Addressing the Trust Deficit in Advertising

Consumers increasing lack of trust doesn’t begin and end with government and other large public and private institutions. It applies to advertising as well. This should hardly be a surprise to anyone. Who trusts ads anyway?

What’s surprising is that advertising continues to work as well as it does when the majority of consumers say they “don’t trust (advertising) much or at all.” This is, no doubt, due to the creative power of great advertising—its ability to entertain as well as sell. Advertising works despite itself.

Trust in Advertising – Paid, Owned and Earned

In a recent Nielsen global study (disclosure: I work at Nielsen), all forms of paid advertising—TV, Print, Digital, Radio, etc., fared poorly on the trust factor. Conversely, and not surprisingly, “recommendations from people I know” scored highest on trust, with 92% of consumers trusting this source completely or somewhat. Owned media, such as brand websites, scored higher than paid advertising, but lower than social recommendations.

Trust In Advertising

Now What ? The Convergence of Paid, Owned and Earned

Now that we’ve demonstrated what many of us already knew, what should we do about it? Does trust in advertising even matter? If so, can we even do anything about it?  After all, the only advertising that most CMO’s control is their own (and some Ad Agency people would even debate that).

Since trust is a continuum , moving from earned (highest) to owned and then paid (lowest), it stands to reason that brands should want more earned and owned media. But giving up paid media? For most brands, this isn’t really feasible given both the broad reach and historical success associated with paid media.

Instead, we need to start thinking of how Paid, Owned and Earned media can work together to improve trust and deliver better results. Marketers continue to discuss them as if they are separate and discreet media. They’re increasingly not.

Technology is blurring the lines of paid, owned and earned media.  Paid media can now also be social. Social is often about paid. Owned media can have paid embedded in it. And sometimes, all three can exist in one consumer touchpoint. What’s a CMO to make of this trend?

3 Examples of Paid, Owned, Earned Convergence

1.       Paid Ads Work Harder with Social

What actually happens when you combine social and paid advertising? Research on Facebook ads with and without a social layer (Jimmy, Billy and 8 other friends are fans of Brand X), shows that social ads generate much stronger breakthrough and purchase intent than ads without a social layer. Why? Knowing that the advertised brand is liked by our friends builds trust.

Paid Advertising Works Harder with a Social Layer

2.       Paid Digital Advertising Drives “Owned Media” Usage

Digital advertising can drive consumers to a Brand’s owned media. In the example below, we look at the effectiveness of four different brands digital advertising in driving consumers to their respective web sites. Brands A & B were far more successful in doing so than Brands C & D.

	Brand A	Brand B	Brand C	Brand D
% of those exposedto the online display campaign that went on to visit a brand’s site post-exposure	4.7	5.2	1.0	1.2
% of those not exposedto the online display advertising who visited a brand’s site	0.5	0.4	0.2	0.3

3.       Owned Can Work Harder Than “Paid Media”

What about owned media? Does it work once consumers arrive? One way of understanding this is to measure the off-line sales impact of those consumers exposed versus not exposed to your brand’s website. In the example below, we can see that exposure to Brand X’s owned digital media drove almost 3x the sales lift of paid digital ads alone.

Owned Media Can Work Harder than Paid

The Opportunity – Putting it All Together

Addressing the truth deficit in advertising is more than just making ads that are, well, true. It’s also about how to use paid, owned and earned media to your brand’s advantage.

Using the example above, why not build social into your paid advertising (where possible), use your paid ads to drive consumers to your website, and optimize your site to drive maximum on or off-line purchase? Why not experiment with the myriad of ways to engage your consumers across the paid, owned and earned continuum?

Because I’m betting that overcoming the trust deficit in advertising isn’t about making ads that aren’t misleading or exaggerated. It’s about adding in social and owned media experiences in ways that gives paid media more legitimacy and enables it to work harder for your brand.

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How to Make “In-Game” Adjustments to Improve Advertising ROI

Imagine a coach who only shows up after the game to find out the final score. No half-time adjustments, no in-game adjustments based on what’s working and what’s not.  Is this good coaching? Of course not.

Advertiser as Coach -- Why Advertising ROI Isn't the Final Score

The final score is just that–a final score. It doesn’t say anything about what caused the game to be won or lost, and more importantly, what adjustments could be made throughout the game to win.

Measuring advertising ROI only is like a coach coming to the game after it’s over to learn the final score, and then declaring victory–or defeat.

Coaching After the Game is Over

In my last post, Driving Higher Advertising ROI Without Big Data, I described the apparent disconnect between the growing avalanche of “big data” and CMO’s continuing frustration with their inability to measure marketing effectiveness.

Given this, the 3R framework of Reach, Resonance and Reaction is a simple, yet powerful framework for evaluating advertising effectiveness. As important as it is to measure sales impact, measuring advertising ROI is not the be all and end all.

The 3R framework illustrates why this is the case. Reaction is the outcome, the end product. It is the product of Reach and Resonance–they are both drivers of Reaction. Even when Reaction is strong, Reach and/or Resonance aren’t always optimized. And this is the opportunity for the advertiser to coach–during the game.

A Simple Case Study — The Power of In-Flight “Coaching”

A client invested a significant amount in a broadscale digital campaign:

• Target (disguised):  males, aged 21-29
• 100 million impressions
• Mix of banner ads, rich media, on-line video
• Multiple creative units
• Multiple web sites

Now, let’s work backwards:

Reaction — How well did the campaign drive sales ?

The campaign delivered +22% sales lift among those exposed to the ads.

How do we know this? The digital ads were tagged, and sales lift was measured via off-line purchase panels among those people exposed to the ads versus those not exposed.

This looked like a huge victory: what’s not to like about a +22% sales lift ? Let the celebration begin…

Reach — How well did the campaign reach males, aged 21-29?

Of the 100 million impressions delivered, only 60 million hit the target. So, 40 million impressions hit women, or men older than 29, teens, or some other group other than males aged 21-29. Obviously, the campaign was not well targeted. In my experience, this is the norm, and not an exceptional case.

But the campaign also wasn’t well planned: the reach was <10% and the frequency was 50+. Most consumers exposed to the campaign were almost certainly exposed way too much. And way too few target consumers were not exposed at all.

This kind of data is available now on a daily basis. Now, if it was just before halftime and you were coach, what would you do with numbers like these ?

Resonance — How well did the advertising break-thru and change consumer attitudes ?

Overall, the campaign performed slightly above norm. Ad recall was well above norm and branding was generally solid–good news and consistent with the sales results.

However, performance varied tremendously across creative formats, creative units and web sites. On-line video performed best, followed by rich media and banner ads. Of the 10 creative units, 3 performed well below norm. And of the 8 web sites, 2 performed well below norm.

Now, if was the end of the 3rd quarter, and your we looking at results like the above, what would you do ? Most likely, you’d move spending out of low performing ads, ad formats and sites, and reallocate them to higher performing ones.

Optimizing Advertising Performance “In Game”

It’s clear in hindsight that the campaign wasn’t optimized. The campaign clearly drove a sizable sales lift among those people exposed to it. If the client had measured results in flight and made adjustments along the way, the sales lift would have been higher, and among a much larger group of target consumers.

As the example above illustrates, it’s not enough to  just measure the sales lift of the advertising. This is like measuring the game’s outcome, without coaching throughout the game.

There are other important factors which are critical for you as the advertising “coach” to do to optimize advertising performance in-game:

• Understand whether you are reaching the right consumer with the right reach and frequency.
• Make sure that your campaign breaks thru and changes consumer opinions–across all creative units and all sites.
• Measure all of the above in flight, in real-time, so you can asses what’s happening and quickly make decisions to change your plan to optimize the campaign and generate the best possible result.

So, what are you waiting for? Don’t be like many advertisers and be content to simply measure the final ROI score. Or, just take Yogi Berra’s famous advice to constantly coach, adjust and optimize during the game, because:

“It ain’t over till it’s over.”

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Innovate 1st Interview Part 2 – Real Time Measurement Challenges in Advertising & Media Effectiveness

I was recently interviewed by Innovate 1st for an upcoming edition of Innovate eZine’s “Conversations on the Cutting Edge” series. This is the 2nd set of excerpts from the interview, which was conducted by Doug Berger, Managing Director, The INNOVATE Company.

To read the full interview series, start with my earlier blog post: “Challenges in Advertising & Media Effectiveness.” 

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Real Time Advertising Measurement

Doug:        How do you do that (measure your TV ad performance literally the next day and know how you’re doing) ?

Randall:     There are syndicated services; Nielsen has one with 5,000 to 7,000 panelists a day going to a panel website (disclosure: I work for Nielsen).  After they log in, they are asked what TV shows they watched the previous day.

Because Nielsen knows what ads were running in those programs, they can not only ask questions about the programming and how engaging it was, but they can also ask questions about the ads that were in those programs.  Then they generate a report on how your ad of the previous day was performing.

TV Viewing Data: What Shows People Watch & What Ads They See

Doug:        In that particular case, the pre-selected panels already have the demographic and the profiling information to slice responses any which way an advertiser would want.

Randall:     That’s exactly right.  This is setting the stage for where things are going in the future.  Another big macro trend is that consumers are increasing overall media consumption.  There’s a commonly held belief that TV is dying.  This is not true.

Actually, people watch more TV today than they did a year ago, and they watch a lot more TV today than they did ten years ago.  What is happening is a proliferation of channels, more TVs per household, a better viewing experience with large, hi-def TV, and you’ve got blockbuster content like ‘Dancing with the Stars’ and ‘American Idol.’

The bigger issue as social media and digital expand is how you bring these things together in a very smart way, because TV is not going away.  It’s changing, but it is not going away.

Doug:       You are looking at predictive models, as well as the variables that drive brand equity.   What are some of the other key drivers that you are discovering about brand building?

Randall:     We just did a study of 30,000 ads. The analysis shows that there are three big drivers.  One is the creative quality itself, which is not really a surprise.

The second driver, also not too surprising, is media weight … the more media you put behind your ad the higher the general recall.

What is surprising is the impact of programming.  In the modeling work we’ve done, the impact of the content within which your ad sits is just as impactful as the creative quality itself.

There are three ways in which programming affects the performance of your ad in-market: program engagement, program genre, and program synergy.  We’ve already discussed program engagement, or attentiveness.

TV Programming Impacts Ad Recall

Beyond this, we see that certain brands or products perform better in certain genres than others.  For example, alcoholic beverage ads score much better in sports vs. non-sports programming; over-the-counter drugs tend to not score well in sitcoms.  A client once asked me, “Why is that?”  I said, “Well, being sick is not funny.”

An example of program synergy would be putting an ad for Slim Fast in ‘The Biggest Loser.’ A lot of this is intuitive and not surprising.  The difference is that today all of this is measurable.

Doug:        What have been some of the key insights and learnings around linking brand to profitability?

Randall:     We are still in the infancy of knowing how to do that.  One of the learnings is the need for different equity measurements.  Single source measurement enables advertisers to see at the household level, with permission of course, exactly what people are watching on TV; what they’re doing online; and then it allows you to look at what those same people are actually buying.  You can literally create an exposed/non-exposed set of households to your advertising and see exactly how the consumption changes.

This is really powerful, and as these systems scale up they will allow for much more granularity.  Instead of looking at women 18-34 years old, you’ll be able to drill down to view a lapsed soda user, or a Coke user, or even a lapsed Coke user.  You’ll be able to find those people and measure how advertising impacts them versus a group that didn’t see the advertising.

Next:  Social Media Myths and Truths

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Innovate 1st Interview: Challenges in Advertising and Media Effectiveness

I was recently interviewed by Innovate 1st for an upcoming edition of Innovate eZine’s “Conversations on the Cutting Edge” series. Following are excerpts from the interview, which was conducted by Doug Berger, Managing Director, The INNOVATE Company.

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Doug:  What have been the critical challenges around advertising and media effectiveness?

Randall: You can simplify it to the two most basic and important objectives of most advertisers: they want to build their brand and they want to build profitability linked to their advertising.  Everything else they’re doing through advertising is ultimately to contribute to those two end goals.

Companies have been pretty good at measuring brand equity … what consumers think of when they think about your brand.   If you are Bounty paper towels, you want to own ‘getting spills up faster.’ 

Unfortunately, even though brand equity has been measured well, it’s been a scorecard statistic.  No connection has been made to the causes of brand equity increase or decrease, and then to business results. On both of these high level metrics, brand equity and ROI, the measurement systems historically have just not been that effective.

 

Marketing Measurement

The issue on the front-end has been a lack of good understanding of the factors that drive brand equity….there has been no way to look at advertising and media exposure and say, ‘Okay, this advertising or these media choices drove a bigger change in brand equity than these other ones.’  On the back end, it’s rare that Marketers can actually link changes in brand equity scores to changes in business results.

Doug:  Let’s dive deeper into this …what have been some of the new trends and developments in advertising and media effectiveness over the last 10 – 15 years?

Randall: The state of the art in measuring advertising and media effectiveness has come a long way.  The more sophisticated companies are now using market mix modeling to understand the relative impact of different parts of their advertising and media allocation. 

It’s being able to look at the individual variables in your marketing plan, like TV versus print, versus digital, versus radio, versus couponing, and then measuring the impact of each of those on an individual basis, on overall sales outcomes.  Big advertisers have really moved the ball forward in their ability to do this, and it helps them apportion their marketing expense.

 

Cross Media Fusion

Doug:   So, you have really been able to look at individual media choices within your portfolio and measure the effectiveness on brand and profitability of the different media choices.

Randall: Yes.  Although, we consistently hear from clients that as good as market mix modeling is, it does break down in certain areas.  About a year ago we partnered with a major consulting company and interviewed C-suite executives at advertisers, media companies, agencies, and technology disruption companies.  These were the issues we that heard:

First, we are still largely targeting based on demographics. Yet, we know that we need to be targeting based on either attitudinal profiles or behaviors, but it is really hard to do that, particularly in the world of TV, where demographic buys still rule.

Secondly, people know intuitively that eyeballs aren’t all created the same in media.  They want more than reach and frequency.  They want to know, are consumers actually engaged with the programming within which ads fit, and does that actually impact the ad performance?  For example, we know from our data that the more attentive a viewer is to a TV program, the more likely they are to recall an ad in that program, all things being equal.  You can place the ad in a very highly engaging program like ‘Lost’, or a low engagement program, and you’ll see that the recall is hugely different.

Another area that is very challenging is cross platform.  We often hear from clients that they believe the impact of their advertising on consumers who have seen the advertising across different platforms, like TV, print, digital and so forth, are more effective than if the consumer sees them individually.  However, there are not good ways to measure that.

Granularity is another issue … understanding within digital media how each of my eight different banner ads performed across 12 different websites.  Advertisers want to know not only was their digital effort effective, but where are the opportunities to optimize by creative unit, by website, and so forth.

 

Online Ads

One of the biggest trends is the move from after-campaign-measurement to measuring in real-time.  In after the campaign measurement, you run a campaign for nine months, collect the data, build the model and then say, ‘Okay, here’s how your TV performed versus digital, versus radio, versus couponing, versus print, etc.’  That’s great, except it’s too slow.

Advertisers increasingly want to measure the advertising performance in close to real-time so that they can make on-the-fly optimization decisions.  They want predictive models so that within the first two weeks of their campaign, they can measure granulated effectiveness and make creative or media mix optimization decisions. 

Ten years ago, when I left Procter & Gamble, it took three months to measure your ad’s performance in-market.  Today, you can measure your TV ad performance literally the next day and know how you’re doing.

Next:  Measuring in Real Time

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Driving Desirable Digital Behaviors with TV Advertising

Things are not always what they seem. Two TV ads score the same—in copy testing or in market—so they’re equally effective, right? Not always.

TV: Driver of Consumer Digital Experiences

TV ads don’t just deliver awareness, message recall, etc. They drive behaviors—some of which are digital–and good for your brand.

Cross Platform Ad Effectiveness

Marketers increasingly want to understand how advertising works across mediums—particularly TV and Digital. Some of the more frequent questions I hear from CMO’s are the following:

• What’s the value of a Facebook fan?
• What’s the role of search in the customer journey?
• How I use the web to drive greater engagement with consumers?
• How can I drive more word of mouth and buzz for my brand?

These are all great digital questions. And lots of people have tried to answer them with digitally focused analysis—some effectively, some not.

Building Brands & Online Buzz

Another Way to Think About TV Ad Effectiveness

Here’s a different tack:  what if we analyzed these questions, not from a digital only perspective, but from a TV advertising perspective? Or, to say it differently, what if we were to ask the question as follows:

“What role does TV advertising play in driving desirable digital behaviors?”

TV & Digital Viewing Behavior

This has been a tough question to answer. Who’s going to keep a diary of what they watch on TV and then the myriad of things they do on-line? The fact is that our understanding of TV and Digital viewing behavior has been mostly limited to knowing how many people did what.

Just as important is understanding not only what people are doing, but in what sequence. And after viewing what ads? New single source viewing data opens up new possibilities for understanding media behavior:  it’s now possible to observe (with viewers permission) both what they watch on TV and what they then do on-line.

Next Generation TV Ad Effectiveness

So, back to the opening question. Two TV ads score the same—in copy testing or in market—so they’re equally effective, right? The answer: not always. Why?

Here are 4 new ways that TV advertising can drive positive digital behaviors.

1.  Drive Consumers to Your Facebook Fan Page – Many brands have embraced Facebook and are building Fan pages as opposed to their own branded websites. They see the advantage of “social” currency and a key objective is building the number of Facebook fans.

TV advertising has a role to play here:  more effective ads can drive more consumers to your brands fan page than less effective (or no) ads. Seen in this light, TV can play an essential role in your digital plans–even when the messaging doesn’t explicitly have a call to web action.

Facebook Fan Pages & Brands

2.  Drive Consumers to Search for Your Brand – Companies across all industries have embraced search, even in CPG, and for good reason. It works. Of course, paid search costs real money. So, how to drive more organic search for your brand? Well, one way is with your TV advertising. What portion of consumers seeing your TV ad go on-line and search for your brand?

3.  Drive Consumers to Your Brand Web Site – Like Facebook Fan Pages, many brands have their own website to engage and deepen the relationship with consumers. Question: is your TV advertising driving consumers to your website? Which ads are more versus less effective in doing so?

4.  Drive Consumers to Talk About Your Brand – Research from Keller-Fay has shown that approximately 1/3 of word of mouth is about TV advertising. How effective is your TV ad at driving word of mouth? Are two TV ads which score equally well on traditional ad effectiveness metrics driving different conversation levels about your brand? If so, one is clearly more valuable than the other (assuming the conversations are positive).

Capital One Mascot Challenge: Driving Consumers to Website

Driving Desirable Digital Behaviors

All of the above represent new ways of thinking about TV ad effectiveness. Traditional measures of TV advertising performance around breakthrough and branding will continue to be important.

But increasingly, Marketers need to think about how TV advertising drives other behaviors—particularly digital ones—that benefit their brands.

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