Lecture 10: Emerging Methods in Marketing Research The Benefits of Merging Data & Accountability in Advertising * Two Examples Recap of combining primary and secondary data The Overture Center for the Arts Linking media exposure to sales * The Overture Center for the Arts OVERTURE?S MISSION: To engage the community in the arts, we: Present a broad spectrum of high-quality performing arts programming Develop audiences for the arts through high quality outreach and programming Advance the missions of resident arts organizations Advocate for the development of the arts in the community Provide a world-class forum for diverse artistic expression * The Overture Center for the Arts Existing Data: Ticket sales, event attendance, and donation data from their database Shortcoming: No insight into the reasons for customers? behavior * What drives each of these activities? Attendance at outreach activities Ticket purchasing Donations Re-examining the Effectiveness of Advertising * Is advertising dead? It?s become a smaller fraction of marketing expenditures Source: Promo Magazine including PROMO, Veronis Suhler Stevenson & Cannondale $546.8 $177.5 $288.3 Consumer Promotion (28.5%) Advertising (17.5%) Trade Marketing & Trade Promotion (54.0%) $288.3 $177.5 $546.8 Total U.S. Marketing Expenditures = $1,012.6 billion * Where Ad Money Goes * Ad Spending at Anheuser-Busch * Ad Spending at P&G Advertising Mix at Kimberly-Clark Non-traditional includes digital, shopper, and experiential marketing Increased focus on packaging * 2007-2008 Ad Prices * * What?s responsible for marketers? loss of faith in advertising? ACCOUNTABILITY (or lack thereof) If I?m spending millions of dollars on advertising, is it worth it? How do you measure this? * Lack of accountability in advertising Most advertising (until this year) is bought based on program ratings Most common is the Nielsen program ratings, which counts the number of viewers in a sample tuned to a program Networks try to sell advertising for the upcoming season during ?The Upfront? WGA strike may change this Issues Pricing is based on CPM (cost per thousand viewers) Program ratings ? Commercial ratings Being tuned to a channel doesn?t mean that you?re watching it The TiVo effect Advertising Clutter DOES IT EVEN WORK??? * Sample of Desperate Housewives Viewing in 2006-2007 National spot cost approximately $400K * First, let?s get on the same page Manufacturers? marketing plans tend to look at their customers as: Brand buyers Heavy brand buyers Category buyers Premium category buyers Price Category/Private label category buyers Heavy/Light category buyers Category switchers Brand and competitive buyers Brand buyers/loyals, Low to mid Loyals Loyal category buyers They don?t necessarily care who you are, but what your buying habits are * Tying Behavior to Marketing Actions Different customers need to be treated differently ?Segmentation,? ?clustering,? ?customer-centricity? Loyal vs. Switchers Heavy vs. Light buyers Promotional activity Message in advertisements Customer service * What about advertisers? Ads are usually developed to target: Specific gender Specific ages Specific income brackets Parents vs. non-parents Other demographic information * What?s the logic? Brand buyers Heavy brand buyers Premium category buyers Heavy/Light category buyers Brand buyers/loyals Loyal category buyers Men, 18-35 Women with income >$50K Married couples with children Girls, 12-18 Residents of ZIP Code 60606 College students Manufacturers? Market Planning Mindset Media Planning Mindset ???? * Where we can run into problems Suppose that I run a company produces video games and have a new product ready to go to market Based on past experience, I?m prepared to spend $3MM on advertising On which groups of potential buyers should I spend my budget? What type of ads (magazine, online, outdoor, TV, etc.) do I develop? * The Traditional Approach Collect aggregate sales data on a week to week basis Could be at the store level, region level, or national level Gather advertising information at the appropriate level Assess the impact of advertising on sales What about accountability? The Super Bowl A 30 second ad in 2008 cost $2.7MM; $3MM in 2009 Attracted 97.5 MM viewers in 2008; up slightly in 2009 Do you think it?s still worth it? * 2008 ?Success? Stories * 2009 Winners and Losers * * Project Apollo Joint project between Nielsen/VNU and Arbitron Support from major manufacturers, including Kraft and P&G The technology and methods already existed + One sample of households + * Collected Data on Buying Behavior HomeScan Food and Beverage products Health and Beauty products Most products that have a UPC Surveys Prescription drugs Movies Financial services Restaurants Car services * Combining Multiple Data Sources * Who Can Benefit? Manufacturers (e.g., Kraft, P&G, General Mills) Service Providers (e.g., Washington Mutual, Charter, Cingular) Retailers (e.g., Target, Best Buy, grocery stores) Advertising agencies developing creatives for their clients Cable/television networks Others? Why It Failed February 25, 2008: ?Despite a promising level of interest, we did not secure sufficient client commitments to make Project Apollo a sustainable venture for our two companies.? * * For Those Interested The Future of Advertising Research: Project Apollo Pilot Spring 2007 roundtable discussion arranged by the Nielsen Center for Marketing Research Another Option for Audience Measurement Digital cable set top boxes (STBs) Tuning data collected second-by-second anonymously Collects data from all STBs Why should we care? What additional data do we need to derive meaningful insights? * * Punchline Marketing needs to be accountable If you can prove that something is effective, managers are much happier Question the data that is available Just because measures are available does not mean that they are good Merging data provides insights you can?t get from individual sources
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