What do we need now and in the future to measure advertising success
Download
1 / 55

What do we need – now and in the future – to measure advertising success? - PowerPoint PPT Presentation


  • 80 Views
  • Uploaded on

What do we need – now and in the future – to measure advertising success?. Chisinau , November 7 th 2008. Introduction. 1973-1988 – Boase Massimi Pollit 1988-1990 – Tilby & Leeves 1990-1993 – Grey 1993-1996 – DDB 1996-2002 – OMD 2002-2007 – Schwarzkopf & Henkel

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' What do we need – now and in the future – to measure advertising success?' - posy


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
What do we need now and in the future to measure advertising success

What do we need – now and in the future – to measure advertising success?

Chisinau, November 7th 2008


Introduction
Introduction advertising success?

  • 1973-1988 – Boase Massimi Pollit

  • 1988-1990 – Tilby & Leeves

  • 1990-1993 – Grey

  • 1993-1996 – DDB

  • 1996-2002 – OMD

  • 2002-2007 – Schwarzkopf & Henkel

  • 2007 – OMD MoscowThe following presentation represents a personal point-of-view – but influenced by working both for an advertiser and in agencies. Some ideas, and indeed charts, have been borrowed from colleagues, most notably Tim Broadbent from O&M.


Format
Format advertising success?

  • How does advertising work?

  • How is advertising effectiveness measured?

  • What’s going to happen?

  • What measurement will we need in the future?


How does advertising work

How does advertising work? advertising success?


What do we know about advertising effectiveness
What do we know about Advertising Effectiveness? advertising success?

  • “Half the money I spend on advertising is wasted;

  • the trouble is I don't know which half. “

    • John Wanamaker,

    • US department store merchant (1838 - 1922)


“The only purpose of advertising is to sell. advertising success?

It has no other justification worth mentioning.”

Ray Rubicam

1893-1978


“Anybody in advertising who doesn’t say his purpose is to sell that

piece of merchandise is a phoney.”

Bill Bernbach

1911-1982


“I have seen one mail-order advertisement actually sell, not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Both advertisements occupied the same space.

Both were run in the same publication.

Both had photographic illustrations.

Both had carefully written copy.

The difference was that one used the right appeal and the other used the wrong appeal”

(John Caples, Tested Advertising Methods, 1931)


Short term or long term
Short-term or Long-term? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • “Andrew Ehrenberg has derived from these models of buyer behaviour (NBD/LSD and Dirichlet) a view on advertising for established brands. It mostly serves to publicise the advertised brand, but seldom seems to persuade. Promotions have only a short-term effect , and do not affect a brand's subsequent sales or brand loyalty. The extra buyers during the promotion have been seen almost all to have bought it before the promotion rather than being the hoped for new buyers”

  • And, advertising normally DOESN’T have much effect on short-term sales

  • It seems to protect existing loyalty and repeat purchase through LONG-TERM effects

  • . . . . . and how do we measure the ABSENCE of change?


How does advertising work1
How does advertising work? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • Advertising has the objective of increasing sales

  • Or not (Road Safety, Health, Fire Prevention, Programme trailers, Nutrition Advice, etc.)

  • Sales when?

  • Different ads work with different levels of success

    • Work in different ways

    • Work in the same way but better or worse


How does advertising work2
How does advertising work? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • Er, we don’t know

  • It seems pretty certain that different campaigns work in different ways

  • It seems pretty certain that different ads within campaigns work with varying success – and sometimes work in different ways

  • It seems pretty certain that long-term effects greatly outweigh short-term effects (N.B. This is normally not true for brand launches and even less true for category launches)


How is advertising effectiveness measured

How is advertising effectiveness measured? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.


The problem with evaluating ads effectiveness
The problem with evaluating ads’ effectiveness not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • “Its a good campaign, if sales go up”

  • “Its a bad campaign, if sales go down”

  • “Unfortunately, neither of these statements is always true. They are very often false”(Rosser Reeves, Reality in Advertising, 1961)


The problem with evaluating ads effectiveness1
The problem with evaluating ads’ effectiveness not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

“Recently a group of marketing men, almost idly, at a

luncheon table, listed thirty-seven factors, any or all of

which could cause the total sales of a brand to move up

or down.

Advertising was only one of these.

The product may be wrong. Price may be at fault.

Distribution may be poor. The sales force may not be

adequate. Budget may be too low. A better product may

be sweeping the market. A competitor may be outwitting

you with strong deals.

And when a wheel has many spokes, who can say which

spoke is supporting the wheel?”

Rosser Reeves


Advertising effectiveness measurement the last 30 shameful years
Advertising Effectiveness Measurement – not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.The Last 30 Shameful Years

  • Broadly, the methods for judging advertising success or failure are the same now as they were 30 years ago – only worse (despite around $10 trillion at 2000 prices being spent on advertising in mainstream media, globally, over this period)

    • Sales (but usually short-term)

    • Pre- and Post- Awareness, Usage and Attitude

    • Tracking (more prevalent now)

    • Econometric Modeling (but almost always based on short-term sales response – sometimes with some lag effects) (more prevalent now)

    • Etc


Problems with modeling
Problems with Modeling not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • Multivariate statistical techniques are being used more and more frequently to evaluate advertising effectiveness (and media mix, regional upweights, etc)

    • Criterion variable tends to be short-term sales – thus ignoring the main, long-term, contribution made by advertising

    • The statistical tools tend to be more robust than the data – like using a road drill for dentistry

    • The tools find relationships within the data – but this merely DESCRIBES the data – it does not necessarily prove CAUSALITY


Abusing a model
Abusing a Model not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • Brand X

  • 30 months, bi-monthly, data, rounded

  • Advertising, distribution and price


Abusing a model1

5% not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

53%

24%

18%

Abusing a Model

  • Sales = 154.0+0.143*Advertising+5.74*Distribution-2.36*Pricing

  • R2 = 0.81

  • Typical Sales Decomposition (Period 15)


Abusing a model2
Abusing a Model not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • Brand X

  • 30 months, bi-monthly, data

  • Advertising, distribution and price AND Factor Y


Abusing a model3

30% not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

4%

37%

17%

11%

Abusing a Model

  • Sales = -120.8+0.142*Advertising+4.94*Distribution-2.00*Pricing+2.79*Factor Y

  • R2 = 0.83

  • Typical Sales Decomposition (Period 15)


What is factor y
What is Factor Y? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • My son Tom’s age (expressed in months/2) at the time of the data series (he was 16 at the time)


So what does this mean for media measurement
So what does this mean for media measurement? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • We don’t know how advertising works

  • We do know that different campaigns and even different ads within a campaign work in different ways

  • We don’t know how to measure its effectiveness

  • Thus, media measurement (for advertisers) should restrict itself to the measurement of EXPOSURE (as now) rather than other factors (engagement?)

  • Even exposure is going to be harder to measure – or it will present different challenges – in the changing media landscape


What s going to happen

What’s going to happen? not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.


Some forecasts

, 1995 not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

, 1996

30” TV

Some Forecasts

“Television will disappear in less than ten years and the internet will be the leading mass medium.”

George Gilder & Nicholas Negroponte

“TV sets across the world will be jettisoned within a decade.”

Sir Christopher Bland, BBC Chairman


Average tv viewing time per day

Minutes not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Croatia

Hungary

Greece

Poland

Italy

UK

Belgium South

Spain

Germany

Ø West Europe

France

Portugal

Czech Republic

Netherlands

Irish Republic

Belgium North

Finland

Austria

Norway

Denmark

Sweden

Switzerland

Iceland*

West Europe

Central & East Europe

Average TV Viewing Time per Day

Source: Television 2006 / Mon- Sun / IP Network / local institutes / TG adults / Ø- time spent viewing / *no panel system


Average tv viewing time per day in western europe
Average TV Viewing Time per Day in not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.Western Europe

TV viewing has grown (+13% in the last 10 years).

Minutes

Source: Television 1996-2006 / IP Network / local institutes / EU-15 /TG / whole TV / figures weighted according to country size


Average media consumption in hours per week
Average Media Consumption in Hours per Week not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

TV is still by far the most used medium.

TV

Internet

Press


Tv consumption in context in western europe
TV Consumption in Context in Western Europe not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

4.01 billion


Tv consumption in context in western europe1
TV Consumption in Context in Western Europe not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

7.65 billion

4.01 billion


Worldwide advertising television end of the hegemony
Worldwide advertising not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.Television :end of the hegemony ?

Not in Russia


Tv current status
TV – Current Status not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

“The reports of my death have been greatly exaggerated.”

Mark Twain


We all know what happened
We all know what happened… not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • TV viewing constant or growing

  • Print still read avidly

  • Cinema attendances increase

  • Despite growth of DVD’s and PVR’s plenty of 30” ads

It’s the people spinning the globe.

Not the technology.


Atomisation not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Consolidation

Convergence

Media

Consumption

Advertising

Revenue

Media

Ownership

Media

Agency

Ownership

Technology

Media

Research

Consumers

Retailing


Consolidation concentration everywhere
Consolidation & concentration everywhere! not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

More power vs. retailers & media owners

More resources & synergies for R & D

More pressure on advertisers

+

$9.3 billion

$56.8 billion

29,000 people

98,000 people

Grocery retail concentration in western Europe

Market share by value of the top three retailers in each country

70%

60%

2001

2003

50%

40%

30%

20%

10%

0%

UK

Italy

Spain

Ireland

Poland

Austria

France

Finland

Greece

Norway

Sweden

Belgium

Portugal

Hungary

Denmark

Germany

Czech Rep

Netherlands


Retail consolidation new media force
Retail consolidation – new media force not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

  • With impressive retail consolidation comes a newly viable and buyable media phenomena – in-store media

  • Retailers are now so big that their in-store media can have larger daily reach than TV shows and stations, or press and radio packages

  • These media will become increasingly important as retailers continue to consolidate, mass media fragments, and usage occasions change to more impulse and channel specific.


The importance of in store media
The importance of In-store Media not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.


Media ownership development
Media ownership development not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

1983:

  • 50 corporations “dominated” mass media

  • $340 million biggest merger

    2000:

  • Number dominating companies down to six

  • AOL & Time Warner merger $350 billion – a thousand times larger!


One company endless possibilities
One company – endless possibilities not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Capitalizing of resources and synergies for Harry Potter launch!

Editorial coverage in the company’s Time and People magazines, by reviews on CNN and by advertising on the AOL internet service (in fact the company, which plans and buys most of its media in-house, is itself one of America’s largest advertisers).


Holistic view of a campaign

Radio not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Packaging

Television

Print

Alliances

British soap opera awards

Outdoor

Interactive

PR

Holistic view of a campaign


Media Consumption not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.


Average time allocation by media
Average time allocation by Media not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

“Television will disappear in less than ten years and the internet will be the leading mass medium.”

George Gilder & Nicholas Negroponte, 1995

Source: Pan-European EIAA Media Consumption Study II

Base: Users of each medium


Penetration by media type
Penetration by Media Type not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

TV remains the media of choice for most consumers with 96% of those studied watching something during a typical week

Penetration by Media Type

Percent

Of

Respondents

In a typical 5 day week, do you watch TV, read a newspaper or surf the internet? (note Magazines and Radio was during a typical 7 day week)

Source: Pan-European EIAA Media Consumption Study II


Offline activities moving online
Offline Activities Moving Online not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Approximately 2 in 5 internet users now book tickets online around a third chat to friends via the internet

%

Book tickets

Read newspapers

Chat to your friends

Shop

Listen to music

Read magazines

Share music

Buy music

Base: Internet users


TV sponsorships not twice as much, not three times as much, but 19 ½ times as much merchandise as another ad for the same product.

Coupons

Consumer

magazines

Displays in shops

Info with

monthly bill

Pester power

Sales people

Family and

colleagues

Radio

Newspapers

Trials

Airport ads

Friends

Helpline/

callcentre

TV

Outdoor

Fragmentation within the media landscape & increasing technological and consumer sophistication

Never EASIER to REACH

Never HARDER to CONNECT



Too much advertising pollutes
Too much advertising “pollutes” Complexity

Turned off by advertising

% agreeing

35

30

%

25

TV ads are annoying

Enjoy ads as much as TV

20

programmes

15

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source: TGI


With increased clutter it becomes more difficult to break through
With increased clutter, it becomes more difficult to break through

Ad “Cost per Awareness Point” Index

Source: Millward Brown (base 700 spots tested) - Spain


Advertising effectiveness is on decline throughRecognition TV – Example MRF

Source: OMD Market Response Finder / Average all campaigns - Germany.


Technology through

Converging technologies, e-merging contents.




Some tentative conclusions
Some, Tentative, Conclusions through

  • Media research should restrict itself to determining levels of exposure for advertising

  • With increasing amounts of media transmitted via the internet and via different platforms, should we maintain current research methodologies? Are peoplemeters dead?

  • The reports of the death of TV have been greatly exaggerated.

  • The store is becoming a significant medium

  • Development of multi-channel communication plans – from multi-channel media owners – and the importance of holistic research for planning and evaluation

  • Project Apollo may finally provide a plausible explanation of advertising effects?

  • The consumer has never been easier to reach but never harder to connect or involve – and advertising has never been less involving

  • TV advertising has reduced power – owing to clutter – or poor creative?



ad