Prepared for: NYU Consumer Behavior Class Prepared by: Joel Rubinson, Chief Research Officer, The ARF November 13, 2008 [email_address] A Consumer-Based View Of The Future Of Advertising

The ARF: a 360 perspective on media and marketing from 400 members … Med MEDIA AGENCY ADVERTISER RESEARCH

Taming the lion in the path

VUCA

Traditional media model Say, new CPG brand Media TV (builds awareness) “ 7 sisters” magazines (information, “endorsement”, coupon) Newspaper, best food day--couponing Rules of thumb Frontload spending (spend half of yearly budget in first quarter) Share of spending = 2x share of market WOM: nice to have, but not in anyone’s model If you can afford it, spend most of your money on TV Underlying mental model is AIDA IS THIS MODEL BROKEN?

Say, new CPG brand

Media

TV (builds awareness)

“ 7 sisters” magazines (information, “endorsement”, coupon)

Newspaper, best food day--couponing

Rules of thumb

Frontload spending (spend half of yearly budget in first quarter)

Share of spending = 2x share of market

WOM: nice to have, but not in anyone’s model

If you can afford it, spend most of your money on TV

Underlying mental model is AIDA

IS THIS MODEL BROKEN?

Would consumers want to kill advertising? A 2006 Forrester Research survey found that 63% of respondents believe there are too many ads, and 47% say ads spoil their reading or viewing enjoyment…between 50% and 70% of DVR users skip ads. (quoted in an Ad Age article)

A 2006 Forrester Research survey found that 63% of respondents believe there are too many ads, and 47% say ads spoil their reading or viewing enjoyment…between 50% and 70% of DVR users skip ads.

(quoted in an Ad Age article)

People are exposed to thousands of messages in a day…

And use over a hundred brands… A person “USES” over 100 brands per day I personally kept a brand diary and got to 77 brands by 2PM and then I got tired… I was “engaged” with fewer than 10 of them

A person “USES” over 100 brands per day

I personally kept a brand diary and got to 77 brands by 2PM and then I got tired…

I was “engaged” with fewer than 10 of them

In a world of sensory overload…

In a world of sensory overload…

The filter is contextual relevance Consumers want relevant messages that help them simplify, enliven, and enrich their lives Consumers control the mental and technological filters but probably would rather not work so hard No marketer has a monopoly; consumers can choose from unlimited options across the long-tails of media and purchase options Consumers even have become content generators

Consumers want relevant messages that help them simplify, enliven, and enrich their lives

Consumers control the mental and technological filters but probably would rather not work so hard

No marketer has a monopoly; consumers can choose from unlimited options across the long-tails of media and purchase options

Consumers even have become content generators

The new marketing reality… “ The consumer is boss” A.G. Lafley, CEO, The Procter and Gamble Company

“ The consumer is boss”

A.G. Lafley, CEO, The Procter and Gamble Company

How to create communications that consumers want

How to create communications that consumers want

What the ARF hears from its members… “ Billions of brand conversations are occurring daily in the US”; marketers no longer control their brands We create contagious conversations TV generates search; consumers become part of the media plan Consumers become active participants

“ Billions of brand conversations are occurring daily in the US”; marketers no longer control their brands

We create contagious conversations

TV generates search; consumers become part of the media plan

Contagious marketing

What the ARF hears from its members… Media strategy is central to the brand strategy We need both push and pull marketing; both exist in traditional and non-traditional media Content across platform is becoming the new organizing principle 360 Media planning because Consumers control their media experience and shopping Consumers become active participants

Media strategy is central to the brand strategy

We need both push and pull marketing; both exist in traditional and non-traditional media

Content across platform is becoming the new organizing principle

It’s about content more than platform ABC gives TV makegoods online—June 16, 2008

What the ARF hears from its members… How can we be contextually relevant and add value to people’s daily lives? “ How can we encourage brand play?” The “think/feel/do” model is dead…”think, feel…it’s one word!” It’s about content, even our advertising Targeting based on relevance can double click rates Marketing based on contextual relevance 360 Media planning because Consumers control their media experience and shopping Consumers become active participants

How can we be contextually relevant and add value to people’s daily lives?

“ How can we encourage brand play?”

The “think/feel/do” model is dead…”think, feel…it’s one word!”

It’s about content, even our advertising

Targeting based on relevance can double click rates

Community life

Community life

What the ARF hears from its members… We listen to consumers. Why do they talk? Because they want to be heard. Consumers want to know that we are loyal to them Existing surveys have sometimes become torture We need to listen to hear the unexpected From shouting to listening …both marketing and research Marketing based on contextual relevance 360 Media planning because Consumers control their media experience and shopping Consumers become active participants

We listen to consumers. Why do they talk? Because they want to be heard. Consumers want to know that we are loyal to them

Existing surveys have sometimes become torture

We need to listen to hear the unexpected

Welcomed partner

Monitor and friend

Let people control the dialogue Communispace. Private Online Communities. Engage and listen to your customers.

Proof that consumers want advertising 360 Yet, TV still the largest portion of the media budget Relevant content Welcomed…remember texting the VP choice? Integrated into social media Viral (video, buttons, widgets, etc.) Brand play Conclusion: advertising can be welcomed by consumers as adding value to people’s lives Obama Wins! ... Ad Age's Marketer of the Year

360

Yet, TV still the largest portion of the media budget

Relevant content

Welcomed…remember texting the VP choice?

Integrated into social media

Viral (video, buttons, widgets, etc.)

Brand play

Conclusion: advertising can be welcomed by consumers as adding value to people’s lives

A great example of welcomed advertising “… otherwise advertising-skeptical consumers welcome advertising when it makes the game more realistic and fun…” Stephen Kim, Microsoft. Journal of Advertising Research 9/08

Conclusions Consumer is, in fact, boss The enterprise must embrace a listening culture, organization, and toolkit Reorient your thinking about advertising. Think of advertising as forms of content and brand experience intended to add value to people’s lives and it will add value back to your brands.

Consumer is, in fact, boss

The enterprise must embrace a listening culture, organization, and toolkit

Reorient your thinking about advertising. Think of advertising as forms of content and brand experience intended to add value to people’s lives and it will add value back to your brands.