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.
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.
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.
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.
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.