure to TV ads were less sensitive to pricing. Audiences with high exposures showed the least sensitivity to price change.
Arbitron and Nielsen have decided to extend the pilot period for Project Apollo until the first quarter of 2008 in order to conduct a number of tests designed to help participating companies better understand the use of the service.
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