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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Driving Desirable Digital Behaviors with TV Advertising

December 6, 2010

Things are not always what they seem. Two TV ads score the same—in copy testing or in market—so they’re equally effective, right? Not always.

TV: Driver of Consumer Digital Experiences

TV ads don’t just deliver awareness, message recall, etc. They drive behaviors—some of which are digital–and good for your brand.

Cross Platform Ad Effectiveness

Marketers increasingly want to understand how advertising works across mediums—particularly TV and Digital. Some of the more frequent questions I hear from CMO’s are the following:

  • What’s the value of a Facebook fan?
  • What’s the role of search in the customer journey?
  • How I use the web to drive greater engagement with consumers?
  • How can I drive more word of mouth and buzz for my brand?

These are all great digital questions. And lots of people have tried to answer them with digitally focused analysis—some effectively, some not.

Building Brands & Online Buzz

Another Way to Think About TV Ad Effectiveness

Here’s a different tack:  what if we analyzed these questions, not from a digital only perspective, but from a TV advertising perspective? Or, to say it differently, what if we were to ask the question as follows:

“What role does TV advertising play in driving desirable digital behaviors?”

TV & Digital Viewing Behavior

This has been a tough question to answer. Who’s going to keep a diary of what they watch on TV and then the myriad of things they do on-line? The fact is that our understanding of TV and Digital viewing behavior has been mostly limited to knowing how many people did what.

Just as important is understanding not only what people are doing, but in what sequence. And after viewing what ads? New single source viewing data opens up new possibilities for understanding media behavior:  it’s now possible to observe (with viewers permission) both what they watch on TV and what they then do on-line.

Next Generation TV Ad Effectiveness

So, back to the opening question. Two TV ads score the same—in copy testing or in market—so they’re equally effective, right? The answer: not always. Why?

Here are 4 new ways that TV advertising can drive positive digital behaviors.

1.  Drive Consumers to Your Facebook Fan Page – Many brands have embraced Facebook and are building Fan pages as opposed to their own branded websites. They see the advantage of “social” currency and a key objective is building the number of Facebook fans.

TV advertising has a role to play here:  more effective ads can drive more consumers to your brands fan page than less effective (or no) ads. Seen in this light, TV can play an essential role in your digital plans–even when the messaging doesn’t explicitly have a call to web action.

Facebook Fan Pages & Brands

2.  Drive Consumers to Search for Your Brand – Companies across all industries have embraced search, even in CPG, and for good reason. It works. Of course, paid search costs real money. So, how to drive more organic search for your brand? Well, one way is with your TV advertising. What portion of consumers seeing your TV ad go on-line and search for your brand?

3.  Drive Consumers to Your Brand Web Site – Like Facebook Fan Pages, many brands have their own website to engage and deepen the relationship with consumers. Question: is your TV advertising driving consumers to your website? Which ads are more versus less effective in doing so?

4.  Drive Consumers to Talk About Your Brand – Research from Keller-Fay has shown that approximately 1/3 of word of mouth is about TV advertising. How effective is your TV ad at driving word of mouth? Are two TV ads which score equally well on traditional ad effectiveness metrics driving different conversation levels about your brand? If so, one is clearly more valuable than the other (assuming the conversations are positive).

Capital One Mascot Challenge: Driving Consumers to Website

Driving Desirable Digital Behaviors

All of the above represent new ways of thinking about TV ad effectiveness. Traditional measures of TV advertising performance around breakthrough and branding will continue to be important.

But increasingly, Marketers need to think about how TV advertising drives other behaviors—particularly digital ones—that benefit their brands.

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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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Beyond Reach, Frequency & GRP’s: How Media Influences Your Brands Advertising

June 21, 2010

How much does media really matter once your brand has great advertising? Is “reach” all that counts? We now know from research that media “form factors” and “personality” likely matter greatly to advertising performance—they are performance amplifiers whose volume can either dial up or dial down your ads’ performance.

Consumer Psychographics: Media Form Factors (Image courtesy of adweek.com)

So, for example, we know that the same ad in On-Line Video outperforms the same ad on TV across key ad metrics like ad recall, brand recall, etc. The question is why? And why does this matter to Marketers?

Media Perceptual Mapping

Let’s start with how consumers “perceive” different media types. In a recent AOL/Questus study, 1800 SmartPhone users were asked questions in a correspondence analysis to generate a perceptual map of six different media channels. Granted, this is not a rep sample, but it is instructive nonetheless.

AOL/Questus Study: Media Perceptual Mapping

Observations from the Perceptual Map

• Unsurprisingly, newspapers, radio and magazines are grouped on the right side as “established media,” but with newspaper by itself—indicating lagging status.

Print News Media: Outdated?

• Electronic media, including Mobile, PC and TV are all on the left side as “leading media,” with TV and PC’s grouped together as “lagging” media.

• Interestingly, TV is separated from PC and Mobile, and from Print, Radio and Newspapers, almost in a category by itself. TV is more leading than lagging and more digital than established. TV is in a world of its own.

When you overlay attributes to the quadrants, you see that each media or media group has its own characteristics:

Newspapers:   Boring, old-fashioned, but trustworthy and credible

Magazines and Radio:   Passive, relaxing and influential

PC and Mobile:   Cutting edge, cool and timely

Television:    Powerful, entertaining and vital

Beyond “Brand Character” to “Media Character”

Clearly, each group has its own personality and characteristics. Just as brands have “brand characters” and “brand personalities,” it turns out that the 6 different media have “media characters” too. And just like brands, I think it’s highly likely that these character traits influence how consumers view the content and ads that flow through each media.

Think about it:  are you more or less likely to say the same ad is believable when delivered via an “influential” media versus a “cool” one? And which is more effective in communicating your brands special offer which ends on Saturday—a “passive” one or one that is viewed as “timely”?

Neural Based Learnings Across the 3 Screens

Let’s take this a step further. NeuroFocus, a leading neural based marketing measurement service, has done some interesting work in assessing how the 3 screens are processed by consumers. At a recent Advertising Research Foundation meeting, Dr. A.K. Pradeep of NeuroFocus outlined their learning about consumers pre-cognitive responses—e.g. those that take place in advance of conscious thinking—to TV, PC and Mobile.

Pre-Cognitive Thinking Influences Effectiveness of Ads

NeuroFocus research indicates that consumers react differently to different media. This is because consumers:

• View TV as excellent for communicating action and emotional depth

• Better engage with PC’s on dynamic content and highly personal communications

• Get a memory boost from Mobile’s small screen and concomitant focus

What Does This Mean For Marketers?

1.  Ad Performance Differs by Form Factor – Ad performance differs by form factor. The same video ad performs differently on TV versus On-Line Video. I think it’s safe to predict that when we measure it, the same ad will also perform differently on a Mobile phone or an iPad.

Form factors matter, and Marketers need to measure and understand the differences in performance to develop the most impactful media plans. Imagine the day when you have 4 different ad performance scores: one each for TV, Web, iPad, and Mobile – all for the same ad.

Ad Performance & Media Form Factor

2.  Media Character Influences Performance – Different media have different “media characters” and physical characteristics and consumers process them differently. This needs to be taken into account when thinking through how to translate your brand strategy into a media strategy.

• Television — If TV is better for emotional depth, then it’s probably more effective for brands with strong emotional benefit messages. TV also seems superior for action, especially given the ever-expanding screen sizes; brands that need to visually demonstrate their benefit in action are also likely to do better in TV. Google’s “Parisian Love” ad offers viewers both emotional depth and a call to action:

• Personal Computers – PC based communication provides depth and interactivity. This is key for educational driven brand strategies. As well, brands with highly personal and sensitive messages ought to perform better in this environment.

• Mobile – Since Mobile communication tends to drive greater memory retention, brands with a totally new message, or with limited spending, could benefit from this medium. And, of course, brands with timely and urgent calls to action should definitely be in the Mobile space.

Starbucks' Call to Action Ads: Mobile Platform

Media – More Than Reach, Frequency and GRP’s

The point is this. Media is a lot more than reach, frequency and GRP’s. The media type, the delivery form factor, and personality characteristics all influence how your advertising works.

And, of course, these are all just tendencies, not absolutes. TV can clearly deliver memorable ads, PC’s can communicate emotional depth, and Mobile can deliver emotionally laden messaging.

The key is to know each media types relative strengths and profiles, augment this with real performance data when possible, and use this knowledge to optimize your efforts in building your Brand and your Marketing ROI.

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The Genetic Markers of High Advertising ROI Brands

April 12, 2010

When I was in 8th grade, I was a pretty good basketball player who aspired to the NBA, but never noticed that my father was only 5’10” tall. The more scientists learn about our genes, the more they learn that while they’re not destiny, they do increase the likelihood that we will turn out a certain way. 

In a similar vein, TV Advertising has genetic tendencies–that is, certain characteristics tend to be associated with high ROI advertising brands. In June, I’m leading a series of Marketing ROI sessions at Nielsen’s annual Consumer 360 event in Las Vegas (Disclosure: I work for Nielsen). In preparation, I’ve been reviewing what we know about Advertising ROI from Market Mix Modeling. And learnings clearly point to a set of “genetic markers” of TV Advertising ROI. 

Market Mix Modeling — What Is It ?

Market Mix Modeling, if you’re not familiar with it, uses Marketing inputs and retail scanner data to build regression models which show how each Marketing element impacts revenue and, ultimately, Marketing return on investment. These models have become increasingly sophisticated and can now answer questions about ROMI by media channel, trade promotion, consumer promotion, FSI, etc. Most major CPG companies and many companies in other industries now routinely use MMM to evaluate the effectiveness of their Marketing mix.  

The Principles of Market Mix Modeling

So, back to the question: Assuming quality creative (always the most important factor), what are the genetic markers of brands with high TV advertising ROI? In a previous post, “The 5 Truths of TV Advertising Effectiveness,” I discussed whether TV advertising works as well today as 15 years ago. But beyond this, Marketing Mix Modeling can provide some answers not just about whether TV advertising is effective, but what kinds of brands and situations it’s most effective for.  

TV Advertising ROI is Highest:

1.  When Brands are Large — Larger brands ($200M+ in revenue) deliver higher ROI’s from TV advertising than smaller brands (<$50M in revenue). Why ?  

  • First, they have more users for advertising to influence. Advertising doesn’t just cause more consumers to buy your brand (or not). Beyond building penetration, effective advertising also builds purchase frequency and transaction size. Larger brands generally have more users, and therefore, more opportunities for advertising to build consumption through changes in purchase frequency and amount.
  • Second, it’s easier for larger brands to pay out the advertising investment. Simple math shows that a +10% revenue lift on a larger $200M brand ($20M) yields more revenue than the same lift on a $50M brand ($5M). So, on a fixed advertising spend, big brands can more easily achieve a good financial return.

TV Advertising ROI: Large Brands Have Large ROI

2.  When Purchase Frequency is High — Higher purchase frequency brands and categories tend to have strong Advertising ROI’s compared to low purchase frequency categories and brands.  

Higher purchase frequency brand consumers are likely more loyal to your brand (they’re buying it more frequently), and therefore, more predisposed to your brand and more likely to respond to your advertising. Also, a higher category purchase frequency means there are more buying opportunities for your advertising to influence consumers to buy your brand.  

3. When the Category is Expandable — Some categories are easily expandable (e.g. movies) while others are not (e.g. prescription medicine). Advertising ROI’s tend to be higher in expandable categories.  

And, big brands tend to benefit the most from category consumption increases, so the big brand effect mentioned above is doubly important (see Mike Ferry’s Guest Post “5 Ways Market Leading Brands Can Drive Growth“). 

4.  When Seasonal Category Consumption Is Higher than Media Costs — Many categories have seasonal consumption spikes. When the increase in category seasonal consumption is higher than the comparable seasonal increase in media costs, this presents an opportunity. Advertising ROI tends to be higher for brands that advertise during these seasonal consumption/media increase periods of imbalance.  

5. When the Brand has the Halo of a Masterbrand — Brands within a “Masterbrand” tend to have higher TV advertising ROI’s than brands without one. The halo effect of other brands within the Masterbrand have a clearly positive ROI impact on individual brands.  

But, Trade Promotions Are Even Better — Or Are They ?

Perhaps the most discouraging learning for Marketers who are big believers in advertising is this:  on average, MMM shows that advertising ROI is less than trade promotion ROI. And for some Marketers, that leads to the obvious: more and more trade spending and less and less advertising. Is this a good thing?  

Definitely not. MMM work clearly shows that there is a strong relationship between the % volume sold on promotion and regular price elasticity. Consumers aren’t stupid. If your brand is frequently on promotion, consumers learn that it’s only a matter of time until the next great deal–and they wait until it comes along.This points to another important way that Advertising works–it reduces price elasticity. It does so by reminding consumers of your brand’s benefit, getting current users to continue buying, encouraging them to buy more frequently and even buying more per buying occasion. 

Genetic Markers of High Advertising ROI Brands — Destiny or Hard Work ?

So, if your brand has the right genetic markers–is big, part of a large Masterbrand,  or lives in a category with seasonal consumption/media increase imbalances, high purchase frequency and expandable consumption–you’re in luck. For everyone else, don’t despair, it’s still possible to have high Advertising ROI.  After all, even the sons of 5’10” fathers make it to the NBA, just not very often and not without a lot of hard work.  

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