Advertising Research and Measurements

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Advertising Research and Measurements
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Strategy is all very well, But It Pays to Give
Thought From Time To Time To the Results.
Churchill
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Categories of research in advertising development
Category 1 Advertising Strategy Research
Category 2 Creative Concept Research
Category 3 Pretesting
Category 4 Posttesting
Before creative work begins
Before agency production begins
Before finished artwork and photography
After campaign has run
Timing

• Product concept
• definition
• Target audience
• selection
• Media selection
• Message element
• selection

• Concept testing
• Name testing
• Slogan testing

• Print testing
• TV storyboard
• pretesting
• Radio
• commercial
• pretesting

• Advertising
• effectiveness
• Consumer
• attitude change
• Sales increases

Research problem

• Free association
• tests
• Qualitative
• interviews
• Statement
• comparison tests

• Consumer juries
• Matched samples
• Portfolio tests
• Storyboards test
• Mechanical devices
• Psychological rating
• scales

• Aided recall
• Unaided recall
• Attitude tests
• Inquiry tests
• Sales tests

• Consumer attitude
• and usage studies

Techniques
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The Typical Environment of the Marketing Decision
Maker

• Has a high economic value of time.
• Makes a variety of decisions in events involving
  risk and uncertainty.
• Is frequently faced with unpredictable events
  that have not arisen previously.
• Operates in bureaucracy that delays research
  resources, yet demands timely and undistorted
  output.

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Advertising Works!
I know that half of my advertising is wasted. My
problem is that I dont know which half.
John Wanamaker (1930s)
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Advertising Effects
High
Effectiveness
Low
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Exposure Frequency
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Media Measurements
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Managers don't Need Research, They Need
Information
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Storyboard (MM)
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Classification of Advertising Effectiveness
Measures
Communication Effects
Sales Effects
Dummy Advertising Vehicles, Consumer Jury/Focus
Groups, Theater-Type Tests, On-the-Air,
Physiological Measures Projective Techniques
Inquiry/Direct Response Market Test
Pretesting
Market Tests Measures of Past Sales
Readership Tests, Recall Tests
Posttesting
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"The most important word in the vocabulary of
advertising is T E S T. If you pretest your
product with consumers, and pretest your
advertising, you will do well in the marketplace"
David Ogilvy
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Characteristics of Good Copy Testing Systems

• Testing procedure should be relevant to the
  advertising objectives.
• In advance of each test, researchers should
  agree on how the results will be used.
• Multiple measures should be used.
• The test should be based on some theory or model
  of human response to
• communication.
• The testing procedure should allow for more than
  one exposure to the advertising,
• if necessary.
• In selecting alternate advertisements to include
  in the test, each should be at the
• same stage in the process as the test ad.
• The test should provide controls to avoid biases.
• The sample used for the test should be
  representative of the target sample.

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Methods for Pretesting Ads /2

• Broadcast Advertising
• Central location projection test Respondents
  see test commercial films in a central location
  like a shopping center.
• Trailer test Respondents see TV commercials in
  trailers at shopping centers and receive coupons
  for the advertised products a matched sample of
  consumers just get the coupons. Researchers
  measure the difference in coupon redemption.
• Theater test Electronic equipment enables
  respondents to indicate what they like and
  dislike as they view TV commercials in a theater
  setting.
• Live telecast test Test commercials are shown
  on closed circuit or cable TV. Respondents are
  interviewed by phone and/or sales audits are
  conducted at stores in the viewing areas.
• Sales experiment Alternative commercials run in
  two or more market areas.

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Methods for Pretesting Ads /3

• Physiological Testing
• Pupilometric device Dilation of the subjects
  pupils is measured, presumably to indicate the
  subjects level of interest.
• Eye-movement camera The route the subjects
  eyes traveled is superimposed over an ad to show
  the areas that attracted and held attention.
• Galvanometer Measures subjects sweat gland
  activity with a mild electrical current
  presumably the more tension an ad creates, the
  more effective it is likely to be.
• Voice-pitch analysis A consumers response is
  taped and a computer used to measure changes in
  voice pitch caused by emotional responses.
• Brain-pattern analysis A scanner monitors the
  reaction of the subjects brain.

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Illustration Message Research Methods

• Measures of recognition and recall
• Starch Readership Service (magazines)
• Bruzzone tests (TV)
• Burke day-after recall (TV)
• Measures of emotion
• The warmth monitor
• Market Facts TRACE
• BBDOs Emotional measurement System

• Measures of physiological arousal
• Psychogalvanometer
• Pupillometer
• Voice-pitch analysis (VOPAN)
• Measures of persuasion
• ASI theater testing
• ARS laboratory testing
• Measures of sales response (single-source
  systems)
• IRIs BehaviorScan
• Nielsens SCANTRACK

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Measures of Recognition Recall
Recognition Recall

• Starch readership service

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.

Arthur Jones/ Medical Industries
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Methods of Obtaining Feedback on the Effect
Process
Effectiveness Tests
Steps in Persuasion Process
Exposure
Circulation Reach
Listener,Reader, Viewer Recognition
Attention
Comprehension
Recall, Checklists
Brand Attitudes, Purchase Intent
Message Acceptance
Retention
Recall over time
Inventory, Point-of-Purchase, Consumer Panel
Purchase Behavior
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Simplifies Rating Sheet For Ads
(Simmones Advertising Measures)
(Attention), How well does the ad catch the
readers attention? _20 (Read-through) How
well does the ad lead the reader to read
further? _20 (Cognitive) How clear is the
central message or benefit? _20 (Affective)
How effective is the Particular
appeal? _20 (Behavior) How well does the ad
Suggest follow-through action? _20
Poor Mediocre Average Good
Great ad ad ad
ad ad
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Measures of Physiological Arousal
Physiological Arousal

• Pupillometer - measures pupil dilation
• Psychogalvanometer - measures galvanic skin
  response
• Voice-Pitch Analysis (VOPAN)
• Eye-Tracking
• Brain- Waves

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Diagram of path followed byEye-Tracking Camera
Eye Camera
Computer
Scene Camera
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• SalesBrain Approach
  
• The Three Parts of the Brain
  
• -The New Brain thinks. It processes rational
  data and
  
• shares its deductions with the other two parts
  of the brain.
  
• 
  
• -The Middle Brain feels. It processes emotions
  and
  
• gut feelings and also share its feelings with the
  other
  
• two brains.
  
  
• 
  
• -The Old Brain decides. It takes input from the
  other
  
• two brains but it controls the decision making
  process.
  
• Once you know that the true decision-maker is the
  old brain,
  
• Your entire sales and marketing strategy should
  apply completely
  
• Different marketing communication principles in
  order to be impactful.
  

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Stimuli to reach the old brain
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Measuring Internet Advertising Effectiveness
Two general Approaches
1. Site-Centric - Measurements from site.
Data is obtained from site owners. 2.
User-Centric -Measurement from the individual
user. Data is obtained from a surfers
sample (Panel) - from their own PC.
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If You Can't Measure it,
You can't manage it !
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Single-Source Data
Defined...
Single-Source Data are store or home electronic
measurements of purchase behavior for the same
household, usually linked to TV exposure (e.g.,
via people meters)
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Single Source Data - Instore Scanning
Retailer HQ
T.V. Data
Stores
Scan Data
(People Meter)
Researcher HQ (Nielsen, IRI)
RS6000
Data Cleansing
Market Data
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Single Source Data - Home Scanning
Retailer HQ
T.V. Data
Homes
Scan Data
(People Meter)
Researcher HQ (Nielsen, IRI)
RS6000
Data Cleansing
Market Data
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Benefits of Scanning Data

• More Robust Data
• Weekly (daily)store level data
• UPC/EAN level reporting
• Demos Vals
• Variety (e.g, volume quantities purchased)
• Large sample (panel)
• Timely Data
• Real time data
• Faster data updates
• Proactive vs. reactive measures

• Higher Quality Data
• Measurement under more natural conditions
• Improves Mktg. Mix Understanding
• More measures
• Casual data (vs. controlled experiments)
• Application
• how advertising works
• copy testing
• media planning
• promotion effectiveness
• retailing support system
• longitudinal analysis

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Single-Source Data
Disadvantages

• Problems with non UPC coded products
• Sample limitation
• Need advanced analysis software
• Might limit some implications
• Need store/chain cooperation
• for store scanning (not home scanning)
• retail tracking systems
• Data stability not yet determined
• Need some complimentary data
• especially, media (radio, outdoors, etc.)
• Cost (?)

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Single-Source Data
For Promotion Effectiveness (Blattberg Neslin,
1995)
Optimal promotion occurrences
Optimal promotion incentives
Last purchase effect on loyalty
Last purchase effect on promotion responsiveness
Related to personal and demographic
characteristics
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Single Source Data - Decision Support Systems
Stores
Decision Support Software
Market Data
Weekly Scan Data
Adv./Promotion Casual Data
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Use the worlds best advertising techniques...
Let your customers do the talking !
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Back to the Future
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The future of Advertising

• Rapid increase in number of outlets
• Broadcasting to narrowcasting to relationship
  marketing
• Role of traditional agencies is up in the air
• division of functions creates new competition
• changes in compensation
• increasing need to integrate advertising with
  other marketing elements (IMC)
• need for new skills (advertising strategysts)

Future trends
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Successful direct mailing requires availability
of computer databases and addressability Direct
Advertising does not deal with customers as a
mass Creates individual relationships with
customer
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Customer Lifetime Value

• The net present value of the profit that a
• company stands to realize on the average
• new customer during a given number of
• years

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Customer Lifetime Value
Year 1 Year 2 Year 3 Year 4
Year 5
Revenue A Customers
1,000 400 180 90
50 B Retention Rate
40 45 50
55 60 C Average yearly sales
150 150 150
150 150 D Total Revenue
150,000 60,000
27,000 13,500 7,500 Costs E Gross
Profit 50
50 50 50
50 F Total Costs
75,000 30,000 13,500 6,750
3,750 Profits G Gross Profit
75,000 30,000 13,500
6,750 3,750 H Discount Rate
1 1.2
1.44 1.73 2.07 I NPV
Rate 75,000
25,000 9,375 3,902
1,812 J Cumulative NPV
75,000 100,000 109,375 113,277
115,088 K Lifetime Value (NPV) per Customer
75.00
100.00 109.38 113.38 115.09
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A Fully-Connected Consumer World
Store
Air
Travel
Office
Home
Car
Factory
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Powering toward the future

• The use of powerful, bright colors and more sex
  and nudity in print advertising will be part of
  print advertising in the next century, according
  to Roper Starch Worldwide, Mamaroneck, N.Y.
  Ropers 10 print advertising predictions for the
  next century were drawn from analyzing trends of
  ads in the Starch database, which includes about
  2 million ads.
• An explosion of color
• A profusion of black and white advertising
• Simplicity in, complexity out
• More dramatic ads
• Greater emphasis of benefits
• More sexiness and nudity
• Business to business ads will improve
• Technology ascending but not intruding
• Renewed interest in unified campaigns
• Increasing demand for accountability

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Remember
Stop Exercising, and you will lose
conditioning and probably gain weight.
Remember!
Stop Advertising, and your brand likely will lose
some of its equity and market share as well!
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Advertising Repetition and Product Extinction
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Reinforcement
Forgetting
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Extinction
0
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Number of repetitive exposures over time
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The Best Advertisement is A Satisfied Client
Duane Collins CEO, Parker-Hannafin