Brands Leaving Money on the Table by Ignoring Context Effects, Recency and Factual Purchaser Targeting

Context EffectsIn the 2017 report there was also a category called context effects which earned only 2 of the explanatory power for incremental sales credited to media advertising In the 2023 report this Context category disappears entirely We are not surprised Advertisers and agencies have ignored context effects and fail to activate with optimization of context effectsIn the 2017 study the context effects contribution was based on Nielsen program types which could only explain 2 of incremental salesIn an NCS study reported in 2018 and sponsored by Turner it was found that using RMT content coding to analyze the duplication of content codes between TV ad and TV program if the buy side maximized such overlap incremental sales effect could be increased an average of 36 Since virtually no one is doing this it does not show up in the latest NCS amp8220Five Keysamp8221 roundup If it had been used in the 450 crossmedia campaigns in the latest study it would have showed up as a strong amp8220Sixth Keyamp8221 and the total incremental sales covered in the study would have been around 36 higheramp160amp160An econometric study conducted by Bill Harvey Consulting for FOX covering about three trillion dollars in brand sales and about fifty billion in adspend shows that since 2014 as brands shifted most dollars from TV to digital only one in five brands grew market share This is because digital is not as good as TV in bringing in new customers so that the more money shifted out of TV and into digital the fewer new customers will be acquired and more of advertisingamp8217s work will be done on a reminder basis in getting more money out of existing brand loyals This is shown in a TRA Comcast studyamp160amp160Why would this be so Why would digital tend to have great reminder effect but weak ability to grow brands to new customers Itamp8217s explained in my MediaVillage In Terms of ROI article of August 2nd Digital excels at getting 12 seconds of concentrated attention which is enough to refresh in an existing customeramp8217s mind a brand that is already being bought But itamp8217s not enough duration of attention to tell a story and evoke emotion both of which are necessary for persuasion and acquisition of a new customer Television can do this and another RMT study shows that even a single impression can have this effect where there is high overlap in RMT content codes between an ad and a TV programamp160amp160Ignoring the difference in the way TV and digital advertising works is another form of context blindness because TV and digital are high level contexts RMTamp8217s work is at the more granular context level of TV programs and specific websitesapps and how much their psychological characteristics 265 RMT content codes called DriverTags overlap with the clientamp8217s ad Both types of context effect should be taken into consideration in media optimizationNeither form of context effect is being effectively considered today by 99 of advertisers The implicit assumption is that amp8220it canamp8217t make that much of a differenceamp8221 to just get the lowest CPMs amp8211 the essence of digitalamp8217s main appeal Lowest price is easy to explain and clients tend to not fault it A better approach would be to consider all of the evidence at the sales level Minimizing CPM with context both types based guard rails would not be a difficult algorithm to execute We have enough evidence now to scientifically and objectively state with certainty that it will definitely increase brand growthNCS in its new update of amp8220Five Keysamp8221 reports the secular effects of the shift to digital while also noting the effects of the pandemic and Gen Z Letamp8217s review the changes for each of the Keys while also looking at it by TV vs digital where NCS has supplied the dataCreativeIn 2017 and again in 2023 Creative delivers 49 of incremental sales effect No significant difference here between TV and digital they are both equally dependent upon the ad creativeThis is the number one driver of incremental sales made by advertising NCS provides many valuable insights includingamp8220As this younger generation gains purchasing power theyamp8217ll be looking for unique advertising creative that keeps them entertained and laughing More than half 52 of Gen Zers prefer creative and entertaining advertising and 43 prefer ads to be humorous Ads with a social message also resonate well with Gen Z Theyamp8217re three times more likely to engage with advertising if it includes social messaging thatamp8217s aligned with their beliefs When brands are closely attuned to audience interests and desires theyamp8217ll find it much easier to raise the bar on creative and achieve better outcomesamp8221BrandIn 2017 this was the third most powerful factor Reach was second it was still the Age Of Television Dominance In 2023 Brand has become the second most powerful variable in generating incremental sales mostly based on brand loyalty also favoring high penetration brands and brands with a higher share of wallet The Brand factor went from 15 to 21 of the incremental sales effectamp8220Incrementalamp8221 does not mean amp8220new to brandamp8221 It means amp8220credited to media advertising as incremental to the sales predicted to have been made anyway without advertisingamp8221This Brand shift in sales weight from 15 to 21 was a big change amp8220The study found that brands with the highest levels of consumer loyalty had twice the incremental sales as brands with low to average loyalty levelsamp8221 the NCS downloadable eBook reportsThe importance of Brand was far greater in digital than in TV In TV Brand is still down around where TVdigital was in 2017 at 13 In digital itamp8217s almost double that at 25 With the composite figure being 21 it looks like the change in the importance of Brand has really occurred because of the shift in dollars to digitalDigital and Brand logically go together because digital does its best work against current brand usersNote that in this study CTV is classified within digital including the streaming of network television programs Itamp8217s likely that a finer breakout of the two types of CTV amp8211 the one which is very much like linear and the other which involves user generated content and the amp8220Skip in 54321amp8221 protocol amp8211 show significant differences from one another in their ability to generate incremental salesReachReach had been the second most powerful driver back in 2017 during the sunset of the Age of Television Dominance at 22 Now itamp8217s dropped to 14 in the Age of Digital Dominance Thereamp8217s good reason for that With advertisers spending most of their money in digital to get the low CPMs reach has gone way down and the Cost Per Reach Point CPRP has gone astronomical TV generally beats digital in CPRP a fact apparently little known or understood The low reach ceilings achievable by digital are shown by the analysis I did of Nielsen ONE data 2224 crossplatform campaigns in 2022 that I reported in my MediaVillage In Terms of ROI article of April 27 2023amp160amp160NCS reports that the Media Keys Reach Targeting and Recency are 39 of incremental sales effect for TV but are only 26 for digital This in itself is a context effect showing that the TV media have 50 higher lift on incremental sales than digital media have Most of this must be against new to brand buyers that TV can create far more frequently than digital can at any price and scaleTargetingTargeting went from 9 to 11 of incremental sales effect This shows how slowly brands and agencies are converting over from sexage to something else Itamp8217s also a reflection on the noise in lookalikes and the underutilization of factual purchaser targetingIn TV Targeting Reach and Recency reported as a cluster called the Media factor combined are 39 vs 26 for digital as cited above This raises an interesting question I shall ask Nielsen and report here later how do TV and digital compare on Targeting alone Reach alone Recency alone Will let you knowRecencyRecency was 5 in 2017 and is now still 5 In a way this is the universe telling Joel Rubinson to brush off his IRI Viant NCS study and get out there and scream louder He showed that triple digit increases in ROAS lay in this dimension if practitioners were more open to finally changing the amp8220Mad Men Era methodsamp8221 and more fully exploiting media addressability Targeting factual purchasers and allocating among loyals and occasionals optimally was what TRA taught and Joel an Erwin Ephron protegee and Leslie Wood continue that work while Joel added the shopping cycle prediction method to recencyLeslie had done the earliest UPC analytics using ScanAmerica which documented high sales effects for getting an impression to a person within 24 hours of a shopping trip and especially if you can getting them twice in that windowLike context effects the recency lesson written by Erwin Ephron himself is still being underconsidered Today consideration means an optimization algorithm with weights for media types and using addressable to target people coming up on their visible shopping cycle as Joel didFor CPG brands these are the three most important things I can say to you today For brand growth you must focus your attention onfactual purchaser targeting of occasionals and loyalscontext effects at both levels andrecencyPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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Brands Leaving Money on the Table by Ignoring Context Effects, Recency and Factual Purchaser Targeting

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Bill Harvey

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Brands Leaving Money on the Table by Ignoring Context Effects, Recency and Factual Purchaser Targeting

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