Tag Archives: advertising effectiveness

A Boon For Hulugans, Streamers and Cord Cutters

Today’s content is written by Alexa Paradis

Hulu has always been a leading force in the streaming age, differentiating itself from Netflix by offering current seasons of network shows in addition to their vast library of shows and movies. This made them the perfect match for cord-cutters who wanted immediate access to new episodes of their favorite shows. On May 3 during their 2017 Upfront, Hulu announced that they were now offering a live TV subscription that includes over 50 channels to start that will grow over the current year. The current channel offerings include all 4 Broadcast networks, all major sports networks, 5 children’s networks along with the Scripps channels just to name a few. This package will not replace their normal streaming subscriptions but instead be an add-on for customers that will cost $40 per month and also come with the ability to stream on multiple screens at once, quite less then the average cable bill. “Hulu can now be a viewer’s primary source of television,” said Hulu CEO Mike Hopkins. “It’s a natural extension of our business, and an exciting new chapter for Hulu.” As a millennial that cut the cord once I moved out of my parents’ house, I would definitely consider adding this onto my normal Hulu subscription especially if it means I can be watching the new episode of Scandal while my boyfriend watches the Yankee game in the other room.

For advertisers this means even more inventory on Hulu, in addition to their 32 million viewers who opt for ad-supported content advertisers now have access to the standard 2 minutes of local breaks per hour on cable networks. Also announced was a new deal with Nielsen, Hulu said advertisers will have access to Nielsen’s Digital Ad Ratings (DAR) across connected-TV devices starting in the fall of 2017, to provide a validated measurement solution across screens. Another amazing new feature for advertisers is the launch of T-commerce interactive ads in partnership with BrightLine that will let subscribers purchase movie tickets through their connected TVs. The on-screen purchasing capabilities will expand to other categories like retail and quick-serve restaurants in 2018.

Aside from the exciting announcement of the live TV subscription Hulu touted their extensive release schedule of original programing for this year with all of their biggest stars stepping on stage to share their excitement. Stars of the instant hit “The Handmaid’s Tail” announced that not only did they have the most streamed series premiere on the platform out of original and acquired series but they have already been green lit for a second season. Other exciting original series announced were Marvels “Runaway Teens”, Mars mission drama “The First” from House of Cards creator Beau Willimon, Seth Rogen’s project “Future Man”, Sarah Silverman’s political comedy series “America, I love You”, “The Looming Tower” which will star Alec Baldwin along with the series finale of “The Mindy Project”.

A powerful moment took place when Mindy Kaling took the stage for her last upfront and thanked Hulu for being a place that all types of women can be showcased and celebrated, which is not something you can find in many types of entertainment today. This certainly sets Hulu apart from their traditional network counterparts as a way to connect with Millennials who place a high value on inclusivity of all types of characters, especially female ones.

This year’s upfront showed that Hulu is remaining vigilant in their quest to be streamers go-to service and advertisers go-to platform to reach a diverse and highly engaged audience. The company shows no signs of slowing down their innovation either.

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The Battle Over The Pipeline

No, not the Keystone Pipeline, but the pipeline delivering content into US homes. Yesterday the FCC proposed a framework (whatever that means) for providing innovators, app developers and device manufacturers the information they need to develop new technologies. A link to the FCC’s statement on this is here: http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0127/DOC-337449A1.pdf

So who is for and who is against?

No surprise, cable companies are against this because it does something they hate most, it creates competition for accessing TV programming. It also removes an important revenue stream—renting boxes to subscribers, generating billions to their coffers.

Basically everyone else in the world supports this. Imagine people having their own boxes (think Roku, AppleTV, Google Fiber) and deciding what programming they want through their cable company and what programming they want direct.

Another benefit for consumers will be the ease to transition from Cable TV to SVOD to YouTube, etc on your TV monitor. My favorite part might be a single remote instead of three. The question that remains is whether this will eventually reduce costs or increase costs. People are willing to pay for multiple services and convenience, so it could go either way.

Video content providers will see a boon and direct access to subscribers without having to be held captive to cable company’s demands and idiosyncrasies. With millions of options for video content people will curate their own personal networks. We will likely see even more short-form content with fewer ads as either pre-roll or in-stream with more real time ad insertion and addressability.

In the words of the French poet Paul Valery, “The future isn’t what it used to be”.

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The Dark Side of Programmatic Buying

Programmatic digital can be dicey when it comes to getting what you paid for and you should be concerned about fraud, bots, safety, and viewability issues that result in bad outcomes.

A few months ago a prospective client asked me to evaluate a small programmatic buy her agency had executed for her with one DSP. The agency thought the buy was great, given that they drove a CTR of .48%, higher than most campaigns with a CPM of $1.40. On the surface I would agree.

That is, until I looked at the source of clicks report. This was a small enough campaign, just under 10,000 clicks, that a simple scan of the source of the clicks made me question the real value of the campaign. Many of the URL’s were from out of the US (Belgium, Brazil, Malaysia to name a few) but his was supposed to be a US campaign. Many were from sites that I could not load if I tried. Many seemed to be legitimate sites, but the visits were very low quality and very brief. The average session time for clicks from this DSP was 1/3rd to 1/4th the next lowest referrer. Average page views were even lower.

I sent the source of clicks list to a third party fraud and safety expert for their opinion. About 50% of the clicks were “High Risk” for fraud and another 5% were “Suspect”.

So if this is true, the client’s CPC for real clicks just doubled, at a minimum. Since I knew which DSP was used I asked them for their opinion on the third party auditor’s findings. I was shocked at the response from the DSP salesperson; we take brand safety very seriously and we’re more than happy to deliver on any parameters mandated.  Normally, during campaign negotiations we need to know in advance if a campaign is being measured by a third party and we’ll set up with daily reporting so that we can optimize out of those placements, sites, creative, and or content driving fraud.” 

Let me translate this for you. He said that if they knew we were going to look at a third party safety audit that they would not have delivered those impressions. Want to know what was worse? The CEO of the DSP echoed the same sentiments when I raised the issue up the line.

Fraud and bot clicks are going to happen. Clients and their partners who focus exclusively on getting the lowest CPM or CPC will find that they are actually paying more than they think for real inventory. Use a third party verification service for your campaigns, even if it is just to keep the people you’re giving money to honest.

For more info go to http://www.ocdmedia.com

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Is Your Marketing An Investment Or A Cost?

Never underestimate the importance of goal setting and strategy in media. While smart media buying will save you money, smart media strategy will make you money. Without a well thought out media plan you are not getting the most from your budget because you have not determined what you should buy and what you should not. While what you buy may be priced well relative to other options, buying the wrong media is wasteful no matter what the price is. And all too often advertisers and their agencies let buying lead the media process or are missing the connection between the plan strategy and the buy.

Would you use an investment strategy of buying only stocks that are less than $10 per share? And would you use the broker who charges the least per transaction because all he has to do is tell you how much of a given stock is available when you are ready to buy? Or does this sound crazy to you? It is crazy. But what’s crazier is that some companies handle their largest investment, advertising media, in this manner.

This approach is designed to limit your costs, but what you may not know is it also limits your return. Successful media buying, much like having success in the stock market, depends on good research and good timing because the basis of both is supply and demand. The biggest difference is that media buying is more negotiable than the stock market, an extra level of complexity that ultimately determines how much you will pay for your ad time/space.

And negotiating is something large media buying agencies on the whole don’t do as well as their smaller sized competitors. “How can this be?” you ask. “My agency buys gazillions of dollars of ad time, they have to get better prices than the agencies who buy less. It’s simple math. You buy more you get a better price.” Remember Lucy and Ethel in the chocolate factory in that classic “I Love Lucy” episode? That is what being a media buyer in a mega-media agency is like. You don’t have time to “wrap” the schedule properly because you have three more buys to get on the air that day.

Negotiating is about give and take, a certain back and forth. If you’re using one of these big guys chances are you’re not getting the best price because the buyer cares more about getting four buys on the air, and less about buying the right inventory. It’s easier for them to only buy the lowest priced stuff because they don’t have to worry about value. But you should because your media buy is your investment in your brand like your stock portfolio is your investment in your retirement, not an expense on your P&L.

Smart media planning let’s you know which media does and does not make sense for your efforts. It helps tell you which media to stay away from. Buying the wrong media because it’s cheap is as wasteful as buying premium priced media that isn’t right for you. Neither one will produce results.

An approach that recognizes the importance of strategy means targeting the right people at the right time, yielding a smarter use of your marketing resources. Make it easier for a buyer to buy effectively because they know the difference between price and value.

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A Matter of Efficiency

If you ask any media planner or buyer what the term efficiency means they will tell you that it is the way to determine relative value of different media and is usually defined as the cost per thousand impressions, CPM, of the media vehicle or buy. This results in their decisions on which media to buy being made strictly on costs.

That definition is dead wrong and leads to overemphasis on a surrogate measurement that may not correlate with sales results. Something is efficient if it is capable of producing the desired results without wasting materials, time, or energy. Can the vehicle deliver sales at a lower cost than other options? There is a cost/benefit perspective inherent in that definition. Nowhere in this description is there any indication that trying to get as many people as possible to see your efforts compared to other choices is the goal.

Making decisions based exclusively on audience cost of a media vehicle can waste tremendous resources. One of the sayings I’m known for is that the cheapest media is the most expensive media you might buy if it does not work.

Today we have so many tools at our disposal to apply metrics other than CPM to define efficiency. We also have ways to insert intermediate steps in the purchase consideration path to measure whether we are on the right track.

Are your media buyers looking at data other than audience delivery to track your progress? Are they looking at your Google Analytics data? Are they making adjustments based on how well their buy is driving traffic? Even if your ultimate goal is sales at retail there are intermediate steps that can be taken to identify what is working and what is not.

The secret is predicting in the planning stage what the potential return on each vehicle will be based on syndicated data, prior transactional data, behavioral modeling, etc. During the execution stage, make sure you align an inbound intermediate mechanism for tracking. You can use unique landing pages or promo codes, statistical modeling on web traffic, coupon downloads, social media actions or good old fashioned phone calls. A holistic look at this activity can prove helpful in making the proper optimizations to your campaign. Now that’s efficiency.

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Relics Part 2–BLUR

In a meeting earlier this week a client was discussing what classes of trade they have distribution in and I mentioned that there’s no longer such a thing as a class of trade. For those of you under the age of thirty, product distribution used to be contained to what we called grocery stores, drug stores or mass merchandisers. Today, these types of stores are one and the same. Food products were sold primarily in grocery, health products were sold primarily in drug and household staples, mostly dry goods, were sold in discount stores. Today, Wal-Mart makes up about 40% of all product sales in almost every product category. Drug stores sell milk and grocery stores sell prescription drugs. The concept of selling through a single class of trade no longer exists. Why? Because consumers want convenience. Whether it’s a quick stop into a convenience store for coffee and breakfast while they’re gassing up or to have one destination for their once-a-week major shopping trip (if that even exists anymore). They don’t want to go to a drug store for their prescriptions, a food store for their groceries and a discount store for paper goods.

I call this blur. Blur refers to the blurring of the lines of delineation that historically existed to differentiate different “channels”. Blur is not only a retail channel phenomenon; it is a reality in the marketing world as well. Today, everything is everything. In my Integrated Marketing class I refer to video and audio as communication techniques, I hate to call them TV and radio. Why? Because TV and Radio are terms that reflect an archaic distribution AND consumption system that no longer dominates. Most of the students in my class don’t listen to traditional radio, but they are exposed to a lot of audio content. The same is true in video.

Even within traditional media concepts like dayparts in TV are blurred. Many cable networks air the same programs in daytime that they do in Prime. Many people DVR whatever they want and time-shift the viewing to their convenience, yet we still plan TV based on old reach curves and buy daypart ratings numbers.

Last year I recall speaking with a client who considered Social Media PR and not advertising. We said it’s neither and it’s both. The line between PR and advertising has blurred dramatically. Is Content Marketing advertising or PR? Is Native advertising or PR? The answer lies in redefining what we do not as advertising or PR but as marketing. And if it’s smart to do PR and advertising for your brand it doesn’t really matter if there’s a line. It only matters that it gets done right. But doing it together, in an integrated manner, where paid promotion of Tweets/Posts and DJ endorsements and product integrations and content all magnify the messaging to a brand’s business advantage.

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Questionable Priorities

Yesterday it was announced that Group M is cutting deals with TV vendors to use C7 ratings instead of C3. For the uninitiated, this refers to Nielsen ratings guarantees for commercial ratings that includes live viewing and played back within seven days (C7) or three days (C3) from DVRs.

Back in 2007 when C3 ratings were first served up Group M quickly forced this new measure into their upfront deals before the industry was ready. There wasn’t much enthusiasm from other agencies at the time and most researchers felt it was premature but Group M’s Rino Scanzoni plowed ahead and C3 became the new currency. I think part of the rationale was that in most cases C3 ratings were fairly similar to Live program (not commercial) ratings—which were the norm to that point. Making the shift from Live to C3 meant no real change in economics for the vendors and an easier transition for the agency. I remember when peoplemeters were introduced to replace the old diary method. Many TV programs’ ratings took nosedives due to passive measurement. One of the challenges for agencies then was year-to-year comparison of different methodologies AND explaining to their clients why the ‘old’ numbers were so far off from reality, thus questioning the recommendations made by the agency. By using a measure (C3) that was similar, by happenstance, to the old measurement (Live) in 2007 the agencies avoided this controversy. Could that have been the reason C3 was forced on the industry?

Now with Group M pushing for C7 I am questioning why and for the benefit of whom? Obviously TV vendors are the biggest beneficiaries because they can monetize four more days of commercial playback. But why is an agency pushing a methodology that could harm their clients financially? Whose priorities are they concerning themselves with? Certainly not a client with time sensitive campaigns. What value is there in an ad promoting a sale that is over within the 7 day window? Of course that was the case—but lesser so—with 3 day playback.

Group M has a self-serving interest in TV ratings being high. It validates the largest part of their business model. It perpetuates their existence, as it does for all mega-media agencies with deeply entrenched TV buying units. But in doing this they may be in conflict with their client’s interests.

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Digital Media Lacks Accountability

According to Bob Liodice, the President and CEO of the Association of National Advertisers that is. Speaking at the 4As conference Mr. Liodice suggested that digital is the least accountable of all media. Mediapost’s story on this can be seen here.

I’ll discuss his issues one by one:

Only 50% of ads are viewable. Digital media sell on addressability to specific audiences. Most other media sell on “real estate”. With a fixed amount of real estate and strong demand a medium can ask a higher price because they can sell all the space/time to a few marketers at the exclusion of others.  Digital media can sell to both, but they’ll sell a certain number of impressions to each and at a lower price. The result is multiple ads on a page, some of which are less or non viewable. A fixed position, less ad inventory model could mean more money for digital media because the supply of ad inventory would be reduced and the demand would be stagnant. TV, Radio and Magazines usually use an interruption model, meaning each ad is viewable/audible—but that does not make them any more effective. It just makes a marketer feel better because they have something more tangible to show for the media investment. People have always muted the ads, left the room or changed the channel.

Only 50% of every dollar spent in digital goes to the media itself. Digital media doesn’t have the ticket price that traditional media have. A single ad in a magazine can cost $50,000 or more. A network TV unit can easily cost $100,000 or more. A $10 million dollar TV budget buys ‘hundreds’ of occasions, yet that same investment in digital media theoretically buys as many ‘occasions’ as impressions. The traditional TV campaign might use one piece of creative so the cost of the execution is amortized over all the ad occasions.  So are media servicing, trafficking, billing, etc. Since digital media are addressable there will be multiple ad executions and sizes and more invoices than the TV buy for the same investment. More trafficking, more ad serving, more billing, just more hands and eyes involved in the process. If this point is true (that only 50% of every dollar spent in digital goes to the media itself) it is not a problem because part of a digital media campaign is having a place for people to go when they click. Each ad might have a different landing page or microsite, thus adding to the costs of digital marketing. 

The return on investment has been hugely disappointing. On the surface CTRs  seem to be a low number. Why? Because we can measure them. What is the response rate for a TV ad that is comparable to a CTR? There is no measurement. Don’t get caught up in the CTR measurement in and of itself. Digital ROI should be measured the same way as ALL other marketing investments, the impact it has on the purchase, mainly the first purchase by a new customer, against fully allocated costs (media, creative, operational).

An e-GRP measurement standard is needed.  This is a step backward for the industry. Digital media currently have a metric that tells us something more than simple ad serving, which is the best we can do for traditional media (other than DR). Why should we exchange a good metric for a bad one? GRPs have been used as the exclusive measure for traditional media for too long and are a relic of an age when aggregating impressions was the best the industry could measure. Yes, we’ve improved the measure over time to incorporate commercial exposure and DVR playback. Just because a TV ad is served doesn’t mean anyone ever sees it or takes note of it. Nielsen is doing a terrible job of estimating audiences. Rentrak has time and again proven to be a better indicator of commercial exposure.

I can understand Mr. Liodice’s perspective. He is the leader of a trade/lobbying association of advertisers. Where his perspective falls short is that digital is a marketing channel, not a media channel. I don’t see the ANA calling for the same standards on in-store marketing and/or trade programs.

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The REAL Downside Of Measuring The Wrong Thing.

Last week I sparked some interest in the discussion of market mix models not properly measuring the impact of advertising. So, let’s continue that discussion, and as always, I invite comments/critique.

One way that ROI can be calculated is shown in the following financial equation:

Image

If a marketing mix model cannot properly measure advertising “Lift”, as I insinuated last week, then the model equation is always going to look for ways to drive advertising spending down, by way of cutting weeks, cutting unit length and cutting the highest priced inventory in the ad mix. These cuts are all to the benefit of things that the models are better at measuring, – price and trade promotion. As ad budgets are cut, promotion budgets are gaining.

Think of it this way; I mentioned last week that the models are understating the impact of advertising on sales because advertising is being evaluated on total sales rather than penetration/trial. Therefore the cost-based adjustments the model suggests are self fulfilling.  Because the advertising “Lift” outcome is artificially low, advertising decisions become driven by cost efficiency.  Years ago CPG companies spent the majority of their marketing dollars on advertising and now, because of the bad advice given to them by a flawed modeling approach, the ratio is more like 2:1 in favor of price/trade promotion.

What’s a marketer to do? Buy tons of cheap cable and :15 units instead of Prime and higher rated shows. What we’ve seen from companies who have adopted this approach are years and years of low single digit sales growth driven by the math financial formula shown above.

On the other end of the spectrum, we’ve seen instances when CPG companies have had to reallocate Prime inventory originally secured for a new product launch—the rare times these brands ever get any premium priced TV time—because of a delay in the launch. The established brands, even with only a few airings of Prime, show penetration gains in those weeks by 75% or more.

Time and time again we see brands that have the richest mix of Prime in their TV mix have the highest incremental penetration—assuming their copy is good. We’ve seen penetration multiples of 3X vs. off air weeks. Going back to the formula above, if we can increase the lift we can improve the ROI – even if we spend the same amount of marketing money in marketing. Don’t get caught up in the race for efficiency at the expense of growth. Don’t measure your media against audience metrics/CPM. You can achieve remarkable growth if you stop listening to the marketing mix modelers.

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