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Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
Advertising Amid Crisis 4-2010
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Advertising Amid Crisis 4-2010

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  • 1. Advertising Amid Crisis: Lessons from the Financial & Automotive Industries in 2009 Brad Fay David Shiffman COO SVP Keller Fay Group Mediavest
  • 2. 2009 Was a Bad Year, Especially for Auto & Financial Industries • “Bailout Plan: $2.5 Trillion and a Strong U.S. Hand” – New York Times, Feb. 10 • “AIG Planning Huge Bonuses After $170M Bailout” – New York Times, March 14 • “AIG Faces Growing Wrath Over Payouts” – Wall Street Journal, March 16 • “U.S. Expands Plan to Buy Banks’ Troubled Assets” – NY Times, March 24 • “U.S. Gets Majority Stake in New GM; Investors Cry Foul” – Washington Post, April 1 • “Rescued Banks Balk at Chrysler Deal; Creditors Pushed to Surrender Claims of Billions” – Washington Post, April 17 • “Judge Attacks Merrill Pre-Merger Bonuses” – New York Times, Aug. 10, 2009 • “GM To Draw Down More U.S. Funds” – Wall Street Journal, Oct. 29, 2009 • “TARP Can’t Save Some Banks” – Wall Street Journal, Nov. 17, 2009
  • 3. To Advertise or Not to Advertise? • The crisis raised this critical question for all marketers, especially in automotive and financial industries. – A desire to save money amid unprecedented financial pressures—not to mention taxpayer ownership—argued against advertising. – But many arguments existed for continuing to advertise. • Manage reputations against a storm of negative news. • Speak to and educate customers with a reassuring voice. • Capture market share from struggling competitors. • Ultimately, companies made different choices, and these differences provide us with a valuable case study about advertising amid crisis. – Applies to whole industries during times of national or global crisis. – May also apply to individual companies facing individual corporate crises.
  • 4. Our Approach • Two data sources utilized: – Keller Fay Group’s TalkTrack® monitoring word of mouth about specific companies based on a continuous online survey. – Nielsen advertising expenditures via Mediavest. • Word of mouth data – Over 70,000 interviews in 2008 & 2009 with nationally representative samples of adults 18-69. – Tracks positive vs. negative polarity of consumer conversations about the brands throughout the crisis, with linkages made to news and advertising as information sources. • Ad spend data – Allowed us to group word of mouth data based on brands or companies that maintained ad spending, versus those who cut back a moderate or large amount.
  • 5. Financial Services
  • 6. Financial WOM Quantity Surged During Crisis, But Now At Pre-Crisis Levels (% of financial brand mentions among all brand mentions, 4-week rolling avg.) • Financial WOM levels have been below average since October. Financial Services 9% Peak coincided with the start of the financial crisis. 8% News of bonuses and bailouts further fueled WOM in Q1 2009 7% 6% 5% 4% 08 E D 16 09 /E N 08 De 9 20 /E 0 1 2 09 E F 8 4 /E 1 0 31 M 8 M 1 22 08 E A 13 05 A 6 08 E A 3 S 4 08 E O 4 De 7 8 09 E S 6 S 6 09 E O 7 20 W/E 20 20 W/E 05 6 09 E M 12 09 E N 8 09 M 3 20 /E 24 2 0 0 20 W/E l 2 0 2 1 0 20 W/E c 2 1 0 2 20 W n 2 20 W/ ct 2 1 W n1 1 0 W ov W ov W ov W un W an W an n W Ju l ul ar ar eb W ug W ug W ep W ug W ep W ep W Apr W ay ay W ec c ct W ct Ju 08 Ju 09 Ju Ja 09 E J O N J J J 08 /E 09 /E 20 W/E E 09 E 20 W/E /E /E /E /E /E 20 /E / 20 W / 20 W/ / / / / / / / W / W 08 08 08 08 09 09 09 10 10 09 09 08 09 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Base: All categories brand mentions, among adults (4-week rolling average, n=20,038) Source: TalkTrack®, June 2008 – January 2010
  • 7. Financial WOM Quality Suffered a Pronounced “Double Dip” (Polarity of financial services conversations, 8-week rolling avg.) • Levels of positive talk were above average in October, November and January, while negative talk levels were below average in October and January. Mostly Positive Mostly Negative Mixed 70% First dip in polarity coincided with the start of the financial crisis. 60% 50% 40% Another dip occurred in March, amid news of AIG 30% executive bonuses 20% 10% 0% 08 E D 16 No 8 De 9 20 /E 0 1 2 09 E F 8 4 /E 1 0 31 M 8 M 1 22 A 3 05 A 6 08 E A 3 Se 4 08 E O 4 De 7 8 09 E S 6 Se 6 09 E O 7 20 W/E 20 20 W/E 05 08 E N 6 09 E M 12 20 W/E t 18 09 M 3 20 /E 24 0 /E v 2 0 0 20 W/E u l 1 20 W/E l 2 0 2 1 0 20 W/E c 2 1 0 2 20 W n 2 20 W/ ct 2 1 W n1 0 W ov v W un W an W an n ul ar ar eb W ug W ug p W ug ep p W Apr W ay ay W ec c ct Ju c No 08 Ju 09 Ju Ja J 09 E J O J J J 08 /E 09 /E 20 W/E 09 E E 20 W/E /E /E /E /E 20 /E / 20 W / 20 W/ / 20 W/ / / / / W W W / W W W 08 08 08 08 09 09 09 09 10 10 09 09 08 09 09 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Base: Brand conversations, among adults (8-week rolling average, n=1,335) Source: TalkTrack®, June 2008 – January 2010
  • 8. Recommendations Moved from “Buy” to “Avoid,” and Have Not Fully Recovered (Specific recommendation received in word of mouth conversation) • Recommendations to “buy it or try it” increased 4 pts for the financial services category since the mid-crisis period. “Consider it” and “avoid it” recommendations decreased slightly, along with the percentage of conversations containing no specific recommendation. Pre-Crisis = Feb – Jul 2008 Early Crisis = Aug 2008 – Jan 2009 All Categories Mid Crisis = Feb – Jul 2009 Financial Services (Pre-Crisis) Late Crisis = Aug 2009 – Jan 2010 Financial Services (Early Crisis) 40% 42% Financial Services (Mid-Crisis) 39% Financial Services (Late Crisis) 38% 36% 29% 27% 24% 25% 24% 23% 22% 22% 21%20% 16%17%16% 12% 8% Buy it or Try it Consider it Avoid it No Recommendation Made Base: Brand mentions where someone else provided advice, among adults (All Categories, n=44,542. Financial: Pre-Crisis, n=2,319; Early Crisis, n=2,643; Mid Crisis, n=2,553; Late Crisis, n=2,312) Note: Most recent period (“Late Crisis”) examined for “All Categories.” Source: TalkTrack®, February 2008 – January 2010
  • 9. WOM-Based Purchase Intent Suffered, But Has Recently Improved (% rating WOM highly likely to inspire action, “9” or “10” on 0-10 scale) • Likelihood to purchase increased 5 pts since the mid-crisis period, while likelihood to seek out information increased by 3 pts. All Categories Pre-Crisis = Feb – Jul 2008 Financial Services (Pre-Crisis) Early Crisis = Aug 2008 – Jan 2009 Financial Services (Early Crisis) Mid Crisis = Feb – Jul 2009 Financial Services (Mid-Crisis) Late Crisis = Aug 2009 – Jan 2010 Financial Services (Late Crisis) 50% 50% 48% 47% 47% 45% 44% 41% 37% 36% 37% 36% 35% 35% 33% Likely to Pass Along to Others Likely to Seek Out Information Likely to Purchase Base: Brand mentions where someone else provided advice, among adults (All Categories, n=44,542. Financial: Pre-Crisis, n=2,319; Early Crisis, n=2,643; Mid Crisis, n=2,553; Late Crisis, n=2,312) Note: Most recent period (“Late Crisis”) examined for “All Categories.” Source: TalkTrack®, February 2008 – January 2010
  • 10. What’s Advertising Got to Do with It? • We correlated ad spend with WOM quality to assess the potential impact of reduced advertising. • In comparing the total amount spent on advertising in 2008 vs. 2009, we split financial brands into three categories: Those that were fairly stable in their ad spending, those that made moderate cutbacks, and those that made very large cutbacks. Ad Spend Category Average % Change in Ad Spend ’08 vs. Ad Spend ‘09 Large Cutback -45% Financial Brands Moderate Cutback -27 Stable +7 Financial Brands Included: • Large Cutback (>40% reduction in ad spend): AIG, American Express, Ameriprise, Capital One, Citibank, Citizens Bank, HSBC, ING, T Rowe Price, UBS & Wachovia. • Moderate Cutback (21-39% reduction in ad spend): Ameriquest, Bank of America, Charles Schwab, Fifth Third Bank, JP Morgan Chase, MasterCard, Merrill Lynch, Vanguard, Visa & Wells Fargo. • Stable (<20% reduction in ad spend): BB&T Bank, Chevy Chase Bank, E*Trade, The Hartford, M&T Bank, Morgan Stanley, Regions Bank, Scottrade, Sharebuilder, Suntrust, TD Ameritrade & US Bank. Source: Nielsen, January 2008 – December 2009
  • 11. Financial Firms that Maintained Ad Spend Experienced a Higher Rate of Positive Talk (% of positive financial conversations, 8-week rolling avg.) • In early 2008, all of the companies had fairly similar WOM quality, but their fortunes separated sharply in Q4, and especially by spring and summer 2009 when those maintaining advertising did much better than the other groups. Large Cutback Moderate Cutback Stable 90.0% 2008 2009 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 08 E M 04 08 Ju 5 Ju 7 M 2 08 / E A 23 5 M 3 N 9 09 E A 5 M 6 N 1 S 7 Se 7 08 E O 8 N 9 D 0 Ja 1 F 1 M 2 A 9 Se 0 0 N 1 10 E D 2 13 6 Au 7 Au 9 20 W/ E 15 Fe 1 07 8 03 2 20 W/ E y 1 0 20 W/ E r 1 20 W/ E g 1 0 20 W/ p 2 20 W/ E v 0 20 W/ E v 3 20 W/ E c 2 20 W/ E g 0 3 20 W/ p 2 20 W/ E v 0 2 20 W/ E pr 1 20 W/ E t 1 r0 20 W/ E r 2 20 W/ E ct 1 20 W ul 0 20 W/ E ul 2 20 W/ E ul 1 20 W/ E n 1 20 W n 2 20 W/ E b 0 2 W ay W ay W ar W ar W ep W ug n n n W ov ec W eb a c Ap p a o o e o 09 Ju Ja O J J J M 08 / E 09 / E 09 E 20 W/ E /E 20 / E /E 20 / E /E 20 / E 20 / E 20 W/ / / W W 08 08 08 09 09 09 08 08 09 09 09 09 08 08 08 08 08 09 09 09 09 09 09 20 20 20 20 20 20 Base: Financial brand conversations, among adults, 8-week rolling average (Large Cutback, n=201; Moderate Cutback, n=347; Stable, n=90) Source: TalkTrack®, March 2008 – January 2010
  • 12. Factoring Both Positive & Negative, the Trend for “Net Advocacy” Illustrates Large Difference in WOM (Net advocacy of financial conversations, 8-week rolling avg.) • Net advocacy for all financial companies cutting back spending were very different from those that were stable in ad spend. Large Cutback Moderate Cutback Stable 70.0% 2008 2009 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% 08 E M 04 0 8 Ju 5 09 E J 17 M 2 08 / E A 23 15 M 3 N 9 09 / E A 5 09 E M 6 N 1 S 7 Se 7 08 E O 8 N 9 D 0 Ja 1 09 E F 1 09 E M 2 09 E A 09 S 0 09 / E 20 09 E N 01 10 E D 2 13 6 Au 7 A 9 5 F 1 07 09 / E 28 03 2 0 20 W/ E g 1 0 20 W/ p 2 20 W/ E v 0 20 W/ E v 3 20 W/ E c 2 3 2 20 W/ E pr 1 20 W/ E t 1 0 2 20 W/ E ct 1 20 W ul 0 20 W/ E ul 2 20 W/ E ul 1 W n1 20 W/ E n 1 0 2 W ay W ay W ay W ar W ar ar W pr pr W ep W ug W ug W ep W un n n W ov W ov W ec W eb eb c o o e 09 Ju Ja O 08 E J J J M A 08 / E 20 W/ E 20 W/ E /E 20 / E 20 / E /E 20 / E 20 / E / 20 W / / / / / / / / W W 08 08 09 09 08 08 09 08 08 08 08 08 09 09 09 09 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Base: Financial brand conversations, among adults, 8-week rolling average (Large Cutback, n=201; Moderate Cutback, n=347; Stable, n=90) Note: Net advocacy is positive less mixed and negative conversations. Source: TalkTrack®, March 2008 – January 2010
  • 13. Which Came First? • Our analysis shows that companies that cut back advertising had the worst outcomes in terms of WOM. – But we have a causation problem. Did WOM turn negative due to the underlying facts that also forced advertising to be cut? – Or did the decision to cut advertising cause word of mouth to go more negative than it needed to? • Talk Track® helps sort out this question because respondents reported whether conversations were related to news or advertising. – We can compare WOM related to news (the underlying “facts”) and those related to advertising.
  • 14. In Late ’08 and Early ‘09, News-Driven WOM Surged for All Financial Brands (% of financial brand conversations containing media/marketing references, 8-week rolling avg.) • The percent of WOM participants who referred to news in their conversations moved ahead of those referring to advertising they had seen, most dramatically in late 2008. ALL Financial Brands 2008 2009 Base: Financial Branded Mentions (8-week average, n=1,328) Source: TalkTrack®, June 2008 – January 2010
  • 15. Spend Financial Brands: Financial Brands: Large Cutback in Ad Stable Ad Spending 20 20 0 0 20 8 W 20 8 W 0 /E 0 /E 20 8 W Ju 20 8 W Ju 0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 08 / E n 08 / E n 20 W Ju 01 20 W/ Ju 01 0 /E n 0 E n 20 8 W Ju 15 20 8 W Ju 15 0 / n 0 / n 20 8 W E J 29 20 8 W E J 29 08 / E ul 08 / E ul 20 W J 13 20 W J 13 0 / E ul 0 / E ul Source: TalkTrack®, June 2008 – January 2010 20 8 W A 27 20 8 W Au 27 0 / E ug 0 /E g 20 8 W A 10 20 8 W Au 10 08 / E ug 08 / E g 20 W Se 24 20 W Se 24 0 /E p 0 /E p 20 8 W Se 07 2 0 8 W Se 0 7 0 /E p 0 /E p 20 8 W O 21 20 8 W O 21 08 / E ct 08 / E ct 20 W O 05 20 W O 05 0 / E ct 0 / E ct 20 8 W N 19 20 8 W No 19 0 / E ov 0 /E v 20 8 W N 02 20 8 W No 02 0 / E ov 0 /E v 20 8 W N 16 20 8 W No 16 0 / E ov 0 /E v 20 8 W D 30 20 8 W De 30 0 / E ec 0 /E c 20 9 W D 14 20 9 W De 14 09 / E ec 09 / E c 20 W Ja 28 20 W Ja 28 0 /E n 0 /E n 20 9 W Ja 11 20 9 W Ja 11 0 /E n Advertising 0 /E n 20 9 W Fe 25 20 9 W Fe 25 09 / E b 09 / E b 20 W Fe 08 20 W F 08 09 / E b 09 / E eb 20 W M 22 20 W Ma 22 0 / E ar 0 /E r 20 9 W Ma 08 20 9 W Ma 08 0 /E r 0 /E r 20 9 W A 22 20 9 W A 22 09 / E pr 0 / E pr 20 9 W A 05 20 W A 05 0 / E pr 0 / E pr 20 9 W M 19 20 9 W M 19 Base: Branded Mentions (Large Cutback, 8-week average, n=201; Stable, 8-week average, n=89) 09 / E ay 09 / E ay 20 W Ma 03 20 W Ma 03 0 /E y 0 /E y 20 9 W Ma 17 20 9 W Ma 17 09 / E y 09 / E y 20 W/ Ju 31 20 W Ju 31 0 E n 0 /E n 20 9 W Ju 14 20 9 W Ju 14 0 / n 0 / n 20 9 W E J 28 20 9 W E J 28 09 / E ul 09 / E ul 20 W J 12 20 W J 12 0 / E ul 0 / E ul 20 9 W A 26 20 9 W A 26 0 / E ug 0 / E ug 20 9 W Au 09 20 9 W A 09 09 / E g 09 / E ug 20 W Se 23 Editorial/Programming 20 W Se 23 0 /E p 0 /E p 2 0 9 W Se 0 6 20 9 W Se 06 0 /E p 0 /E p 20 9 W O 20 20 9 W O 20 09 / E ct 0 / E ct 20 W O 04 20 9 W O 04 0 / E ct 0 / E ct 20 9 W No 18 20 9 W N 18 0 /E v 0 / E ov 20 9 W No 01 20 9 W N 01 0 /E v Quite Well During & Especially After Crisis 0 / E ov 20 9 W No 15 20 9 W N 15 09 / E v 09 / E ov W De 29 W De 29 /E c /E c D 13 D 13 ec ec 27 27 Ad-Driven WOM for ‘Stable’ Spenders Held Up (% of financial brand conversations containing media/marketing references, 8-week rolling avg.)
  • 16. Ad-Driven Financial WOM Remained Fairly Consistent, and Positive, Throughout Crisis (% of financial conversations citing marketing or media) • Meanwhile, news-driven WOM turned very negative during the early and mid-crisis periods. Negative Mixed Positive Pre-Crisis Early Crisis Mid-Crisis Late Crisis Advertising Advertising Advertising Advertising -11% -16% 60% -18% -20% 51% -18% -18% 51% -16% -19% 55% Public Relations Public Relations Public Relations Public Relations -26% -21% 47% -45% -25% 23% -44% -19% 32% -27% -15% 50% All Financial Services Financial Services Financial Services Financial Services WOM Driver Categories (Pre-Crisis) (Early Crisis) (Mid-Crisis) (Late Crisis) Advertising 22% 16% 16% 15% 17% Public Relations (Editorial/Programming) 13 9 16 11 9 Base: Brand conversations, among adults (Polarity for Advertising/Public Relations: Pre-Crisis, n=650/372; Early Crisis, n=721/720; Mid-Crisis, n=662/512; Late Crisis, n=689/387; WOM Drivers: All Categories, n=71,829; Financial: Pre-Crisis, n=4,128; Early Crisis, n=4,549; Mid-Crisis, n=4,404; Late Crisis, n=4,140) Source: TalkTrack®, August 2009 – January 2010
  • 17. Even for the Troubled Companies that Reduced Ad Volume, Ad-Driven WOM Stayed Fairly Positive (Polarity of financial conversations citing advertising) • Ad-inspired WOM started more positive for the “stable” ad spenders and recovered more quickly. • Ad-inspired WOM stayed surprisingly positive for the companies that cut spending the most, suggesting that advertising helped to offset the negativity driven by developments and news coverage. Word of Mouth Referencing Advertising Negative Mixed Positive Pre-Crisis Early Crisis Mid-Crisis Late Crisis Financial Brands: Large Cutbacks in Ad Spending -15% -13% 59% -20% -13% 48% -24% -26% 43% -14% -16% 58% Financial Brands: Stable Ad Spending -6% -16% 77% -15% -12% 56% -7% -21% 60% -14% -12% 66% Base: Financial brand conversations citing advertising, among adults (Large Cutback: Pre-Crisis, n=113; Early Crisis, n=113; Mid- Crisis, n=110; Late Crisis, n=106. Stable: Pre-Crisis, n=50; Early Crisis, n=47; Mid-Crisis, n=57; Late Crisis, n=60)* *Red denotes small base size. Source: TalkTrack®, February 2008 – January 2009
  • 18. Automotive Brands
  • 19. Automotive WOM Quality Suffered During First Half of ‘09, But Has Since Recovered (Polarity of automotive conversations, 8-week rolling avg.) • Levels of positive talk were below average during Dec ‘08-Feb ’09 and again during May-Jul ‘09. Mostly Positive Mostly Negative Mixed 70% 60% 50% 40% Positive WOM levels about the automotive category dropped considerably during the spring 30% & summer of ‘09, but have since been on the recovery. 20% 10% 0% Base: Brand conversations, among adults (8-week rolling average, n=1,473) Source: TalkTrack®, June 2008 – January 2010
  • 20. Ad Spend Breakdown: From ‘08 to ‘09, Auto Brands in Crisis Either Maintained Advertising, Cut Back Moderately, or Slashed Spending • We correlated ad spend with WOM quality to assess the potential impact of reduced advertising. • In comparing the total amount spent on advertising in 2008 vs. 2009, we split auto brands into three categories: Those that were fairly stable in their ad spending, those that made moderate cutbacks, and those that made very large cutbacks. Average % Change’08 vs. Ad Spend Category ‘09 Large Cut -55% Auto Brands Moderate Cut -28 Stable -1 Auto Brands Included: • Large Cutback (>40% reduction in ad spend): Acura, Chrysler, Hummer, Infiniti, Jaguar, Land Rover/Range Rover, Lincoln-Mercury, Mazda, Mitsubishi, Nissan, Pontiac, Porsche, Saab, Saturn, Suzuki & Volvo. • Moderate Cutback (21-39% reduction in ad spend): Chevrolet, Dodge, GM, Hyundai, Jeep, Kia, Mercedes-Benz, Scion, Toyota & Volkswagen. • Stable (<20% reduction in ad spend): Audi, BMW, Buick, Cadillac, Ford, GMC, Honda, Lexus & Subaru. Source: Nielsen, January 2008 – December 2009
  • 21. 20 08 • 20 W/ E 08 M W ar 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 20 /E 0 08 M 2 20 W ar 08 / E A 23 WOM. 20 W/ E pr 1 08 M 3 W ay 20 / 08 E M 04 W ay 20 / E 2 08 Ju 5 n 20 W/ E 15 08 J Cutback, n=554; Stable, n=498) 20 W ul 0 08 / E 6 J 20 W/ E ul 2 08 Au 7 20 W/ E g 1 08 S 7 W ep 2008 20 / E 0 Source: TalkTrack®, March 2008 – January 2010 08 Se 7 Large Cutback 20 W/ p 2 08 E O 8 c 20 W/ E t 1 08 N 9 o 20 W/ E v 0 08 N 9 o 20 W/ E v 3 09 D 0 e 20 W/ E c 2 09 Ja 1 20 W/ E n 1 09 Fe 1 20 W/ E b 0 09 F 1 W eb 20 /E 2 09 M 2 a 20 W/ E r 1 09 5 Ap 20 W/ r0 09 E A 5 p 20 W/ E r 2 09 M 6 a Moderate Cutback 20 W/ E y 1 (% of positive automotive conversations, 8-week rolling avg.) 09 Ju 7 W n 20 / E 07 09 Ju Base: Automotive brand conversations, among adults, 8-week rolling average (Large Cutback, n=247; Moderate 20 W n 2 09 / E 8 J 20 W/ E ul 1 09 Au 9 20 W/ E g 0 09 A 9 W ug 2009 20 / E 3 09 Se 0 20 W/ p 2 09 E 0 O Stable 20 W/ E ct 1 Brands That Cut Back on Advertising 09 N 1 o 20 W/ E v 0 09 N 1 W ov 20 / 2 10 E D 2 W ec /E 13 Ja n 03 Positive WOM Much Lower in ‘09 for Auto Auto brands that maintained a steady level of ad spending on 2009 benefited from the highest levels of positive
  • 22. Auto Brands that Maintained Ad Spend Levels in ‘09 Enjoyed Best Net Advocacy, Even in Crisis Periods (Net advocacy of automotive conversations, 8-week rolling avg.) • Auto brands that made the largest cutbacks in ad spending in ’09 vs. ’08, however, suffered from some of the worst net advocacy levels that year. Large Cutback Moderate Cutback Stable 50.0% 45.0% 2008 2009 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 08 E M 04 08 Ju 5 09 E J 17 M 2 08 / E A 23 15 M 3 N 9 09 / E A 5 09 E M 6 N 1 S 7 Se 7 08 E O 8 N 9 D 0 Ja 1 09 E F 1 09 E M 2 09 E A 09 S 0 09 / E 20 09 E N 01 10 E D 2 13 6 Au 7 A 9 5 F 1 07 09 / E 28 03 2 0 20 W/ E g 1 0 20 W/ p 2 20 W/ E v 0 20 W/ E v 3 20 W/ E c 2 3 2 20 W/ E pr 1 20 W/ E t 1 0 2 20 W/ E ct 1 20 W ul 0 20 W/ E ul 2 20 W/ E ul 1 W n1 20 W/ E n 1 0 2 W ay W ay W ay W ar W ar ar W pr pr W ep W ug W ug W ep W un n n W ov W ov W ec W eb eb c o o e 0 9 Ju Ja O 08 E J J J M A 08 / E 20 W/ E 20 W/ E /E 20 / E 20 / E /E 20 / E 20 / E / 20 W / / / / / / / / W W 08 08 09 09 08 08 09 08 08 08 08 08 09 09 09 09 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Base: Automotive brand conversations, among adults, 8-week rolling average (Large Cutback, n=247; Moderate Cutback, n=554; Stable, n=498) Note: Net advocacy is positive less mixed and negative conversations. Source: TalkTrack®, March 2008 – January 2010
  • 23. Ad-Driven Auto WOM Remained Very Positive Throughout the Crisis (% of automotive conversations citing marketing or media) • WOM driven by news, however, decreased in positivity (and simultaneously increased in negativity) during the Mid-Crisis period. Negative Mixed Positive Pre-Crisis Early Crisis Mid-Crisis Late Crisis Advertising Advertising Advertising Advertising Public Relations Public Relations Public Relations Public Relations All Automotive Automotive Automotive Automotive WOM Driver Categories (Pre-Crisis) (Early Crisis) (Mid-Crisis) (Late Crisis) Advertising 22% 22% 22% 20% 23% Public Relations (Editorial/Programming) 13 10 11 12 13 Base: Brand conversations, among adults (Polarity for Advertising/Public Relations: Pre-Crisis, n=1,010/506; Early Crisis, n=950/495; Mid-Crisis, n=959/591; Late Crisis, n=1,161/656; WOM Drivers: All Categories, n=71,829; Automotive: Pre-Crisis, n=4,916; Early Crisis, n=4,404; Mid-Crisis, n=4,762 Late Crisis, n=4,892) Source: TalkTrack®, August 2009 – January 2010
  • 24. Ad-Driven Auto WOM Stayed Fairly Positive, Even For Troubled Companies That Reduced Ad Volume (Polarity of automotive conversations citing advertising/PR) • Companies making large cuts in ad spending had a very pronounced differences between ad-stimulated WOM and news-stimulated WOM. Negative Mixed Positive Pre-Crisis Early Crisis Mid-Crisis Late Crisis Large Cutbacks Advertising Stable Large Cutbacks Public Relations Stable Base: Automotive brand conversations citing advertising,/PR among adults (Large Cutback: Pre-Crisis, n=161/90; Early Crisis, n=142/88; Mid-Crisis, n=152/133; Late Crisis, n=173/105. Stable: Pre-Crisis, n=372/191; Early Crisis, n=369/197; Mid-Crisis, n=363/186; Late Crisis, n=471/269) Source: TalkTrack®, February 2008 – January 2009
  • 25. Take Aways • Advertising plays a substantial role in driving positive word of mouth for major brands • Even during a major crisis, ad-driven WOM continues to be nearly as positive as during normal times • Cutting back ad spend during a crisis diminished the impact of a valuable tool for offsetting negative news • Cautions – We believe message is important: Advertising creative needs to reflect new realities and changing consumer perceptions – Other drivers of WOM also are critical, such as customer service, public relations, social media, etc.
  • 26. TalkTrack® Methodology • Data collected through an online survey – Sample drawn from largest online consumer panels – Demographically balanced to Census for ages 13-69 • Conversations counted with assistance of 24- hour diary – Respondents recruited to take notes on conversations in 15 marketing categories over next 24 hours – Re-contacted a day later to answer standardized questions about brands/companies talked about • Sample sizes support time series analysis – 700 respondents per week; 36,000 per year – Yield 7,000 conversational brand mentions weekly; ~ 350,000 per year
  • 27. How to Reach the Authors David Shiffman (david.shiffman@mediavestww.com) Brad Fay (bfay@kellerfay.com)
  • 28. The Keller Fay Group Bringing best-in-class tools to word of mouth strategy and measurement

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