The Seismic Shift in Targeted Advertising and Media

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At the recent "Media & Money" conference in New York, I gave a presentation on "The Seismic Shift in Targeted Advertising and Media," or Yield Management: What Advertisers Can Learn From the Airlines. For all of its negative press and terrible operating results, the airline industry has produced one brilliant success which has the potential to turn the advertising and media business upside down: yield management. Advertisers now have all the pieces of the yield management puzzle--and just need to put them together to vastly improve their marketing efforts.

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The Seismic Shift in Targeted Advertising and Media

  1. 1. Media & Money Conference Randall Beard, Global EVP at Nielsen IAG -- CPG
  2. 2. The Seismic Shift in Targeted Advertising and Media <ul><li>Current State </li></ul><ul><li>Analogue: Airlines </li></ul><ul><li>Yield Management in Marketing? </li></ul><ul><li>TV Engagement </li></ul><ul><li>Ad Engagement </li></ul><ul><li>Implications & Future State </li></ul>
  3. 3. Advertising & Media – Current State Approach Rules of Thumb Target Audience Measurement Primary Focus Financial Impact Timing Broad Viewership 1 Screen Unclear Outcomes Annual
  4. 4. Analogue: Birth of Yield Management <ul><li>Airline Industry circa 1985 </li></ul><ul><li>Peoples Express </li></ul><ul><li>Highly profitable </li></ul><ul><li>AA launches SuperSavers </li></ul><ul><li>Peoples bankruptcy </li></ul><ul><li>Introduction of Yield Management </li></ul><ul><li>Optimize Revenue </li></ul><ul><li>Perishable Resource </li></ul><ul><li>Price Discrimination </li></ul>
  5. 5. Yield Management – Disruptive “ the single most important technical development in transportation management since we entered deregulation” Robert Crandall Former Chairman & CEO of American Airlines
  6. 6. Yield Management: Airlines to Marketing ? For Advertisers <ul><li>Right Ad </li></ul><ul><li>Right Consumer </li></ul><ul><li>Right Program </li></ul><ul><li>Right Price </li></ul>For Airlines <ul><li>Right Seat </li></ul><ul><li>Right Customer </li></ul><ul><li>Right Time </li></ul><ul><li>Right Price </li></ul>
  7. 7. Yield Management in Marketing – Key Enablers <ul><li>Digital </li></ul><ul><li>Cross Media Measurement </li></ul><ul><li>New Measurement Tools </li></ul><ul><ul><li>Precision Targeting </li></ul></ul><ul><ul><li>TV Engagement </li></ul></ul><ul><ul><li>Ad Engagement </li></ul></ul><ul><ul><li>Purchase Data link </li></ul></ul><ul><li>Real Time </li></ul><ul><li>Accountability </li></ul>
  8. 8. Yield Management: Airlines to Marketing PROBLEM Inadequate real-time tools and measurement Advertisers willing to pay for ad and media effectiveness BUT
  9. 9. <ul><li>TV Program Engagement </li></ul><ul><li>What is it? </li></ul><ul><li>Does it Matter? </li></ul>TV Program Engagement
  10. 10. Program Engagement Impacts Ad Recall When viewers are paying more attention to a TV program, they also pay more attention to the ads that air within that program General Recall Program Engagement
  11. 11. <ul><li>Ad Engagement </li></ul><ul><li>What is it? </li></ul><ul><li>Does Context Matter? </li></ul>Advertising Engagement
  12. 12. Advertising Engagement – By Program Genre Source: Nielsen IAG Ad Data, 09.15.07 - 02.27.08. Based on A18-54 with Household Income $50K+ Purchase Intent Differs By Program Genre For the Same Creative Unit Program Genre Purchase Intent (Top 2 Box) Auto Racing 173 Sports Magazines 158 Professional Football–Pre-Game 119 Drama/Adventure 119 Animation 104 Feature Film 104 Reality 96 Situation Comedy 92 Game Show 92 Professional Football–Game 88 Talk Format 81 College Football–Game 77 Documentary/Salute/Tribute 69 Total 100
  13. 13. Yield Management in Marketing – What’s Next Where is all this leading ?
  14. 14. Advertising & Media – Broad Trends Science / Algorithms Broad Target Viewership 1 Screen Unclear Outcomes Annual Rules of Thumb Precision Targets Engagement 3 Screens Purchase / ROI Real Time Replanning
  15. 15. <ul><li>Advertisers will move toward Yield Management </li></ul><ul><li>Right Audience – Demo + Psycho, Behavioral </li></ul><ul><li>Right Program – Ratings + TV Program Engagement </li></ul><ul><li>Right Ad – Creative + Ad Engagement </li></ul><ul><li>Right Time – Annual + Periodic Replanning </li></ul>Future State: Marketing Yield Management All linked to consumer purchase behavior… … with Marketing ROI as key outcome
  16. 16. The Future – Closer Than You Think ROI Driven Advertising & Media “… Get on board soon or risk being grounded…”
  17. 17. Discussion / Q&A For more, go to: http://blog.nielsen.com/nielsenwire/

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