The Top 10 Insights

From the Advertising Research Foundation Annual Convention NYC March 20-22 2006

What is Engagement?  Joe Plummer, chief research officer for the ARF, announced the working definition of the steering committee that had been laboring on the issue for months:

 A 10 page paper explaining that definition by the eminent Professors Zaltman and Mast was distributed.   Still, to some of us, it sounded more like a description of how it works than what it is.  Among 25 other definitions also passed out at the conference I preferred one offered by Bob Barocci, ARF President and a similar one from Bill Harvey, long a developer of key advertising measures:                   

“Engagement is a prospect’s interaction with a marketing communication in a way that can be proven to be predictive of sales effects.”

That says if its effect isn’t measurable in terms of sales we are spinning our wheels.  We are back decades to things like DAGMAR, working with measures we only hope are part of some hierarchy of effects that may eventually lead a consumer to buy.

Red Bull succeeded by avoiding the “hypodermic” approach.   Joe Plummer used that analogy comparing advertising of the past with injecting a media audience with advertising and hoping something happens.  Then he introduced agency head Thomas Grabner to tell the Red Bull story, citing the successful introduction of this new, premium price, non-alcoholic “Energy” drink as a prime example of brand promotion that worked by “engaging” people in “co-creation”.  They organized things like flying machine contests, getting great news coverage as almost all entries crashed spectacularly into the water as soon as they were launched.  Having ice skaters “fly” down toboggan runs was another.   As a result, this small unknown Austrian brand has achieved global distribution in 10 years, something that Coke took 80 years to accomplish.

Advertising IS expected to survive.  There are those who view the current scene with considerable alarm: loading tunes into ipods instead of listening to radio, using Tivo to eliminate commercials, watching downloaded video instead of TV, and all of the other rapidly emerging ways consumers have to obtain and control content on demand.  These concerned people feel there may soon be no room left for advertising as we know it.  A good part of the conference was devoted to discussing the current status and effect of all these changes.  But, above the many specific issues that were reviewed, was an overall consensus the advertising industry WILL survive.  It was pointed out (more than once) the arrival of TV did not cause the demise of radio, and when consumers are offered the choice of paying for content, or getting it free when advertising is included, the advertising supported version is almost always the winner.

Pepsi isn’t risking advertising on myspace.com, in spite of its exploding popularity with hard to reach teenagers.  In a panel discussion of how advertisers are adjusting to the new media mix, Pepsi CEO Dawn Hudson, said Pepsi is a family brand and the shocking, out of control; content kids are putting on that site keeps them from using it.   But they are working on cell phone promotion by offering cell phone rings on TV that you can download from the internet, and they produced a film on snowboarding to reach the target group that is getting harder to reach. Panelists from Subway, McDonald’s and Campbell Soup also indicated they were spending more online.  McCann’s David Cohen said advertisers striving for greater reach can get more of it from home page advertising than from a week on TV.

Spanish Advertising works with English speaking Hispanics.  Coke led off this discussion with VP Ravi Parmeswar pointing out the exploding importance of Hispanics - now estimated at 41 million in the US. A segmentation study showed Coke that the 30 second TV spot, alleged by others to be waning in importance among the general public, was still the best way of reaching all segments of the Hispanic market.  In addition to spots in Spanish he showed Coke spots where both languages are spoken to engage the more acculturated segments.  Jack Bookbinder of Kaiser Permanente, the country’s largest HMO, and I followed with a discussion of what we had learned in the Hispanic segment of a large two year study to track the impact of their $100+ million “Thrive” campaign.  We described our early frustrations and later successes in finding online research panels that enable us to validly conduct efficient, recognition-based ad tracking among almost all segments of the Hispanic/Latino market.   One of our findings confirmed what Coke was doing.  We found English-dominant Hispanics were the ones that showed the biggest “lift” in buying (joining) interest after seeing the commercials that recognized their culture.

Portable People Meters to finally roll out without TV.  John Snyder, Arbitron VP, announced the firm is rolling them out to measure radio listening in the top 50 markets, starting with Houston in July, and replacing diaries in all 50 markets in about four years.  Nielsen teamed up with Arbitron to launch the Apollo project in January testing a single source system where panels who scan all their purchases at home are equipped with portable people meters (PPMs) to show what they have heard or watched.  Nielsen has now abandoned an option it had to use these PPMs to also measure TV audiences, permitting Arbitron to finalize launch plans and sign up agencies and media buyers that account for over 90% of all radio buys.  They have been testing and refining PPMs for five years and this has shown it provides more stable and reliable results.  Diary data bounced noticeably week to week.  It showed good days for radio were bad days for TV.  It also had the precision to show hardly anyone continued listening to the rebuttal that followed the President’s last State of the Union Message.  Ed Papazian, publisher of the industry’s statistical bibles, added that the delays and other limitations imposed by diaries kept radio from being top of mind among media buyers.  Removing them should help the whole radio industry. 

Don’t ask to survey a representative cross section of China – yet.  The conference heard from a number of representatives of China’s growing advertising and research industries.  Their economic success is creating a new middle class and a growing market for consumer goods, one that has not developed the small number of dominant brands that distinguish our market.  There are now 1000 brands of beer striving to become the “Bud” of China.  Questions in all consumer surveys still need to be checked by the government, but interestingly, not if it is a B2B survey. (Apparently part of their policy to encourage trade.)  Surveys in urban China are being conducted essentially the same as here, but if you want rural/peasant coverage, that’s like it was here a half century ago when surveying new areas meant sending in people first to recruit and train interviewers.

Ipsos nailed for calling phone results “recognition”:  In a breakout session they were doing a good job describing how levels of engagement and involvement could be evaluated by comparing ad recall scores with ad recognition scores.  They described how they got them by embedding commercials in program material that respondents watched in their typical pretest.  Then they called the respondent back a day later to see what they remembered and get their reactions.  When someone asked where they got the recognition scores, the answer was from a verbal description during the phone interview.  A fairly vigorous “that’s not recognition!” debate ensued.  (I was not the one who asked the question, honest.)  The session was already running late or I might have offered the evidence our firm developed years ago on the subject.  The verbal description approach IS a significant improvement over unaided recall, but it is only half as good as when you SHOW the advertising to the respondent.

 How do you measure the impact of the new media?  The question was posed repeatedly during the conference. The old standard measures of how many are being reached by advertising media are missing many of the new methods of getting music, entertainment, and information to people.  Sessions on cross media and overlap tended to be long on anecdotes and short on methodology.  There was some talk that we need to switch from media centric measures to consumer centric measures, but not enough about what may be the best answer:  tracking surveys that use ad recognition to show where the messages are coming from.

Innovation is needed – sometimes:  Stefan Jenzowsky, Siemens Innovation VP, closed the conference with a variety of observations on the subject.  Siemens is spending 23 million euros a day on telecommunications R&D that does not make their cell phones better, only cheaper.  He favors innovation that cannibalizes existing products because if you don’t use that innovation, your competitor will.  Online gaming is growing tremendously.  The average age is 20 and they spend 24 hours a week on it.  80% said they don’t want TV on their mobile phone.  After they tried it in a test, 78% said they liked it.  He said the fastest growing advertising category is SPAM.  Even when only 1 in 10,000 buys, it can be profitable because the cost is virtually nothing.

                                                                        Don.Bruzzone                                                                         March 2006

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