Marc Pritchard Spells Out the Media Optimization of the Future

The new prescription does look a lot like what this advisor has been recommending for some time. Not to mention Erwin Ephron and Ed Papazian.

The old way (still very popular today in reality, distinct from the way it is described in pitches) is a lot like throwing money at it in paint buckets without over-aiming, with an obsessive focus on getting the most impressions of whatever quality at the lowest cost, targeting a sex/age group as a rough approximation of a very detailed and sophisticated target that is never operationalized. Making deals mostly with giant players for cost efficiency, hoping for a trickle-down effect which never comes.

Now, in an epochal address, Marc calls out that feeble method:

"It’s not who spends the most that matters. What matters is who reaches the most consumers with the greatest media precision with the highest advertising effectiveness and the optimum efficiency and delivers sustained growth and value creation."

This is a very carefully worded description of the key elements that have been paid only lip service in the past:

• Reach Consumers
• Media Precision
• Advertising Effectiveness
• Optimum Efficiency
• Sustained Growth
• Value Creation

Reach

"We find that many brands just keep the bar too low and settle for target audience reach of around 50% to 70%," Marc said. "Now why is it so low? We’re resetting the bar to achieve 90% target audience reach. And getting as close as possible to 100%. We want to reach all consumers and each consumer."

Of course, in discussing reach, one must consider which time frame to measure it in -- the numbers Marc mentions suggests he is talking about a campaign, probably within a Quarter. A target audience Quarterly reach of 90%-100% for a given brand campaign would probably be reaching 70%-75% by linear and streaming TV, adding another ten+ reach points with radio, another ten+ reach points by all things digital including DOOH plus a drop of print.

The idea of buying all networks and streamers is not really that different for P&G. They were always buying broad, dispersed schedules in order to maximize reach, but now they are dialing it up and doing it scientifically, using optimization. For example: "Tide switched to programmatic media-buying, finding connected TV IDs across all platforms that could stop duplicating ad frequency, increase reach and save money."

Media Precision

Media precision is something new for P&G. Ten years ago when I was at TRA and working closely with P&G, I told them that they were buying too many rotations, that it was severely limiting the ROI increases they could get from heavy swing purchasers. Now their humanistic multicultural inclusivity focus demands precision, so that campaigns can deliver "90% to 100% reach among each multicultural group: Black, Hispanic, Asian Pacific, Indigenous, White, people with disabilities, and LGBTQ+ consumers."

P&G is obviously optimizing on many sub-targets at the same time, which we proposed in our ARF paper Crossmedia ROI Optimization Must Include Creative.

My first optimizer that could simultaneously target multiple target groups was Next Century Media’s Opti*Mark addressable optimizer, still about a decade ahead of today’s addressable TV platforms.

One lookout I suggest to Marc: be cautious in the use of virtual IDs (VIDs) in maximizing reach against precision targets. Using actual measurements is far better than probability-based VIDs in achieving both reach and media precision, especially against well-defined multicultural targets. Probabilistic methods have already been far oversold in the marketing industry. The demographics generally available today at the ID level tend to be extremely inaccurate as reported by ARF. VIDs is a new techie way of doing the old Agostini and Sainsbury reach models of the mid-20th Century. These probability methods also tend to overstate actual reach attained. Anonymizing deterministic real ID data, and using calibration panels (Nielsen or other at equal high quality if that can be achieved) and clean rooms, privacy is protected and so is accuracy.

Advertising Effectiveness

This is the heart of the matter. Without it, nothing else counts. In the optimizers of the future, measures of advertising effectiveness will be taken at every level of the ARF Model, and these will be used in a fast feedback loop to continuously reoptimize in flight, causing new creative executions to be rapidly produced as well as media shifts. That means always-on measurements of brand campaign attention, recall, persuasion, brand perceptions, emotional engagement, behavioral engagement, incremental sales, and projected ROI against consumer lifetime value gain, projected brand equity in an acquisition, net promoter score, brand love, and brand customer base growth.

Current optimizers are usually dealing with only one of these payoff measures, which tells you when you are failing, but not where the fix is needed.

Interestingly, I’m working with several notable companies to create something like that right now.

The interaction effects -- sometimes the synergistic effects are as large as the direct effects -– must also be taken into account. Ads resonate to a greater or lesser degree with each person, and to a lesser or greater degree with each context. Contexts which we do not think of as being high impact will be surprisingly high impact for the ads which resonate with that context. All of this must be included in a scientifically complete optimization solution. The difference made is not slight, it’s double-digit over optimizers which ignore internal interaction effects among variables.

The industry’s collaborative efforts including those of ANA, VAB, ARF, MRC, IAB and many others are creating greater interoperability and standardization, which will enable more data from more directions to inform this new scientific and pragmatic paradigm for marketing. That data superhighway benefits everyone including today’s leading companies as well as startups, to the degree that a company allows the old restrictions and siloed thinking to molt away. Fear, which drives silos and herd mentality, is what crowned CPM the only arbiter in media for too many decades. It’s time to transcend the fear and to achieve sustained growth as individuals.

Optimum Efficiency

This is the heart of Marc’s announcement. He did not say "maximum efficiency" but "optimum efficiency." This is the really big and overdue change for the entire industry. It has always been "sacrifice everything else for efficiency" in actual practice. The word "optimum" conveys "as much efficiency as we can afford without harming advertising effectiveness, sustained brand growth and value creation."

It has always been drive down the CPM as much as possible. Get as much reach as you can without hurting the first principle (CPM). That has wasted trillions of dollars over a century or more and made CMOs the low person on the C suite totem pole. Go Marc!

Sustained Growth

In order to sustain brand growth, the brand must constantly gain new customers, and innovate new products, hopefully more than mere line extensions.

Interestingly, even mature brands like Tide have hyperlocal areas in which they are still growing today, and still have headroom to grow more. Local media could benefit from the widespread dissemination of the data supporting hyperlocal growth opportunities for brands considered topped-out.

Value Creation

When Marc Pritchard talks about value creation, he means more than the brand equity value. He includes human values, improving the quality of life for customers, employees, shareholders and people in general. Brand content created by P&G, including The Talk, The Look and Thank You Mom, clearly demonstrates what he means by value creation in the larger sense.

We’ve unpacked the one-sentence tight definition of the new marketing lens offered to the whole industry by P&G in this keynote. It’s very exciting to read these words of an industry leader confirming many of the ideas I’ve been fighting for all my career, and to know that P&G is actualizing these ideas with technology right now.

Self-published at MediaVillage through thewww.AvrioB2B.complatform.

Click the social buttons above or below to share this content with your friends and colleagues.

The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.