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.”
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.
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.
- 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.
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.
- 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.
- 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.
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.