Ipsos Mori Hong Kong Seminar: Reporting Live From The Future

Global Marketing and Research Trends Kym Penhall Managing Director Ipsos ASI Asia-Pacific

Trends, like horses, are easier to ride in the direction they are going. John Naisbitt 3

The “Perfect storm” Trends… 4

The “perfect storm” trends…Performance for many consumer products anddaily services are becoming similarThis challenges what can be meaningfullysaid about product features and how wedifferentiate ourselves. 5

The “perfect storm” trends…The increasing “Pro-sumer”– Consumers are becoming more informed, more connected, more demanding, and less loyal (guilt-free disloyal). 6

The “perfect storm” trends…Just as brand marketing needs greater impact,traditional advertising approaches areevolving:  Technology to skip TV ads,  Software to prevent spam and Pop-Ups  Privacy laws are restricting the power of digital opportunities 7

Implications: Increasing product parity, a more informed consumer and changing media habits make it difficult for today’s marketer to differentiate. It is critical to engage the consumer with your brand. We do not feel manufacturers should be focusing their business success on low prices.  Hard to beat the ‘private label’ and low-cost price brands  On-going promotions train consumers to only buy at discounted prices.  Do not want to cut profits.

The “perfect storm” trends… Price vs. Purchase Intent Source: Ipsos ASI Equity*Builder Database, CHINA 5.0 4.5 Very Little Correlation Purchase Interest 3.5 3.0 2.0 1.5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Price Comparison (more expensive) 9

Implications: It is very important to get consumers to want to buy your brands, …at full price.  How? Leverage …  Innovation  Created marketing properties, icons, spoke-people, sponsorships, etc  The human senses  Sell the emotional experience of the brand

 With many similar products in any given category, the role of emotions + human values is becoming more important for brand management. 77% 70% Probably Purchase Intent % 64% 58% 49% 46% Definitely 59 % 20% 46 % 42 % 35 % 26 % 28 % 10 % 0 1-2 3-4 5-6 7-8 9-10 11+ Number of Emoti*Vator AssociationsSource: Ipsos ASI R&D Dec 2007, N.A.: 75+ brands across 15+ categories 11

Created Marketing Associations Add to the Brand Brand Commitment % r= .71 Presence of "Marketing" Associations to Brand (icons/characters/spokesperson) %Source: Ipsos-ASI R&D Data 12

The Communication Trends… 13

The communication trendsDigital marketing will continue to grow + evolve:  Less banner advertising & viral videos;  More focus on social network opportunities,  More online TV advertising, and  Exploration of greater mobile targeting. 14

Where the Dollars Go Online; 2009 Sponsorship 2% Classifieds Display 10% 22% Broadband video 4% 1/3 is intrusive; the Rich media rest is consumer 7% driven. Search Lead generation 48% 6% Email 1% Source: IAB 15

‘Search’ is growing Internet Ad Revenue Share by Advertising Format -2004 -2009 FY2004 FY2005 Fy2006 Fy2007 Fy2008 Fy2009 %of Total Revenue Search Display Banners Classifieds Rich Media and Lead Generation Sponsorships Digital VideoSource: IAB 16

Internet users in Hong Kong as at 31st December 2011 penetrationSource: Internet World Stats 17

Internet Penetration December 31st 2011 Sth. Korea 82.7% China 38.4% Japan 80.0% Thailand 27.4% Taiwan 70.0% Philippines 33.0%India Malaysia10.2% 61.7% Singapore 77.2% Indonesia 22.4% Australia 89.8% New Zealand 84.5% Source: Internetworldstats.com 18

Source: Ipsos estimate 19

US$2,660m, 20% US$10,100m, 22% US$1,642m, 19% US$346m, 21%US$130m, 12% US$410m, 8% US$20m, 1% US$109m, 2% 20

users past 6 months 2012. penetration 21

World ranking in terms of total Facebook users (past 6 months)Ranking in terms of total country population (Dec. 2011) Ranking in terms of Facebook penetration 22

Iceland Norway 72% 57% Faroe Islands Monaco 58% 107% Singapore 56% Taiwan 53% Gibraltar 67%Turks & Caicos Qatar 62% 58% Brunai 61% Chile Falkland Islands 56% 90% 23

Iceland Norway 72% 57% Faroe Islands Monaco 58% 107% Singapore 56% Taiwan 53% Gibraltar 67%Turks & Caicos Qatar 62% 58% Brunai 61% Chile 56% 24

Iceland Norway 72% 57% Singapore 56% Taiwan 53% Qatar 58% Brunai 61%Chile56% 25

Taiwan 53%Chile56% 26

Facebook posts 1 per second on launch day 27

Source: Hollywood Reporter Website 28

The communication trendsTelevision will/has come back with a greaterappreciation as a touchpoint that really works 31

Television is still very strong, and growingIn December 2009, GroupM predicted that spending on British TV would fall by 0.2% in 2010. +11.9% In Hong Kong actual TV advertising spend 2010/11 increased 13% 32

The communication trendsThrough the evolution, Creative Content remains key,more so for social networking, buzz, and advocacy.Less banner advertising & viral videos;  Growing pressure to find THE (creative) Big Idea to leverage the potential of the Internet. 33

The communication trends We observe in our ASI databases that ‘creative’ explains 75+% of the variance in campaign success. There is a large range in in-market performance based on the right creative, for the right objectives… 34

Creative is key; wide range in recall levels Average Recall Across Studies (when present) Source: Ipsos ASI Brand*Graph Database, N.A. Average Max Channel Performance Packaging Price Television POSWord of Mouth Radio Promos Posters News/PR Sponsorships In-Store Cinema On-line Ads MagazineCoupon Insert 0 10 20 30 40 50 60 70 80 90 35

And there is a large variation in impact too Range In Impact By Touch Point (Ranked LOWEST to HIGHEST below) Source: Average results from 20+ observations (when present), across multiple industries + studies Price = Average across categories (when present) Cinema Radio On-line Ads MagazineSponsorships POS Posters Television News/PR FSI Website Promos In-StoreWord of Mouth Performance Packaging Channel 0 20 40 60 80 100 Lowest Percentile in mix mix Lowest Percentile in Top Percentile in mix 36

The communication trends Convergence:  Media silos blend away.  Media, creative, and touchpoint integration.  Greater holistic approach (for the Big Idea).  Integrated approach to the three screens. 37

Implications: Since the impact (ROI) of great creative is several times better than just average creative, advertisers should do everything in their power to create and leverage great creative content.  The opportunity cost is equal to (if not more than) the cost of the whole media budget. Consider your creative development process.  Is it best designed to deliver excellent creative?  Should the process evolve with the right incentives to reward the desired outcomes?

Implications: Find the “big idea” early, pre-test many ideas early, incentivize the right (desired) outcomes.  This approach has proven to produce better quality adverts, faster and cheaper

Implications: Marketers may be best served to plan their creative content and media plans together as one exercise (and not separately as two distinct functions).  Plan holistically across all channels (touchpoints) The Frequency component of GRPs may decrease, so advertisers should focus more on the importance of Reach, with more frequent changes in “on air” creative.

The Research Trends… 41

The “research” trends… Growing interest in media-related research. Greater demand for integrated and cross-media learning, including ROI 42

Recall does not follow consumption We observe in our databases significant differences between the consumption of media versus the efficacy of the same media. TV Ad Recall (Ad*Graph database) 54%Claimed Ad Recall 40% 34%Correct Volunteered Ad Recall 29 % 22 % 15 % 18-34 yrs 35-49 yrs 50+ yrs Watch MORE TV per week Source: Ipsos ASI databases; North America 43

Brand*Graph 360 Summary Audit Source: Average results from 20+ observations (when present), across multiple industries + studies Average (excluding product touch points) 60 Channel / Shelf 50 Performance Packaging (excluding product touch points)Average Recall % Price 40 POS Television 30 Average Word of Mouth Radio Promo Posters 20 Sponsorship In-Store Cinema On-Line 10 Website FSI Magazine 0 0 2 4 6 8 10 12 14 16 Share of Impact % 44

The communication trendsThrough the evolution, Creative Content remainskey, more so for social networking, buzz, andadvocacy. Less banner advertising & viral videos;  Growing pressure to find THE (creative) Big Idea to leverage the potential of the Internet. 45

The “research” trends… Growing appreciation for the irrational (emotional) consumer: importance of emotions, emotional response, irrationality, nudging, CSR, and human/brand values 46

Implications: We have talked about many concepts here today:  The importance of emotions + human values  The importance of great creative  The Emergence of new digital touchpoints within the whole campaign mix  The difference between media consumption data and true efficacy of the same media channels  And the evolution of consumer/market research We would now like to share with you some insights to our own evolution within Ipsos, and how it brings new advantages to advertisers/marketers…..

Hong Kong Focus Queeny Wui Associate Director of Ipsos ASI Hong Kong

A few tips to improve ROI on Advertising 49

1It is not (only) about money

Ads Do Not Wear In Although TV ads do have long- term brand equity-building 100 90 potential, the most marked 80 impact is in the short-term. 70 Claimed Ad Recall ( norm = 40%) 60 Proven Recall Any Ad A strong ad will achieve high 50 % 40 levels of recall in the minds of 30 consumers within the first burst 20 17 14 of spend. A poor performing ad 10 0 0 0 will not. 200 150 Creative #1 Creative #2 Adults 260 420 184 259 100 242 234 A bad ad doesn’t get any better 248 454 190 226 177 50 TRPS 235 192 4 218 simply because you show it more 0 5-Jan-97 2-Feb-97 2-Mar-97 30-Mar-97 27-Apr-97 25-May-97 22-Jun-97 20-Jul-97 9-Nov-97 4-Jan-98 1-Feb-98 1-Mar-98 17-Aug-97 14-Sep-97 12-Oct-97 7-Dec-97 29-Mar-98 26-Apr-98 24-May-98 8-Nov-98 6-Dec-98 21-Jun-98 19-Jul-98 16-Aug-98 13-Sep-98 11-Oct-98 often 51

Recognition flattens out after around 1500 GRPs 54 52 52 % Ad Recognition 41 42 38 <=500 500-999 1000-1499 1500-1999 2000-2999 3000+ GRPs Build in Ad recognition by GRPs 52Source: Hong Kong Brand*Graph database

Persuasion Peaks Quickly After Airing Persuasion also peaks quickly. Most campaigns peaked by 1000 GRPs and within 12 weeks from start of airing. 29 % Increased interest 23 In brand 19 18 14 13 # of weeks Advertising 1-3 4-6 7-9 10-13 14-19 20+ Approx 400 600 800 1200 2000 3000+ cumulative GRPs• Time at which purchase interest showed maximum increase before starting to decline. 53• Source: Hong Kong Data Fitted to global Adgraph database

2It’s about creativity!

Creative is King!• Creative quality accounts for 75% of variance in campaign success.• In-Market Spend Will Not Offset Weak Creative. • Strong creative can achieve higher recall in-market with less support than weak creative with a high level of media support. Note: insert graphs, tables, images here Click to add text here 70 Proven Recall Brand A (Strong Creative, Less Support) 60% 50 49 40 30 25 20 Proven Recall Brand B (Weak Creative, High Level of Support) 10 0 55

3Minimize Decay (More Important than Building Recall)

Minimizing Decay is More Important than building recall• More continuous media would avoid off-air periods, and decay• It is likely better to think in terms of minimizing the “down” than maximizing the 100 “up” because the “up” has diminishing returns 90 80 70 60 % 50 51 40 42 Correct Proven 30 Ad Recall 20 10 0 500 Creative B (452) TARP’s Creative C (452) Creative F 250 Creative E Creative D (848) (763) Creative A (855) (1235) 0 18-Nov-01 10-Nov-02 24-Jun-01 16-Jun-02 15-Jul-01 28-Jul-02 28-Jan-01 3-Jun-01 20-Jan-02 26-Aug-01 7-Jul-02 18-Aug-02 22-Apr-01 14-Apr-02 7-Jan-01 5-Aug-01 1-Apr-01 18-Feb-01 10-Feb-02 16-Sep-01 30-Dec-01 29-Sep-02 22-Dec-02 11-Mar-01 28-Oct-01 24-Mar-02 20-Oct-02 3-Mar-02 9-Dec-01 8-Sep-02 1-Dec-02 7-Oct-01 13-May-01 26-May-02 5-May-02 57

4Creative Pools should not be aired at the same time

Creative Pools Should Air Sequentially• Choosing to air 2 or more pieces of creative concurrently is less effective vs. Dedicating all media weight to one piece of copy.• In our general experience, pools of ads dilute the amount of media exposure per ad, which is not off-set or enhanced by the possible “synergy” of following this practice Percentage Point Gain in Proven Recall at 1000 TRPs 59

5Adding an Additional Media Touch Point is Better than Overspending on One Medium

Adding an additional media touch point is better than overspending on one medium• All media appear to build with diminishing returns. The recommendation is to focus your media plan on building reach quickly and not to drive recall too high in any one medium.• If can afford to maximise the medium, add a second to extend the reach. % penetration 70 Note: TV outperforms other media per $100k 60 Note: insert graphs, tables, images here Click to add text here TV 50 40 Outdoor 30 Radio Newspaper 20 Magazine 10 0 0 $ $ $ $ $ $ $ $ 61

Multi-media Campaigns With Same Creative Focus Have Higher Recall/ PersuasionCreative synergies in multi-media campaigns can increase consumer understandingof messaging objectives/persuasiveness (especially for equity-type advertising). % 62

New AdvertisingResearch Solutions Queeny Wui Associate Director of ASI Hong Kong

Effective Advertising is…a good story, [the strategy sets up the story] well told. [the creative delivers the story] 64

Early Stage Tools… how you can optimize your communication quickly withdeep qualitative insights AND strong quantitative measures

Next*AdLab & Big*Idea Combined qual/quant early stage testing Quantitative: Reliable results based on Ipsos ASI’s validated philosophy on effective advertising (Reach and Response) combined with Qualitative: Going beyond consumer declarations to understand what is behind the scores.  Allows real time interaction between client, agency and researcher.  Provides immediate results & recommendations on which actions need to be taken Stage 1 Stage 2 QUANT QUAL Before your eyes in 1 day How do consumers Why? react spontaneously? What is the potential?

The Idea is Good, the Creative Routes are promising… Ready to Spend the Big Advertising Money?Final Stage Gate with Next*Connect  Check the expected ROI  Firm Action Standards  Marketing Accountability  Impeccable Management of the Advertising Process 67

Next*Connect Methodology Next Day Recruit Sample Brand Consumer Watches Brand Recall Interview & Start Choice Ads In Media & Choice What do people Interview “Pre” Views Movie Trailer “Post” really remember?TEST Forced Exposure Intent Ratings Communication & Diagnostics Brand Ratings Test vs. Control Observation Recruit Sample & Start InterviewCONTROL Matched Control Group No Ad Exposure Intent Ratings Communication & Diagnostics Brand Ratings 68

Next*Connect reflects today’s crowded multi-media environmentA. Respondent Chooses B. Respondent Exposed To C. Respondent Exposed Movie Preview Advertising To Chosen Movie With Test Ad(s) Embedded Preview Outdoor Print TV Online In-Store Next*platform multi-media environment greatly enhances our ability to work with media beyond television. 69

Next*Connect for full evaluation and diagnostics Brand Copy Emotional Brand Reaction Message Related Persuasion Effect Response & Equity Diagnostics Diagnostics Recall Index EngagementExamines Highlights Combines Showcases Pinpoints Studies Identifieshow likely how the effects of the potential which your theyour ad is effective brand for your ad to elements of message - emotions to get your ad is related recall build brand your ad are assessing created by noticed at and equity. contributing its clarity your ad and and motivating persuasion to its and its reveals thewhether or consumers into a single success, effect on impact not your to take indicator of which are your brand thesead is being action. ad detracting, perception. emotions linked to effectivenes and what have on your s that is you can your brand. brand. validated to address to in-market improve sales. performance .

The Ipsos ASI approach: Design Principles • Consumers attention is not focused on the advertising (so it Test in context is the job of the ad to engage the consumer) Test on the same • Allow comparisons across mediaintegrated platform as • And even multi-media campaign other media testing Allow consumers toengage with the ad as • To make sure we understand the they would in-market full range of how digital can work (e.g., click through) 71

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Ipsos Mori Hong Kong Seminar: Reporting Live From The Future

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Ipsos Mori Hong Kong Seminar: Reporting Live From The Future Presentation Transcript