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XMOS 2004 Creative Imperatives, Sales Impact (Boston)

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  • Good Morning everyone! Good morning How you doing today! Great I love this business! Repeat after me? “I LOVE THIS BUSINESS”! We have a great day outlined for you today and I want to thank you for your support and participation
  • The situation is like a beam-balance in which each brand weighs the same. With one brand one each side, the scale is balanced. However, it takes only a feather added to one side of the balance to tip it in favor of the brand on that side. The brands consumers have to choose from are often very similar. Which way will the buying balance tip? When we look for advertising effect we are looking for feathers rather than heavy weights. David Ogilvy, 1963, Confessions of An Advertising Man
  • Importantly, the answer is a resounding “NO!” It’s completely valid to ask who’s paying the bill for the research, and the answer is: THE MARKETERS. Each of the marketers involved in the studies are paying for the privilege. They’re involved so that they can move the practice forward, get a better understanding of how to spend their online dollars, and how to allocate budgets more effectively and efficiently. The marketers are calling the shots; they are overseeing the methodology, posing the questions and deciding on the specific data that is released. This is critically important and we hope it’s a point you’ll make to your customers as you introduce them to the research.
  • And , last but not least , we need to identify the media companies – the publishers – who enabled this research to be conducted “in the real world” instead of in a lab environment. A special Thanks goes out to MSN for taking the risk to the first study.
  • Strategically, what was the best option for McDonald’s? The answer was to extend the REACH of the Internet message. Optimally, the online portion of the campaign should reach a total of 60% of the total target audience. This increase would drive overall awareness up 8.3%. In terms of total impact, this means that McDonald’s would generate awareness among 6 million more customers, without spending one additional dime of marketing money!
  • Are these findings a surprise? Branding and Sales increases are not new news Consistent with 1500+ branding studies and two dozen sales studies
  • Good Morning everyone! Good morning How you doing today! Great I love this business! Repeat after me? “I LOVE THIS BUSINESS”! We have a great day outlined for you today and I want to thank you for your support and participation
  • Transcript

    • 1. XMOS 2004: Creative Imperatives, Sales Impact Insights from the Cross Media Optimization Study series IAB 2004 Road Show - Boston Greg Stuart September 2004
    • 2. Test Your Internet Knowledge: Myths or Truths
    • 3. Internet’s: Truth or Myth
      • Q: Internet’s total reach will surpass Cable TV’s reach in 2004
      • Truth! Internet is projected to have greater penetration than Cable TV this year
      eMarketer sourced - AC Nielsen 12/03 for Cable & NNR, comScore, etc for Internet Internet Radio & Television Cable TV ~ 67% 98% Magazines 84% Newspapers 55% 2004: 68%
    • 4. Internet’s: Truth or Myth
      • Q: Online Advertising is the Fastest Growing Medium?
      • Truth: Absolutely!
      • Medium Est % Growth
      • Internet 15.8%
      • Spot TV 14.3%
      • Radio (Ntwk, Spot, Local) 11.5%
      • Cable TV 9.9%
      • Network TV 9.8%
      • Syndication 9.8%
      • Outdoor 8.4%
      • Magazines (Consumer) 6.4%
      • Newspapers (Nat’l & Local) 6.4%
      • Magazines(B2B) -.1%
      Source: TNS Media Intelligence/CMR 2004 Estimated Growth versus YAG
    • 5. Internet’s: Truth or Myth
      • Q: In 6 of the 12 XMOS Studies, Online was the most Cost Effective Medium?
      • Myth! Actually, in 9 out of 12 studies Online was proven to be the most cost effective medium in influencing a brand’s branding or sales metrics
      • $
      Source: IAB XMOS
    • 6. Internet’s: Truth or Myth
      • Q: 50% of Households who access the Internet have Broadband?
      • Truth! By 2005, nearly 40 million homes, or 53% are expected to have Broadband access.
      Source: eMarketer Nielsen NetRatings
    • 7. Internet’s: Truth or Myth
      • Q: According to Tipper Gore, “Kids are great…with the Internet and all, they practically raise themselves.”
      • A: Myth! It was actually Homer Simpson who realized this unique capability of the Internet.
    • 8. 10 Myths
      • Online is not a Branding Medium
      • Online is not a Mass Reach vehicle
      • Online does not generate offline sales
      • We need to get the job done in our primary media
      • Online is less impactful/efficient than TV
      • Our Target audience segment is not Online
      • We are already Online; we have a web site
      • The sales channel won’t let us use Online
      • We don’t know how to compare Online and Offline
      • The client doesn’t like Online
      www.iab.net/2004xmos Loves Demands we Mix Facts More
    • 9.
      • “ We are a people of tradition, but the past no longer serves us. Learn from the present and focus on the future.”
    • 10. The Media Landscape Has Changed Have you re-evaluated your marketing mix?
    • 11. The Past is Outdated In the Beginning, Media Mesmerized Us
    • 12. There was a time when radio could hold attention
    • 13. Television then… TV Now…
    • 14. Television then… TV Now…
    • 15. Advertising Wallpaper
    • 16. It takes a lot of courage to release the familiar and seemingly secure, to embrace the new. Alan Cohen But there is no real security in what is no longer meaningful.
    • 17.
      • The Key To Understanding The New Landscape:
      • Implication to marketers:
      • Set aside your assumptions and see what works.
      • Implication to research:
      • Measure the effect through observation
      • - Don’t guess at it.
      • - Don’t ask consumers to guess at an ads influence!
    • 18. Measuring Advertising
      • Never ask respondents if they took a certain action because of advertising
        • Instead, observe the effect
        • Advertising is a low involvement communication and is not generally perceived as a cause for action (even when it is)
    • 19. The IAB XMOS Project 2 ½ years, 15 major brands, 18 ad agencies, 27 online publishers, thousands educated, million$ optimized, billion$ in sales gained
    • 20.
      • XMOS 1.0
      • Unilever’s Dove
      • XMOS Branding - 1st wave
      • McDonald’s
      • Colgate Total
      • Kimberly Clark Kleenex
      • AstraZeneca Nexium
      • XMOS Branding - 2nd wave
      • Universal Pictures Home Video
      • ING
      • VeriSign
      • Sensodyne (UK)
      • Carlsberg (Denmark)
      • Charlie’s Angels (Denmark)
      • XMO$ Sales & Branding
      • 12. Ford F-150
      • 13. P&G’s Olay
      • 14. Kraft’s Jell-O
      • 15. Nestlé's Coffee-mate
      15 Public Studies to Date
    • 21. Conducted with Numerous Agency Partners Zubi Saatchi
    • 22. Thanks to the XMOS I Sponsors
    • 23. Better Results Same Budget The Conclusion 8% to 34% increases in Awareness and Brand Image 5% to +1000% increases in Purchase Intent Plus, increases in Sales for Ford, P&G, Kraft, more
    • 24. Summary Of XMOS Results * Not the actual optimized level, but considered an interim increase ** Brand ran Optimal level so there was no gain from more online spending *** Because of differing objectives, cross media comparison was inconclusive +4% -- -- -- 4%* Jell-O +7% -- -- -- 5%* Coffee-mate In Field -- -- -- TBD Olay -- -- -- +1491% +1-5 % -- +20 % -- +14% Purchase Intent 6%* 11 % 15 % 19 % 10-15% 10 % 11 % 13 % 15 % Reco’d % Online +5% -- -- -- -- -- -- -- -- Sales -- *** Verisign F150 ING ET Home Video Nexium Kleenex Total Chicken Flatbread Dove Brand Image Brand Awareness Brands -- -- -- +10-20 % +7% +34 % -- -- -- ** -- -- -- -- +8% --
    • 25. Why does increasing Online produce better results within the same budget? Online advertising affects branding metrics Online advertising is typically more cost efficient at producing branding gains Online reaches those who would otherwise not get the advertising message Coverage Effectiveness Value
    • 26. Lighter TV users are Heavier Online Users COVERAGE
    • 27. Why does increasing Online produce better results within the same budget? Online advertising affects branding metrics Online advertising is typically more cost efficient at producing branding gains Coverage Effectiveness Value
    • 28.
      • Build awareness, reinforce key image attributes and boost purchase intent
      • Generate sales
      • Brand differentiation and sales
      • Generate purchase intention and sales
      Marketing Objectives
    • 29. Universal Home Video – E.T. DVD Release
      • Launch Goals:
          • Communicate the release of E.T. DVD
          • Position brand as one of the most beloved movies of all time, with new footage & enhanced visual effect, a must buy DVD
      • Primary Objective: Generate purchase interest
    • 30. The Power of Good Creative
    • 31. Online was Better at Affecting Overall Branding Goals An unforgettable masterpiece for the whole family Based upon what you have seen or heard, how much would you say each statement describes the movie E.T. The Extraterrestrial on DVD and video … (Describes completely/Describes somewhat) Stat sig. Stat sig. TV + Rich Media Overlay TV + Online TV Only Pre-Campaign
    • 32. However, TV & Online do Drive Purchase Intent Thinking about E.T. The Extraterrestrial, how likely are you to buy the DVD or Video Definitely will/Probably will buy (net) Stat sig. Stat sig. TV + Rich Media Overlay TV + Online TV Only Pre-Campaign
    • 33. TV Built Awareness but Not Purchase Intent Brand Awareness Purchase Intent % Pre-TV TV Campaign Post TV Campaign
    • 34. Rich Media 6½x More Cost Effective TV Based on Relative Cost Index against Effectiveness Summary No lift N.A. 315 100 Purchase Intent (def/probably) 648 339 100 Brand Image Avg (top box) 192 1079 100 DVD Release Awareness 299 Online Banners 100 Rich Media Overlay 169 CPM ($ per Thousand) TV
    • 35. Universal: Major Gains with Online Absolute gains (bar chart) and % lift TV Online Rich Media +31% +1491% +107%
    • 36. Jell-O Ad Examples
    • 37. The Addition of Online Builds Brand Control n= 468; Branded n=469; Coupon n= 465 Purchase Intent: The next time you buy dry gelatin mix that comes in a box, what is the probability that you will buy Jell-O gelatin mix ? (Top 2 box- 11 point Juster Scale) All significant values are at a 95% confidence level Online advertising increases purchase intent by 7 points Offline Offline + Online Purchase Intent Lift: + 7%
    • 38. Online Sells Product Offline
      • Online advertising resulted in a 7.5% sales volume lift
      *All volume numbers above are weekly volume per 100 Households Control* Exposed to Online Ad Average Weekly Volume per 100 Households Measured in Ounces Sales Lift: + 7.5% Incremental Volume +.1 oz
    • 39. Jell-O Sales ROI Online frequency=9.8 Online frequency=7.0 Calculated National Theoretical Recommended frequency level ROI: Payback of Each Media Vehicle per Dollar Spent Above average ROI Below average ROI Direct TV Direct Print Radio Trade FSI Online
    • 40. The Coffee-Mate Online Campaign
    • 41. The Addition of Online Builds Brand Brand Image: Considering everything you have seen or heard about Coffee-mate Non-Dairy Liquid Creamer and your own personal opinions, please indicate the degree to which you Agree or Disagree with the following statements: (Top-Two box- 5 Point Scale) Online advertising increases five out of eight key metrics Offline Offline + Online Average increase + 7% Control n= 468; Branded n=469; Coupon n= 465 Results shown are for branded campaign using an average of all attributes *All significant values are at a 95% confidence level
    • 42. And Again, Online Builds Sales
      • Online advertising resulted in a 10% sales volume lift
      *Control Panel=606 Exposed Panel=1,127. All volume numbers above are weekly volume per 100 Households **Statistically Significant at the 95% confidence level Control* Exposed to Online Ad Average Weekly Volume per 100 Households Measured in Ounces Sales Lift: + 10% Incremental Volume +1.3oz
    • 43. Coffee-mate Sales ROI Online Recommended Level ROI: Payback of Each Media Vehicle per Dollar Spent TV Consumer Promotions Trade Online Above average ROI Below average ROI
    • 44. The All New 2004 Ford F-150
    • 45. “ The Most Important Launch In the History Of Ford” - Bill Ford
    • 46. One Day Reach = 40%!!! Digital Roadblock
    • 47. TV vs. Online Roadblocks (Purchase Intent)
      • Both are effective
      • But the roadblock
      • is more cost efficient
    • 48. Individual Media Effects Led by Online Branding Metrics Summary – 1 st Two Mos. Data +15pts +6pts +13pts +3pts Ad Recall +5pts +6pts +4pts Not Sig Not Sig Road-block +12pts +3pts +2pts Purchase Intention (unaided) +6pts +4pts Not Sig Shopping +6pts +6pts +5pts Purchase Consideration +9pts +8pts Not Sig Avg Brand Image Attributes +10pts +11pts Not Sig Familiarity Online Maga-zines TV
    • 49. Purchase Consideration Impact Efficiency Relative Cost Index (ROMO) Interpretation: If it cost Online $1 (indexed of 100) to increase purchase consideration, then it cost $1.96 for the roadblock, $3.54 for magazine and $21.54 to TV to achieve the same increase. $1.00 $1.96 $3.54 $21.53 Sample Cost 196 Roadblock 354 Magazine 2153 TV 100 Online Relative Cost Index Brand Metric: Purchase Consideration (top 2)
    • 50. Online is a MAJOR contributor to success
      • Weighted average of Roadblock and Online
        • (impact of roadblock x reach of roadblock + impact of online in-market + reach of in-market) / sum of reach = weighted impact
      Internet Reach 55% or 2.2 Million Consumers interested in buying F-150 because of Online ads Online’s Impact = Purchase Intention +6.8%
    • 51. Ford Sales Analysis
      • 500,000 F-150’s sold annually
      • Online was 6% of sales, or 30,000 trucks
      • Results in $750,000,000 annual F-150 sales
      Tracked Buying of Control & Exposed Group @ $25,000 per Truck
    • 52. What if Ford Ran Increased Online?
      • Online included Roadblocks & In-Market
      • Plan would then sell +5%, or 25,000 trucks
      • Results in additional $625,000,000 annual sales
      Optimization and Judgment suggested +6% increase in Online @ $25,000 per Truck
    • 53. The Evidence is In: Online DRIVES Sales! Sales lift: Nexium 6.0% Jell-O 7.5% Coffee-mate 10.0% Olay 12.5%* Ford F-150 21.0%** *Mid-point data only. Campaign is still in field, Reported % increase in household buy-rate. Actual volume increase were higher. ** 28% actual lift, 21% represents a more conservative figure to account for heavier media delivery
    • 54. The Power of Good Creative
    • 55. How Bad is Online Creative?
      • Of the last 5 XMOS programs, creative testing was done prior to the study launch
        • Only 1 brand’s ads required no adjustment
        • 2 brands found 1/2 the ads were not effective
          • Diluting the effectiveness of the campaign
        • 2 brands discarded ALL ads & started all over
          • Both developed better ads that scored much better
    • 56. Nothing Else Matters if Creative is Wrong Better creative can make the difference between success and failure Source: XMOS B A
    • 57. Colgate Purchase Intent for Online Only *sig Better creative can make the difference between success and absolute failure Ad A
    • 58. Another Case in Point: Olay
    • 59. Online Ads AD4 AD5
    • 60. Measuring Effectiveness: Creative Testing * Ad 5 show directionally positive increases in purchase probability Point difference over control +4% Message Association (love the skin your in) not sig Average Branding Attributes not sig Purchase Probability (top 2 box)* +3% Awareness- Aided not sig Awareness- Unaided #4 Branding Metrics
    • 61. Revised Ads Produced Better Results
      • Try the “Glance test”
    • 62. Individual Media Effects Branding Metrics Offline n =573 Offline +Online n =547 Point difference over control +9% Average Branding Attributes +12% Purchase Probability (top 2 box) not sig Awareness- Aided +11% Awareness- Unaided Online (revised)
    • 63. Why does increasing Online produce better results within the same budget? Online advertising affects branding metrics Online advertising is typically more cost efficient at producing branding gains Online reaches those who would otherwise not get the advertising message Coverage Effectiveness Value
    • 64. The Old Marketing Mix Is NO LONGER OPTIMAL
      • Billions are lost due to sub-optimal marketing mix
    • 65. What Does XMOS Really Mean to the Industry?
      • There is $17 Billion to $85 Billion of Inefficiency in the U.S. Advertising Marketplace today
      Assumes total U.S. Advertising Budget of $250 Billion and a minimum recorded gains from optimization of 7% for KCC (250B x 7% = $17B) up to 34% for Colgate (250B x 34% = $85B)
    • 66. What If Brand Optimized & Competitor Didn’t? Assumes category growth 3%, optimized sales increase of 11%
      • Optimized Non Optimized
      • Brand’s Share Brand’s Share
      • Starting Share 25.0% 25.0%
      • Year I 26.9% 24.4%
      • Year II 29.0% 23.7%
      • Year III 31.3% 22.9%
      • Year IV 33.7% 22.1%
      • Year V 36.3% 21.2%
      • Overall Sales Change +69% -2%
      Example assumes overall category growth of 3% and average annual gain in sales based on XMOS studies gain of 11% in total sales growth due to Online. All other variables assumed constant
    • 67. The Key To Improving Marketing ROI
      • Set aside old, outdated assumptions and measure what produces the best ROI
      • If you hope to make advertising more profitable, you had better measure what’s working, and what’s not
    • 68. Beware of Media Planning Inertia
    • 69.
      • Updating last years mix
      • with minor tweaks is NOT
      • a solution
      • Instead, use zero based media planning
    • 70.
      • Accountability is not measurement…
      • It is doing something about the measurement.
    • 71. Make Sure EVERYTHING Works! Same Media Budget  310% Increase Source: InsightExpress
    • 72. Next Steps: New Round of Studies
      • XMO$ Sales & Branding
      • Seeking 4 marketers to measure SALES & Branding impact of all media.
      • The IAB will pay half the cost of each study
      • See greg@iab.net or doron@iab.net
    • 73. Closing Thoughts
    • 74. Summary Of XMOS Results * Not the actual optimized level, but considered an interim increase ** Brand ran Optimal level so there was no gain from more online spending *** Because of differing objectives, cross media comparison was inconclusive +4% -- -- -- 4%* Jell-O +7% -- -- -- 5%* Coffee-mate In Field -- -- -- TBD Olay -- -- -- +1491% +1-5 % -- +20 % -- +14% Purchase Intent 6%* 11 % 15 % 19 % 10-15% 10 % 11 % 13 % 15 % Reco’d % Online +5% -- -- -- -- -- -- -- -- Sales -- *** Verisign F150 ING ET Home Video Nexium Kleenex Total Chicken Flatbread Dove Brand Image Brand Awareness Brands -- -- -- +10-20 % +7% +34 % -- -- -- ** -- -- -- -- +8% --
    • 75. A bit of advice given to a young Native American at the time of his initiation: ‘As you go the way of life, you will see a great chasm. Joseph Campbell Jump. It is not as wide as you think.’
    • 76. Thanks [email_address] IAB 2004 Road Show - Boston Greg Stuart September 2004