5 Advertising Game Changers

June 5, 2014

I speak frequently at advertising industry events, and probably the single most frequent question I get is this:

 “What are the biggest game changers in advertising that you believe will permanently change the way that CMO’s and their Marketing organization’s operate in the future?”

From conversations with many CMO’s, Media Heads, Agency Research Heads, etc., I see 5 big trends that will forever change advertising as we’ve known it for the past 50 years.

tv-everywhere

 5 Advertising Game Changers

1.  Content:  More Than a Pipeline – Advertisers used to think of media plans as analogous to a “pipeline.” Advertisers produced ads, and publishers provided content, which acted as a “pipe” to pump the message to end consumers. This is an overly simplistic view of media plans; a better analogy would be content as a “trampoline,” where content provides “bounce” to advertising effectiveness.

It does so in two ways: attentiveness and context. When viewers pay more attention to content, they also tend to pay more attention to the ads in that content. So, content or programs which have higher attentiveness also drive high ad performance. Similarly, program context also impacts ad performance. Benefit consistency (sports clothes in sports programs; weight loss foods in weight loss programs, etc.) help ads outperform the same ads in content with less relevant context.

Attentiveness and context are not new concepts. But measurement of them is, and advertisers are increasingly taking advantage of this knowledge.

2.  Media Planning: More than Audiences – All of the media agencies are being asked for more from their clients—more cost savings, more foresight, more analytics, but more than anything—more brand and sales impact from their media plans. This means that traditional media planning is morphing from being mostly about audience and costs—e.g. reach, frequency, GRP’s and cost per 1000, to brand or sales impact.

This has two implications. First, agencies are beginning to incorporate impact based metrics into their media plans. Instead of GRP’s, there will be “effective GRP’s,” where brand or sales impact is factored in. Second, agencies and advertisers will begin to pre-test media plans. Instead of simply looking at audience and cost metrics, agencies and advertisers will begin using simulations to look at projected brand and sales impact as well.

3.  Real Time: More than After the Fact – Everything is moving digital, and one of the benefits of digital is measuring your advertising with granularity and speed.

Two examples: Currently, over 20% of display ads are auctioned thru Real Time Bidding DSP/SSP platforms. Buying audiences in real time is going to get even bigger and more granular, as DSP/SSP platforms become more sophisticated and are fueled by increasingly granular data sets.

And, audiences won’t just be bought in real time, they’ll also be bought for sales impact. Digital attribution modeling now employs daily regression modeling at the individual person level to measure sales impact by touchpoint, including by web site and placement. The move to real time is real, inexorable and now.

4.  Single Source:  More than Guesswork – Connecting—literally—the ads people are exposed to with the goods and services they buy—has always been deemed the holy grail. This “single source” data at the individual or household level is finally here—at scale, providing unparalleled insights into how advertising works.

Enabled by privacy protected loyalty and credit card buying data plus viewing panels and set top box viewing data, it will help agencies and advertisers understand which audiences most respond volumetrically to the advertising, which ads drive the most volume, which programs or web sites deliver the most lift, what role exposure frequency plays in driving sales, etc.

While still early in the adoption phase, single source is poised to finally provide extraordinary insight into how to improve advertising effectiveness.

5.  Audiences:  More than Demo’s – Digital audience buying is already focused on all kinds of characteristics that go well beyond basic demo’s. For example, re-targeting uses viewer browser shopping behavior to target future ads (I shopped for a bike on Web site X, so I see bike ads outside of site X in the days and weeks following).

The data sets used to buy audiences are getting richer and more granular. You can already buy digital audiences based on TV viewing behavior (e.g. buy digital audiences unlikely to have seen your TV advertising), offline buyer behavior (e.g. heavy category consumer who have not bought your brand), geography, etc.

The Game Changers Converge

If you’re feeling that these five game changers seem to overlap to some degree, you’d be right. While they are all different concepts, they are mutually reinforcing and, when taken together, are amplifying and accelerating changes to the advertising eco-system. For example, when advertisers launch a new campaign, within the first week they can:

  • Use single source to quantify how web site content impacts ad performance.
  • Measure this daily to get a read across all sites in their plan.
  • Use real time bidding to bid for the most volumetrically responsive sites.
  • Bid for audiences most likely to have not seen their TV ads to extend reach.
  • Leverage all of this learning in their next impact based media plan.

Where to start ? It sounds almost overwhelming. Well, you can always take Muhammad Ali’s sage advice: “it isn’t the mountains ahead to climb that wear you out, it’s the pebble in your shoe.” In other words, get started small and get started now !

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Using TV Data to Optimize Digital

January 5, 2014

As the TV and digital worlds begin to merge, one of the more interesting new capabilities that advertisers and their agencies should be exploring is using TV audience viewing data to plan and buy digital audiences to increase total campaign effectiveness.

Videology's Mark McKee on Bringing TV data into Digital

Videology’s Mark McKee on Bringing TV data into Digital

In this BeetTV video, Videology’s Mark McKee explains some of the thinking behind this.

Using TV data to Optimize Digital

This  is important because historically, TV and Online planning and buying were done separately in most cases, missing a great opportunity to extend reach beyond random duplication of audiences. I wrote about this opportunity in a separate blog post earlier this year.

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Motley Fool: Advertising Reach is Bigger Than You Think

January 4, 2014

Motley Fool View on Measuring Time Shifted Viewing

Motley Fool View on Measuring Time Shifted Viewing

As advertising moves increasingly across screens, measurement needs to move fast to keep up.

This Motley Fool article takes a look at the time-shifted viewership of TV programs that occur outside the official C3 ratings, and the implications for media companies and advertisers.

Article: Advertising Reach is Bigger Than You Think

Moving forward, there will be two fundamental advertising models–linear and dynamic. In the linear, or traditional, model, one ad is served to many people. This can happen live or thru time shifted viewing. In the dynamic advertising model, one ad is served to a single individual–e.g. each ad is addressable.

Audience measurement of the future will need to take account of both linear and dynamic advertising insertion models and measure both live and on-demand viewership.

If this isn’t tricky enough, think about the implications for ad effectiveness: is an ad that is viewed 2 days later as effective as one delivered live ? Is an addressable ad sufficiently more effective than a less targeted linear ad to justify its price premium ?

The linear vs. dynamic and live vs. on-demand viewing patterns will almost certainly impact not just reach–but advertising performance as well. Measuring and understanding relative ad effectiveness across these dimensions will become even more important in the future.

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How Brands Grow – Blowing Up Marketing Shibboleths

January 3, 2014

How Brands Grow by Dr. Byron Sharp

If you’ve never read it, you should. Dr. Sharp, from the Ehrenberg Institute of Marketing Science, takes aim at many well established marketing beliefs and systematically demonstrates with data that they are often much overblown hype. If you’re a real Marketer, you owe it to yourself to read this book.

I particularly like his concepts of “mental and physical availability” as the most important drivers of brand growth. Advertising’s role is to create greater mental availability, and this is why real world “breakthrough” and memorability are such crucial gatekeeper metrics to advertising success.

I wrote a blog post book review on How Brands Grow some months back, but I recommend you read the book.

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Machine Reading Advertising Implications

December 11, 2013

Machine reading revolution has advertising and media implications #machinelearning #advertising http://ow.ly/rFxhA


Neuroscience in Advertising: Making the :15 the New :30

August 5, 2013

The :15 second TV commercial has a lot in common with cubic zirconium—a cheaper and lower quality “look-alike” that is almost instantly recognizable by anyone as anything but the real thing.

Often treated as an afterthought by Marketers and Agencies alike, the :15 TV spot is usually just a cut down version of the :30, rarely copy tested, but assumed to be at least 50% as good as the :30 from which it’s derived.

But the truth is that most Marketers have no idea how good, or bad, their :15’s really are. It’s as if everyone just blindly assumes the best, without thinking about the worst. Fifteen second ads adhere to the same basic principles of success as :30’s, but just get much less attention.

An Improvement — Real Time :15 vs. :30 Optimization

Things have improved somewhat over the past few years. With the advent of real time TV ad effectiveness measurement, Marketers can now monitor the performance of their :30’s and :15’s on a weekly or bi-weekly basis, so they can understand relative differences in performance.

This enables you to see when your 15’s perform well enough to warrant moving out of your :30’s and into 100% focus on your :15’s. But all of this is after the fact. What’s really needed is better :15 design beforehand. But how?

Neuroscience & Copy Testing

Neuroscience has had any number of fits and starts over the past few years when applied to Marketing. But one area where there has been substantial and undeniable progress is in the area of copy testing. Possibly the most advanced technique uses EEG measures of brain activity to understand how viewers are responding to advertising. This approach uses EEG to identify and capture responses to brain stimuli in fractions of a second.

In particular, EEG based copy testing can measure three things extremely well:

  1. Attention – When and how much viewer attention is paid to an ad. This is key to knowing if someone even notices or pays attention to your ad in the first place.
  2. Memory – Whether a viewers memory is activated in response to viewing an ad. Without memory, it’s unlikely that an ad will influence much future behavior.
  3. Emotion – To what degree a viewer is drawn to or pulls away from the ad stimulus. Attention and memory are important, but so is positive emotional attraction.

Taken together, these three measures are key to effective ads. They relate directly to whether someone pays attention to the ad, whether the ad is stored in long term memory, and whether the ad elicits a positive emotional response.

Importantly, EEG based copy testing measures viewer’s brain waves in milliseconds throughout the commercial. Typically, a viewer’s brain waves looks like a series of peaks and valleys as the viewer responds to different parts of the commercial. These peaks and valleys correspond to the parts of the commercial that are most and least effective as measured by attention, memory and emotion.

The Optimal :15 TV Spot

Back to the :30 vs. :15 conundrum: how do you design a better :15 TV spot? Well, it’s not as difficult as rocket science, but it’s essentially an exercise in brain wave assessment. Simply put, you cut out the ads “valleys” and keep the “peaks.”

Neuroscience based copy testing has advanced to the point where it can algorithmically eliminate the weakest portions of the :30 TV commercial while keeping the strongest ones for the new :15. This re-cut commercial is then edited by the Agency creatives for story flow, continuity, and visual seamlessness into a final spot.

The Neuroscience Based :15 TV Commercial – How Good ?

At this point, you might be asking: “but how good, really, are these cut down neuroscience based ads? It all sounds like a big black box.”

Based on Nielsen NeuroFocus (disclosure: I work at Nielsen) testing of both original :30 TV spots and the EEG-optimized :15’s, here is what we see:

  • ~90% of neuroscience optimized :15 ads test just as well as their :30 counterparts
  • A significant number of optimized :15 ads actually test better than their :30 counterparts

Upside for Marketers

So, the next time you see your Ad Agency, tell them that you have a “present” for them—neuroscience-based :15’s. They’re definitely a lot more valuable than regular “cubic zirconium” :15’s and, more importantly, viewers will respond as if they’re :30 “diamonds in the rough.”

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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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