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.

Get free updates of Randall Beard’s Blog by RSS reader

Get free updates of Randall Beard’s Blog by e-mail

Advertisements

Linear TV vs. On-Line Video Advertising — Which is More Effective?

April 5, 2010

Did You Know That:

  • On-line video ad spending grew +41% in 2009 — even during a down advertising year?
  • 72% of all internet users in the U.S. viewed on-line video last year?
  • More U.S. consumers watch video on the web than watch recorded TV on DVR’s?

All of this adds up to something very interesting: On-Line Video advertising is growing like a weed. Which raises another question: how does On-Line Video advertising work versus Linear TV advertising? 

On-Line Video Ads -- How Do They Compare to Linear TV Ads ?

My colleague David Kaplan of Nielsen IAG (disclosure: I work for Nielsen) partnered with Beth Uyenco, Global Research Director from Microsoft, to compare the effectiveness of Linear TV advertising and On-Line Video advertising in a recent presentation to the Advertising Research Foundation (ARF). 

Research Approach — What Was Measured

Kaplan and Uyenco used Nielsen IAG’s U.S. on-line panel to measure TV and web video advertising data from November 2007 to May 2009, across 238 brands, 412 products, and 951 advertising executions.  For each ad, they measured the same effectiveness metrics: general recall, brand recall, message recall and likeability. Key measurement metrics were identical across the two mediums. 

On-Line Video Advertising -- Why Is It More Effective ?

Key Learnings — Linear TV vs. On-Line Video

1.  On-Line Video Outperformed Linear TV — Remember that this was an “apples-to-apples” comparison which compared the exact same creative execution across the two mediums. On-Line Video scored higher than Linear TV ads, on average, for: 

  • General Recall:        65% vs. 46%
  • Brand Recall:           50% vs. 28%
  • Message Recall:      39% vs. 21%
  • Likeability:               26% vs. 14%

2.  The On-Line Video Advantage was Largest Among 13-24 year olds — Among younger consumers, On-Line Video outperformed Linear TV advertising by greater than 2 to 1. On-Line Video’s advantage cut across all age groups, but was smallest among  50+ year olds. 

3.  Re-purposed TV Ads Outperformed Web Original and Flash Animation Ads — This was one of the most interesting learnings of the study. Even when controlling for prior TV ad exposure, a re-purposed TV ad shown on web video performed better than ads created specifically for the web. What does this say about Marketers understanding of digital creative ? 

4.  Linear TV + Web Video Ads are More Effective Than Linear TV Alone — Consumers exposed to ads in both mediums had higher general recall, brand recall, message recall and likeability than consumers exposed to TV alone. Once again, the data clearly shows the advantage of a cross-platform, integrated marketing approach. 

Why Is On-Line Video More Effective ?

There are a number of reasons which could explain On-Line Video ad superiority: 

  • Higher Program Engagement — As I’ve discussed in a previous blog post, Why Your Brand Should Understand TV Program Engagement, research shows that the more engaged consumers are in a program, the more likely they are to remember the ads in the program. Nielsen IAG research shows that on-line video program engagement is +13% higher than the broadcast TV primetime norm. So, this higher engagement naturally drives higher ad recall.
  • Inability to Skip Advertising — If you’ve watched any On-Line Video, you know that you can’t easily skip the ads. I think the impact of DVR ad skipping on ads is over-rated, but the lack of DVR like ad skipping has to benefit On-Line Video ads.
  • Reduced Ad Clutter — On-Line Video has about 1/2 the ads per hour than regular network TV. Various research studies over the years have shown that there is a small, but significant, impact of clutter on advertising effectiveness.
  • Presence of Companion Ads — On-Line Video ads are more likely to have companion ads in the same program. The presence of companion ads increases ad effectiveness versus a single exposure alone. However, even when they controlled for a single ad exposure, On-Line Video still significantly outperformed Linear TV.

Now, before you think about running out and building your next campaign around On-Line Video, consider this: the average consumer spends only2% of the time viewing web video as they do TV. The practical implication of this is that most brands can’t deliver a high reach media plan with web video alone. 

But the facts remain: On-Line Video ads are more effective than Linear TV ads, especially among 13-24 year olds. As well, On-Line Video ads work synergistically with TV, and perhaps best of all, TV ads can be re-purposed on-line and actually score better than creative that’s been created specifically for the on-line medium. 

Can It Last ?

Some of the factors contributing to On-Line Video’s advantage, such as higher program engagement scores, are unlikely to change anytime soon. But others, like reduced ad clutter, will probably erode over time. Content providers are not making much money with their content on-line, and some are experimenting with more ads per hour. So, any advantage due to less clutter is likely to be short-lived. 

Nonetheless, with it’s higher performance versus Linear TV and spectacular growth rates, I think it’s only a matter of time On-Line Video ads become a signficant part of every smart CMO’s marketing mix. 

Follow Randall Beard on Twitter  

Get free updates of Randall Beard’s Blog by e-mail  

Get free updates of Randall Beard’s Blog by RSS reader


Social Media Marketing: Do The Same Marketing Rules Apply ?

February 15, 2010

This is the 5th in a series of periodic guest posts. Catherine Davis is a marketing executive with extensive experience at Diaego, Harris Direct Online, Morgan Stanley, Discover Card, and Leo Burnett. 

*********************************************  

Do traditional marketing rules apply to Social Media ? Just before the holidays, I attended the CMO Club Summit in San Francisco, where the topic of discussion quickly turned to social media. Industry experts from Guy Kawasaki to Hewlett Packard’s Michael Mendenhall weighed in on whether marketers should incorporate social media as part of their overall strategy.  

Our conclusion? While social media marketing is driven by unique characteristics, the marketing evaluation process follows that of traditional media planning.  

 

When embarking on a social media marketing plan, marketers must consider the following points:   

1.  Social Media Marketing is Particularly Well-Suited to Building Brand Affinity

Estee Lauder created a powerful and actionable social media marketing campaign, where they encouraged women to try new products and have a makeover done at department store locations. Sounds ordinary? Well, post-makeover these women were photographed — and the photo was uploaded to the social networking site of their choice.  

Estee Lauder: Social Media Marketing to Women

There are fewer examples of social media driving sales.  Dell is probably the best known example.  Reuters reported that Dell attributes more than $3 million in sales to Twitter, where the company has  600,000 followers.  Considering these figures as a sole output of viral marketing, it is clear that  Dell will continue to make headway with its  integrated social media program.  

2.  Understanding  Your Target and Whether They Actively Participate in Online Social Networks are Equally Important

One of the best examples of understanding the target consumer comes from  Sears.com. The online retailer created a website for teenage girls called “Prom Premiere.” On the site, girls are encouraged to use Facebook applications and email to share photos of prom dresses with family and friends. This initiative demonstrates a concrete understanding of the target audience, as well as the purchase decision process for prom dresses.  

Sears: Prom Dress Sharing via Facebook

  

3.  Social Media Campaigns Require Scalability and Measurement

How do brands develop scalable initiatives? Take Nike’s  “Nike Human Race,” which leveraged Nike’s legacy of sponsoring local races and supporting running training programs.  By rallying an international community of devoted athletes, Nike converted 40% of previous non-consumers after only one year, and had 800,000 runners participate in the 2008 race.  

The “Nike Human Race” is clearly scalable and impactful in long-term brand building. The next level of scalability is understanding how the program translates into sales. Digital campaigns are more easily measurable, more timely, and therefore more usable in a yield management model. Put in place precise metrics to measure the marketing ROI on your social media initiative.  

4.  Make Sure There is a Strong Strategic Link to Your Product or Brand

Estee Lauder’s program works because their makeover inspires confidence in the picture a woman posts on LinkedIn or Match.com. Sears Prom Premiere made it interactive and fun to choose just the right dress for prom.  Each brand offered a product that was part of the solution and that made it ownable. 

5.  Nothing is Free – Budget Carefully

Marketers often think of social media as an inexpensive way to build a brand or promote a new product.  While there are a few high profile exceptions, that is generally false. Social media marketing requires the right resources, a budget to seed and then support the program, and time to build.  Like any other marketing campaign, maintaining realistic expectations and timeline will help lead to success.  

What’s the Bottom Line in Social Media Marketing ?

Social media can be an incredibly creative way to engage your customers and help define your brand.  If you haven’t done a social media campaign yet, begin monitoring any large or influential communities where your products or your competitors are frequent topics of conversation.  Identify the role your brand plays in their lives and how you can add value. 

Evaluate your in-house assets –many companies have a wealth of information that can be used to create and syndicate content on highly trafficked sites.  Start small and create a test and learn environment. You will quickly learn what works and should be scaled up.  If you are already actively involved in social media, take a step back and evaluate your program.   It needs to be assessed on it’s own merit and against the channels it is replacing.  It should be just one part of a fully integrated marketing program. 

******************************************************* 

Catherine Davis was most recently SVP Marketing at Diageo, the world’s largest alcoholic beverage company including Johnnie Walker, Guinness, and Smirnoff.  She is a marketing executive who builds brands and creates new media and marketing models to drive business growth. Catherine is experienced in CPG, financial services, and online businesses and has demonstrated leadership across all marketing functions, including digital.  

******************************************************* 

Follow Randall Beard on Twitter  

Get free updates of Randall Beard’s Blog by e-mail  

Get free updates of Randall Beard’s Blog by RSS reader 



The 5 Truths of TV Advertising Effectiveness

January 18, 2010

Question:  Is TV advertising less effective today than 15 years ago?

If you think you know the answer, read on. Digital and social media are having a transformational effect on Marketing content, organizations and processes. This being said, what’s often ignored is what we know about TV advertising effectiveness in the here and now. 

The 5 TV Advertising Truths

I recently wrote about “The 5 Myths of TV Viewership,” and this post forms a book-end with that earlier one. Like TV viewership, there are many myths about how and whether TV advertising actually works in the current environment. Here are the 5 most prevalent ones–some of which you might find surprising:
MYTH:   TV Advertising Takes a Long Time to Work
TRUTH #1:   Advertising Works Fast, When it Works

Part of the mythology of TV advertising is the “3+” frequency myth. That is, it takes a minimum of 3 repetitions of an ad for it to move a consumer down the purchase funnel. For CPG, this is simply not true. 

The advertising response curve is "convex"—the greatest marginal response is from the first exposures.

Numerous single source tests have demonstrated that when TV ads work, they work quickly to build sales (Rubinson, Journal of Advertising Research).  In fact, the TV ad effectiveness curve is generally convex—e.g. early airings have the most impact, and additional airings decrease in effectiveness (Taylor, Kennedy & Sharp: Journal of Advertising Research). When ads work, they tend to work quickly. 

MYTH:  When TV Ads Work, They Have Large Impact
TRUTH #2:  Ads Generate Small Impact Over Time

The question “What sales impact is my ad having?” has been studied rigorously since the advent of single source data (e.g. BehaviorScan or other panels which track the single variable impact of advertising on purchase behavior). On average, for the CPG categories studied, every $1 invested returns about $.10 (Taylor, Kennedy & Sharp Journal of Advertising Research). The sales return on an invested TV ad dollar has varied between .06 and .14 over the past 20 years (Hu, Lodish, Krieger & Hayati Journal of Advertising Research). And the sales lift is larger in year 2 than year 1. 

MYTH:  DVR’s are Killing Ads
TRUTH #3:  Ad Impact is Similar With or Without DVR’s

Yes, it’s hard to believe, but the evidence suggests that DVR homes have about the same recall of TV ads as non-DVR homes (du Plessis, Journal of Advertising Research). 

 

There’s likely a range of reasons for this phenomenon, including people with DVR’s watching higher engagement shows, DVR’s increasing total TV viewing time, etc. Interestingly, research shows that consumers have the same recall and understanding of your ad when fast forwarded as when viewed in a normal manner, if they have already seen it normally once (du Plessis, Journal of Advertising Research).   

MYTH:  Digital Ads are More Likable Than TV Ads
TRUTH #4:  TV Advertising is More Likable

People assume that because the web is a “lean-forward” medium, ads in this environment are naturally more engaging  and well liked. Research shows that this is not the case. On average, TV ads are liked better than digital ads (Moult & Smith, Journal of Advertising Research). Here I should also say that likability doesn’t necessarily translate to effectiveness. 

MYTH:  TV Ads are Declining in Effectiveness
TRUTH #5:  TV Ads are as Effective Today as 15 Years Ago

This is perhaps the biggest myth of all—that TV ads are losing effectiveness over time. Falling TV ratings and the rise of social media and mobile are hurting TV ad effectiveness, right? Wrong. The research on this topic, across time and geographies, strongly suggests this is not true. As noted earlier, advertising demand elasticities have fluctuated over the past 15 years, but are not declining (Rubinson, Journal of Advertising Research). So, TV advertising is as effective (or ineffective) as ever. 

Future of TV Advertising

So, if TV advertising is still effective, what’s the future of TV advertising? I’d suggest it will be in three areas: 

1. Cross Media – The rise of digital and social media has created numerous new means and forms to advertise and engage consumers. Research clearly shows that the impact of a TV ad is even higher when a consumer has been exposed to your brands ad on the web, and vice versa. Thus, CMO’s should focus on building cross media campaigns that continue to leverage TV as appropriate, but in new combinations with new social media and digital initiatives (for more on social media marketing, see “How the Future Social Web will Transform Marketing”). 

Social media has entered the traditional marketing ecosystem.

2. New TV Ad Forms – As TV evolves from network to networked TV, new advertising form factors are cropping up. iTV is already in place and many brands are experimenting with this new approach. Additionally, Shelly Palmer and others have proposed new ad forms such as speed bumps, telescoping ads, etc. which are being enabled by “networked” TV. Marketers need to keep an eye on these new ad forms and be ready to experiment, learn and adjust. 

3. Earned Media – There is vast opportunity for brands to understand how to use paid media to drive earned media. However, this is a nascent and poorly understood area that deserves much greater experimentation. Nonetheless, understanding how paid media drives earned, earned drives paid, and how they influence one another is fertile ground for future advertising model innovation. 

So, back to our original question: “Is TV advertising less effective than 15 years ago?” The answer is a clear “no,” just as you should answer the question “Shouldn’t we completely forget about TV advertising and just concentrate solely on new media?” 

Follow Randall Beard on Twitter 

Get free updates of Randall Beard’s Blog by e-mail 

Get free updates of Randall Beard’s Blog by RSS reader



The Future of Marketing & Me

September 24, 2009

This month, I started a new role with Nielsen IAG as Global EVP/GM for the Consumer Packaged Goods sector. IAG measures program and marketing engagement across the 3 screens (TV, Web, Mobile) in real time to help Marketers optimize their Marketing effectiveness and business impact. This role affords me the unique opportunity to sit at the forefront of the revolution that’s washing over the Marketing landscape, by working with CMO’s of major CPG companies to understand what Marketing really works and what doesn’t in TV, web, in-program product placement and cross-media in this new, complex and highly challenging world.

The Nielsen Company

The Nielsen Company

A sampling of the topics I’ll be focused on include:

  • Media Selection – How does selecting the right TV programs improve ad recall?
  • Ad Optimization – What is the optimal creative unit mix, copy length, wear-out, and rotation?
  • Program Environment– To what extent does the program environment drive ad effectiveness?
  • In Program Product Placement – How should Marketers evaluate product placement?
  • Cross Media Performance – What are the cross-media effects of ads?
  • Digital  & Social Media – How does advertising work in new media and in interaction with TV?
  • Real Time Impact – How do Marketers monitor ad performance in real time and adjust on the fly?

Blog Themes — Transformation & Impact

If you’re read any of my blog posts over the past few months, you’ve probably recognized at least two major themes:

  • The Transformed Marketing Landscape — We’re living through a transformational period in Marketing, the likes of which hasn’t been seen since the rise of TV and mass marketing. This change is driven by the fragmentation of media, increasing digitization of marketing, rise of social media, increasing importance of word of mouth from our social networks, and measurement tool innovation, among others. In short, Marketing has become a real-time, highly complex, more measurable, and conversational endeavor.
  • The Need to Demonstrate Real Marketing Impact — Marketing should build brand image, increase customer satisfaction, and deliver improved top and bottom line business results. Marketers were already challenged to show real value for their spending before the changes outlined above; their ability to deliver results in this environment is even more challenging. This means that, more than ever before, they need partners who can bring sophisticated measurement and analytical tools to bear on their most pressing challenges and leadership thinking as to what this means for the Marketing function.

The crushing economic crisis of the past 18 months has, in my mind, only accelerated the need for the Marketing function to become more transparent and accountable for real business results. CEO’s, CFO’s and shareholders are demanding it, either directly or indirectly.

How My New Role Impacts This Blog

  1. The CMO Perspective — I’ve written this blog from the point of view of a CMO. This perspective will continue, and in fact, will be enhanced as I meet and work with CMO’s from major CPG companies around the world. These conversations will enable me to bring an insiders view of the major issues and challenges facing Marketing organizations in this changing Marketing landscape, and share these perspectives as appropriate.
  2. The Marketing Effectiveness Perspective — The new role provides a unique vantage point: the ability to look across CPG companies, brands and geographies to understand what works and what doesn’t. I want to have more and deeper insight into what Marketing really drives business results than anyone else in this space.  This will allow me to provide new perspective and insight, while still respecting client confidentiality.

Going Forward

I’ll continue to write about important Marketing topics — both ones which benefit from my Nielsen perspective and those which don’t. This blog won’t be an ad for Nielsen or a thinly disguised vendor white paper. But it will frequently draw on Nielsen data to make what I think are important points about Marketing. And while it should go without saying, it most certainly won’t ever compromise the confidentiality of any client which does business with Nielsen.

Thanks for your support and readership. Keep the comments coming. I look forward to continuing to write about Marketing topics that are at the forefront of the Marketing transformation that is enveloping us and most importantly, how Marketing can build brand equity, customer satisfaction and revenue and profit.

Get free updates of Randall Beard’s Blog by e-mail

Get free updates of Randall Beard’s Blog by RSS reader