Is Real Time Bidding the Future of Advertising?

August 23, 2010

One of the hotter trends in the on-line advertising field is the rise of real time bidding (RTB). One journalist, Nick Saint, even went so far as to headline a recent RTB article “The Rise of Real Time Bidding is the Biggest on-Line Advertising Story of 2010.” How important is RTB and could it ever move beyond the web?

Real Time Bidding: 2010 Online Advertising Trend

Real Time Bidding – What is It?

Real time bidding combines web browsing behavior, sophisticated algorithms, and ad inventory platforms which make it relatively easy for advertisers to bid on specific audience profiles in real time.

Key players in the RTB space include AdMeld, Invite Media (recently purchased by Google), and AdSafe. Advertisers use platforms like MediaMath which combines all of the relevant data—who advertisers want to target, how much they’re willing to pay, etc.–to make buying on-line inventory simple and fast.

Real Time Bidding: Web Browsing & Behavior Analytics

The RTB Value Chain

Conceptually, RTB makes a lot of sense:  why buy inventory impressions when you can buy against a much more targeted audience? Everyone benefits:

  • Publishers can sell targeted inventory at higher prices
  • Advertisers are willing to pay a premium to get more targeted ad coverage
  • Middlemen supply the platforms and technology and benefit as well

Setting aside privacy issues, which the Wall Street Journal and others have reported on recently, RTB is a classic case of how marketers can operate in a more efficient manner with the right information and technology.

The RTB Value Chain: Linking Web Behavior & Publisher Demand

What’s Wrong with RTB

Sounds great, right? Currently, RTB is essentially focused on better targeting. And better targeting is important. In fact, past analyses using single source data from the TV world would suggest that better targeting based on buyer behavior instead of demographics can increase advertising effectiveness by +10% or more. But, there are important areas where RTB currently fall short:

  1. RTB doesn’t Consider the Contextual Power of Content – As I’ve written about in other posts, content—in this case web page content–makes a big difference in how your ad performs. If content providers had access to data showing how ads perform on brand recall, purchase intent, etc. in different content, this data could easily be factored into the RTB buying algorithms to yield a better advertising outcome.
  2. RTB doesn’t Focus on Business Impact – Why stop at better targeting? If the data existed, why not buy media based on actual impact—either brand equity improvements or volume and share growth? In the past, the industry got hung up on click-thru rates as a surrogate for impact—a bad decision. But, the general intent was a good one—to more closely link the impression to actual performance. In an ideal world, advertisers would buy inventory not just against a target, but against real business impact.
  3. RTB is only On-Line – On-line is important and getting more so every day. But, for some categories like CPG, TV remains the medium of choice for driving high levels of reach very quickly at relatively low cost. For RTB to really have an impact, it will need to migrate out of on-line and into the world of TV. As TV morphs into an increasingly “networked” on-demand form of entertainment, this is becoming more and more plausible—albeit still a ways in the future.

RTB—Where Next?

RTB is a great concept and its beginning to come to life on-line. The AdMeld CEO estimates that the 2010 RTB market will be approximately $1B, so this is no longer a niche phenomenon. But for perspective, this is still only 4% of estimated on-line ad spend, and just a tiny fraction of the $55.8B TV advertising market in the U.S.

Real Time Bidding: Small Percentage of Online Media Spend

All of the shortcomings outlined above aren’t meant to suggest that RTB is a bad idea. Far from it, I think it’s a huge advance forward and one that we should watch very carefully.

For RTB to realize its logical potential, it will need to increasingly measure brand impact and cross into other mediums like TV. But the potential is truly enormous—imagine being able to buy media in real-time based on how it actually builds your brand and your Marketing ROI.

Now that would be nirvana for any CMO or CEO—whether it’s the biggest advertising story this year or any other year.

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Understanding, Identifying and Building Distinctive Brand Assets

March 15, 2010

This post is part of a continuing series of guest posts. Jenni Romaniuk is an Associate Research Professor of Brand Equity, Ehrenberg-Bass Institute, University of South Australia.

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This post is a summary of an Ehrenberg-Bass Institute corporate member report written in conjunction with Nicole Hartnett, Research Associate at the Ehrenberg-Bass Institute.

Distinctive assets are non brand-name elements that are able to evoke the brand in the memory of consumers.   Some of the most famous examples include the Nike ‘swoosh’, the Aflac duck and Mastercard’s priceless advertising.  All of these elements are able to represent their brand name without needing any other prompting.

Aflac Duck - Distinctive Brand Asset

Many creative elements have the potential to become distinctive assets including: logos, slogans, colors, shapes, typefaces or fonts, characters, celebrities, jingles and/or music, sounds, advertising style, tastes, textures and scents.

However merely using one of the elements described above as part of your brand identity does not necessarily mean it is an ‘asset’ for your brand. For an element to be an asset, it needs to meet two criteria:

Uniqueness To what degree is your brand only linked to the element? When consumers link multiple brands to an element, brand confusion ensues. Ideally, marketers want to develop brand assets that are unique in their category.

PrevalenceHow many consumers link your brand to the distinctive element? The more consumers that are able to identify your brand based on the asset, the stronger and more valuable the distinctive asset becomes.

The Nike Swoosh Is Prevalent and Unique

Simply put, distinctive assets are more creative alternatives to directly showing a brand name, and they help create a larger brand footprint when elements are used in conjunction with the brand. Marketers can use non-word elements such as color, visual images, and sound to provide a multi-layered process for entry into consumer memory. On the consumer end, brand assets simplify brand identification outside of the advertising context, for example on-shelf or as a retail outlet.

How does an element become a distinctive asset?

To develop a distinctive asset, marketers need to make a commitment to consistent co-presentation of the element and the brand name across all consumer touch-points. Then, consumers must learn to associate the element with the brand.

Whether a brand has already developed distinctive assets or is embarking on creating elements, the main question marketers need to answer is: “Do consumers recognize my brand?” Throughout this process, keep in mind that for an element to be a distinctive asset it must evoke the brand, without prompting, for close to 100% of consumers. Only then can the distinctive asset be considered strong enough as a unique brand identifier. Ultimately, distinctive assets can replace the brand name in marketing initiatives.

I have created the Distinctive Asset Grid to enable marketers to classify their brand’s distinctive elements.  The grid is divided into four broad quadrants, which each represent the current state and future potential of a distinctive element.

If an element falls in the quadrant labeled …

Use: It is a strong distinctive element that evokes the brand from memory for the vast majority of consumers. Distinctive assets that fall in the “Use” quadrant are highly differentiated from those of competitive brands. Therefore, assets in this quadrant can be used to replace the brand name in advertising.

Invest: The element has unharnessed potential: it meets the most important criteria and it is highly unique to the brand.  However, not many people are aware of the asset (low prevalence) which restricts its ability to be used in place of the brand name. To further cement the element, it should be co-presented with the brand name.

Avoid: If the asset falls in the “Avoid” quadrant, marketers should be wary of using the element as an alternative to the brand name. Otherwise, the element may bring competitors to mind for consumers.

Ignore: An element in this quadrant is best unused in its present state. The exceptions are elements that are at the beginning of their development, as the majority of new elements have low prevalence and uniqueness. However, if an element’s uniqueness and prevalence have not developed after receiving proper marketing support, then the asset should be reconsidered.

Finally, some FAQ:

1.  Are there any drawbacks in using distinctive assets for brand identification?

While distinctive assets represent some opportunities, they also present some risks.  If you use the brand name to identify the brand in advertising, all who notice the brand name will know that it is that brand that is advertising.  However, if you only use a distinctive asset to identify the brand, and it is not 100% unique and prevalent, there will be some people who see the distinctive asset but don’t think of the brand name.  These are wasted exposures.

2. Do distinctive assets have to have a meaning for consumers beyond the brand name? (or is it better if they do?)

There is good reason to be cautious about selecting elements with strong meaning to develop as distinctive assets.  Firstly, the strong meaning will hamper the brand’s ability to attach the brand name to the distinctive asset.  This meaning will be evoked in consumer memory when the element is presented, which will then dominate and interfere with the development of links to the brand name.  Secondly, you can’t control the consistency of this past meaning.  Finally, what if the core meaning of the brand changes over time in response to consumer or market trends?  The distinctive asset will also need to change, negating the value of past investments.

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For more information on this research, contact Jenni: Jenni@MarketingScience.info

Jenni Romaniuk’s research interests are Brand Equity Metrics, Brand Salience, Distinctive Brand Assets, Brand Name Execution, Advertising Effectiveness and the influence of Word of Mouth on consumer behaviour, particularly in Television program viewing.  Her work has been published in European Journal of Marketing, Journal of Advertising Research, Journal of Business Research and Journal of Marketing Management.  Jenni is also past editor of Journal of Empirical Generalisations in Marketing Science (JEMS): www.empgens.com

The Ehrenberg-Bass Institute is a world-class research institute that delivers real scientific knowledge and dramatic discoveries to corporations all over the word including Coca-Cola, Unilever, Procter & Gamble and Turner Broadcasting. To learn more about the Institute visit www.MarketingScience.info

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Brand Salience – Why It Matters for Your Brand

February 22, 2010
Woody Allen once said that “80 percent of success is just showing up .” Unfortunately, at purchase decision time, the vast majority of brands never show up at all. Getting consumers to “think” about your brand more often, and in more buying situations, is one of the most under-rated marketing challenges that brands face today.

Brand Salience — What is It?

Brand Salience is the degree to which your brand is thought about or noticed when a customer is in a buying situation. Strong brands have high Brand Salience and weak brands have little or none.  This helps explain to some degree why big brands are big and small brands are small: if no one thinks about you at the moment of buying truth, your brand is going to be relegated to the dustbin of small and unnoticed brands.

Moment of Truth - Does Your Brand Have Salience ?

Brand Salience IS NOT the same thing as top of mind awareness. Top of mind awareness is simply what brands come to mind when consumers are asked to recall brands within a category. Brand Salience is different. Why? Because it is what brands come to mind when consumers are in a purchase situation. More specifically, Brand Salience is the memory of your brand and its linkage to other important memory structures. The buying situation “mindfulness” and linkage to memory structures is what differentiates Brand Salience from top of mind awareness.

What Drives Brand Salience

This all sounds very simple. But there really is some science behind it. Jenni Romaniuk and Byron Sharp of the Ehrenberg-Bass Institute for Marketing Science have done research into Brand Salience, and the findings are surprisingly simple, yet counter-intuitive, for Marketers. Brand Salience is a function of the quantity and quality of the consumers memory structures. Brand Salience is the step before consideration–is your brand even “thought of” before the consumer considers a brand or brands and makes a final purchase decision? Or is it mentally screened-out, like the majority of brands?

1.  Quantity Of Memory Structures

In buying situations, consumers are often driven by mental “cues” that trigger their thoughts around brand consideration sets. For example, if I’m thinking about getting a quick meal for under $5, I’m likely to consider Subway based on their ubiquitous “$5 Foot Long” campaign.

Subway $5 Footlong - Building Brand Salience

Or, if I want to eat something “fresh and healthy,” then I’m also likely to think of Subway given their focus on fresh and healthy eating. The more memory structures your brand is linked to, the more salient your brand–e.g. the more likely it is to be thought of during a buying situation. The examples above point out something important: what buyers remember about brands isn’t always the same across buying decisions. So, the quantity of memory structures can make a difference.

2.  Quality of Memory Structures

Romaniuk and Sharp argue that the quality of Brand Salience is a function of the strength of the association and the attribute relevance.  Taking the Subway example above: because I’ve seen so many $5 dollar foot long creative executions, the linkage is very strong. Additionally, if value is important and relevant to me because I’m on a budget, this further increases Brand Salience.

So, to summarize:  Brand Salience is a function of: a) the quantity of memory structures your brand is linked to; and b) the quality of these structures, as defined by the strength of association and relevance of the structure. By building the quantity and quality of memory structures, you maximize the number of consumers who will think of your brand and the number of times they think of your brand in various buying situations. So, in Woody Allen parlance, your brand “shows up.”

Brand Salience vs. Brand Equity — A Conflict?

If you grew up in traditional CPG brand management like me, you were trained to believe that a brand should define its equity and rigorously and relentlessly focus on communicating it without deviation. I still recall senior P&G managers speaking scornfully of advertising which was “off-brand.” On the other hand, Brand Salience sounds a bit like a license for freelance communication–equity be damned.

There needn’t be a conflict. Marketers need to consider two approaches to building Brand Salience:

1.  Focus on Defining and Communicating Different Cues Against A Common Equity – Assuming you’ve defined a focused and important equity for your brand, you need to do the consumer research to understand the most important and relevant cues which link to your benefit. Then, having defined these, brands need to execute creatively against these cues to maximize the number of memory structure associations.

Subway Fresh & Healthy - Building Brand Salience

For example, Subway’s “fresh and healthy” positioning can be executed via a range of cues like “good for my kids,” “for people on diets,” “good for outdoor activities,” etc. These are all different cues that may lead to a consumer considering Subway for a “fresh and healthy” offering.

2.  Create and Own Distinctive Executional Memory Structures – A second approach is to increase the quantity and quality of executional memory structures. For example, the Subway logo, usage of the Jared Fogle character, the $5 dollar foot long music, etc. are all examples of creating executional memory structures. These executional memory structures help create a platform that enables consumers to more easily remember your brand in buying situations.

Subway's Jared Fogle - An Executional Equity

So, Brand Salience is an important but often ignored challenge for Marketers. Do your brand a favor. Listen to Woody Allen. Make sure that your brand “shows up” and is salient — a very important step in ensuring your brand gets considered for purchase.

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What Drives Branded Integration Success?

February 1, 2010

From my January 19th guest post on Joe Pulizzi’s blog  Junta42:

Instead of using your own content marketing to surround and reinforce your brand, what if you put someone else’s TV program content around it instead ? Branded Integrations, done right, use TV program content to drive your brand. The problem, though, is that most Branded Integrations come about by happenstance and not by use of proven tools and techniques. Here’s how to successfully use Branded Integrations as part of your Content Marketing portfolio.

Branded Integration – A Short History

Branded Integration has a long history, arguably as old as publishing itself.  The Lifesavers brand was integrated into the 1932 Groucho Marx movie “Horsefeathers,” and Spielberg’s “E.T.” featured the first paid candy integration: Reese’s Pieces. National Geographic had a starring role in the 1946 movie “It’s A Wonderful Life.”

Reese's Pieces in "E.T." -- the first candy branded integration.

Procter & Gamble and Unilever sponsored soap operas continued the trend. More recently, companies have taken branded integrations even further with video games and even programs designed around TV commercial characters (Geico Cavemen).

Given this long history, it should come as no surprise that Branded Integration is big business: PQ Media estimated 2006 product placement spending at $3.1B.

Is This A Good Idea ?

Being big and being good aren’t always the same thing. Does Branded Integration really work? Certainly, the large spending would lead you to think so. However, the usual process for developing branded entertainment – haphazard and creative driven — often leaves something to be desired. A branded entertainment company executive once explained the process something like this:

“The studio sends us a script. We break it down. We look for our clients demographics and then we tell our client this movie is available with this actor, with this director, with this producer, do you want it?”

Is this really the way companies should be deciding to spend $3.1B a year?

Beyond the :30 spot: Executing Branded Integrations

Beyond the :30 spot: Marketers need criteria for executing branded integrations

What Really Drives Branded Integration Results?

There are four keys to making Branded Integration work as Content Marketing for your brand:

1.  Choose the Right TV Shows – The best way to get high brand recall and brand opinion shift from your Branded Integration is to pick a show that fits with your brand and has high scores historically for Branded Integrations. Predictive models which isolate the factors most impacting brand recall, opinion shift, and fit with brand generally show that over 50% of the models’ variation are driven by TV show selection. Fortunately for Marketers, there are now syndicated panels which measure TV program Branded Integration effectiveness – so you can know a program’s track record ahead of time.

2. Design the Most Impactful Integration – Having selected the right genre and program for your integration, don’t just rely on the network and agency to tell you what the integration will look like. You need to negotiate for what really works. And what works, based on predictive modeling, is the following:

  • Involve Your Brand Longer – The duration of the integration makes a big difference; longer is better
  • Visualize Your Brand Icon – Don’t accept just an audio appearance; your brand needs to be visualized
  • Have Your Product Touched or Worn – It’s key to have characters physically interact with your product
  • Connect Your Brand to a Main Character – Physical interaction is good, but interaction with the main star is even better

These factors have been proven through research to be the most important creative factors in determining brand integration recall and positive brand opinion shift. Make sure that your execution includes them.

3.  Advertise Your Brand During the Program – This seems obvious but is often overlooked. Nielsen IAG research shows that ads aired during a program with the same brand integration generally score better for recall, branding and likeability than the same ads aired outside the Branded Integration program. Said simply, there really is “synergy” between your Branded Integration and your ad in the same program.

4.  Execute Branded Integrations in Multiple Shows in a Season – Continuity is key. If possible, negotiate for a series based branded integration, instead of an episode. Why? Having a Branded Integration in previous episodes of the same series raises brand recall and brand opinion by about 1% per previous episode — for example, take Subway’s series integration in NBC’s “Chuck.”

Subway's integration in NBC's "Chuck" not only increased sales, but saved the series.

Subway's integration in NBC's "Chuck" not only increased sales, but saved the series.

Where Should Marketers Focus ?

Adding Branded Integrations to your content marketing portfolio provides another way to drive engagement with your brand (for more on content marketing, see “Build Your Brand with Content Marketing”). But, don’t just walk blindly into it. Choose the right programs, design the integration for greatest impact, advertise during the program and deliver integrations consistently for maximum impact.

So the next time your Agency calls with their next “BIG” branded integration idea, do your brand a favor. Ask the tough questions: Why is this the right show? How will the execution optimize impact? What’s the proposal for integrating my ads? Is this part of a longer deal? Most importantly, negotiate from a position of strength: use historical data and learnings about what really drives Branded Integration success to add another powerful element to your Content Marketing mix.

 

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