Why Social + Mobile = Shopping

July 27, 2010

What happens when you take two hot growth areas—Social Networks and Mobile–and combine them with good old fashioned shopping? You get a phenomenon people are just now beginning to understand: the convergence of Social, Mobile & Shopping—let’s call it SMS for short. 

SMS - Social, Mobile & Shopping

 

What’s the SMS convergence? It’s the increasing ability of shoppers to use social networks to inform their shopping experience, access information about products, and broadcast their product experiences – all in real time via their mobile phone. 

Let’s look at the trends in Social Media and Mobile that are powering this convergence. 

Social Media Trends

  • Social networking penetration is increasing.  Facebook now has over 500 million users, growing its user base by +69% from 2009 to 2010.
  • Consumers are spending more time with social networking.  In the past 3 years, the average time spent has risen from 2 to 6 hours per week.
  • Social networks are mass.  There are now more people aged 50+ using social networks than people <50. They’re not just for students anymore—anyone can be reached thru social networks.

Facebook: Social Networking Growth

 

Mobile Trends

  • Penetration is growing. Within 10 years, there will be as many mobile phones in use as there are people on the planet.
  • Smartphones are taking over.  Smartphones are growing disproportionately fast. It’s projected that by the end of 2011, more people in the U.S. will use Smartphones than standard cell phones.
  • Usage is becoming more sophisticated.  With more Smartphones, come more apps. The average Smartphone user has 22 apps versus only 10 for regular cell phones.

Smartphone Penetration (image from Nielsen Wire)

 

How Social Networks & Mobile Intersect

The stats above probably confirmed what you already knew: Social Networking and Mobile are high growth areas. What you may not have realized is this: Social networking and Mobile are increasingly intertwined. Specifically, social networking apps are: 

  • #1 on the iPhone
  • #1 on the Blackberry
  • #2 on Android phones

It’s easy to see where this is all going. Social networking on Mobile is going to get bigger, more sophisticated and more enabled over the next few years. And this has some interesting implications for shopping. 

Social Networks & Mobile

 

Enter Shopping – A Social and Information Driven Activity

Social networks and Mobile are ideally suited for shopping. Why? 

First, shopping is a social experience.  People love to shop, but they really love to shop with other people. Unfortunately, this isn’t always possible. Enter Social Networking on Mobile. 

Second, shopping is about finding the right product at the right price.  This requires information. Consumers can access the opinions of their friends and acquaintances as they shop. And they can get real time access to valuable information—pricing, quality, etc.– about products and services. 

Third, people love to share their experiences with products and services.  Going forward, consumers will be able to broadcast their own shopping experiences via mobile, to both friends and others, and in close to real time. Had a bad experience with the service desk? Consumers will tell everyone they know—before they leave the store. 

Social Media & Shopping: Users Share Experiences

 

5 Actions for Marketers

The SMS convergence has numerous implications for Marketing organizations. Here are 5 to think about: 

  1. Brands must be open and transparent to win in this environment.  As I wrote in a previous post,  consumers are becoming more knowledgeable about your product and your company. The merging of Social and Mobile only accelerates this trend. Brands cannot afford to hide.
  2. Brands have an opportunity to improve their consumers shopping experience. Brands can now create apps and content that make their target consumers’ shopping experience better. Better could mean simpler, easier, more social, or any other improvement that’s relevant to their shopper.
  3. Brands must invest in creating Social CRM capabilities. Jeremiah Owyang has written extensively about the need for Marketing organizations to create social CRM capabilities. That is, to create a function to listen and engage with consumers in authentic dialogue about your brand.
  4. Brands can drive Social Shopping.  Making the buying process part of a social event is increasingly feasible. Disney recently created a Facebook app which enabled friends to buy movie tickets for the same movie. This is a great example of social shopping.
  5. Brands should experiment with shopping based App advertising.  The advent of Apple’s iAd system opens up a whole new advertising platform. This will create all kinds of new opportunities to advertise to consumers in context relevant ways. Imagine your target consumer walking into a store, snapping a photo of the UPC of your competitors’ product via a shopping app to learn more. Is this a place you might want to advertise?

SMS – Now or Later ?

SMS, like most changes, isn’t happening overnight. So, there’s always a tendency to say “it’s not big, let’s wait to see where it goes…” But the trends are clear and CMO’s need to pay special attention. 

It would be wrong to suddenly shift huge amounts of your Marketing budget into a largely unproven set of opportunities. Yet, the most prudent CMO’s will invest in a measured approach to learning what works and what doesn’t, and ultimately learn how to win in this nascent but increasingly important space. 

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4 Ways to Better Brand Your Advertising

July 19, 2010

A friend recently sent me the CramerSweeney branding quiz, which is a lot of fun and only takes a few minutes to complete. Beyond the fun of seeing how many of the great brands you get right, it reinforced for me just how powerful great branding really is.

Building Great Brands

In my job at Nielsen, I routinely see advertising performance results for hundreds of CPG brands. And it’s surprising to me how many brands succeed in breaking thru the clutter with strong recall and messaging about the brand’s core benefit, yet fall short when it comes to communicating the brand itself.

What’s the Issue ?

In previous blog posts, I’ve written about brand salience—the ability of consumers to think of your brand when they’re in a buying situation. But the branding issue I’m describing here is specific to advertising:  when consumers see your brand’s ad, do they know it’s for your brand?

This is not just an issue of being sure that consumers know the ad is for your brand–more branding, of course, is always better. But less branding is worse, too. It’s worse in that the consumers who aren’t recalling your brand are usually recalling one of your competitors. That’s right, if your brand recall is below 50%, then it’s likely that your advertising is doing more for your competitors than your own brand–ouch!!

Brand Recall Benchmarks

Various “brand recall” benchmarks have been established over the years. Most put the desired target of at least 2/3 of recallers; that is, 2/3 of consumers or more who recall your ad should also know that it’s for your brand. Benchmarks are great, but what about achieving them? Sadly, the results are not positive. Various studies have put average TV brand recall at about 40%. So, for most advertisers, there is huge upside in simply increasing the number of people who know your ad is actually for your brand.

4 Ways To Achieve Better Brand Recall

1.  Develop and Use a Brand Icon – Use of an iconic character or visual identity can clearly increase brand recall, particularly when the icon becomes an equity thru repeated usage over time. Examples include the Merrill Lynch bull, the Geico gecko, the AFLAC duck and the Pillsbury Doughboy. Advertisers often tire of their icons before consumers do, so if you have a good one, use it.

Pillsbury Doughboy: Brand Icon

2.  Create an Acoustic Identity – Icons are not limited to visual characters of identities. Music can be iconic, too. Think of the NBC ding-ding-ding, the Intel dum-dum-dum-dum, or many other well known musical flourishes. As I wrote about in “Why Your Brand Needs An Acoustic Identity,” musical icons can be ones that you create and attribute meaning too over time (like Intel’s) or adopted from popular culture and owned by your brand thru repeated usage (as in United’s use of Rhapsody in Blue).

3.  Show and Tell Your Brand Early and Often — Research has usually shown that showing your brand early and often enhances consumers ability to recall your brand.  Showing and telling also works to improve brand recall. And finally, there is new research which suggests that showing your brand periodically throughout your commercial minimizes the likelihood that viewers will switch away.

4.  Execute Cross-Platform Advertising Plans — There’s also something you can do which has nothing at all to do with your TV creative. Run your advertising on the web as well. This is because there’s a growing body of evidence that TV ads perform better, including branding, if consumers have also seen your ad on-line. So, it turns out that your media plan can also have a powerful impact on your brand recall performance — don’t neglect this often overlooked opportunity.

Web Advertising: Branding Boosts from Cross-Platform Synergies

Better Branding for Your Brand

So, how did you score on the CramerSweeney branding quiz? If you’re like me, you probably got close to 20 out of 20 correct. Why? Not because we’re brand geniuses, but rather, because each of the advertisers made it easy to remember their brands.

How? Using a brand icon, creating an acoustic identity, showing and telling your brand early and often, and executing cross-platform media plans are all proven ways to improve your advertising’s brand recall.

No doubt your brand is above average and surpasses the 40% average brand recall. If so, that’s great. But most brands don’t, because they don’t take advantage of the basic opportunities outlined above. Do so and perhaps your brand can be in the next edition of the CramerSweeney branding quiz.

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Media Multi-Tasking: Can it Benefit Your Brand ?

July 12, 2010

How often have you watched TV while using your laptop? Have you ever used your PC while keeping an eye on the TV in the same room? If you’ve done either, you’re like an increasing number of consumers who are multi-tasking in the new media world.

Multi-Tasking Across TV & On-Line Media

In many previous posts, I’ve talked about how cross-platform media exposure works. More specifically, it’s becoming increasingly clear that TV plus On-Line exposure is more impactful than either individually. And the same “1+1=3” phenom is almost certainly true across other media combinations.

What’s next in cross-media understanding? One potential area is “simultaneous exposure,” or exposing consumers to two different media at the same time–like working on your laptop while you watch the latest episode of Two and a Half Men. In theory, this should have an even larger impact than the same message in multiple media platforms over time.

What We Know About Simultaneous Media Usage

With the advent of single source viewing measurement, the clouds are clearing and we now have a much better understanding of how consumers are using media across the 3 screens. And the reality sure isn’t “cord-cutting. ” From this viewing data, we know that:

  • ~40% of HH’s watch both TV and Internet at the same time at least once a month
  • Simultaneous viewing is highest among the oldest groups—35-49 year olds and 50+
  • Simultaneous viewership of TV and internet grew 25 minutes per week year over year

No Signs of Cord-Cutting: Simultaneous Viewership Grows

So, we increasingly see the convergence of TV and Web viewing–although there isn’t yet much evidence of people switching off their cable or satellite connections to switch on to web based TV. However, the viewing experience and TV/Web overlap is quite different depending on your starting point. For example:

  • Among TV viewers, 4% of people are also on their PC’s at any given time
  • 40% of Internet viewing is done while people are also watching TV

This means that there is a lot more clutter around when people are on their PC’s than when they are watching TV. It also means that when you advertise on-line, there’s a pretty good chance that your consumers are also watching TV. The question then, is this – can you take advantage of this dual TV/Web usage?

On-Line Advertising: Breaking Thru Ad Clutter

What TV and Web Content Are Consumers Watching Simultaneously?

An obvious thought here is that consumers are likely consuming like content across the screens at the same time. That is, if I’m watching American Idol on TV, then I’m probably also consuming American Idol content on-line—at the same time. This would certainly present unique opportunities for advertisers to leverage common cross-platform content and perhaps achieve even greater synergy across the mediums. So, what are people watching at the same time?



The answer, interestingly, is not what you might think. The reality is that consumer viewing behavior isn’t different at all due to simultaneous viewership. Said differently, consumers watch TV and On-Line in the same way–whether they are watching simultaneously or not. So, if I’m watching American Idol on TV, I’m most likely to be doing the same things I would normally do on-line—like checking e-mail, perusing Facebook, or watching YouTube videos—versus viewing American Idol related content on-line.

What Does This Mean for Marketers ?

Simultaneous cross-platform TV and Web viewership is increasing. A significant amount of on-line PC content is consumed with the traditional TV on at the same time. The mediums are becoming increasingly intertwined—but they are not producing parallel content consumption.

This means the following:

1. Advertising break-thru is more important than ever — Brands need to focus more than ever on outstanding creative that cuts thru the increasingly cluttered world of media. Consumers are more distracted than ever with media multi-tasking. Because of this, brands need to understand how engaged consumers are with programming; consumer attentiveness to programming, and the ads in those programs, is more important than ever.

2. There are more opportunities to drive simultaneous messaging — It’s true that consumers aren’t generally consuming common content as they use TV and the Web simultaneously. However, there’s still an interesting opportunity for brands to leverage simultaneous media usage across platforms. Think about the traditional TV mujlti-network “roadblock” applied across both TV and Web.

3. Digital creative needs to link more closely to its TV counterpart. The fact that 40% of PC based web content consumption is done with the TV on means that brands need to work harder to have their digital creative connect to and work in tandem with their TV advertising.

Consumer Insights to Media Insights

In my days as a Brand Manager, we worshipped at the alter of the great “consumer insight.” These insights were almost always about how, why and where consumers used, thought and felt about their brands.

Sitting here, working on this post on my laptop–and watching the TV out of the corner of my eye, it seems clear that in the future, a new kind of consumer insight will become increasingly important–media insights. And within the world of media insights, media multi-tasking is one of the more interesting areas to watch.

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Are DVR’s Killing Your Brand’s TV Advertising?

July 5, 2010

The post title really says it all—or does it? The advent of DVR’s has generated all manner of concerns about their potential impact on advertising. A menace, a threat, the potential end as we know it to effective TV advertising. But are DVR’s really making your brands TV advertising less effective? Or, is it all just hype?

Are DVR’s Killing Your Brand’s Advertising?

Ad Skipping – A Historical Perspective

Viewers have always had the option of skipping ads—even before the DVR. In the earliest days, they could switch channels, get up to get something to eat, go to the bathroom, etc.

Then came the VCR, which made recording and playback of TV shows possible, at least for those who could follow directions. If you think the DVR is controversial for advertisers, the VCR was even more so — it prompted the 1984 Sony Corporation v. Universal Studios court case on whether consumer copying of TV shows via a VCR was copyright infringement.

Pre-DVR research consistently showed that only 3% of all 30-second ads were skipped when the VCR gained a foothold in the 1980’s. And as of 2000, only 10% of VCR owners used the recording function, and an even smaller percentage skipped ads. So, advertisers continued to be willing to use TV advertising because of its broad reach and ability to engage viewers.

VCR to DVR – Engaging Viewers Despite Ad Skipping

 

Less the court case, DVR’s simply take ad skipping to another electronic level. In theory, DVR’s make ads easier than ever to skip.  So, what do we know about DVR’s?

DVR Facts

Let’s start with some key facts to know about DVR’s:

  1. DVR household penetration is 25%, which is much lower than many people assume. DVR penetration, however, continues to grow. The total amount of DVR viewing is about 15% of total viewing, and is staying relatively constant. This is because the amount of DVR usage by program is declining.
  2. Viewership data shows that about 6% of ads are skipped on average when viewers are watching programs on a DVR. This would suggest that DVR’s have doubled ad skipping versus VCR’s.
  3. Channels make a difference to whether viewers DVR or not. Broadcast is DVR’d at a higher rate than cable.
  4. Not all programming is DVR’d at the same rate. Reality and drama programs are most DVR’d (15-16%).

How DVR’s Impact Ad Effectiveness

Nielsen IAG research tells us several important things about how DVR’s impact ads:

  • DVR’s drive lower ad effectiveness. Ad effectiveness overall is -30% lower in DVR versus non-DVR households, but is not changing significantly over time.
  • DVR impact on the total ad campaign is small. When we combine the -30% ad effectiveness metric with the 15% DVR viewing, this would suggest that the average ad campaign is losing about -5% in effectiveness due to DVR’s.
  • Higher quality ads perform better in DVR households. Specifically, the most effective ads have 40% more impact when DVR’d than the worst ads.
  • Program genre matters. Ads in Dramas are less impacted by DVR’s than ads in other genres, such as Sitcoms, Reality shows, etc.
  • Last in pod Ads are least impacted by DVR’s. Additionally, multi-spotting your ad during a program does not make a significant difference in ad performance.
DVR’s, Advertising Performance & Television Program Genre

 

How Should Marketers Respond ?

Taken together, there are several important lessons here for Marketers:

  1. The overall impact of DVR’s on Ad Effectiveness is overblown. Yes, it’s true that 15% of viewing is now DVR’d. But combined with the fact that ads are 70% as effective in DVR households, the net -5% impact of DVR usage is relatively small. This is something that CMO’s should keep an eye on, but nothing that demands ringing the alarm bell.
  2. High quality creative can mitigate DVR’s negative impact. It’s a truism that great advertising creative is the most important factor in whether your campaign will build business or not. The DVR data showing that high quality creative is impacted less by DVR’s than low quality creative is just one more reason to focus on getting a great creative idea from the beginning.
  3. Media planning needs to account for DVR usage. Network, genre and pod placement all influence how DVR’s impact your advertising. Smart CMO’s should begin to demand that agencies take these factors into consideration when developing media plans.

DVR’s are pretty neat—it’s great to be able to DVR your favorite show and play it back whenever it’s most convenient for you, not the broadcaster. But, as the data above shows, they’re definitely not the end of TV advertising effectiveness as we know it.

DVR’s — Good for Advertising ?

And another thing. There’s at least two silver linings in all of this.

First, DVR’s are one of several factors that are actually driving TV viewership higher. So, there’s more opportunity than ever to connect your brand with viewers.

Second, Marketers who understand the real impact of DVR’s on advertising can build these learnings into their creative and media plans for competitive advantage.

And wouldn’t that be great for your brand—the DVR as a competitive advantage, not as a menacing technology that threatens one of your core Marketing programs.

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