Understanding Awareness in ATAR
The starting point of the ATAR forecasting model is A = Awareness.
This is a measure of what proportion (percentage) of consumers (or other buying units) will become aware of the product – whether or not they buy it.
How is awareness determined?
Some companies will use market research surveys to ask respondents about their level of awareness of various brands and advertising campaigns.
For example, they will ask consumers “when thinking about fast food outlets, which is the first one to come to mind?” – this is known as top of mind, unprompted awareness.
The survey will then ask, “what other fast food outlets are you aware of?” – which is still unprompted awareness (but not top-of-mind) of the brands/chains.
Finally, the survey will ask “have you heard of these brands – yes/no?” – and then the respondent will be presented with a list of remaining brands – this is known as prompted awareness. The addition of prompted and unprompted awareness will provide total awareness of each new product/brand.
We will use the total awareness metric in the ATAR forecast. The reason that we use total awareness – rather than unprompted awareness – is that the consumer will be able to recall the product/brand in a purchase situation when they are reminded by seeing the product in-store, or by advertising, or by salesperson information.
What drives product awareness levels?
Typically, when we hear the word “awareness”, we naturally associated with advertising and promotion. There is no doubt that mainstream advertising, such as TV advertising, will have a significant impact on the level of awareness.
But there are numerous other factors that will influence the level of awareness, which include:
- Seeing the product in-store
- Through sales promotion tactics (typically in-store)
- Media articles
- Online reviews
- Word-of-mouth from friends/family
- Online comparison sites
- Salesperson’s recommendations
- Seeing the product in use by other people/consumers
- Product placement (TV/movies)
Marketers can control the awareness levels to a reasonable extent
Like all the variables in the ATAR forecasting model, marketers have a reasonable level of control over awareness levels. This is because they can influence awareness through the promotional mix and utilize the tactics of advertising, sales promotion, publicity, product placement, targeting Internet influencers, trade promotions, and so on.
Therefore, it should be very feasible for marketing launch plan to be able to deliver to awareness expectations.
Awareness levels should increase over time
Awareness benefits from a cumulative effect over time. For example, when a new product first enters the market its level of awareness is quite low. This awareness will increase over time with the accumulated impact of advertising, word-of-mouth, retailer take-up, and so on.
Therefore, in your ATAR forecasts, you would generally have a relatively low level of awareness in year one (with the exception being large firms/brands) and with that level of awareness progressively growing to year five.
Align awareness estimates with the marketing program
The Excel ATAR forecast template has the capacity for you to enter different levels of awareness for each of the five years. Obviously, you should look to align your awareness estimates with underlying marketing tactics.
This means that if you have quite high levels of product/brand awareness built into your ATAR forecast, then it will be necessary to implement a significant marketing program to drive awareness. Again, the exception here would be very strong brands that are able to generate high awareness through publicity and direct marketing of their existing customer base. However, for most firms/brands, generating high levels of awareness is a significant challenge and an expensive exercise (which also needs to be built into the projected promotional costs).
Finding the awareness estimates
Firms would estimate the awareness inputs into the ATAR model based upon their prior experience. Firms that have launched multiple new products/brands in the past should have comparative points of information to utilize.
Otherwise, if this information is not available, then most advertising agencies would be able to assist in this regard. One of their prime goals as an agency is to drive the level of product/brand awareness, and would have a very strong understanding of what is achievable in the various product categories and for what promotional cost.
If you do not have access to any information – then you will need to use some form logical assumption, as follows:
- Small firms/brands will generally have low marketing budgets, resulting in quite low levels of awareness and vice versa. Therefore, awareness levels should be higher for larger brands.
- Consider awareness relative to the size of the target market. If you have a small firm/brand and they are targeting a relatively small target market, say consumers that visit a particular shopping center (as they are a retailer in the shopping center) – then they should be able to generate a relatively high level awareness of that small target market.
- But if they define the target market as a whole city, when they only operate in one shopping center, then the awareness would be very low.
- Consider the type of promotional media. For example, mainstream TV advertising has a significant impact on awareness, as opposed to online advertising which is more designed to execute a sale.
Rule-of-thumb: If you have awareness in excess of 20%, then you will need a supportive underlying marketing plan that will help deliver this level of new product awareness.