tv effectiveness webcast rubinson
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Webcast Prepared for Members of The Advertising Research Foundation
Prepared by: Joel Rubinson, Chief Research Officer, The ARF
January 14, 2009
Joelrubinson@gmail.com
Follow me on twitter @joelrubinson
Empirical Generalizations Regarding the Effectiveness of TV Advertising Over Time
Can TV still work? A prima facie case against…
• DVR household penetration in 2008 has reached 25 - 30% (Eggerton, 2008; Goetzel, 2008; Steinberg, 2008) and 50% of DVR owners typically fast forward (Morrissey, 2008).
• Increase in TV commercial clutter. Over the last 50 years, “non-program content” in a 60 minute prime time show has increased from 11 to 18 minutes (Papazian, 2007).
• Shift in media consumption patterns that have led 50%+ of TV viewers to multi-task, presumably paying less attention to TV as they are simultaneously on the web, using their phones, reading, etc. (MRI, 2008; Papper, Holmes, Popovich, & Bloxham, 2005).
Can TV still work? It’s even getting a little ugly…
• A sense that there is something wrong about push marketing that attempts to “interrupt” viewers and intrude
• “What would you rather have, 5 million impressions or 10 quality relationships?” ANA conference speaker
• “What is the future of a business where the consumer hates your product — in this case, advertising?” Greg Stuart, former head of the IAB, in AdWeek
Can TV still work? Some empirical results in favor…
• Evidence was published in 2007 by professors Hu, Lodish, and Krieger from IRI Behaviorscan testing using experimental design that the average level of effectiveness of TV advertising, using test vs. control methods, has actually INCREASED.
• Evidence that people are in heightened states of awareness while fast forwarding and still absorb messages (especially those they have seen before).
Anecdote: NYU marketing class
» I asked students to write down their favorite brand and then to comment on how they became “introduced” to that brand
» I called on 5 students and no one said that TV was the way they became aware of the brand or even had much influence on them
» One student said her favorite brand was Apple…here is the conversation that ensued…
» Can people fully retrieve such information?
The key questions
» Has the effectiveness of TV impressions changed over time and if so, has it increased or decreased?
» Is TV a reasonable option in the media mix or has a decline in effectiveness made it an undesirable way to spend your money?
ARF conducted a meta-analysis of seven US databases, 388 cases
» The ARF wanted to factually inform this issue via a meta-analysis…let’s harvest what the industry has learned!
» To integrate the results across databases, we used an indexing approach
• Choose a “dependent variable” for each database (some measure of impact vs. weight on an “impressions” rather than dollar basis)
• Average all the cases across time in a given database on this dependent measure and call that an index of 100
• Analyze the index of cases over time (trending up or down) and/or compare the index of effectiveness across different media platforms
The databases that the ARF had access to
» Sales lift analysis databases
• Represent a broad range of CPG product categories– IRI – (n = 125) controlled and matched market testing where the level
of spending was increased substantially from a non-0 level– PM Group (n =37) and Dratfield Analytics (n = 27)—marketing Mix
modeling– ARS® – (n = 112) modeling wearout factors, and GRP advertising
pressure vs. the sales impact associated with advertising.
» Cross Media comparison databases
• Represent a broad range of products and services (not limited to CPG)– Marketing Evolution (n = 40) and Dynamic Logic (n = 47) –
respondent level, post-hoc experimental design methods– PointLogic/Compose – Media planning tool for analyzing the relative
impact of various advertising platforms
TV Advertising does NOT appear to be declining in effectiveness, and perhaps is even increasing
TV Advertising does NOT appear to be declining in effectiveness, and perhaps is even increasing
figure 1IRI Behaviorscan Data 1990-2002
0
20
40
60
80
100
120
140
160
90-94 95-99 00-02
Year
Ind
ex Index of Elasticity
TV Advertising does NOT appear to be declining in effectiveness, and perhaps is even increasing
figure 2PM Group Data 2003-2008
0.00
20.00
40.00
60.00
80.00
100.00
120.00
2003-2005 2006-2008
Year
Ind
ex o
f T
V E
ffecti
ven
ess
Average
TV Advertising does NOT appear to be declining in effectiveness, and perhaps is even increasing
Dratfield Analytics
0
20
40
60
80
100
120
140
2005 2006 2007 2008
Year
TV
eff
ecti
ven
ess
Effectiveness index
TV Advertising does NOT appear to be declining in effectiveness, and perhaps is even increasing
•Even when controlling for copy quality and wearout, TV advertising effectiveness appears to be increasing.
Figure 4ARS Persuasion Points Delivered vs. Incremental Sales
(From Marketing Mix Modeling) 1997-2005
0
20
40
60
80
100
120
140
1997-1999 2000-2002 2003-2005
Inde
x Index of Inremental Days of Sales/ Persuasion Points DeliveredIndex of Incremental Days of Sales
/ Persuasion Points Delivered
TV Advertising does NOT appear to be declining in effectiveness, and perhaps is even increasing
figure 1IRI Behaviorscan Data 1990-2002
0
20
40
60
80
100
120
140
160
90-94 95-99 00-02
Year
Ind
ex Index of Elasticity
figure 2PM Group Data 2003-2008
0.00
20.00
40.00
60.00
80.00
100.00
120.00
2003-2005 2006-2008
Year
Ind
ex o
f T
V E
ffecti
ven
ess
Average
Dratfield Analytics
0
20
40
60
80
100
120
140
2005 2006 2007 2008
Year
TV
eff
ecti
ven
ess
Effectiveness index
Figure 4ARS Persuasion Points Delivered vs. Incremental Sales
(From Marketing Mix Modeling) 1997-2005
0
20
40
60
80
100
120
140
1997-1999 2000-2002 2003-2005
Inde
x Index of Inremental Days of Sales/ Persuasion Points Delivered
Index of Incremental Days of Sales
/ Persuasion Points Delivered
TV can be an effective platform
TV can be an effective platform
Figure 5Marketing Evolution Data 2004 -2007
0
20
40
60
80
100
120
140
160
180
Online Print TV
Media
Ind
ex o
f P
eop
le I
mp
acte
d p
er $
1k
Familarity
Purchase Intent
Awareness
TV can be an effective platform
Figure 7aDynamic Logic 2004-2008
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
No Yes
Opportunity to See
Aid
ed B
rand
Aw
aren
ess
tv
online
Figure 7bDynamic Logic 2004-2008
0%
10%
20%
30%
40%
50%
No Yes
Opportunity to See
Pos
itive
Pur
chas
e In
tent
tv
online
TV can be an effective platformF ig ure 6a
C ompos e T ouc hpoint R anking s 2005-2008
0
5
10
15
20
25
30
35
tou
ch
po
int
ran
k
C ompos e 200506
C ompos e 2007
C ompos e 2008
F ig ure 6bC ompos e 2005-2008 Awarenes s R anking s
0
5
10
15
20
25
30
35
Television
Home s hopping televis
ion
P roduct place
ment (TV/m
ovie)
Movie thea tre
R adioNewspapers
Maga zines
P roduct article
s
F ree cus tomer m
agaz ines
Loose in
s erts
Interne t advertisin
g
Interne t search
C ompany webs ite
s
E mails
Outdoor
A irport
P ublic tr
ansporta
tion
Doctor's
office
800 numbers
Direct
ma il
C e lebrity endors ements
S ports s ponso
rship
E vent s
pons ors hip
In-s tore advertising
E xamining in
-store
P rice promotions
P roduct sa
mples
P ers ona l reco
mmendation
P rofes sional re
commendation
To
uch
po
int
Ran
kin
g
C ompos e 200506
C ompos e 2007
C ompos e 2008
Conclusions
» TV advertising does not appear to be declining in effectiveness, and perhaps is even increasing
» TV can be an effective platform
» TV appears to work best at generating brand awareness
» Marketers must be alert to the dynamic nature of TV as long-form video becomes more available via other platforms and as TV becomes interactive and targetable
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