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© 2008 Arbitron Inc./Edison Media Research
Tracking Encoded Television Ads with PPM
Are Half My Advertising Dollars Wasted?
© 2008 Arbitron Inc./Edison Media Research
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John Wanamaker
“Half the money I spend on advertising is wasted, the
trouble is I don’t know which half”
© 2008 Arbitron Inc./Edison Media Research
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How does advertising work? For all of advertising’s history, the only way to determine the success of an advertising effort was to line up alternative sets of data
Dates of Campaign Cash Receipts
© 2008 Arbitron Inc./Edison Media Research
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How does advertising work?
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12 13 12 15 14
31
2003 2004 2005 2006 2007 20080
10
20
30
40
50
60
70
80Percent saying "WAAA"
Which station plays the most music?
TV Campaignpromoting WAAA for
playing 'most music'
Measure changes in perceptions
© 2008 Arbitron Inc./Edison Media Research
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How does advertising work?
Dates of Campaign “The Book”
For Radio…
© 2008 Arbitron Inc./Edison Media Research
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The Role of the CMO(Chief Marketing Officer)
• A position that didn’t even exist 20 years ago
• Often moved from finance into marketing
• INSIST in measurement and discrete “ROI (return on investment)” computations for all expenditures
• Won’t accept the notion that you just ‘have to advertise’…he or she needs to see it ‘working’
• The CMOs are pushing innovation in marketing and advertising measurement and analysis
© 2008 Arbitron Inc./Edison Media Research
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With new technologies…
A revolution in the
measurement of advertising and marketing effectiveness
is at hand
© 2008 Arbitron Inc./Edison Media Research
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For media advertising…
The PPM enables the revolution
© 2008 Arbitron Inc./Edison Media Research
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What PPM always does:
Encoded Audio
© 2008 Arbitron Inc./Edison Media Research
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What PPM is already doing:
Encoded Audio
Encoded Audio
© 2008 Arbitron Inc./Edison Media Research
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What PPM might do in the future:
Encoded Audio
Encoded AudioProduct Encoding
© 2008 Arbitron Inc./Edison Media Research
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For this experiment, we encoded a radio station’s TV spot
Encoded Audio
Television Commercial for a Radio Station
© 2008 Arbitron Inc./Edison Media Research
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What this allows us to do:
• Determine who in the PPM panel viewed the commercials
• How many times did they see the commercials?
• Analyze changes in listening behaviors among those who saw the television commercials
– Immediate changes
– Changes over time
© 2008 Arbitron Inc./Edison Media Research
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Philadelphia
© 2008 Arbitron Inc./Edison Media Research
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Context of B101’s campaign:
• Coming right on the heels of their astoundingly successful Christmas music programming
• For a station which has advertised consistently, and consistently aggressively, for years
• As of the dates of this campaign, B101 had no direct competition in the “Adult Contemporary” marketplace
© 2008 Arbitron Inc./Edison Media Research
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8,634 Detections!Almost exactly an average of three detections per
Philadelphia PPM panelist
© 2008 Arbitron Inc./Edison Media Research
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Saw at least one ad
62%
Did not see ad38%
Who saw the B101 spot?
© 2008 Arbitron Inc./Edison Media Research
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0
300
600
900
1200
1500
1800
2100
2400
2700
0 1 2 3 4 5 6 7 8 9 10 11 12
What portion of Philadelphia saw at least one commercial in the campaign?
WeekJanuary - March 2008
# of Respondents seeing B101 Spot at
least once
62% of panelists saw at least one spot during the campaign
26%
53%61%
© 2008 Arbitron Inc./Edison Media Research
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0
200
400
600
800
1000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36
Number of B101 spots seen
Number of Spots Seen
# of Respondents
One respondent saw the ad thirty-six times in these 12 weeks!
© 2008 Arbitron Inc./Edison Media Research
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Saw at least one ad
62%
Did not see ad38%
Who saw the B101 spot?(Women 25-54)
Base: Women 25-54
© 2008 Arbitron Inc./Edison Media Research
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0
50
100
150
200
250
300
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Number of B101 spots seen(Women 25-54)
Number of Spots Seen
# of Respondents
Base: Women 25-54
© 2008 Arbitron Inc./Edison Media Research
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0
300
600
900
1200
1500
1800
2100
2400
2700
0 1 2 3 4 5 6 7 8 9 10 11 12
Number of B101 spots seen over time
WeekJanuary - March 2008
# of Respondents
One
TwoThree
Four
Five +
© 2008 Arbitron Inc./Edison Media Research
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5.05.2
4
5
6
7
People who saw the ad spent a little more time with B101
Average Quarter Hours (AQH)
Didn’t see any spots Any Detections
© 2008 Arbitron Inc./Edison Media Research
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5.0
6.2
4
5
6
7
People who saw the ad more spent more time with B101
Average Quarter Hours (AQH)
Didn’t see any spots 5+ Detections
© 2008 Arbitron Inc./Edison Media Research
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Three Classifications of B101 Listeners
B101 Light/Non-Listeners
B101 Moderate Listeners
B101 Heavy Listeners
0-9 QHR in week one
10-19 QHR in week one
20+ QHR in week one
© 2008 Arbitron Inc./Edison Media Research
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Moderate19%
Heavy58%
Light23%
Heavy listeners to B101 accounted for most QHs in week 1
© 2008 Arbitron Inc./Edison Media Research
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0123456789
101112
1 2 3 4 5 6 7 8 9 10 11 12
B101 Listening by classification during the campaign
Week
AQH
Heavy Listeners
Moderate Listeners
Light/Non-Listeners
4.1
7.3
© 2008 Arbitron Inc./Edison Media Research
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By the end of the campaign, previously ‘moderate’ listeners were contributing more
Moderate33%
Heavy48%
Light19%
Moderate19%
Heavy58%
Light23%
Week 1 Week 12
© 2008 Arbitron Inc./Edison Media Research
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10400 1080012100
0
5000
10000
15000
B101’s first preference AQH showed moderate growth through first quarter
P1 AQH to B101
Jan Feb Mar
Did the TV spot help re-gather the core after
Xmas music?
© 2008 Arbitron Inc./Edison Media Research
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02468
1012141618202224
1 2 3 4 5 6 7 8 9 10 11 12
B101 Listening (45-54 year-old male panelist)
Week
(0 spots seen)
AQH
(1 spot seen)(2 spots seen)
(3 spots seen)
(3 spots seen)
© 2008 Arbitron Inc./Edison Media Research
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Philadelphia
© 2008 Arbitron Inc./Edison Media Research
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Context of the WJJZ spot:
• A newer frequency for a previously well-established brand
• Attempting to gain trial (“cume”) by making consumers aware that the station is now at a new frequency
• Note: 15 second spot (vs. :30 for B101)
© 2008 Arbitron Inc./Edison Media Research
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5,121 DetectionsJust under an average of two
detections per panelist in Philadelphia
© 2008 Arbitron Inc./Edison Media Research
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Saw at least one ad
50%
Did not see ad50%
Who saw the WJJZ spot?
© 2008 Arbitron Inc./Edison Media Research
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Saw ad, didn't listen89%
Saw an ad, started
listening11%
Only a small portion of those exposed to the WJJZ ad tried the station
Base: Saw at least one ad
© 2008 Arbitron Inc./Edison Media Research
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Lessons learned about brand building from packaged goods marketers
'If Brands Are Built Over Years, Why Are They Managed Over Quarters?'
Published: August 22, 2007 in Knowledge@Wharton
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Beware of focusing all marketing resources on the short term “pop”
•In 1993, as store-level scanning data started to become widely available, Wharton marketing professor Leonard Lodish coauthored an article outlining the power of this technology to gauge the effect of price promotions on revenue
•Lodish warned that while these tools could be an effective way to measure the impact of discounting, they were not the only determinant of brand power
© 2008 Arbitron Inc./Edison Media Research
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Beware of focusing all marketing resources on the short term “pop”•Lodish insisted there are other long-term measures that may not be as easy to collect, but are just as important, perhaps more important, to sales, market share and stock price over time•Brand managers heard the first part loud and clear. The second part? No so much.•"People will go toward what is easy and precise, and shy way from the more difficult and complex," says Lodish. "It's human nature."
© 2008 Arbitron Inc./Edison Media Research
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Beware of focusing all marketing resources on the short term “pop”
Short-term sales data tracking promotional effects don't capture deeper impacts. The paper cites a study by Information Resources, Inc. (IRI), which reviewed 24 brands in Europe over a three-year period ending in 2005. The study found that the total impact of discounts was actually only 80% of their short-term effect, while the total effect of advertising could be as much as 60% greater than short-term measures would suggest.
© 2008 Arbitron Inc./Edison Media Research
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The need for short term behavioral data AND brand/perceptual data
The authors note that the nature of the data itself has an impact on marketing decisions that can actually impair brands over time. When asked why, the managers said they are judged by quarterly sales, and that investors focus on those numbers because the link between discounts and quarterly sales is clear. “Thus, hard numbers drive out soft, leading managers to manage brands by the data they have, not the data they need,” the researchers write in their paper.
© 2008 Arbitron Inc./Edison Media Research
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The importance on long term brand power dataIn the process of researching their paper, Lodish and Mela visited many companies and were astonished by the lack of longitudinal data collected by the firms. Many kept only 52 weeks of information. Furthermore, the researchers note, major data suppliers typically discard data after five years, while at the same time developing the capability to process hour-by-hour data. The authors acknowledge that hourly data will be useful as a way to monitor stock-outs. "However," they continue, "it is difficult to imagine that local stock-outs affect market capitalization in the same way as brand equity, which often takes more than five years to build."
© 2008 Arbitron Inc./Edison Media Research
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How Clorox turned around profits with brand building advertising“Prior to 2005, Clorox was trapped in an endless cycle of discounting its flagship bleach product.
Clorox changed its strategy and reduced discounting while increasing advertising to build long-term loyalty and diminish consumer response to price.
Initially, profits were down, but rebounded by the first half of 2006 along with long-term prospects for brand pricing power.”
© 2008 Arbitron Inc./Edison Media Research
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Balancing short term & long term"Short-term oriented measures, such as sales, should be supplemented with long-term metrics to obtain a more complete view of brand performance," the authors write.
"We believe this would offer a major step to redressing the weakening state of brands evidenced in recent years, increase our understanding of how strong brands can be built, and help firms do a better job of 'owning' their customers."
© 2008 Arbitron Inc./Edison Media Research
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'If Brands Are Built Over Years, Why Are They Managed Over Quarters?'
• Marketing success cannot be totally measured by the short term measure of “popping” a month or a quarter
• Radio brands need to be tracked over the long term via branding measures for key images
© 2008 Arbitron Inc./Edison Media Research
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Other kinds of possible analyses
• Get the local television station to encode their news programming and their radio ads for the news
• Look at your own promo spots for special programming and see if they succeed in pushing listenership to those shows
© 2008 Arbitron Inc./Edison Media Research
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Some early conclusions
• In an historic first, we now have the ability to look directly at marketing exposure and audience shifts
• It is premature to draw overly broad conclusions, however, the data suggests:
– The B101 campaign may have helped restore P1 AQH after Christmas music
– The TV seems to have increased AQH among ‘moderate’ listeners
© 2008 Arbitron Inc./Edison Media Research
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Next Steps
• More stations should encode their television spots so we can build a normative database of radio marketing “cause and effect”
– Different buying strategies
– Different creative
– Different competitive situations
• Television stations and networks should encode their radio spots for the same analysis
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© 2008 Arbitron Inc./Edison Media Research
Tracking Encoded Television Ads with PPM
Are Half My Advertising Dollars Wasted?