CONTENTS

An Ex Post Evaluation of Generic Egg Advertising in the U.S.

Manager's Viewpoint - American Egg Board

Manager's Viewpoint - California Egg Commision

Editor's Notes

Director’s Corner

Next Meeting

NEC-63 Spring 1997 March 21-22, 1997 New Orleans Economic Analysis of Industry-Financed Research and Promotion

Manager's Viewpoint

by Louis B. Raffel
President, American Egg Board

In this issue of the NICPRE Quarterly you’ll find studies utilizing econometric models to test the effectiveness of American Egg Board (AEB) and California Egg Commission advertising. Both show positive results. That should make egg producers happy, right? Well, half right.

While there has been a lot of work developing methods to measure the effectiveness of generic advertising, there has been little done to test the effectiveness of other generic promotional activities. In the case of the AEB, approximately half the annual budget is spent on media advertising. The other half is spent on a variety of other programs ranging from food service promotion to nutrition research.

There are ways to measure some of the other activities, of course. You can survey egg producers, for example, to measure how well your producer communications programs are working. And you can count newspaper clippings to see how well your recipe releases are being used.

But it is an axiom of research that you can’t measure the negative. Can anyone measure how many outbreaks of illness attributable to eggs may have been prevented by AEB education programs teaching food service operators and consumers how to store, handle, and prepare eggs properly? And how much negative impact does the publicity generated by one egg-related illness have compared with the positive impact of one TV commercial? How then do you determine the amount of money to spend on advertising relative to food safety education?

The American Egg Board has spent millions of dollars on scientific research to determine the relationship between dietary cholesterol and heart disease. After many years, we are learning that one or two eggs a day in the diet of most normal, healthy people will have no effect on their blood cholesterol levels. Those millions of dollars were committed without knowing in advance what the outcome would be. How could anyone measure the value of fund expenditure on research in advance?

For that matter, even now that we know the results of many of the studies, how can we measure their value? Consumer research shows a more positive attitude towards eggs. How much of this is attributable to the research and its resulting publicity? How much of it was from our ability to use the message learned from scientific research in our advertising? Pardon the pun, but which came first, the chicken or the egg?

The point here, of course, is that program evaluation is not an exact science. Some programs are not measurable by the usual standards. Many of the programs are interrelated and not measurable independently. Measuring the value of one program against that of others is even more difficult, especially when attempting to determine how much of the total budget should be invested in each.

In an earlier NICPRE Quarterly, Mike Simpson, Executive Director of the National Pork Board, observed that the majority of business is done based on intuition and risk. Like pork producers, egg producers are also business men and women accustomed to doing business their way. And any of us would be hard pressed to argue that our “scientific” measurement techniques are better than their intuition and common sense.

So, while egg producers are happy to know that there has been a scientific measurement that shows their investment in generic egg advertising is providing them with a positive return, they also know that accountability is a long road and they will still have to make a lot of tough decisions without a roadmap.