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1 Rex Briggs Principal Marketing Evolution
1
Rex BriggsPrincipal
Marketing Evolution
2
“When I point,
look where I point,
not at my finger.”
Warren McCulloch, noted neurophysiologist and father of computational neuroscience
3
““Advertising is the last area of spending where Advertising is the last area of spending where the return on investment is not known.the return on investment is not known.
Because of this, it tends to be the first area to Because of this, it tends to be the first area to be cut.”be cut.”
● Dr. Pete Sealey • Professor, Berkeley’s Haas Graduate School of Business• Former head of Marketing for Coca-Cola
4
McKinsey & Company raises questions about marketers spendingMcKinsey & Company raises questions about marketers spending
Marketing spending has grown dramatically over the last 10 years. Indeed it has grown at nearly four times the rate of inflation… Companies are examining their marketing spending and asking, “Where did the money go?”
As we enter what is anticipated to be a protracted period of slower growth, marketers can and must do more with less. Careful attention must be given, however, to how spending is restructured so that cuts in spending do not risk reducing the brand’s presence with key customers.
Source: Restructuring Marketing Spending to Do More with Less, 2002
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Do you look at advertising through the consumer’s eyes?
Do you look at advertising through the consumer’s eyes?
6
Marketer’s viewThe Dove Nutrium Bar CampaignMarketer’s viewThe Dove Nutrium Bar Campaign
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Television: As Marketers Experience It
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Magazine: Dove Nutrium Bar
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Consumer’s Experience With Media
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A More Realistic View…
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The way consumers see online adsThe way consumers see online ads
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Do consumers look at online ads?Do consumers look at online ads?
11% of consumers time is spent looking at ads (across the travel websites tested)
Source: Ziff Davis Smart Business Labs and eyeTracking.com, Study of travel sites, June 2000
14
Background: Adaptation of a traditional media ad to an online advertisement
Ad RecallAd Recall- 5.1 pts (19% increase)- 5.1 pts (19% increase) Aided Brand AwarenessAided Brand Awareness - No increase- No increaseBrand ImageBrand Image - No increase- No increase
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Ad RecallAd Recall- 10.1pts (40% increase)- 10.1pts (40% increase)Aided Brand AwarenessAided Brand Awareness - 4.7 pts (8% increase)- 4.7 pts (8% increase)Brand ImageBrand Image - 3.9 pts (15% increase)- 3.9 pts (15% increase)
Ad RecallAd Recall- 5.1 pts (19% increase)- 5.1 pts (19% increase) Aided Brand AwarenessAided Brand Awareness - No increase- No increaseBrand ImageBrand Image - No increase- No increase
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Marketers’ View vs. Consumers’ Experience
Advertiser’sBrandingObjective
ConsumerExperiencewith Media
Consumer’sDecoding ofMessage
AdvertisingEffect
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Day’s AgendaDay’s Agenda
I. The Evolving Media LandscapeI. The Evolving Media Landscape
II. The New Marketing MixII. The New Marketing Mix
III. Questions and AnswersIII. Questions and Answers
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The The EvolvingEvolving
MediaMedia Landscape Landscape
The The EvolvingEvolving
MediaMedia Landscape Landscape
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Keep your eyes on the road ahead
Keep your eyes on the road ahead
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THE MEDIA LANDSCAPE HAS CHANGEDTHE MEDIA LANDSCAPE HAS CHANGED
Share of media time shifting● The internet continues to expand
Effective marketing mix is changingNumerous studies converge on these changes
• TV’s changing effectiveness dynamics• Online ad effectiveness studies• XMOS
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The paradox of TV pricingThe paradox of TV pricing
CPMPrice
Ratings
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The Media Landscape Has ChangedThe Media Landscape Has Changed
34%
24%
13%9%
0%
5%
10%
15%
20%
25%
30%
35%
% D
ay A
fter
TV
Rec
all
1965 1974 1981 2000
Source: NAB (1965-1986); Nielsen (2000)
Percent of adult evening viewers who Percent of adult evening viewers who can name a brand can name a brand
advertised in a show they watched last advertised in a show they watched last nightnight
Make bars in same colors
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Online Delivers the AudienceOnline Delivers the Audience
Broadband
Online
NotOnline
Source: Harris Interactive, April 2002
More half of Canadians
are now online
And over half have
broadbandSource: ComScore 2003
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Canadians are spending more time on line Up 5% since October 02Canadians are spending more time on line Up 5% since October 02
Traffic Trend North America
15,00015,50016,00016,50017,00017,50018,00018,50019,00019,50020,000
Oct-02
Nov-02
Dec-02
Jan-03
Feb-03
Mar-03
Year
Un
iqu
e V
isit
ors
per
mo
nth
Canada
Linear (Canada)
Canadians are spending 21% longer than the US (per visitor on average)
Meaning: The relative impact of the medium is greater in Canada
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Is there too much hype around the Internet?Is there too much hype around the Internet?
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Which trend matters to marketers?Which trend matters to marketers?
Percent of time spent Online by Users
16%
14%
12%
10%
8%
6%
4%
2%
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T H E W E B I S
UNDER-HYPED- Michael Tchong
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GREATER ACCESS BRINGS PROFOUNDCHANGE
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In Fact, Essential to Consumer’s LivesIn Fact, Essential to Consumer’s LivesWhen was the last time you:
Source: Jupiter, eMarketer, Forrester, NetRatings
40% Not Decided40% Not Decided
42% Travel Info/Mo.42% Travel Info/Mo.
21% Map Info21% Map Info
92% News At Work92% News At Work
30% “Competitive” Research30% “Competitive” Research 15% “Making New Friends”15% “Making New Friends”
26% Check Quotes26% Check Quotes
30
31
32
Takeaway:Takeaway:
The Internet is a cultural, media and marketing force to be reckoned with
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But,
is it an advertising vehicle?
But,
is it an advertising vehicle?
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Internet is the “Swiss Army Knife” of MarketingInternet is the “Swiss Army Knife” of Marketing
Direct marketingRelationship marketingEventsSweepstakesTargetingTime-of-day impulse stimulationAnd…
35
Do the same theories apply online? Can Online accomplish the same goals?Do the same theories apply online? Can Online accomplish the same goals?
Why do we use Television? Why do we use Television?
36
Putting it in perspectivePutting it in perspective
1. The media landscape has changed
2. Internet is part of consumers experience- More so in Canada than in the US
3. A website is not enough – brands need to proactively get the message to the consumer
• We need to analyze the value of Online Advertising in the mix
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Myth: Online can’t communicate my marketing message
Myth: Online can’t communicate my marketing message
Reality: Online advertising has been proven to…●Build awareness of new products●Communicate benefits and brand image● Increase sales
Over 1,000 online ads have been measured
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Yes… Online can do branding
Many studies have proven conclusively that Online Advertising works for many different brands:
● 1996 Hotwired Advertising Effectiveness studies (5 ads)● 1997 IAB Advertising study (12 ads)● 1997 Ipsos-ASI Roundtable research (120 ads)● 1997 Berkley Systems Interstitial study (4 ads)● 1997 Softbank/ARF research (3 brands, 12 ads)● 1997 Electronic Telegraph-UK (2 ads)● 1998 Wired Digital Rich Media study (3 ads)● 1998 IBM Super bowl Sponsorship study● 1999 Real Player Streaming Advertising (7 ads)● 1999 Superstitial study (4 ads)● 1999 Ipsos-ASI TV vs. Internet research (45 ads)● 2000 Beyond Interactive Marketing Mix study (12 ads)● 2001 MSN/IAB/DoubleClick Ad Effectiveness Studies (11 ads)● 2001 AC Nielsen.consult Online Ad Effectiveness Study (42 ads)● Etc.
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Sales impact for convenience foodsSales impact for convenience foods
19% increase in volume for a snack food (over 16wk campaign)
(Netquity Study, IRI/P&G Study, Fall 2000)
5% sales volume increase for Pepsi and Mountain Dew brands (vs. category growth of 0.06%)
(Pepsi, Nielsen Scanner Data, Fall 2000)30% purchase intent increase for Gatorade among key males under 18 target audience
(Dynamic Logic, 2001)13% purchase intent increased for Coke, from 57.7% to 65.3% (Dynamic Logic, 2001)
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1,000+ Ads Tested – Online Advertising Works!1,000+ Ads Tested – Online Advertising Works!
0% 20% 40% 60% 80%
PurchaseIntent
BrandFavorability
MessageAssociation
Aided BrandAwareness
Exposed
Control
Mean Changes for Four Measures of EffectivenessSource: Dynamic Logic MarketNorms – Database of 400 campaigns
*All measures statistically significant at 99%; n=campaigns; between 375 and 416
+3.7+3.7
+5.9+5.9
+2.0+2.0
+2.1+2.1
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The New Marketing QuestionThe New Marketing Question
No longer talking about WhyWhy Online
HowHow to integrate
Specifically, how to integrate to
maximize:• Brand Awareness• Brand Image • Purchase Intent & Sales
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The New Marketing Mix
The New Marketing Mix
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“Surround Sound Marketing”“Surround Sound Marketing”
“Just as each speaker accomplishes the same goal by exploiting its unique position and strength, each element of the marketing mix must find its strength and leverage it to surround the consumer with a synergistic and consistent message.”
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Introducing the ParticipantsIntroducing the Participants
Marketing Evolution/Rex Briggs:Marketing Evolution/Rex Briggs: Developed landmark study methodology and executed the studies
Dynamic Logic:Dynamic Logic: Applied AdIndex® product to collect consumer views and behavior
ARF (Advertising Research Foundation):ARF (Advertising Research Foundation): Endorsed the study methodology
Forrester Research:Forrester Research: Full analysis & review
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A Word About The MethodologyA Word About The Methodology
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TEST, LEARN, EVOLVE.
To understand rather than proveTo understand rather than prove
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The Study’s Methodology and Rigor Are Widely Accepted and RespectedThe Study’s Methodology and Rigor Are Widely Accepted and Respected
Endorsed by the Advertising Advertising Research FoundationResearch Foundation (ARF)
Nominated for ESOMARESOMAR John & Mary Goodyear Award (Best International Research )
Reviewed and Analyzed by Forrester ResearchForrester Research
Endorsed by Major Agency Media Media Research DirectorsResearch Directors
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Offline or Online -- Same ResultsOffline or Online -- Same Results
Both Colgate (Total Toothpaste) and Kimberly-Clark (Kleenex) executed companion phone studies that confirmed online is inline with other research methods
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Bring your website content to the consumers… Rather than bringing your consumers to your website.
Being Online is about bringing your brand message to consumers…
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OutlineOutline
Key Finding, and Explanation
● Brand Awareness
● Brand Image
● Purchase Intent & Sales
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Key Findings from XMOSKey Findings from XMOSThe major findings of the Study to date
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The Key Finding of the StudyThe Key Finding of the Study
Same budget Same budget Better resultsBetter results
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Why does Increasing Online produce better results within the same budget?Why does Increasing Online produce better results within the same budget?
Online advertising affects branding metrics
Online advertising is typically more cost efficient at producing branding gains
Online reaches those who would otherwise not get the advertising message
CoverageCoverage
EffectivenessEffectiveness
ValueValue
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CoverageCoverage
Media Media potholespotholesCoverageCoverage
55
CoverageCoverage
Heavier TV Not Reached
By TV
25% 75%
56
Frequency Does Not Fall EvenlyFrequency Does Not Fall Evenly
2.4
4.3
7.6
16.4
1.0
V IV III II I
HEAVIESTLIGHTEST
Avg
. F
req
by
Qu
inti
le Frequency considered
wasteful
Frequency considered not helpful
15%
57
CoverageCoverage
Heavier TV Not Reached
By TV
25% 60% 40%
Lightest Quintile
+15%
58
CoverageCoverage
Media Media potholespotholes
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Effectiveness
and ValueEffectiveness
and Value
60
Effectiveness and valueEffectiveness and value
*OTS = Opportunity to see advertisement based on GRP levels
% P
urch
ase
inte
nt
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Frequency: Number of OTS* ad exposures
Diminishing returns
61
Bra
n din
g e f
f ect
Marketing spend
Television
Internet
Effectiveness and valueEffectiveness and value
62
CoverageCoverage
EffectivenessEffectiveness
ValueValue
• Brand Awareness
• Brand Image
• Purchase preference
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Growing Brand Awareness Growing Brand Awareness The major findings of the Study to date
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Growing Brand AwarenessGrowing Brand Awareness
Increasing Online is more cost effective way to build brand awareness
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Product AwarenessProduct AwarenessAided awareness: Grilled chicken flatbread sandwich
*4 day moving average (for greater sample size stability)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
6/3 6/5 6/7 6/9 6/11 6/13 6/15 6/17 6/19
Broadcast Only
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Online builds brand awareness Online builds brand awareness
That’s a 3pt incremental That’s a 3pt incremental branding gain for same branding gain for same budgetbudget
10.0%10.0%
20.0%20.0%
30.0%30.0%
40.0%40.0%
50.0%50.0%
60.0%60.0%
0.0%0.0%
*Online advertising:
• 60% reach/2.0 frequency
• TV TRPs trimmed by approximately 20%13.6%13.6%
Of budgetOf budget
Point of diminishing returns
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Optimizing for Brand BuildingOptimizing for Brand Building
Recommendation
Intern
etIn
ternet R
eachR
each
60%60%
or66 MillionMillion
More More Consumers Consumers Aware of the Aware of the
Product!Product!The AffectThe Affect
==
Aw
areness
Aw
areness
68
CoverageCoverage
EffectivenessEffectiveness
ValueValue
69
Positioning the Brand Brand ImagePositioning the Brand Brand Image
The major findings of the Study to date
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Building Brand ImageBuilding Brand Image
For McDonald’s Flatbread Sandwich…For McDonald’s Flatbread Sandwich…• New, Exciting, Different and Combination of great
flavors
For Dove Nutrium Bar…For Dove Nutrium Bar… • Nourishes your skin, contains vitamin E and relevance
For ColgateFor Colgate• Long lasting protection and complete protection
For Kleenex soft packFor Kleenex soft pack• Convenient and innovative design
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Cross-media synergy
Creative reinforced the Creative reinforced the core message across mediacore message across media
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What about the
40% of your target that are not reached by TV?
What about the
40% of your target that are not reached by TV?
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The Kleenex® TV campaignThe Kleenex® TV campaign
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Campaign over 8 weeksCampaign over 8 weeks
Heavier TV Lighter TV Not Reached
By TV
40% 60% 25%
Heavier Online Heavier Online
Lighter Online Lighter Online Not Reached Not Reached By Online By Online
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Summary of branding gains among lightly reached / not reached TV audienceSummary of branding gains among lightly reached / not reached TV audience
Positive Brand association Positive Brand association
(top box average) (top box average)
35%
39%
39%
42%
10% 15% 20% 25% 30% 35% 40% 45%
No Mag or OnlineNo Mag or Online
Online (no mag)Online (no mag)
Magazine (no online)Magazine (no online)
Magazine and OnlineMagazine and Online
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Can Online communicate
emotion?Can Online communicate
emotion?
77
Product image: Describes completely/ Describes somewhat - 15-64 (broad market)
Combination of great Combination of great flavoursflavours
50.0%50.0%
54.9%54.9%
58.4%58.4%
BaselineBaseline
Offline onlyOffline only
Online + OfflineOnline + Offline
50%50% 55%55% 60%60% 65%65% 70%70% 75%75%45%45%
ExcitingExciting
38.1%38.1%
41.6%41.6%
45.9%45.9%
25%25% 30%30% 35%35% 40%40% 45%45% 50%50% 55%55%
BaselineBaseline
Offline onlyOffline only
Online + OfflineOnline + Offline
78
Humor in Online advertisingHumor in Online advertising
79
CoverageCoverage
EffectivenessEffectiveness
ValueValue
80
Purchase Intent & SalesPurchase Intent & Sales
The major findings of the Study to date
81
Dove Nutrium BarDove Nutrium Bar
82
Effectiveness and Value Effectiveness and Value
Purchase intent (top 2 box)Purchase intent (top 2 box)
8.7%8.7%
11.5%11.5%
14.2%14.2%
0%0% 5%5% 10%10% 15%15% 20%20%
Pre-campaignPre-campaign
Offline OnlyOffline Only
Online + OfflineOnline + Offline ((freq & freq & 3.1)3.1)
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ValueValue
ValueValue
Cost per person affected by advertisingCost per person affected by advertising
00
100100
00 2020 4040 6060 8080
Pre-campaignPre-campaign
100100 120120
6565
Offline OnlyOffline Only
Online + OfflineOnline + Offline
84
Optimizing the Dove Plan for Brand BuildingOptimizing the Dove Plan for Brand Building
2.0 impressions(down from 2.6)
5.5 impressions (down from 6.0)
TV
3.1 Impressions(up from 1.7)
Inte
rnet
TV Print
85%
50%
10%
10% in Original
Plan
Reach Frequency
Inte
rnet
60%
85
All Media Demonstrate Diminishing ReturnsAll Media Demonstrate Diminishing Returns
Number of advertising exposures
Ave
rag
e o
f B
ran
din
g M
etri
cs (
%)
MagazineMagazineOnlineOnline
TelevisionTelevision
20%
25%
30%
35%
40%
45%
0 2 4 6 8 10 12 14 16Frequency
86
Results in a 14% increase in purchase intent
Same Budget, Same Budget, Better ResultsBetter Results
Results in a 14% increase in purchase intent
Same Budget, Same Budget, Better ResultsBetter Results
Optimizing OnlineOptimizing Online
87
Colgate Total ToothpasteColgate Total Toothpaste
88
Online ads increase purchase intentEffectivenessOnline ads increase purchase intentEffectiveness
120
109
100
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Offline Only
With Online@ 7%
With Online@ 11%
Index of Improvement in Purchase Intent
89
How much does it cost to make some one want to buy your brand?How much does it cost to make some one want to buy your brand?
$=ROI
Primary goal: Increase purchase intent
90
Online is More Cost Effective than Other MediaOnline is More Cost Effective than Other Media
Effective TV and Print CPMs are compared and indexed to this number.
Online TV Magazine
(100) (123) (184)
Purchase Intent Purchase Intent
Cost of Change by Other Media Indexed to Online
91
Purchase preference is influenced by time of dayPurchase preference is influenced by time of day
30%
35%
40%
45%
50%
3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Top 2
Purchase Intent: McDonald’s Flatbread Purchase Intent: McDonald’s Flatbread
LunchLunch
92
CoverageCoverage
EffectivenessEffectiveness
ValueValue
93
Key TakeawaysKey Takeaways
Same budget Same budget Better resultsBetter results
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Recommendation for getting the marketing mix in proper sync
1. Form a working group• Include key brand, agency & research teams
2. Examine how online provides coverage to your target
3. Measure Online to Offline effectiveness and value
4. Persist! Continue to reinforce the idea that with Online, our marketing mix could be optimized
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“When I point,
look where I point,
not at my finger.”
Warren McCulloch, noted neurophysiologist and father of computational neuroscience
