THE TOP 10 INSIGHTS - Day 4

From the Advertising Research Foundation Week of Workshops, October 19, 2000 

1. Loyal customers are the real measure of brand equity? This is the premise underlying the Brand Keys system for assessing the return on marketing efforts by dot-coms described by Robert Passikoff. He started by identifying four attributes that account for most of the bonding with (liking of) brands in the category. He finds the ideal level for each attribute and compares it with each brand’s actual score for that attribute. Then he comes up with what the scores would be after some change in the mix. In the example cited it was the type of customer loyalty program to be offered by the two leading booksellers on the web. For Amazon.com it resulted in a 6% increase. The Barnes & Noble score was unchanged. He cited this as a system that is predictive of the effect on customer loyalty. He said some of the methods used were proprietary (read: black box, unverifiable). He said the "theoretical framework" on which the bonding concept is based is the ARF’s Copy Research Validity Project. That’s a bit of a stretch because the ARF study only showed likable ads sold more. It did not deal with how well the products or brands were liked.

2. More analytical procedures move to the internet. Online versions of the Moskowitz IdeaMap® and The Spectra Grid were presented. The conventional conjoint interview used for IdeaMap® was reduced from its usual time of up to 30 minutes to 12 minutes or less, the practical limit for online interviews. Respondents were recruited in partnership with FreeRide.com an internet based loyalty program and portal, that was already giving its one million plus members points immediately redeemable for a wide variety of products and services, eliminating the problem of providing incentives for respondents. Spectra Research announced it has over 600 leading sites currently Spectra grid-coded, showing who uses the site in terms of Spectras 54 cell grid of 6 life stages by 9 geodemographic categories. 

3.  3M measures the impact of a frequency marketing program. This was a case history of a more traditional program to promote customer loyalty that did not have anything to do with the internet. They felt it would be worthwhile to set up a program reminding people to change their air filters, so in 1995 they started experimenting with putting questionnaires in the packages. 29% were filled out and returned. Sales of filters to participants of the Reminder Service increased 44% in the latest year, at the same time the program was providing a wealth of information on consumers buying filters 3M had never had before. 

4.  Frequent Shopper data confirms existence of a habitual coupon-using segment. Mike Hess, wearing his PDI hat, reported on work his firm did before being acquired by Knowledge Networks. They used the panel of 800,000 households PDI screened from frequent shopper databases. Among the things learned about loyalty was that few consumers fit the marketer’s hoped for behavior when they received coupons: namely, the low cost with a coupon gets them to try the product, they like it, and they happily pay full price for it ever after. After studying buyers of 12 brands in 11 categories they found those who try it paying full price are about the only ones you can rely on to continue buying at full price. Gregg Ambach reported on other uses of the PDI panel in the final day’s session on media planning. It can add a new dimension to the analysis. Instead of just showing the change in sales that results from changes in the marketing mix, panel household data can show how much came from first time buyers vs. repeat buyers. And how much came from the number who bought vs. the amount they bought. Ambach’s talk gets the BRC award for the clearest thinking and most lucid presentation at the Conference. He pointed out one of the few things his panel approach could not evaluate was the difference resulting from running good, effective advertising rather than poor, ineffective advertising - the type of thing our firm measures with ad tracking studies. 

5. Addressable advertising test scheduled for Pittsburgh. In yet another application of frequent shopper databases, Dennis Bender described how Marketing Science Associates plans to use what Giant Eagle, the dominant retail chain in the region, knows about a sub sample of 200,000 customers with frequent shopper cards, and warehoused data on what they have bought in the past 78 weeks. This is to be merged with AT&T’s advanced broadband cable operation in the Pittsburgh area that is capable of inserting commercials in programs. Newer forms of Bayesian analysis are being proposed to fuse the databases and overcome weaknesses in prior forms of data fusion. The system is being designed to provide an actual test of the relative efficiency of sending specific types of advertising to specific types of people by cable. 

6. Kantar plans on a multimedia optimization "dream" system. It was described by David Ernst of TN Media and Michelle de Montigny of Kantar Media Research as a system that will eventually show the optimum combination of advertising in all media under all conditions. They will start by combining print and TV, and add the rest later. They feel now is the time to start because the necessary data is now available, almost everybody has the necessary computing power, and single media optimizers have proved very successful. They will be using fusion to get demos, usage and media graphics since no single source exists. And from this researcher’s point of view, the most important part of the announcement was the rating of content was going to be built into the model. The omission of ad quality from marketing mix models has long been a pet concern, and this is the first time we have heard a new system is specifically planning to include it. They admitted they didn’t know how they were going to do it, so I was sure they left with my card.

7. AT&T shows successful marketing mix modeling isn’t limited to package goods. The price wars that drove long distance rates from 15¢ to 5¢ per minute provided the incentive, but the results showed every other element in their mix helped, including news coverage of the price wars. They also found advertising and news coverage worked synergistically to help telemarketing efforts.

8. Resolved: Multimedia optimizers are a fad that is going to pass. OMD has been developing one, Media Wizard, and they felt the best way to cover the issue was with a mock debate. Andrew Green argued the case against them saying there is no way to say how much a commercial is worth vs. a billboard, or a 60 second commercial vs. a double page color spread, and we have enough trouble with the audience measures for each individual media, without trying to combine them. Tim Foley attempted to answer the concerns, and in front of this Conference of 600 researchers who love to play with new methodological toys, guess which side was declared the winner?

9. Recognition-based tracking shows more viewers notice commercials in well-liked programs,. Paul lordanow of Maxicom, France described a study where they had people in Switzerland fill out diaries to show what programs they watched and how well they liked them. Then they showed them photo boards of commercials that were on when their diary showed they were watching. The photos were masked so they did not show who it was for. The percent who recognized the commercials and knew who they were for was 18% higher among those who saw it during one of the better liked programs. The irrepressible Erwin Ephron was chairing this session and publicly complimented Paul Iordanow for using recognition-based ad tracking, and avoiding the strong criticism voiced yesterday about the validity of recall-based tracking studies. This same type of highly accurate recognition-based tracking that shows how many recognize advertising and know who it is for is a specialty of our firm.

10. Recall based tracking study of college students lacks sensitivity. Tony Jarvis, until recently of the CTN Media Group, reported on efforts to deliver the accountability required in today’s market place. The firm had a telephone survey conducted among college students to show their use and purchasing intentions in 22 product categories, and how that varied based on the advertising they recalled. There was no difference shown among those who recalled advertising for the product. Jarvis characterized ad tracking studies as "tricky" and listed among things learned from the effort, that they should search further for more sensitive measures of advertising’s effect. After Erwin Ephron complimented the previous speaker for using recognition-based ad tracking surveys, I got to ask the last question of the week. In view of yesterday’s strong criticism of ad tracking studies based on unaided recall, did CTN consider the problem was the use of recall? If they had asked if students recognized the advertising, the evidence cited yesterday indicated the sample would have been divided into those who actually noticed the advertising and those who didn’t with greater accuracy. Could that have been what was needed to show advertising caused a difference? He said with the benefit of hindsight that is probably what they should have done. But they had a limited budget so they did it by phone. After the session I said if he is ever in that situation again, give our firm a call. We can usually do a recognition-based tracking study for less than one done by phone. In fact, we recently wrote an article on the subject. ("Track the effect of advertising better, faster and cheaper online" Quirks, July/August 2000)

(These are only highlights of things that caught my interest. For full copies of papers visit the ARF web site at www.TheARF.org. We understand they will be available shortly.)

Don Bruzzone, October 2000 

Bruzzone Research Company · 2515 Santa Clara Avenue · Alameda, CA 94501 · (510) 523-5505 · Bruzzone-Research.com

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