Everything will become digital

Digital used to be synonymous with online but everything will become digital. Dave Poltrack from CBS predicts a huge increase in HD, 3D, and IPTV TV sales.  David Verklin, President of Canoe Ventures talks about the interactive TV advertising experience that will be nationally available via Canoe (a joint venture of the biggest cable operators).  video in Facebook?  How about facebook built into your new 55″ HD 3D TV? The future of print media is being revolutionized by electronic readers like iPad.  One can also imagine codes being inserted into print advertising or editorial pieces that, when captured by a smart phone, instantly leads to a multi-media experience or electronic coupon. Radio sees a digital path forward with servable audio streaming.

Digitization is transformational to the media experience, advertising possibilities and media businesses.  No longer is CBS a TV company or Time, Inc. a magazine; no longer is “media platform” the business organizing principle.  Now, the media property is the organizing principle and it must live synergistically across platforms.  Advertising on traditional media no longer has to be static and served to a whole audience (but more on this later).

As traditional media reinvent themselves in a digital age, they will hold onto, even increase, their attractiveness to advertisers.

Data will always trail the media possibilities

New touchpoints are emerging weekly it seems.  Advertising via the iPad is exciting and was born so very recently.  Apps for smart phones that create amazing location-aware and shopper marketing options are emerging so fast it is mind-numbing.  How can a manufacturer not want to put codes on packages that, via a reader that any smart phone can now have, bring a brand’s story to life with sight, sound, and motion at point of purchase?

Digitization allows a marketer to guide a consumer along the path to purchase right to the check-out.  Imagine a TV commercial where you can request a coupon that then gets delivered to your cell phone and is integrated with cell phone payment via a reader (exists in Asia already).

The point is, syndicated media research data bases, custom marketing research assessment can’t possibly get ahead of this; they will always be playing catch-up, focusing on the most significant of the touchpoints that are attracting substantial funds. The marketer who is cautionary and wants to wait for “solid evidence” of the effectiveness of a new media option will find themselves behind their competitors.

The importance of understanding audience size will diminish as we go to ad serving

The most important things in traditional media, the stats we all understand, relate to audience size ( GRPs, circ, etc.) However, imagine watching an episode of House on a platform that allows for selective ad serving.  As soon as two different households start getting different ads served to them, measuring total audience becomes less important to the advertiser.  They need to know how many got served the ad according to targeting ad serving rules, but total program audience is not a measure of reach in a targeting world.  Online, monthly uniques are a guide to which sites an advertiser should consider but they are paying for impressions served (or clicks).  “Traditional” media could/should move to this model as it becomes digital.

If this comes to pass as traditional media become digital, imagine the implications for syndicated media currency databases, and media tools.  While this will be traumatic to the existing infrastructure for “traditional media”, the increased business value of advertising and the increased CPMs that advertising should command when it is made more relevant based on intelligent serving rules are potentially very significant.

1. Media clouds

Increasingly, the same media brand can be experienced on multiple platforms, in ways that fit with the strengths of each type. For example, MTV’s The Hills is not just a scheduled TV program; it has an immersive web environment with on-demand episodes, social media, ringtones, blogs, and more. The New York Times doesn’t just put print content online; it offers sophisticated interactive graphics on its website and articles encourage user comments.

I think of this as a type of digital cloud … a media cloud. Consumers can “grab” content from the cloud – in traditional forms, in non-linear snippets, on a mobile, on demand, at home or in a store while shopping. Your friends now come with you on every shopping trip if you have a smart phone; the possibilities are endless. Media companies are building their content for multiple platforms.

Advertisers need to consider if it is better to buy different programs in a given medium or to forge tight co-branded, integrated trans-media packages.

2. Integrating bought, owned, and earned media

Media exposure is no longer a linear, brand-controlled transaction – media can now be thought of as bought, owned or earned. They each can serve different purposes in the brand building process so you need to sharpen your objectives and map them to touchpoints. Bought advertising is costly, yet it works and it delivers the reach that many marketers need. Earned media can be defined as consumer-to-consumer brand sharing (comments or assets); it’s pretty much free and influential but you can’t control self-perpetuating sharing. If you don’t catch lightening in a bottle, consumer sharing of messages or applications results in low reach so it might not be the best center of gravity for a media strategy for a broad penetration marketing need. Owned media is about media synergy. People probably first discover your website by either bought advertising, search, or already being a customer. Bought and earned media also drive search so there are indirect as well as direct effects on the business. The ARF 360 media and marketing council is hoping to help the ecosystem crack the code on how this all fits together.

3. The yin and yang of technology

Addressable advertising technology provides the ability to deliver messages that are highly personalized and contextualized. But for every action there is a reaction; while some welcome relevant advertising, others find such personalization creepy and intrusive, motivating legislative inquiry into privacy issues. Every marketer, media company, and ad serving company will need effective privacy leadership. Marketers must prepare for a mixed targeting model that combines addressability for those who opt-in with a better choice of media properties where no addressability is required.

Media technology has also given us DVRs and video on demand potentially allow people to skip ads. In response media companies disable fast-forward for ads in on-demand viewing, create program/product integration and add coordinated interactive content.

Yin and yang; for every marketing action there is a reaction and then a reaction to that.

Media Planning: The Bottom Line

Media planning typically kicks in downsteam of the new offer development. Then media planners often start by reverse engineering the media strategies of benchmark brands. Advertisers need to rethink this media planning process. Media strategy development should start much earlier … right when the opportunity is first being sized, the target is being determined, and the way that consumers seek and share information about the purchase is understood. In fact, the media strategy might be the source of the innovation (e.g. Dove Campaign for Real Beauty) and the best way to choose among different concepts. Integrating media and offer into a quest for something new, different, and incremental means the advertiser needs to “run the media strategy meetings”.

Media strategy principles in a 360 world should take priority over the analysis of benchmark brands. The benchmark approach locks you into a recursive trap so you are probably observing strategies that reflect a 5-7 year old media environment (those brands probably used benchmarking too). Instead, the media strategy team needs to answer questions such as:

• How big is the opportunity? (To inform the need for broad reach)
• On which media properties and social media sites do my target consumers tend to congregate?
• How do people seek and share information about what you offer and the needs you address? Which media touchpoints are most influential for this type of product or service along the path to purchase? In fact, don’t rule out the possibility that shopper marketing (either in-store or via mobile devices) could be the cornerstone of the brand-building strategy.

We are living in the new normal so think different. Marketers need to fully integrate offer development, listening and consumer input, quantitative research, and media strategy right at the fuzzy front end.

Online research panels proven to produce different results

The ARF foundations of quality research compared results from the exact same questionnaire across 17 online research panels (including all of the big ones) fielded at two different points in time (2 weeks apart).  We found that the test retest reliability of each panel was high but that results differed across panels by more than you would think based on sample sizes (n=2,000 per panel per wave).  This insight led to the ARF Quality Enhancement Process, a series of metrics, planning, and reporting templates intended to control for this effect.

Cell phones are primary for close to 40% of US households

The most recent CDC NHIS survey found that 23% of all US households are cell phone only (46% of those aged 25-29) and another 15% have landlines but are cell phone primary.  We are changing the way we connect.  Landlines have become less important than cell phones and for many, talk is becoming a less important method of communication than text and social media updates.

The Media Ratings council has said that media research must have a solution for this, implying that landline-only research can no longer be equated with probability sampling.  Nielsen, Arbitron, and Knowledge Networks have all switched to addressed-based sampling methods to restore probability sampling properties.

Listening becomes a source of insights and marketing intelligence that anyone can access

Listening is a way of hearing in real time what people WANT to talk about, rather than what marketing wants to talk about.  People express themselves in their own words rather than the interviewer’s vocabulary.  Google’s team of economists proved that what people are searching for predicts many things from the geographic spread of the flu to auto sales right down to the brand.

Marketing research is no longer a gatekeeper to rich consumer insights as marketing, customer care, corporate communications, agency of record planners can now can tap into Twitter, forums, etc. directly. Only by listening would J&J have known they needed to pull the Motrin campaign.  One of the Ogilvy Award winners, the NBA, needed listening to find the way fans’ express and share their passion.  The research team must embrace listening as well as asking (i.e. surveys) to remain relevant and get to the front-end of marketing innovation.

Marketing research still struggling to be recognized as having significant impact

The ARF research transformation initiative has brought many leaders together and conducted executive interviewing in 2009 among 20 research leaders.  The consensus is that the research team is often brought in too late in the process, viewed by many below the C-suite as an expense rather than an investment, and as an impediment rather than an enabler.  We must prove that research creates an indispensible runway between the consumer and the boardroom that leads to making the right calls on big, future-focused issues that result in business growth.

Media companies and advertisers form CIMM

The leading media companies and advertisers came together to create the Coalition for Innovative Media Measurement, making a clear statement to the industry that they intend to turbo-charge innovation in media measurement.  Why?  They believe existing media metrics are not keeping up with the fast-paced evolution towards the multi-tasking, multi-platform, long-tail way that people consume media.

Shopper research takes center stage at understanding the effects of the recession

Numerous studies about the effect of the recession focused on changes in shopping patterns and increases in buying store brands.  In other words, shopper research became as important as consumer research this year, especially on the big issue that was keeping marketers up at night.  Marc Pritchard (leading marketer at P&G) has been emphasizing “store back” marketing.  The ARF formed a shopper insights council to inform media planning and the new era of winning at retail.  We foresee a powerful convergence of mobile and shopper marketing.

Marketers have always been more focused on brand-building than what happens at retail.  Marketing research has always been more comfortable with consumer research than shopper insights.  This must change.

Six big wakeup calls in 2009 are doing our profession a favor; refocusing us on what it will take to conduct trustworthy research, find unexpected feedback, provide anticipatory insights, measure media in a way that people now choose to experience it, and properly rebalance our understanding of how people choose brands by placing more emphasis on understanding the shopper.

• Media habits approach: How does a marketer’s target consumer spend time with media and specifically, which media properties are “target rich” environments?  For example, online publishers often use a media habits argument to explain why they should get a share of ad dollars that is closer to share of media time.
• Touchpoints influence approach: Services like Integration or Compose are centered on self-reported approaches to prioritize which brand communication touchpoints influence someone’s brand choice regarding a particular type of product/service or in conveying a certain brand benefit.

Let me add a third approach to the mix that comes from the field of shopper insights that would have a big impact on the allocation of media spending.

• “Path to purchase” approach:  Understand the journey by which shoppers come to buy a particular brand, product, or service.  Did they decide before or after entering the store? Did they do research as they started their shopping process? How did they research their purchase?  What are the media touchpoints that best map to each leverage point in the path to purchase process?

Understanding “Path to Purchase” will change marketing and media priorities.  In most cases, it is likely to increase the budget for search, comparison shopping, and particularly in-store shopper marketing vs. using a media habits approach because those places don’t have a big share of media time but they are where the “lean-forward” action is.  Shopper insights research shows that, for many products, 50% or more of purchases and brand choices are decided on right in the store.  For such products, to put it in terms that media planners can relate to, shopper marketing is like recency on steroids.

The touchpoints influence approach might miss the mapping of a touchpoint to a brand objective.  Brand teams should have two broad classes of communication goals: creating and maintaining desired brand meaning, and reminding people of the brand as close to the decision point as possible (recency). If different touchpoints best map to specific marketing goals, the logical implication is that impressions and “reach points” across media platforms are not interchangeable or additive; this suggests that multi-platform reach calculations, a main purpose of media habits studies, become more of a media insight than a quantitative measure needed for creating a media plan.

A more important media calculation might be to create meaningful recency and  “likelihood to see/hear”  (LTS)factors for different media.  For example, in comparing TV to shopper marketing, TV might have a higher LTS factor (20 or so commercials in a show vs. 40,000 SKUs in a grocery store) but a lower recency factor vs. advertising that is right at the point of purchase.  Hypothetically, cinema advertising might have the highest LTS of all touchpoints (you’re sitting in the theatre waiting for the movie to start) but a really low recency factor.  However, the recency factor itself might be less important when marketing’s main objective is “imparting brand meaning” (say during the launch of a brand).

To address these issues of how to begin integrating shopper marketing and off-premise advertising into a well-informed media strategy, on August 20^th, the upcoming ARF Shopper Insights council will bring together gurus from their respective worlds who have not been on the same panel before to discuss this issue.

• Herb Sorensen –  Ph.D., Global Scientific Director, Shopper Insights TNS-Sorensen Associates (legendary shopper guru)
• Erwin Ephron – Partner, The Ephron Consultancy (father of recency)
• Paul Donato – EVP, CRO, The Nielsen Company (media industry leader)
• Mike Hess – Director of Research, Carat Insight (branding, shopping, and media expert)

ARF members can register for this event at no charge by going to MyARF.  For those who can’t make it, I’ll report back via this blog on what should be an amazing and long-overdue discussion.