Does TV Advertising Still Work? My Digital Life TV Interview with Shelly Palmer

In a recent post, “The 5 Truths of TV Advertising Effectiveness,” I discussed some of the empirical truths that we know from research about how TV advertising really works.

Shelly Palmer, author of “Television Disrupted: From Network to Networked TV” (highly recommended), picked up on my blog post and asked me to join him for a discussion of TV advertising effectiveness on his program “Digital Life.”

Digital Life with Shelly Palmer

In our interview, Shelly asked three important questions:

1. Does TV advertising still work?
2. How do advertisers address the growing challenge of media fragmentation?
3. Are TV ratings likely to be supplemented with other “currency” metrics in the future?

Urban Media Myths — Our conversation started with urban myths in the media & marketing world. Debunked myths included the widespread belief that TV viewership is declining (it’s not, program ratings are) and that TV advertising is gradually losing effectiveness (also not true, it’s as effective as ever).

Program Enagagement & New Currencies — A second focal point was the concept of program engagement, or how attentive and engaged viewers are to a television show.  Shelly was intrigued by the program engagement concept and whether TV ratings as a currency could be supplemented by TV program engagement as a secondary currency.

Rob Norman – GroupM Interactive — Interestingly, the concept of program engagement seeped into Shelly’s interview with Rob Norman, CEO of GroupM Interactive Worldwide. Rob and Shelly discussed how TV advertising remains valuable in promoting brand visibility. Rob offered the example of Super Bowl ad buzz, which marketers can measured by the synergy between paid media and earned media.

For more of our discussion on TV viewership and program engagement  — which Shelly pointed out “is fantastic and needs to be discussed a lot more” — check out the video below:

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What Drives Branded Integration Success?

From my January 19th guest post on Joe Pulizzi’s blog  Junta42:

Instead of using your own content marketing to surround and reinforce your brand, what if you put someone else’s TV program content around it instead ? Branded Integrations, done right, use TV program content to drive your brand. The problem, though, is that most Branded Integrations come about by happenstance and not by use of proven tools and techniques. Here’s how to successfully use Branded Integrations as part of your Content Marketing portfolio.

Branded Integration – A Short History

Branded Integration has a long history, arguably as old as publishing itself.  The Lifesavers brand was integrated into the 1932 Groucho Marx movie “Horsefeathers,” and Spielberg’s “E.T.” featured the first paid candy integration: Reese’s Pieces. National Geographic had a starring role in the 1946 movie “It’s A Wonderful Life.”

Reese's Pieces in "E.T." -- the first candy branded integration.

Procter & Gamble and Unilever sponsored soap operas continued the trend. More recently, companies have taken branded integrations even further with video games and even programs designed around TV commercial characters (Geico Cavemen).

Given this long history, it should come as no surprise that Branded Integration is big business: PQ Media estimated 2006 product placement spending at $3.1B.

Is This A Good Idea ?

Being big and being good aren’t always the same thing. Does Branded Integration really work? Certainly, the large spending would lead you to think so. However, the usual process for developing branded entertainment – haphazard and creative driven — often leaves something to be desired. A branded entertainment company executive once explained the process something like this:

“The studio sends us a script. We break it down. We look for our clients demographics and then we tell our client this movie is available with this actor, with this director, with this producer, do you want it?”

Is this really the way companies should be deciding to spend $3.1B a year?

Beyond the :30 spot: Marketers need criteria for executing branded integrations

What Really Drives Branded Integration Results?

There are four keys to making Branded Integration work as Content Marketing for your brand:

1.  Choose the Right TV Shows – The best way to get high brand recall and brand opinion shift from your Branded Integration is to pick a show that fits with your brand and has high scores historically for Branded Integrations. Predictive models which isolate the factors most impacting brand recall, opinion shift, and fit with brand generally show that over 50% of the models’ variation are driven by TV show selection. Fortunately for Marketers, there are now syndicated panels which measure TV program Branded Integration effectiveness – so you can know a program’s track record ahead of time.

2. Design the Most Impactful Integration – Having selected the right genre and program for your integration, don’t just rely on the network and agency to tell you what the integration will look like. You need to negotiate for what really works. And what works, based on predictive modeling, is the following:

• Involve Your Brand Longer – The duration of the integration makes a big difference; longer is better
• Visualize Your Brand Icon – Don’t accept just an audio appearance; your brand needs to be visualized
• Have Your Product Touched or Worn – It’s key to have characters physically interact with your product
• Connect Your Brand to a Main Character – Physical interaction is good, but interaction with the main star is even better

These factors have been proven through research to be the most important creative factors in determining brand integration recall and positive brand opinion shift. Make sure that your execution includes them.

3.  Advertise Your Brand During the Program – This seems obvious but is often overlooked. Nielsen IAG research shows that ads aired during a program with the same brand integration generally score better for recall, branding and likeability than the same ads aired outside the Branded Integration program. Said simply, there really is “synergy” between your Branded Integration and your ad in the same program.

4.  Execute Branded Integrations in Multiple Shows in a Season – Continuity is key. If possible, negotiate for a series based branded integration, instead of an episode. Why? Having a Branded Integration in previous episodes of the same series raises brand recall and brand opinion by about 1% per previous episode — for example, take Subway’s series integration in NBC’s “Chuck.”

Subway's integration in NBC's "Chuck" not only increased sales, but saved the series.

Where Should Marketers Focus ?

Adding Branded Integrations to your content marketing portfolio provides another way to drive engagement with your brand (for more on content marketing, see “Build Your Brand with Content Marketing”). But, don’t just walk blindly into it. Choose the right programs, design the integration for greatest impact, advertise during the program and deliver integrations consistently for maximum impact.

So the next time your Agency calls with their next “BIG” branded integration idea, do your brand a favor. Ask the tough questions: Why is this the right show? How will the execution optimize impact? What’s the proposal for integrating my ads? Is this part of a longer deal? Most importantly, negotiate from a position of strength: use historical data and learnings about what really drives Branded Integration success to add another powerful element to your Content Marketing mix.

 

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Learning From the Dynamics of Viral Marketing

In what context do viral marketing strategies work? How do on-line product recommendations develop, multiply, spread and ultimately, dwindle and die? And, can Marketers influence any of this?  

These were important questions posed by Leskovec, Adamic, and Huberman in their 2008 study “The Dynamics of Viral Marketing.” This is one of the few studies I’ve seen to actually study how on-line recommendations grow virally and how this growth impacts purchase behavior throughout the viral network.  

Viral Marketing -- When and Where Does it Work?

 

Admittedly, the study had limitations, notably that it was only four categories, just measured on-line viral activity, and included a discount incentive to help motivate purchase. But, even with these limitations, it uncovered deeper insights into the systematic patterns in knowledge sharing and persuasion online—all of which are of high interest to Marketers.  

What Did the Study Entail?

Lescovec et al. examined an online recommendation network composed of 4 million people who made 16 million recommendations for 0.5 million products. Each time a consumer purchased a book, music, or movie, he or she could  send e-mails recommending the item to friends. The first person to purchase the same item through a referral link received a 10% discount.  

What was Measured

• When and at what price a product was purchased
• If the product was recommended to others
• Whether the recommendation resulted in a subsequent purchase and discount

They then modeled the effectiveness of recommendations as a function of the total number of previously exchanged recommendations.  

Recommendation Networks Grow Slowly Over Time.

 

Important Viral Network Learnings & Insights

Finding #1:  Consumers recommended a large number of products to the same group of people. As a result, recommendation networks became heavily locally-based. For example, in the DVD recommendation network there are 182,000 pairs that exchanged more than 10 recommendations.  

Consumers Tend to Recommend Products to the Same People

 

Finding #2: Recommendation networks centered on a specific product category. That is, the people tended to focus on recommending a particular product category and thus created a “community of interest.” Having said this, most all networks shared recommendations for all types of products.  

Finding #3: Trust, influence, and perception of “spam” affected purchase. As people exchanged more recommendations, the likelihood they would purchase the product increased due to a growing foundation of trust. However, purchase likelihood increased, peaked, and then fell as consumers received additional recommendations for a specific product. A few recommendations built credibility; too many appeared as “spam.”  

Finding #4:  Most recommendation chains didn’t grow very large. In fact, most terminated with the initial product purchase, and even the largest connected networks were very small as a percentage of the total population.  

Recommendation Chains Don’t Typically Grow Very Large

 

Finding #5: 20% of recommendations accounted for 50% of sales. This is not far from the usual 80-20 rule, where the top 20% of products account for 80% of sales.  

What are the ‘Viral’ Implications for Marketers?

1. Identify the “Amplifiers.” Given that 20% of recommendations generate 50% of sales, it’s key to figure out whom the amplifiers are and focus your efforts on them.  

2. Determine Where the “Amplifiers” Congregate. Where do they exchange product information? On what platforms do they consume media? Web behavior can be linked to off-line purchase panels to quantify the effectiveness of recommendations (see “What Really Drives Web Advertising ROI”).  

3. Take Online Recommendation Networks to the next level Through Social Media Marketing. Marketers should explore development of models to measure recommendation systems on Twitter, Facebook, Foursquare, and the larger online arena. Through broader web 2.0 outreach, marketers can quantify consumer engagement on recommendation networks by volume, reach, tone, and source.  

Marketers can optimize paid media and earned media with viral marketing.

 

4. Be Wary of Creating “Recommendation-Fatigue.” A fine line exists between trust and influence in recommending a product and what is widely considered “spam.” Consumer engagement via any online channel must be done with careful consideration of earned media and buzz promotion.  

Viral Marketing: Limitations…

What’s not yet so clear from the research is how to minimize transmission “breakdown” – e.g. how do you minimize the likelihood that a product recommendation is the last one. As the research showed, most viral networks don’t grow very large. Marketers will only invest significant money if they can truly scale viral marketing programs.  

…And Future Opportunities

With the right tools and metrics, marketers can diversify their marketing plans to incorporate viral marketing strategies. The research clearly shows that viral marketing can build unique and niche recommendation networks, bolster consumer engagement, and lift sales.  

And as consumers continue to favor a digitally-based, social network-centric world, it’s critical that Marketers become more expert at viral marketing. Key to this will be identifying amplifiers, focusing on congregation points, leveraging social media opportunities—all without overdoing it. As importantly, Marketers must discover new approaches to spread and scale viral marketing just as effectively as the flu seems to proliferate every flu season.  

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