Mediating Mind

HOW THE WORLD HAS CHANGED IN THE LAST 60 DAYS - by Bill Harvey

2007-06-10T14:07:00.000-07:00

My good friend Bob DeSena keeps saying it. “The world has changed in the last __ days,” he says. First time he said it I heard 41 days. The next day he was up to 42. I believe he is actually counting the days since It All Changed.

With a guy like Bob around it is impossible not to think. His statement got my mind going.

What Bob is talking about are the series of deals in the box below all of which occurred since April.

(Ed: Bob’s slide shows the name “iO” because he heads North America
for that British Telecom spinoff which is an intelligent convergence
platform for all screen media.)

To Bob the most stunning aspects of these deals is that players crossed the line to the other side of the tracks. A buyer (WPP owns many top agencies) buys a seller. A technology company (Microsoft) buys a (technology-rich) agency.

Bob sees the worlds of Media, Telecom, Technology, and Agencies in collision like galaxies passing through one another, and says that underneath all this collision is actually the real convergence. It's just hard to recognize because we were expecting convergence to be somehow different. Maybe we always picture convergence from a device point of view, and Bob is seeing it from a human organizations point of view.

The thing that one spots immediately is that this whole phenomenon (“The Four Apocalyptic Deals”, “4AD”) has something to do with agencies. They are morphing intuitively like the blind sages that they are. One can guarantee that each of these centers of adaptive thinking will land on its feet, wearing a completely new mask, but pretty much doing the same old thing albeit in a better way.

Even the blurring of the line as regards Third Party Measurement is not new, although it runs through 4AD. 24/7 will be selling to WPP agencies. The advertiser has to trust that WPP and 24/7 are “above all that”. Why is this not new?

Because in the 70s J. Walter Thompson bought Simmons, then the leading magazine measurement currency, upon which $5+ billion dollars would be transacted at Third Party Data reflective prices every year. Life went on. There were no brouhahas, everyone earned their trust. WPP which now owns JWT also owns Kantar, one of the top 4 marketing research companies in the world, and Kantar owns Millward Brown, one of the world's most trusted sources of campaign effectiveness measurement.

The trust (enforced by the MRC in some cases) goes on and widens. An enlargement of trust seems like a nice idea. We will come out of the metamorphic period in a few years, notice that we are now butterflies, look around and be surprised yet proud that we are in fact all trustworthy. Or more likely a few will turn out not to be, and their cases will be object lessons what not to do.

The most profoundly different aspect of The Change may yet to be seen, waiting round the next corner. It could be this:

For the last few years I've heard myself saying, “Let's drop the confrontational opposite-sides-of-the-table roles of buyer and seller. Both ‘sides' benefit the greater is the advertising effectiveness that is created in the marketplace. If the two ‘sides' work together with that as their single mutual goal, can't everything else work itself out from that?”

With the fusion of agencies and sellers and technology, isn't this table rearrangement in the cards?

State Of The Industry

2006-06-18T10:44:00.000-07:00

Unsurprisingly the upfront is soft. Advertisers have woken up to the error of our ways. Sure enough, interruptive ads as the sole use of magical media is a shortfall. New ways are needed and we need to find them. In the meantime let’s test everything and slow down the outpouring of vast cash in habitual ways except where the proof makes that justifiable to those who would ask marketing to defend its life.

NCM has found for example that the ancient practice of sponsorship works – but not all sponsorship. It has to:

1.Not be perceived as advertising by the consumer
2.Engender a gratitude effect in the consumer as in “how surprising that X-CO brought me this program without ads – and how hip – I guess I misjudged X-CO – maybe their products deserve another look”

But look at what happens when you do that:

Slides are excerpted from Bill’s presentation to the ARF Annual AMS Conference June 21, 2006

Five to seven times the persuasion effect of TV commercials – ROI way above the average for plain old advertising.

Would love to post any other cases where new ways have garnered results which break the low 4:1 ROI ceiling implied by MMA findings above – do you have any you’d care to share – please post it here as comment so we can all see – thanks. Best to all, Bill

Six New Marketing Strategies to Engage Consumers Emotionally

2006-03-27T04:28:00.000-08:00

Emotions

Speaking to a worldwide advertising industry audience gathered in Geneva, P&G head of worldwide media strategy Bernhard Glock announced two years ago that the world’s leading package goods company saw the need to “touch the hearts” of consumers.

In the U.S., the industry’s three leading associations, the ANA, 4As and ARF embarked on an ambitious project to expand the industry’s ability to measure and understand the emotional element in advertising. They then popularized the term “Engagement” as a rallying cry. Let us engage consumers emotionally, is part of their message. The other parts of Engagement besides Emotional Bonding, according to Dr. Joe Plummer of ARF, are Utility/ Relevancy/ Targeting and Surprise/ Discovery, and they are also largely emotional/ unconscious responses too.

A topnotch marketing research scientist and Harvard professor, Gerald Zaltman, drew upon neuroscience and other disciplines to synthesize a picture of how consumers think, concluding that 95% of how we think is unconscious and emotional, and is not being measured by 99% of the $16 billion spent each year on marketing research.

In a gathering last year at the New York Yacht Club convened by the viral marketing company Informative, clients of that company including P&G, Pfizer, Lego, Bose, and Intuit talked about how Informative’s natural language based Internet communication system, designed to bring marketers and consumers closer together, had revealed important consumer insights that had been filtered out by the standard tools of marketing research such as focus groups and surveys.

These scattered events form a pattern. The world’s leading corporations, who collectively spend on marketing about one-fifth of their total revenue (about a trillion marketing dollars a year) – money spent essentially based on guesswork with little after the fact proof that the money was well spent – are reaching the end of their patience waiting for this intolerable situation to right itself. Using econometric modeling and every other tool they can lay their hands on, they are mounting their own version of an ad hoc non-coordinated Manhattan Project to make marketing measurable and accountable. And as they peel the onion they are discovering that there are more layers there than they thought, and that even cutting edge science is only on the frontier of being able to answer their questions, and that emotion and unconscious aspects of the mind must indeed be engaged by marketers who are serious about having an effect.

These momentous changes in the field of marketing are occurring simultaneously with an explosion of new media triggered by new digital technologies. Marketers using econometric modeling and simpler metrics are becoming disillusioned with the apparent lack of efficacy in their traditional mass media marketing techniques, and are turning to these new media with hope that they will provide greater returns on marketing investments (ROMI). For one thing, almost all of them allow consumer response – they are interactive. For another thing, almost all of them leave a census-level audit trail – they provide a foundation for deep accountability.

It is the point of view of this paper that simply changing media will not in itself cause a substantial increase in effectiveness. Readers who know us will infer from our career-long affection for the New Media that this latter statement is not to deny that the New Media will play a major role in the future of marketing. Rather we believe that the underlying problem is that the communication strategies being used are at fault, and that if these strategies are translated wholecloth into the new media, the problem of low ROMI will persist.

Flashbacks

In 1976 we approached one of our early teachers, Dr. Larry Deckinger of Grey Advertising, one of the wisest people in the field, with our own speculations about the impending demise of the general advertising industry communication strategy – the strategy of hitting people with unwanted messages containing information designed to persuade them to buy.

We showed him evidence that the mind of the market was changing. People were becoming more skeptical about advertising content, more distrustful of large corporations, less interested in shallow materialist interests, and more vocal about yearnings to find real meaning in their lives. Talking to them about largely fictitious advantages of one commodity/parity brand over others – while interrupting them from watching something they had chosen to watch – seemed in this new context to be insulting, and a guarantee of boomerang effectiveness.

We predicted that advertising in its traditional form would become less effective due to these seismic shifts in the consumer psyche, and proposed that Grey go to its advertiser clients with a proposal to change the nature of advertising in a way designed to succeed in the new mental environment.

We made our proposal with the foreknowledge that the industry would be biased in favor of continuing to insert commercials in TV programs in much the same way for as long as possible, and that any proposal revolutionary enough to meddle with that practice would not be likely of adoption. This is because any industry is loathe to totally overturn processes which have made so many individuals so wealthy for such a long time. So we made what we thought would be an acceptable proposal, one that would keep the wheels of industry turning in much the same way, only changing the exact nature of the content in those inserted video blobs.

We proposed that advertisers create miniprograms the same length as commercials. Miniprograms that would inspire, uplift and expand the minds of viewers, add to their quality of life, teach them something useful, or report on the good citizenship charitable works of the brand or its parent company. We called these units PSADs – public service announcement ads. Alternative names: sponsored miniprograms, Quality Of Life advertising (QOL).

A beauty product might create spots about how to be beautiful by projecting an inner beauty emanating from having set one’s mind into a loving mode. A pet food manufacturer might pass on a tip about how to communicate with a cat. A cooking tip from a food advertiser. A soap manufacturer’s tip about how to remove a certain type of stain from a certain fabric. How a company was raising the standard of living in a poor country by its new plant opening there. And so on.

We argued that where a brand really had a product difference to talk about, it should do so, but where there was nothing truthful to say about product advantages, brands should use the time to give a gift of content that could be appreciated, creating good will.

Larry said that he agreed with all this but did not think that he could get Grey management to go along with it, and if they did, he was not sure that the clients would go along with it anyway.

Another of our early teachers at about the same time taught us a lesson about great advertising. Nick Pisacane, copywriter and creative consultant, for major brands at McCann-Erickson, Wells Rich Greene, BBDO, et al, explained that he always tried to tie his commercials to larger issues, things that people really cared about. Instead of talking about a product for home improvement, he would write commercials about the deep feelings evoked by the idea of home, and then tie his client’s product to those deep feelings.

Common Sense

To a “civilian” i.e. a human being not in the business, explaining this has always been easier. They take it all as obvious. “You mean, instead of interrupting and insulting me with ads which assume that I am a trivial person concerned about these lowly matters, advertisers should entertain me with something brief and beautiful, or educate me with information I can use? Which of these two approaches would make me like them better, make me want to repay them by considering buying their brand? Duh, let me see, that’s a really tough one….”

If we are now really trying to engage consumers emotionally, to touch their hearts, is it not time to reconsider the content we put into our messages? Can we really engage the consumer emotionally by talking about the absorbency of our paper towel? Isn’t it time not only for New Media and new measurements and new buzzwords, but also for a whole new perspective on how to use the bits of time called advertising?

Gratitude Effect

28 studies conducted over the past five years for P&G, Nestle, American Express, Toyota, Volvo, et al have shown that a 29% average increase in purchase intent can be created by a brand sponsoring useful content on the Internet, eschewing the opportunity to bend the consumer’s ear with a product pitch, and instead merely saying “Brought to you by”.

This compares with an average 4% increase in purchase intent created by the average TV commercial pretested by leading TV commercial pretesting company ARS – 35,000 TV commercials included in that 4% average.

Next Century Media did these 28 studies with the Sponsorship Effectiveness Index (SEI) tool NCM created with Studio One Networks, Inc. SEI utilizes classic experimental design where the only variable between the matched exposed and control group is that the control group does not see any mention of any sponsor. The purchase intent measurement like the pre-post brand choice instrument used by ARS attempts to hew as closely as possible to the original Horace Schwerin methodology which has been validated and revalidated as predictive of actual sales effects many times over the past 70 years.

A study I did years ago for a pet food manufacturer showed that sponsoring a prime time TV Special about cats had three times the persuasion effect as the average TV commercial used by the same brand.

A series of CBS TV Specials measured by Norman Hecht Research showed similarly high persuasion effects, except in one case where there were multiple sponsors. The use of sponsorship – giving a gift of good content without taking it as license to bombard the viewer with product bombast – appears to have its emotive effectiveness when there is a single giver to whom to be grateful.

This apparent emotive Gratitude Effect is a clue to at least one of the likely communication strategies of the future marketing/advertising field.

Six New Strategies

Here are our predictions as to which communications approaches are going to supplant the traditional “rape the consciousness” mode of advertising in a quest for emotional engagement with consumers. In the process of outlining these we will mention the early pioneers who today are laying the groundwork for each of these new approaches.

Emotional Advertising
Surprise
Cause Marketing
Gratitude Sponsorship
Educational Marketing
Experiential Marketing

Emotional Advertising

In my flashback above I mentioned one of my early teachers, copywriter Nick Pisacane. Recently he has been serving as a confidential creative consultant for some of the biggest names in advertising – the “Intel Inside” a number of big hitters. When the research I was doing started to point in an emotional direction I gave Nick a call and said in effect “Your time has come.” One thing led to another and with me as Research Advisor, Nick and his longtime art director Al Amato formed a new creative resource called EmotionalAdvertising.com. This organization although still in its infancy has already formed a strategic alliance with a production company that specializes in the use of major film directors such as Oliver Stone, et al, in the production of advertising, in traditional and new forms. Not all Emotional Advertising creative product will utilize such talent because as Nick and Al say, it will not always be necessary. Nothing I can say about their work means anything compared to the reel of the great advertising they have already created, all of which touches the heart. A sampling is on their website which can be reached directly by clicking here.

As we move into the new age of advertising, an age of true maturity and practical realism for the field, emotional advertising and its leading proponent EmotionalAdvertising.com is destined to play a major role.

Surprise

I mentioned that the Advertising Research Foundation’s Chief Research Officer Joe Plummer recently hypothesized that the three drivers of Advertising Engagement are:

Surprise/Discovery
Emotional Bonding
Relevancy/Utility

You may already have seen some of the results of the new Eye Tracking study which Next Century Media did for TACODA. These results strongly support the Plummer hypothesis about the importance of surprise.

TACODA is one of the leaders in the use of Behavioral Targeting on the Internet. Behavioral Targeting sends ads to people who appear to be targets for a product because in their very recent (last few days) Web behavior they have visited sites related to the purchase of that product. Over the past two years Behavioral Targeting has proven itself in numerous case studies as reaching the same people the advertiser can reach on highly targeted Contextual content sites (e.g. Autobytel) but reaching them in environments where the CPM is far lower. While this is great for the advertiser in extending the reach of targets most efficiently (most advertisers buy a base of Contextual sites then add Behavioral on top of that base), it’s also great for publishers because it allows them to raise the CPM of a Run Of Network site by offering Behavioral Targeting there – a true win/win situation.

Behavioral Targeting never claimed to be as good as Contextual Targeting (advertising on the sites specifically related to purchase of, and information about specific products), just more efficient in reaching targets. Then the unexpected happened – case studies started to roll in from TACODA, Advertising.com, Revenue Sciences, 24/7 and others, showing that Behavioral often beats Contextual in clickthrough rate, lift in purchase intent, ROI, and other important measures.

TACODA asked NCM to investigate. We suspected surprise as one possible element. Seeing a car ad on a baby site, we hypothesized, would surprise the user and therefore perhaps gain more attention than if the car ad were on a car site. It looks as if we were right. An eye tracking study conducted to our design by The PreTesting Company, the best-known user of the technique with numerous patents to its credit, found that users looked more at the same ads in Behavioral Targeting environments than in Contextual Targeting environments. Interestingly, this advantage for Behavioral Targeting became even more dramatic – a 54% advantage for Behavioral over Contextual – after the first exposure (specifically, across the second, third, and fourth exposures of the same ad to the same person). Apparently the effect of surprise does not wear out as quickly as some other psychological effects do.

TACODA and NCM are now planning a brainwave study to delve even more deeply into the matter of surprise. Stay tuned.

Surprise is one of the most important and least researched elements in advertising. Researchers interested in delving deeper should start with the work of Dr. Emmanuel Donchin, who discovered the brainwave signature of surprise (the P300 Wave).

Cause Marketing

Cause Marketing is the doing of good works by companies, and the appropriate communication of those good works using media. 30 second miniprograms as espoused above is one form in which such good works might be communicated to the public. The segment of the population which Stanford University’s Stanford Research Institute (SRI) has dubbed “Societally Conscious” is likely to be most affected by this strategy, but its effects are not limited to that group. Cause Marketing is estimated to be a $1 billion industry segment as of 2005 (we conservatively project from a 2001 IEG Sponsorship Report estimate of $733 million). An MIT article further estimates that 69% of 2005 sponsorship dollars went to sports, while 9% went to social causes, implying a $11 billion size for total sponsorship dollars in the U.S. in 2005.

Case studies show that Avon, Stonyfield Farm and Starbucks benefited from sponsoring social causes. Cone Communications, an agency specializing in Cause Marketing, conducts surveys to measure consumer reactions to this form of marketing. Among their findings:

80% of Americans say they have a more positive image of companies that support a cause they care about
Nearly two-thirds of Americans say they would likely switch brands or retailers to one associated with a good cause
More than half say they would pay more for a cause marketer’s product or service
87% of employees at organizations with a cause marketing program feel a strong sense of loyalty to their company as opposed to 67% of those at companies that do not support causes

The average consumer is vocal in saying she/he couldn’t care less about most advertising. The same average consumer is a human being with real feelings, who is passionate about some subjects. An advertiser seeking to make a deep connection with real human beings can learn what they care about and then do something good for something they care about. This can have deep and long-lasting effect on the relationship with those consumers,
far in excess of what can be done with almost any advertising.

Look for Cause Marketing to become a larger share of the total marketing pie in years to come.

Gratitude Sponsorship

Gratitude Sponsorship has already been described above. Studio One Networks is a pioneer in the use of this form on the Internet and radio (and is now moving into television). Hallmark is an advertiser who has long been associated with this form on television. The sponsorship approach was the main mode of advertising in the early days of radio and television until the quest for efficient reach (and the “eggs-in-too-few-baskets” downside of an all-sponsorship approach at least as regards new TV pilots, only 2% of which make it to a second season) led to scatter plan strategy in the early 60s.

Andrew Susman had been an executive at Time Warner prior to forming Studio One Networks. At Time Warner he helped P&G launch their Parentime site, one of the first uses of Gratitude Sponsorship on the Web.

Of the 28 studies NCM has done so far for Studio One (three more are in the field right now), the one that has been fully disclosed with advertiser permission is the Volvo case. The Volvo study was made possible by Phil Bienert, VP Marketing of Volvo, Charlie Tarzian, CEO of Euro RSCG Circle, and the Interactive Advertising Bureau who helped line up the Internet publishers including Yahoo, Terralycos, Conde Net, Studio One Networks and others.

Volvo placed a simple “Brought to you by Volvo – for life” message on its coverage of the New York Auto Show from the Jacob Javits Center. There was no advertising. However, because it was a car show, all of Volvo’s competitors were showcased in the editorial. The user must have typically been quite surprised to see Volvo obviously paying real money to bring the user rave reviews about new Mercedes, BMWs, Chryslers, etc.

The inclusion of Volvo in the Consideration Set of those seeing this (vs. a matched control group seeing the same editorial with no sponsor message) was over 600% higher. Marketing Mix Modeling applied to the data deduced a 90 to 1 ROI for Volvo. A study done by Erwin Ephron and MMA in 2003 for presentation to ESOMAR showed that for non packaged goods products, paid media advertising averages only a 2.24 to 1 ROI. Volvo exceeded the average by a stupendous margin by surprising the audience with great content in which Volvo’s competitors were showcased. Go figure.

Sponsoring content liked by the target audience without asking anything in return (i.e. not even taking advantage of the opportunity to insert advertising) hits all three of the Plummer Engagement Drivers: Surprise, Emotional Bonding, and Relevancy. No wonder it worked for Volvo.

Look for a renaissance in the use of sponsorship as more and more ad-skipping takes place. Product placement may move in this direction, so as to gain the Gratitude Effect by getting the viewer to understand that the program might not have been there at all if it were not for the sponsor. The concern for ad skipping on VOD will undoubtedly cause a move toward the use of sponsorship on VOD. The same is true of content on mobile devices, where interruptive ads will be particularly disliked by most users.

Educational Marketing

Educational Marketing is the teaching of subjects to consumers for free, sponsored by specific advertisers. Powered is a pioneer in the use of this form on the Internet for companies such as HP and Sony.

HP for example sponsored a course on digital photography. The only subtle advertising for HP’s products occurred when the course had to show products in use and these happened to be HP products…almost like product placement. But HP was also the giver of the gift of a free course, and HP also distinguished itself from other marketers in its restraint from using the opportunity for a pitch.

The result (not specifically for HP but the average across all Powered sponsors during 2005) was an ROI of 55 to 1, 25 times the average ROI for paid media advertising for non CPG advertisers according to the Ephron/ MMA study.

Observers of human society have often focused on education as the key to uplifting the human condition, and have often identified its opposite, ignorance, as the main driver of what we call evil. Wouldn’t it be convenient if advertisers found that they could gain huge increases in ROI by helping to educate rather than by what we have been doing under the guise of advertising for the last Century or so.

Experiential Marketing

Experiential Marketing is the use of in-person experiences/events to allow human level communication among and between companies and consumers. Dan Belmont is a pioneer in the use of this form.

The way I met Dan was my cell phone rang and it was John Bernbach, son of Bill, one of the greatest creatives in the advertising business, whom it had been my honor to meet many years ago, introduced by my friend Rosser Reeves. John, a genius in his own right, teamed with Martin Puris in a company called NonTraditional Media about which I will write in another posting, said “Remember you said you had a plan to measure the ROI of
event sponsorship? Well, I’ve got a guy with me right now named Dan Belmont who wants to do just that.”

15 minutes later Dan and I were having a drink and comparing notes. I learned the term “Experiential Marketing” means more than event sponsorship, it includes everything that can be personally experienced by a consumer directly i.e. not through media – including such things as product sample tastes given in supermarkets. I was amazed to discover that Dan had put together Intel, Cisco, Dell, Oracle, Microsoft and AOL in a group called the Technology Experience Marketing Strategy Council. They are seeking empirical measurements of the ROI of experiential marketing. I told Dan that NCM had been invited years earlier by the ANA Sponsorship Committee to put together a plan to do the same thing as regards the event sponsorship piece of it.

This story does not yet have an ending. Dan has just taken a big job at Omnicom, as Chief Marketing Officer for The Marketing Arm, the Omnicom agency that plans, buys, measures, and executes across all the emotional platforms, and as President of its sports marketing division Millsport. The Technology Experience Marketing Strategy Council continues in its mission with Dan as Chairman. The next chapter will be an interesting one. Experiencing direct contact with marketers is the most personal form of persuasive communications a consumer can have. Personal experience goes deep. With Dan’s passionate leadership we have no doubt that there will be empirical measurements of just how deep in the not too distant future.

The Over-Story Hasn’t Got an Ending Yet Either

As with all things, there will be advertisers who move first into these new areas of generating positive emotion which drives sales results. Since the emotional bonding with anything tends to go deep within human beings’ psyches, once some advertisers achieve emotional bonding, the ability of their competitors to do the same thing may well be decreased. This creates more of an incentive for advertisers to lead rather than settling for the fast-follower strategy preferred by so many. The years ahead will be interesting to watch.

Engagement and the ARF Model

2006-03-14T05:25:00.000-08:00

The ARF et al have to step very carefully here – these are tricky issues. As Erwin Ephron points out, advertising Engagement does not just depend on the media, it depends even more on the creative itself – so basing transaction currency on a medium’s average advertising Engagement numbers is to some extent holding the media responsible for something they do not control. This whole vortex has roots going back at least to the 1950s and probably earlier.

In the 1950s, spurred on by the arrival of television, the ARF struggled to create a Model which would permit advertisers and agencies to make fair intermedia comparisons, knowing how to relate print circulation and audience to broadcast audience on an apples to apples basis. After years of remarkably intellectual debate by some of the brightest minds in the industry (then or now), in 1961 the ARF published its first Model defining the levels on which media could be compared. That Model had 6 levels and ignored the existence of multistage direct marketing where a person can interact with an ad yet not commit to purchase. This omission became increasingly relevant as direct response ballooned and as New Electronic Media with interactivity appeared on the scene. In the late 90s the ARF asked me to form a committee to update the Model. The choice of me as the first chair of this new committee reflected the fact that I had been using an unofficial updated ARF Model for our clients at Next Century Media, and that (13 level) Model had been published in a paper in the ARF Journal of Advertising Research.

Erwin Ephron agreed to be co-chair of the committee which also consisted of Bill Moran, Jim Spaeth, Denman Maroney, and graphic artist genius Phil Brandt whose responsibility was to create a new visual representation of the Model. In 2002 the new (8 level) Model was published.

The subtext of the Model from the 1950s through the present moment is the reasonable desire of advertisers and agencies to move the basis of buying media up from the low level called “Vehicle Exposure” where it has been for as long as anyone can remember. This is the level measured by Nielsen, Arbitron, MRI, Simmons, Scarborough, et al. It represents potential exposure to the ad in that it purports to measure the audience to the vehicle in which the ad is embedded – e.g. the program or publication.

Ideally, the buyer side would like the transaction with the media seller to be based on the highest level of the Model: Sales produced by the advertising. A few direct marketers and Internet sellers have already accepted this deal but 99% have resisted, saying that since they don’t control the creative, they could do their job perfectly and not get paid because of the agency’s creative failure. “Not fair!” they say, reasonably enough.

The ARF through its Engagement Proclamation seeks to cut this baby somewhere like in half…by finding a middle ground acceptable to all parties…and yet finding a metric that is predictive of Return On Investment (ROI), which is part of the Sales level of the Model. This is a ‘cake and eat it too’ strategy. Can it work?

Here are the hurdles which ARF must overcome:

The media must find the metric fair to them.
The metric must be proven to validly predict ROI.
Measuring the metric must be affordable and practical.
No one research company must be unfairly favored.

So, when we say ‘if successful’, it’s because of those hurdles.

Some practitioners have suggested that Engagement ought to be based on some characteristics of the medium which do not involve the creative. For example, the Durationists believe that in television one could infer Engagement based on the length of time the average audience member stays tuned to a program. Loyalists believe that the number of telecasts out of four seen by an average audience member would be a useful indicator of Engagement. And there are some Duratio-Loyalists who argue that Engagement ought to be based on both of those measurements.

This would make sense if we knew for sure that loyalty or tuning duration to a program translates to more attention to an ad placed in that program. It’s also possible that the longer one stays tuned to a program the more one needs to run to the washroom when the commercial comes on. As Erwin points out, we really don’t know the degree to which media Engagement leads to advertising Engagement. Some direct marketers insist that, leaving cost aside, the response rate to direct response TV is greatest in the least involving programming, and 2-6AM is often cited as an example of such programming. In my own experience I’ve never had an opportunity to verify the latter assertion.

Some of the other places in the Model where one might plant the flag called “Engagement” include:

Advertising Exposure (commercial audience, ad page exposure) – this is level 3 of the updated Model, right above Vehicle Exposure
Commercial Retention (the percent of those starting a commercial who stay tuned to the end of it without muting or turning the sound down)
Advertising Attentiveness (based on self-report or psychophysiological measurement) – level 4 of the updated Model
Advertising Communication (e.g. commercial recall) – level 5
Advertising Persuasion – level 6
Advertising Interaction – level 7
Sales produced by the advertising – level 8

This picture of the model shows the eight levels at which media performance can be measured as eight segments of a helix seen from above. The segments are numbered and colored in increasing order of advertising relevance. In this example the relative sizes of the slices suggest the relative numbers of people involved at each level. The number of people who buy the advertised product (Sales Response, segment 8, colored red) is smaller than the number persuaded by the advertising (segment 6), which is smaller than the number attentive to the advertising (segment 4) and so on. The number of people exposed to the vehicle (segment 2) is usually larger than the number of vehicles in circulation (segment 1), since more than one person is likely to read a copy of an issue of a magazine or watch a TV set tuned to a TV program. The picture is not meant to suggest that the levels are necessarily consecutive; beyond advertising exposure, they need not be. Rather, it simply is a way of laying them out in an easily observable format for purposes of comparison.

In all of these cases, one would have to find a practical, affordable way to obtain valid averages across all of the advertising recently placed in each medium. A new company in which I’m involved, Touchpoints ROI Audit (TRA), and Apollo, the VNU/Arbitron coventure midwifed by P&G, could calculate average sales effect medium by medium. This would go all the way to the top of the Model. The media who were shown to have low averages however would argue that it wasn’t their fault that the ads placed in their medium had been so lousy, and that if someone gave them some good ads, they would move to the top of the ranking in sales effect.

This same criticism will be leveled by the media at everything in the bulletpoint list above except Advertising Exposure. From Commercial Retention through Sales, the creative is more important than the medium in determining these numbers.

So what is ARF likely to announce on March 21?

Guess #1: ARF will stop short of limiting the definition of Engagement to one specific metric derived from one specific method, and will instead lay down the groundrule that it must be a metric validated to be predictive of ROI, and which can be applied to audience data as a weight in the CPM calculation so as to be integrated into the buying process. The prestigious Richard D. Lysaker Award might be offered to whichever company comes up with the best solution, in the hopes that many research companies rise to the challenge.

Guess #2: ARF will actually elect one metric based on one method. I find this hard to believe given the long history of staying neutral on issues which could tilt favoritistically toward one or another research company. But I’ve been surprised before.

Guess #3: ARF might select ROI measurement itself as the goal, and this would point toward TRA and Apollo, while encouraging others to create their own contenders in this category. This is highly unlikely because from the get-go, as Bob Barocci, ARF CEO, explained it to me, the purpose of MI4 was to come up with a surrogate for ROI.

Guess #4: There has lately been close collaboration between ARF and Harvard professor Gerald Zaltman, whose book How Customers Think threw marketing research into a cocked hat by saying that 95% of the time consumer buying behavior is unconscious whereas nearly 100% of the time, marketing researchers measure the conscious mind only. What if ARF selects a psychophysiological metric for Engagement? Interesting to imagine, but hard to believe. By doing this, ARF would be taking about as radical a stand as Galileo did (and might be just as right as Galileo, but would likely take as much flak as he did too).

Guess #5: ARF calls for two measures, one emotional and the other behavioral. The emotional measure might be psychophysiological, or not, or perhaps the door is left open either way on that. The behavioral measure would involve purchase measurement and real ROI.

Guess #6: This is the only guess I would put money on. This guess is that all of the above guesses are wrong and ARF does something I have not anticipated. It will be very interesting to find out. I hope someone emails me as I will be on a cruise ship in the Pacific with my wife and Mom (already booked before ARF set the date). And I hope the ship has connectivity!

All the best,

Bill

ARF Engagement Recipe: Surprise, Utility, and Emotion

2006-03-03T06:29:00.000-08:00

In a series of webcasts and meetings during December, the ARF stimulated and educated the industry on the subject of Engagement. A great deal of valuable discussion took place and many companies participated. We did too. We were grateful when we saw that one of the ideas we had input, the importance of surprise in creating Engagement, stuck. Joe had undoubtedly already been thinking about it, judging from his instant agreement.

Joe Plummer, ARF’s Chief Research Officer and the leader of the MI4 Joint ANA/AAAA/ARF Task Force, put forth the following three possible drivers of Engagement in one of those webcasts:

Surprise/Discovery: the ad is in some way unexpected and therefore catches the consumer’s attention in a way that it would not if it were predictably in line with previous advertising seen. Primarily a creative control dimension, but with important media control aspects as we will see below.
Utility/Relevancy: the ad speaks to the individual’s interests. This dimension is the reason why targeting is important. If an ad is well targeted, this dimension will be highly functional in driving Engagement among the True Targets in the audience reached. Primarily a media control dimension in most cases but with some creative control aspects too. The ARF Adworks studies showed that targeting is the most robust predictor of high ROI.
Emotional Bonding: the ad creates positive affect such that the consumer is willing to be drawn closer to it. “Touching the consumer’s heart” is the high end of this dimension, and “liking” is more broadly descriptive of all instances of it. ARF’s Copy Testing Validation study had found that in addition to Persuasion, the best predictor of ROI among communications effects measures, Liking is a secondary measure of importance which can increase the ROI predictivity of Persuasion. Primarily a creative control dimension, but, again, with important media control aspects as brought out below.

Joe’s enunciation of these three dimensions sparked some new realizations in me. Some of the research we at Next Century Media had been doing had left some unresolved questions in my mind, and acceptance of Joe’s model would clear these questions up. Of course, the status of the three-driver model is that it is hypothetical at this point; much more research will have to be done before its truth is empirically established. Yet the explanatory power of a model is often a clue as to its veracity.

Here’s how the Plummer Model helped me reach closure on some intriguing questions.

Interestingly, these questions primarily relate to media, not to creative variables, although these two domains are abstractions, and the consumer never sees media divorced from creative or vice versa.

Next Century Media conducted a series of 30 studies over the past five years, for companies such as P&G, Nestle, American Express, Toyota, Volvo, et al, which show that “Brought to you by” Internet sponsorships, without advertising, average 7.5 times the Persuasion effect of average TV commercials.

Having been trained first at Grey which looked down on such sponsorship as mere signage, and always argued for product benefit demonstration at the time, I wondered “How could this be?” How could a simple “Brought to you by”, with no explanation of product benefits let alone demonstration/ dramatization of same, on the Internet, have more Persuasion effect than the average TV commercial?

All but one of these studies are proprietary. The one that we can show here is the one we did with the IAB’s help for Volvo and its agency Euro RSCG Circle. Volvo sponsored Yahoo’s coverage of the Annual New York Auto Show at the Javits Center. Volvo’s little box saying “Brought to you by Volvo For Life” appeared on every Web page next to photos and detailed editorial coverage of the features of all the new Mercedes, BMWs, Chryslers, etc. – all of Volvo’s competitors. The results: 7.7% of those exposed to the sponsorship message, afterward indicated that Volvo is one of the cars they will consider the next time they buy a car. The corresponding figure among the identical control group which did not see the sponsorship message, but saw everything else just the same as the test group, was 1.6%.

In the car funnel, longtime averages indicate that the average new car buyer considers 6 makes, test drives 3, and buys 1. Therefore, getting into the consideration set means you have nominally a one in 6 chance of making the sale. Not in the consideration group your chances are effectively zero. Therefore it was possible to model the ROI.

The model showed an ROI of 90 to 1. This is obviously very good in a world in which the DMA published average ROI of direct marketing is 11.49 to 1, and in which the Ephron/Pollak study showed that the average ROI of TV advertising is .54 to 1 for packaged goods and .87 to 1 for non packaged goods – in other words, these media on average lose money for the advertiser. (Counting only short term sales effects; Adworks studies suggest that one must multiply these by about 2.6 on average to model longterm sales effects, which would make the ROI on average TV slightly positive but nowhere near what Volvo achieved with this sponsorship.)

These results are hard to believe but directionally consistent with each of the 29 other studies. What is going on?

The Plummer Model makes this all understandable. This is why my gut feels that there is probably a heap of truth in the Plummer Model.

Surprise: the users seeing Volvo sponsor a show that trumpeted the glories of its competitors while never stooping to hawking its own cars, would have been quite surprising. It suggests an advertiser that sincerely wants to give good editorial content to people and does not ask for anything in return. This is gracious. The kind of behavior one sees in heroes. Not what the consumer usually sees advertisers do. Surprising and impressive.
Utility: coverage of such events in such depth had not been seen a lot on the Internet. Being able to “be there” brought a lot of interest and satisfaction to people interested in new cars.
Emotional Bonding: even before the Plummer Model we hypothesized a “Gratitude Effect” in response to this “gift” of good content. The lift in willingness to consider Volvo in all likelihood stemmed from an increase in liking of that manufacturer, not because of its product features, but because of the gentility of its management.

Another set of research findings we developed recently also became less puzzling when looked at through the lens of the Plummer Model.

Since the early 20th Century if not earlier, advertisers have wanted to put their ads into editorial contexts where the advertiser’s product category is central to the editorial itself. Cars in car books, golf clubs in golf magazines, etc. This is called Contextual Targeting or Content Targeting. Two benefits are seen in doing this:

Reach targets in concentration.
Get more attention to the ad, because people are in that environment due to an interest in the product category, so why wouldn’t they pay more attention to the ads for that product?

The second of these two assumptions fell apart in the last 18 months as Behavioral Targeting on the Web made it possible to reach people who had just been to a product related site, sending them an ad for that product in a lower-CPM non-product-related environment. For example, sending a car ad on a news site to someone who just went to Autobytel.

Behavioral Targeting controls for the targeting dimension by reaching the same people, so that the attention/ engagement metrics comparing Behavioral to Contextual Targeting relate only to the second hypothesis, i.e. that people will pay more attention to product X ads in a product X editorial environment.

In a significant proportion of cases they didn’t. Analysis of case studies from TACODA, Revenue Sciences, Advertising.com, 24/7 and others found that in about a third of cases, Behavioral beat Contextual in clickthrough rate and/or purchase intent lift and/or ROI and/or other communications measures. How could this be?

Dave Morgan, CEO of TACODA had showed me this puzzling situation and asked my help in figuring it out. This led to TACODA and NCM in December announcing a year-long research program to understand how Behavioral and Contextual Targeting really work on the Web, and how they can best be used together. The work reported next was all commissioned by TACODA. Thanks to TACODA for letting NCM design and analyze the research however we feel it will be of most value to the industry.

We hypothesized that two factors could be at work: excessive clamor/clutter of product X ads in Contextual, and/or the surprise effect of seeing an ad for a product in a place where you wouldn’t expect to see it.

An Eye Tracking study designed and analyzed by Next Century Media was carried out by The PreTesting Company. That study shows that Behavioral Targeting averages 17% more Ad Looks than Contextual Targeting, and this average increases to 54% more Ad Looks after the first exposure. In other words, as frequency builds, the same ad increasingly gets filtered out in the Contextual environment, but apparently as a result of surprise, the level of Ad Looking stays up in Behavioral. We are now planning a brainwave study to confirm this, because the P300 brainwave has been validated as a signature of surprise. The P300 brainwave occurs as an autonomic response when something in the environment does not match the expectation model in the brain for that environment. Because P300 is an autonomic response, it appears to not wear out in the first four exposures (the maximum frequency tested in the Eye Tracking study). Perhaps it doesn’t wear out at all.

These results become more understandable when looked at through the Plummer Model:

Surprise: this Engagement driver appears to be well leveraged by Behavioral Targeting. Good news for the users of BT – they never expected to get a bump in Engagement, BT justifies itself based on lower CPM against targets, now there appear to be two benefits.
Utility: Behavioral Targeting reaches the same targets as Contextual Targeting, hence high utility/relevancy – people interested in the product category.
Emotional Bonding: this is up to the creative. Behavioral Targeting in itself probably does not offer any special edge on this driver. But two out of three isn’t bad!

Thanks, Joe, for your contribution to Engagement theory. You’ve helped me make more sense of counter-intuitive data.

Please tune in next time when we will consider other theories of Engagement.

All the best,

Bill

What Will Be The Impact of ARF’s Decisions on Engagement?

2006-02-14T14:38:00.000-08:00

On March 21, at its Annual Conference, the Advertising Research Foundation (ARF) will announce its new official definition of Engagement and how it is to be validated and measured. In the ARF program for that conference, the first line about the opening session says: “Engagement is being defined as the new currency for advertising ROI.”

The word “currency” made me think about the numbers that media buyers and sellers use, and so I asked about this. Joe Plummer, Chief Research Officer of ARF, and leader of the Joint ANA, AAAA, and ARF Task Force on Engagement (which had been codenamed MI4 before it was unveiled), corrected me. Joe said: “The MI4 project has never set as its goal a new single measure of currency that will apply to all consumer touchpoints. Our goal has been to get people thinking in new ways beyond exposure or ‘reach’ in this new world of media and consumer behavior and encourage the search for new metrics that can be useful for both planning and tracking/evaluating performance. We have not focused on buying or currency measures. Thus, at the Annual conference we will announce a framework and a definition of engagement.”

I think that what Joe is saying to me is that Engagement will be a new metric for post-evaluation but not necessarily for buying.

Combining this with other public statements ARF has made, there might be three Engagement metrics announced that day, one for media Engagement, one for ad Engagement, and one for brand Engagement.

The measure of brand Engagement might be the ultimate ROI surrogate in the post-evaluation of a media campaign. Depending on how ARF advises us to measure it, that measure might or might not be something that can be broken out by individual media contribution. Of course, it would be most useful to be able to break it out by media, because otherwise brand Engagement would be useful for creative improvement but not for media improvement.

If the ad Engagement tracking is designed to explain the overall level of brand Engagement effect, then we will learn about individual media contribution by using these two metrics together.

And, if media Engagement turns out to be predictive of ad Engagement, then all three types of Engagement metrics would need to be applied together in a cohesive system.

In any case, it seems likely that what we learn in post-evaluation using Engagement metrics will feed back to changing the way we buy media. Although as Joe says, the intent is not to create a buying currency, this does not mean that there will be no impact on buying.

Because I enjoy speculating, here are some of the things I would expect to occur as the Engagement metrics percolate through the industry.

The new Engagement metric may turn out to be similar to certain existing metrics e.g. Jan Hofmeyr’s “Brand As Friend” measurement which reflects consumer bonding with a brand and plays an important role in Jan’s seminal Conversion Theory of how advertising works.
I would bet that sponsorship approaches will tend to increase post-evaluation scores of that “emotional bonding” type. Thirty studies Next Century Media has conducted show that Internet sponsorships average seven times the Persuasion effect of average TV commercials. There is what I hypothesize is a Gratitude Effect in sponsorships when they are done right. (This is a big subject so I’ll save more of it for the next posting.) Thus the buying could tend to shift toward sponsorship as a category, and this would affect what we call media planning more than what we call media buying, in that the buyer would not be doing anything differently in picking spots and books with that part of the budget that is not sponsorship.
On the other hand, I can imagine that we might discover that certain people in the broader target audience might turn out to be more susceptible to becoming Engaged than others. Going back to Hofmyer for example what he calls a brand’s “Convertibles” and “Availables” (non-purchasers of the brand who have a latent liking for the brand) might be much more likely to become Engaged with that brand than those who are not interested in that brand at all. If that happens then Engagement could affect buying. Buyers would be given target audience definitions which either directly or through a surrogate target, aim at not just purchasers, but purchasers susceptible to brand Engagement.
Finally, if media Engagement scores turn out to be predictive of ad Engagement which cumulates in brand Engagement, then buying will involve weighting the number of susceptible targets reached, by the media Engagement score, and spending the budget to minimize the Cost Per Thousand of that.

If these speculations bear fruit, this paradigm shift will do more to shake up the media world than all of the technology changes which have already whipped the advertising/media industries into a bubbling froth. Not intended to be buying currency, Engagement could cause the application of straight audience data (today’s buying currency) to mutate into having only, say, a third of its current weight in the eventual buying currency.

In the next posting: some thoughts about the three drivers of Engagement put forth by ARF’s Joe Plummer, and how they help explain the unusually high Persuasion scores achieved by “brought to you by” Internet sponsorships and the remarkable phenomenon of Internet Behavioral Targeting often out-engaging Contextual Targeting when everything we’ve always believed says that this is impossible.

PS – I see here that I promised to talk about Durationism. That’s the idea that one can measure Engagement by measuring how long people on average stay tuned to a program (or how often they watch its telecasts, or both). This needs its own blog posting because it gets into the many ways that Engagement can be measured. I’ll work on that for the posting after next .

The Great Engagement Debate

2006-02-03T06:17:00.000-08:00

ARF has stirred up a useful debate about Engagement. In the previous post we gave our own notion of what Engagement is – it cuts across multiple levels of the ARF Model to include all of the work an ad has to do to accomplish its mission – gain attention, persuade, cause purchase behavior.

Others are tossing in very interesting and valuable insights to the pot. Mike Bloxham of Ball State University reports from the results of his Middletown studies that print appears to have higher Engagement than other media. By which he means: when print is being used, there is more of a tendency to focus on it exclusively. When non-print media are being used, they are more commonly being used two or more at a time.

We wonder what Erwin Ephron would say about this. In a recent paper Erwin points out that what we are striving for is the Engagement of the ad, not of the medium itself. He explains that a medium can have high Engagement and yet this could fail to rub off on higher ad Engagement, depending on the specific creative.

Echoing Erwin’s emphasis on the creative aspect of Engagement, Meg Blair and the ARS organization have compiled data which shows that “In the context of ROMI*, the power of the message (ad) is by far the larger contributing factor, explaining 51%, or 4 times the contribution of media/weight (explaining 13%).”

It is horrifying to contemplate the hidden implications when one compares Meg’s piechart to the one produced by most Marketing Mix Modeling (MMM) exercises. Take a look and see if it strikes you the way it struck me.

Meg’s pie:

Typical Modeling pie today:

In Meg’s pie, TV gets credit for 64% of the brand share changes. In the typical modeling pie, TV gets credit for 8.7%. The only difference is that in today’s modeling, Engagement variance is assumed to be zero. The quality of the ads is assumed to be not a factor of any importance in driving brand sales. In Meg’s approach to modeling, ARS Persuasion scores are used to weight GRPs. In straight MMM, GRPs are used unweighted by creative persuasion. Meg’s approach to modeling using persuasion data seems to come close to delivering the Engagement metrics on which ARF has set their sights.

The part that horrifies me is that decisions about where to allocate hundreds of millions of dollars each year are being made on the basis of the modeling that says creative has zero impact.

Hopefully this intolerable state of affairs will start to change rapidly once ARF announces its definition of Engagement on March 21 as part of their Annual Convention in New York.

Stay tuned. In our next post, more on the Engagement debate, including a look at Durationism, and some educated guesses as to what ARF might announce next month.

Bill

*ROMI=Return On Marketing Investment

iMedia Podcast

2006-02-02T07:37:00.000-08:00

Visit iMedia's website http://www.imediaconnection.com/content/8084.asp to hear my report - The Power of BT - on research that shows behavioral targeting to be more effective than contextual targeting.

What is Engagement?

2005-12-28T15:12:00.000-08:00

The Association of National Advertisers (ANA), American Association of Advertising Agencies (4As), and the Advertising Research Foundation (ARF), through their joint MI4 Committee, have established an industry-wide effort to develop Engagement metrics by which media may be bought and sold. The idea, driven by today’s focus on media ROI, is to finally get past the exposure metrics which have dominated media selection for as long as anyone can remember.

The MI4 Committee met on December 9, 2005 to allow individual researchers to present their ideas on the subject. The agenda to which we were to address ourselves included questions similar to these: “What is your definition of Engagement? What are your hypotheses? What other hypotheses are there? What are your findings? How have your findings been applied in media selection? What’s your future plan for Engagement R&D?”

Dictionaries define Engagement as meaning “the act of sharing”, “a mutual promise”, “contact by fitting together, meshing, interlocking, in gear” – among many other meanings. These are all intriguing, alluring concepts which tickle the mind, when applied to advertising. But there has been already much mind-tickling on the subject of Engagement, since the MI4 Committee came out from secret status some months ago. The word has already become overused. It’s time to get concrete. How are we going to define Engagement so that the work of measuring it can go forward?

Our December 9 presentation proposed that the operational definition of Engagement for advertising industry purposes ought to be: “A measure of concurrent response to advertising that can be proven to be predictive of sales effects.” This definition includes two measurable aspects: First, at the time of advertising exposure, there is a psychological response that can be measured. Second, that immediate response triggers a behavior change that can later be measured in terms of sales effects.

Why this definition and no other? Because Bob Barocci, President of ARF, told me that the whole point of MI4 is to “find a measure that can serve as a surrogate for ROI.” And Kate Sirkin, Global Research Director of Starcom and spearhead of MI4, said that her intention for Engagement is to “focus more on brand preference and product movement than on recall.” Therefore however we as an industry define Engagement, it has to predict sales effects. Yet by implication Engagement is something that happens at the moment the advertising is perceived, therefore there must also be an element that is measurable in that moment.

We welcome your reactions, pro and con, and your alternative views on this subject – thanks! Best to all for the New Year, Bill

To be continued. Stay tuned.

www.billharveyconsulting.com
www.nextcenturymedia.com
www.humaneffectivenessinstitute.org