Transcript Jim Spaeth`s Powerpoint

New Currencies
for Television?
Jim Spaeth
President
The Advertising Research Foundation
Evolving Media Currencies
1900:
1930:
1960:
1980:
1996:
1999:
Circulation
Household Ratings
Total Audience (RPC)
Persons Ratings
Advertising Impression
Advertising Clicks (almost!)
Evolving Media Currencies
THREE OBSERVATIONS:
1. The basic mainstream currency has
only changed once in 100 years
2. The pace of change is accelerating
3. Today four currencies co-exist:
•
•
•
•
Impressions
Ad Impressions
Clicks/leads
Cost per order
The New ARF Media Model
(working draft)
I.
VEHICLE DISTRIBUTION
II. VEHICLE EXPOSURE
III. ADVERTISING EXPOSURE
IV. ADVERTISING ATTENTIVENESS
V. ADVERTISING COMMUNICATION
VI. ADVERTISING PERSUASION
VII. ADVERTISING RESPONSE
VIII. SALES
WHY?
Circulation to Readers
• Readers favored magazines over
newspapers
• Random sampling provided valid
estimates of RPC and Readers
• Magazines invested in research
• Magazines benefited by getting credit
for multiple readers per copy
Household to Persons Ratings
• Viewing became more individually
based, less family based
• Product proliferation lead to
consumer segmentation and media
targeting
• Persons ratings better servedthe
advertisers’ needs
• Television profited by selling a
differentiated product
Program to Ad Ratings
• Identified as the “next step” for 40
years -- a step not taken!
• Immediate product of Web server log
file analysis
– The source of server based audience
data and audits
– Adopted without fanfare
• Forecast for Interactive Television?
Clicks?
• As Web Advertising emerged, P&G
announced it would only pay for
click-throughs.
• Higher level of value
• Rejected by marketplace as the only
measure of value
Cost Per Order
• The currency of DRTV and
Infomercials
• An element of many e-commerce
deals
• Forecast for interactive television?
Evolving Currencies
• Evolving business models:
– The Media
– The Advertisers
• Evolving technology
– Media
– Marketing
– Measurement
• Evolving economic values
Marketing ROI
• Demanded by advertisers
• About 3/4 currently setting budgets
with ROI
• Ad Tracking, Marketing Mix Models,
Matched Markets, Experimental
Designs, Panel Data ….
Marketing ROI
IMPACT OF MARKETING ON BRAND X SALES
ADV.
COUPON
TPR
DISPLAY
Marketing ROI
INCREMENTAL GROSS INCOME DOLLARS PER
MARKETING DOLLAR
ADV.
TPR
DISPLAY
COUPON
0
1
2
3
4
Marketing ROI
INCREMENTAL GROSS INCOME DOLLARS PER
MEDIA DOLLAR
MAGAZINES
TV
ONLINE
RADIO
0
1
2
3
4
Marketing ROI @ the ARF
• MAX, w/AAAA and MSI
– Techniques are available
– Senior management credibility at issue
• Methods & Practices Study w/ANA, in
field
• Best Practices w/APQC, about to launch
• Media Accountability Council, applying
these methods to media planing
Research ROI
PRICE
PROMOTION
MEDIA
TRADE
DIRECT
….
MARKETING
DECISIONS
MARKETING
PROFIT
Research ROI
• Planning Decisions
– Marketing Mix Models?
– Ad Tracking?
• Buying Decisions
– Optimizers?
• Failure to prove value added
• Business process barriers
Marketing ROI
• Accountability:
– Advertisers are seeking it
– Research methods are providing it
– The value of research is demonstrated by it
– Some media will profit from it, others will lose
– Will be a catalyst for changing currencies
New Media Technologies
•
•
•
•
Internet / Television Hybrids
Interactive Television
PVR’s
The Web as a model:
– Unbundling of content from ads
– E-commerce  TV-commerce?
– Multiple currencies
– New measurement technologies
New Media Technologies
•
•
•
•
•
Evolving business models
Evolving technologies
Evolving economic values
Evolving currencies managed for ROI
How will the new media play?