Answering John Wanamaker’s Question

I recently spoke at Nielsen’s annual Consumer360 conference (disclosure: I work for Nielsen). My session was humbly titled  “Answering John Wanamaker’s Question:”

“I know that 50% of my advertising is wasted, I just don’t know which half.”

John Wanamaker's Adage: "“I know that 50% of my advertising is wasted, I just don’t know which half”

Here are a few key points from the presentation:

Current State – Measuring Advertising Performance

Market Mix Modeling has advanced the state of advertising and media measurement. Thru regression modeling, MMM can now measure the relative impact of TV vs. Digital vs. Print, etc. Some companies have even driven this to more granular measurement of ROI by TV network, creative unit and daypart.

Market Mix Modeling: Linking Sales & Advertising

However, MMM still breaks down in several important areas:

• Consumer Targeting – TV media buying is still largely done against broad demographics. Targeting consumers based on behavior, attitudinal profile, or geo-demographics is still challenging for most media.
• Engagement – Advertisers are still struggling to understand how engaged consumers are with various media and programming, and how this affects their advertising performance.
• Cross-Platform – There is a need to not only measure the performance of advertising across each communications touch point, but to also measure the interactive effect.
• Granular Measurement – Marketers want to measure advertising and media in a more granular way—e.g. by creative unit, by network, by genre, by program, etc.
• Brand Equity – Brand equity metrics are good, but are still silo’d. On the front end, there is little understanding of how advertising and media exposure drive equity scores. And, on the back end, brand equity metrics are rarely connected to business results–both short and longer term.

Brand Equity & Business Results

• Real Time – Most measurement of advertising and media impact is after the fact—great for understanding what worked for the next planning cycle, but not very helpful for the current one.

Transformational Changes

We are currently in the midst of a transformational change across these 6 dimensions:

• Standard Demos => Tighter Consumer Framing

Marketers will move beyond media targeting based on demographics to being able to target on buyer behavior, attitudinal profiles, geo-demographic location and other factors. And, they will be able to measure ad performance against any or all of these groupings.

• Audience Measurement => Engagement

New measurement is shedding light on the very important role that engagement with media plays on advertising effectiveness. Viewer engagement with TV programs, web sites, and genres all affect ad performance. In the future, Marketers will be able to plan their media efforts using these differential performance measures.

• Silo’d Platforms => Integrated Measurement

Cross-media measurement is here and synergy is real. Beyond the theories of integrated marketing communications, we can now measure the impact of ad exposure across platforms on consumer behavior. This will be another factor in how Marketers build out their plans in the future.

Comprehensive Cross-Platform Measurement

• Blunt Measurement => Granular Analysis

Measurement is becoming more granular. No longer content with high level measures such as TV vs. Digital vs. Print, etc., Marketers will increasingly be able to measure ad performance by network, by genre, by web site, by creative, by combination of touchpoints, etc.

Granular Analysis Across Marketing Platforms

• ROI Only => Equity linked to ROI

Equity measurement will move from an annual or semi-annual report card, to a real business driver. CMO’s will be able to understand how advertising and media exposure are impacting brand equity scores. And Brand Equity scores will be linked to real business outcomes—once and for all ending the “build the brand” vs. “build the business” debates.

• Post Measures => Real Time

All of the above will move increasingly to real time measurement, which I wrote about in “The Seismic Shift in Targeted Advertising and Media.” Measurement will move from a series of “dip-stick” check-ins to more continuous measurement of performance. Early data points will be used to model projected outcomes. This will, in turn, enable “on-the-fly” decision making.

Shift Toward Real-Time Measurement

The Answer:  The Smartest Marketers Will Know It

The future is closer than you think. Most of the pieces above exist today in one form or another. And, they will become increasingly connected in the future.

If you have doubts, just remember this: in the future, the smartest Marketers will almost certainly know the answer to John Wanamaker’s question. And so should you.

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Beyond Reach, Frequency & GRP’s: How Media Influences Your Brands Advertising

How much does media really matter once your brand has great advertising? Is “reach” all that counts? We now know from research that media “form factors” and “personality” likely matter greatly to advertising performance—they are performance amplifiers whose volume can either dial up or dial down your ads’ performance.

Consumer Psychographics: Media Form Factors (Image courtesy of adweek.com)

So, for example, we know that the same ad in On-Line Video outperforms the same ad on TV across key ad metrics like ad recall, brand recall, etc. The question is why? And why does this matter to Marketers?

Media Perceptual Mapping

Let’s start with how consumers “perceive” different media types. In a recent AOL/Questus study, 1800 SmartPhone users were asked questions in a correspondence analysis to generate a perceptual map of six different media channels. Granted, this is not a rep sample, but it is instructive nonetheless.

AOL/Questus Study: Media Perceptual Mapping

Observations from the Perceptual Map

• Unsurprisingly, newspapers, radio and magazines are grouped on the right side as “established media,” but with newspaper by itself—indicating lagging status.

Print News Media: Outdated?

• Electronic media, including Mobile, PC and TV are all on the left side as “leading media,” with TV and PC’s grouped together as “lagging” media.

• Interestingly, TV is separated from PC and Mobile, and from Print, Radio and Newspapers, almost in a category by itself. TV is more leading than lagging and more digital than established. TV is in a world of its own.

When you overlay attributes to the quadrants, you see that each media or media group has its own characteristics:

• Newspapers:   Boring, old-fashioned, but trustworthy and credible

• Magazines and Radio:   Passive, relaxing and influential

• PC and Mobile:   Cutting edge, cool and timely

• Television:    Powerful, entertaining and vital

Beyond “Brand Character” to “Media Character”

Clearly, each group has its own personality and characteristics. Just as brands have “brand characters” and “brand personalities,” it turns out that the 6 different media have “media characters” too. And just like brands, I think it’s highly likely that these character traits influence how consumers view the content and ads that flow through each media.

Think about it:  are you more or less likely to say the same ad is believable when delivered via an “influential” media versus a “cool” one? And which is more effective in communicating your brands special offer which ends on Saturday—a “passive” one or one that is viewed as “timely”?

Neural Based Learnings Across the 3 Screens

Let’s take this a step further. NeuroFocus, a leading neural based marketing measurement service, has done some interesting work in assessing how the 3 screens are processed by consumers. At a recent Advertising Research Foundation meeting, Dr. A.K. Pradeep of NeuroFocus outlined their learning about consumers pre-cognitive responses—e.g. those that take place in advance of conscious thinking—to TV, PC and Mobile.

Pre-Cognitive Thinking Influences Effectiveness of Ads

NeuroFocus research indicates that consumers react differently to different media. This is because consumers:

• View TV as excellent for communicating action and emotional depth

• Better engage with PC’s on dynamic content and highly personal communications

• Get a memory boost from Mobile’s small screen and concomitant focus

What Does This Mean For Marketers?

1.  Ad Performance Differs by Form Factor – Ad performance differs by form factor. The same video ad performs differently on TV versus On-Line Video. I think it’s safe to predict that when we measure it, the same ad will also perform differently on a Mobile phone or an iPad.

Form factors matter, and Marketers need to measure and understand the differences in performance to develop the most impactful media plans. Imagine the day when you have 4 different ad performance scores: one each for TV, Web, iPad, and Mobile – all for the same ad.

Ad Performance & Media Form Factor

2.  Media Character Influences Performance – Different media have different “media characters” and physical characteristics and consumers process them differently. This needs to be taken into account when thinking through how to translate your brand strategy into a media strategy.

• Television — If TV is better for emotional depth, then it’s probably more effective for brands with strong emotional benefit messages. TV also seems superior for action, especially given the ever-expanding screen sizes; brands that need to visually demonstrate their benefit in action are also likely to do better in TV. Google’s “Parisian Love” ad offers viewers both emotional depth and a call to action:

• Personal Computers – PC based communication provides depth and interactivity. This is key for educational driven brand strategies. As well, brands with highly personal and sensitive messages ought to perform better in this environment.

• Mobile – Since Mobile communication tends to drive greater memory retention, brands with a totally new message, or with limited spending, could benefit from this medium. And, of course, brands with timely and urgent calls to action should definitely be in the Mobile space.

Starbucks' Call to Action Ads: Mobile Platform

Media – More Than Reach, Frequency and GRP’s

The point is this. Media is a lot more than reach, frequency and GRP’s. The media type, the delivery form factor, and personality characteristics all influence how your advertising works.

And, of course, these are all just tendencies, not absolutes. TV can clearly deliver memorable ads, PC’s can communicate emotional depth, and Mobile can deliver emotionally laden messaging.

The key is to know each media types relative strengths and profiles, augment this with real performance data when possible, and use this knowledge to optimize your efforts in building your Brand and your Marketing ROI.

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The Home, Car, Store Digital Shopping Funnel

In a recent post, “Digitizing the 1^st Moment of Truth,” I wrote about the advent of UPC driven Smartphone apps that have the potential to radically change the point of sale shopping experience. This is really just part of a larger shift to a “Digital Shopping Funnel.”

Digital Purchase Funnel: Home-Car-Store Pathway

Today’s consumers live in a busy, sometime chaotic, world. For most consumer shoppers, their lives are connected by 3 important elements — the home, the car and the store. All three offer increasing digital opportunities for Marketers to communicate with and influence consumers.

The old purchase funnel was consumer mindset: awareness, knowledge, consideration, and purchase. The new Digital Purchase Funnel can be thought of as the series of digital interaction points along the journey from a consumer’s home to the store. How should Brands be thinking about this journey?

The Home-Car-Store Digital Journey

The Home – TV, of course, remains the dominant in-home screen and continues to grow in usage. 2009 TV usage in the U.S. was at an all time high of 35 hours per week. PC usage continues to be high at ~7 hours per week, but growth is leveling off. The most important in-home trend that bears watching is cross-platform media usage, particularly as the World Cup approaches.

New Nielsen data shows that almost 50% of consumers watch TV and are on-line concurrently at some point, and about 4% of total viewing time is simultaneous. Related, AOL research shows that 71% of consumers use their Smart Phones while watching TV.

TV & Mobile Usage: Simultaneous Viewing Trend

This means that consumers aren’t always paying attention to the TV shows they’re supposedly watching. Ever try watching an episode of “Lost” while surfing the web? If you have, then you know that you miss a lot because you’re not as involved as you could be. Involvement in a show becomes more critical than ever (see my blog post: “Why Your Brand Should Understand TV Program Engagement”).

Further, if I know that many consumers in my target audience watch “Lost” and use Facebook at the same time, perhaps I should be doing cross-platform advertising and other marketing for “Lost” and Facebook. This kind of simultaneous advertising and social media exposure across TV-Web-Mobile will become more important in the future.

Cross-Platform Program Viewing Grows

The other in-home trend to watch is on-line video. In 2009, on-line video usage increased +41%. More importantly, Nielsen IAG research shows that the same ads as on-line video are more effective than traditional network TV ads, all things equal. And, the combination of traditional TV ads and on-line video ads are more effective than either individually. All of this means that understanding cross-platform viewing and ad impact is more important than ever.

The Car – The average driver spends about 2.5 hours per day in their car, according to Arbitron. This is 2.5 hours of time that’s about to change rapidly with the advent of in-car digital media. Long the domain of radio and music, the car is perhaps the last frontier in digital mobile content. Ford recently announced that they’ve now sold 2M cars with Sync, and GM’s On-Star is now in 6M cars. What can we expect in the way-station to the store in the future?

What we can expect is car based wi-fi, web connectivity via the driver’s cell phone, mobile apps designed for car usage, and even in-car mobile TV. Of course, most of these applications will be either voice-activated by the driver, or used by passengers for safety reasons.

For Passenger Use: In Car Wi-Fi

Google is already operating in this space with its Android 2.0 upgrade, which includes a voice activated Google Maps application. Marketers are largely absent in-car at present other than radio, but the potential to deliver in-car communications, offers and other content via new digital connections is huge and largely untapped. And even radio is innovating, with Turner network offering contextual based advertising (see “Contextual Advertising: Moving Beyond the Web”).

The Store — Once in store, consumers will be able to use numerous UPC driven apps to evaluate products on price, performance, social responsibility and other important criteria. Consumers will be smarter and more informed at point of sale than ever before.

Increasingly, retailers will use their “4^th Screen” out of home digital networks to advertise and promote brands in store. Current in-store networks have already demonstrated the ability to drive significant consumption increases of brands in exposed vs. non-exposed comparisons.

In-Store Digital Networks: Important Part of the Digital Purchase Funnel

Finally, shopper marketing, including couponing, will become increasingly digital and activated by geo-location, and past shopper behavior will inform predictive analytics that will suggest products (such as, “consumers like you also bought…”), offers and other specials.

Stitching The Pieces Together

This new Digital Purchase Funnel – from home to car to store – is quickly becoming a reality. Almost all of the pieces are in-place or under development.

What’s fuzzy at the moment is how brands will stitch these home-car-store touch points together in a seamless consumer experience to maximize impact:

• What advertising combinations across these 3 points will be most impactful?
• Which messages will be most effective?
• Where can brands add the most value thru content specific apps?
• Where along the home-car-store axis do consumers want to engage or converse with brands?
• How will brands measure impact?

Our knowledge of these kinds of effects is virtually non-existent. But in the future, brands will need to answer these types of questions to engage consumers along this important Digital Purchase Funnel to win at the critical 1^st moment of truth – the store shelf.

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Digitizing the 1st Moment of Truth

When I was the Marketing Director for P&G China, our Regional Head, A.G. Lafley (later the P&G Chairman and CEO), used to come to Guangzhou, China every quarter. Part of the “review” ritual was going on in-home visits and store checks. Naturally, these visits were less about CEO learning and more about making an important point to the local organization: the consumer is the boss.

Critical Marketing Consumer Touchpoint: In-Store Experience

The entourage trooped from kiosk to kiosk, always focused on issues like: Are we in stock? Are we shelved appropriately? Is pricing in-line with objective? And so on. Part of the ritual was the CEO making sure to take unannounced detours—just in case the stores looked too good to be true. But, of course, the core of the “1^st moment of truth” was about physical in-store conditions.

In-Store Experience + Digital Information

No more. Increasingly, the future of the 1^st moment of truth appears to be some combination of the in-store experience coupled with the digital world. Ask yourself this: how many times have you stood in front of a store shelf comparing products, but really wishing you had more information—any information—before making a decision? There’s clearly a big consumer need for relevant information at the store-shelf.

Today, there are a series of Smartphone apps which do exactly that. UPC driven, these apps bring social media to the store-shelf by helping consumers consider user reviews, social responsibility ratings, and other peer feedback—right at the 1^st moment of truth.

UPC apps: Digital In-Store Experience

Why Is Digital at the Point of Sale So Important?

First, as I wrote in an earlier post “When Will Mobile Marketing Get Moving?,” it’s projected that by 2012, Smartphone usage in the U.S. will surpass that of feature phones. This means that before very long, most people will be able to download and use the apps at the point of sale. Scale is close at hand.

Second, these apps will increasingly include Social Media features so that you will be able to read product specific feedback from friends, family and peers—just before making your purchase decision. This could be enabled by Facebook Connect, built into the App itself, or by virtue of a separate Google Sidewiki application.

Facebook Connect: Allows Users to Interact With Brands In Real Time (Image from Mashable.com)

Finally, there are opportunities for these apps to create advertising applications that are geo-location or product specific. Since your GPS enabled phone will know where you are, and your UPC snapshot will communicate your category and brand of interest, this will provide a hugely relevant set of data for advertisers to use for targeting.

Apple’s recent announcement of iAd, coupled with their model of sharing ad revenue with app developers, are set to make advertising driven apps a whole lot more appealing and likely. It looks like app driven advertising is here to stay.

3 Digital Moment of Truth Apps

So, the trends are all in favor of these apps that marry the shopping experience with real time, important purchase information. What are some of the most interesting early apps in this space?

1. ShopSavvy – How many times have you stood in front of a store-shelf considering buying a product but unsure as to whether it’s a good deal or not? 81% of Americans use their mobile devices while shopping — so they can find out. Around the longest, ShopSavvy has huge potential to play havoc with retail pricing — according to Ad Age, ShopSavvy reported more than 42 million scans last month. With ShopSavvy, you scan a product’s UPC, and the app then tells you the prices at other competing retailers (both in-store and online) for the exact same item.  If it is cheaper elsewhere, they’ll go buy it—retailers are sure to love this app.
2. Sticky Bits – Launched in March 2010, Sticky Bits enables users to take a UPC photo and attach “bits” of content to it, creating a social page for the brand and UPC. Think about this for a minute: every product with a UPC can potentially have its own social media space—with all of the positive and negative potential that represents. Users can write reviews, attach comments, and generate any kind of user generated content they think is appropriate for the product.
3. Good Guide – Consumers increasingly want to buy brands that not only work, but make them feel good about their purchase decision. A big part of this is knowing that the company operates in a socially responsible manner. Good Guide enables consumers to spot check your brand’s social responsibility with scores across the product’s health, environmental, and social impact. Good Guide simply continues a trend toward Brands needing to operate in ways that are more open and transparent.

Good Guide App: Product Knowledge for Eco-Conscious Consumers

The 1^st moment of truth is set for big changes. The combination of the physical world shopping experience plus social media at the point of purchase promises to change the shopping landscape in a way that nothing has in a long, long time.

I haven’t talked with A.G. Lafley about this change (although I did talk with him recently), but I think I know what he would say: “the consumer is boss.” Meaning that the 1st moment of truth – what the consumer does at store shelf – is becoming even more important with the introduction of digital content.

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