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New Currencies New Currencies for Television?for Television?
Jim Spaeth
President
The Advertising Research Foundation
Evolving Media CurrenciesEvolving Media Currencies
1900: Circulation
1930: Household Ratings
1960: Total Audience (RPC)
1980: Persons Ratings
1996: Advertising Impression
1999: Advertising Clicks (almost!)
Evolving Media CurrenciesEvolving 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 The New ARF Media Model (working draft)(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?WHY?
Circulation to ReadersCirculation 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 RatingsHousehold 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 RatingsProgram 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?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 OrderCost Per Order
• The currency of DRTV and Infomercials
• An element of many e-commerce deals
• Forecast for interactive television?
Evolving CurrenciesEvolving Currencies
• Evolving business models:– The Media– The Advertisers
• Evolving technology–Media–Marketing–Measurement
• Evolving economic values
Marketing ROIMarketing ROI
• Demanded by advertisers
• About 3/4 currently setting budgets with ROI
• Ad Tracking, Marketing Mix Models, Matched Markets, Experimental Designs, Panel Data ….
Marketing ROIMarketing ROI
IMPACT OF MARKETING ON BRAND X SALES
ADV.
COUPON
TPRDISPLAY
Marketing ROIMarketing ROI
0 1 2 3 4
COUPON
DISPLAY
TPR
ADV.
INCREMENTAL GROSS INCOME DOLLARS PER MARKETING DOLLAR
Marketing ROIMarketing ROI
0 1 2 3 4
RADIO
ONLINE
TV
MAGAZINES
INCREMENTAL GROSS INCOME DOLLARS PER MEDIA DOLLAR
Marketing ROI @ the ARFMarketing 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 ROIResearch ROI
MARKETINGMARKETING
PROFITPROFIT
PENETRATION
PRICE PAID
LOYALTY
PRICEPROMOTION
MEDIATRADEDIRECT
….
MARKETINGMARKETING
DECISIONSDECISIONS
Research ROIResearch ROI
• Planning Decisions–Marketing Mix Models?– Ad Tracking?
• Buying Decisions– Optimizers?
• Failure to prove value added
• Business process barriers
Marketing ROIMarketing 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 TechnologiesNew 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 TechnologiesNew Media Technologies
• Evolving business models
• Evolving technologies
• Evolving economic values
• Evolving currencies managed for ROI
• How will the new media play?
