xmos research review the new marketing mix rex briggs, marketing evolution

XMOS Research ReviewXMOS Research ReviewThe New Marketing MixThe New Marketing Mix

Rex Briggs, Marketing Evolution

We are a people of tradition, but the past no longer serves us. Learn from the present and focus on the future.

Have you re-evaluated Have you re-evaluated your marketing mix?your marketing mix?

The Media Landscape Has ChangedThe Media Landscape Has Changed

The Past is OutdatedThe Past is OutdatedOur conceptual models of media

and advertising are outdated

1. Media and advertising in context2. XMOS learning3. Closing thoughts

Our conceptual models of media and advertising are outdated

Old WayMedia Magnetism

Active Attention

Learning Theory

New WayAdvertising Wallpaper

Passive Attention

Absorption Theory Brand salience & enhancement

The Past is OutdatedThe Past is OutdatedIn the Beginning, Media Mesmerized UsIn the Beginning, Media Mesmerized Us

There was a time when radio could hold attentionThere was a time when radio could hold attention

Television then… Television then… TV Now…TV Now…

Advertising WallpaperAdvertising Wallpaper

We have learned more in the past We have learned more in the past 10 years about how the brain 10 years about how the brain works than we learned in the works than we learned in the

previous 100 yearsprevious 100 years

Learning theory is rarely Learning theory is rarely applicable in today’s media applicable in today’s media

environmentenvironment

Advertising’s effect is more Advertising’s effect is more subtle, and impossible for subtle, and impossible for

consumers to accurately gauge consumers to accurately gauge on their ownon their own

Our conceptual models of media and advertising are outdated

Old WayMedia Magnetism

Active Attention

Learning Theory

New WayAdvertising Wallpaper

Passive Attention

Absorption Theory Brand salience & enhancement

Orange Juice Case ExampleOrange Juice Case Example

Control group:

Branded OJ Taste Test

Exposed group:

Ad exposure, then

Branded OJ Taste Test

5.1

1 5 10

Overall taste rating:

7.6

1 5 10

Overall taste rating:

Illustrative data, see JAR 2004 for case example

It takes a lot of courage to release the familiar It takes a lot of courage to release the familiar and seemingly secure, to embrace the new. and seemingly secure, to embrace the new.

Alan CohenAlan Cohen

But there is no real security in what is no But there is no real security in what is no longer meaningful. longer meaningful.

The Key To Understanding The New Landscape:

Implication to marketers:

Set aside your assumptions and see what works.

Implication to research:Measure the effect through observation

- Don’t guess at it.

- Don’t ask consumers to guess at an ads influence!

Measuring AdvertisingMeasuring Advertising

• Never ask respondents if they took a certain action because of advertising– Instead, observe the effect

– Advertising is a low involvement communication and is not generally perceived as a cause for action (even when it is)

42.0%

64.0%

Measuring Advertising EffectMeasuring Advertising Effect

Brand Image: Considering everything you have seen or heard about the All New 2004 Ford F-150 and your own personal opinions, please indicate the degree to which you Agree or Disagree with the following statements. (Top-Two box- 5 Point Scale)

“Good looking”

BeforeCampaign

AfterCampaign

++22%22%++22%22%

*significant value are at a 95% confidence level

XMOS 1.01. Unilever’s Dove

XMOS Branding - 1st wave2. McDonald’s3. Colgate Total4. Kimberly Clark Kleenex 5. AstraZeneca NexiumXMOS Branding - 2nd wave6. Universal Pictures Home Video 7. ING8. VeriSign9. Sensodyne (UK)10. Carlsberg (Denmark)11. Charlie’s Angels (Denmark)

XMO$ Sales & Branding12. Ford F-15013. P&G’s Olay14. Kraft’s Jell-O15. Nestlé's Coffee-mate

15 Public Studies to Date15 Public Studies to Date

http://www.ford.com/en/links/General/www_fordvehicles_com/default.htm?referrer=home

http://www.kleenex.com/us/index.asp

XMOS LearningXMOS Learning

1. Headline finding

2. In-depth learning

Online Advertising ImpactOnline Advertising Impact

• Online achieves direct response• Online builds awareness• Online communicates brand image• Online builds preference• Online sells products offline

Better ResultsBetter ResultsBetter ResultsBetter ResultsSame BudgetSame BudgetSame BudgetSame Budget

The Headline Conclusion

Results in a Results in a 14% increase14% increase in purchase intent in purchase intent

Same Budget, Same Budget, Better ResultsBetter Results

Results in a Results in a 14% increase14% increase in purchase intent in purchase intent

Same Budget, Same Budget, Better ResultsBetter Results

Optimizing OnlineOptimizing Online

And…And…

• Good ads are incredibly important– Take the time to test creative

In Depth Learning From In Depth Learning From CROSS MEDIA RESEARCHCROSS MEDIA RESEARCH

Summary Of XMOS ResultsSummary Of XMOS Results

Brands

DoveChickenFlatbread

Total Kleenex NexiumET Home

Video ING Verisign Jell-OCoffee-mate

Olay F150

Reco’d % Online 15% 13% 11% 10%

10-15% 19% 15% 11% 4% 5%

TBD

**** 6%*

Brand Awareness -- +8% -- -- -- -- ** *** -- -- -- --

Brand Image -- -- +34% +7%

+10-20%

-- -- -- -- -- -- --

Purchase Intent +14% -- +20% -- +1-5% +1491% -- -- -- -- -- --

Sales-- -- -- -- -- -- -- -- +4% +7%

In Field

+5%

** Not the optimized level, but considered an interim stepNot the optimized level, but considered an interim step

**** Brand ran Optimal level so there was no gain from more online spendingBrand ran Optimal level so there was no gain from more online spending

****** Because of differing objectives, cross media comparison was inconclusiveBecause of differing objectives, cross media comparison was inconclusive

**** **** Results based on three months of analysis, full analysis is six months, and is still in progressResults based on three months of analysis, full analysis is six months, and is still in progress

Why does increasing Online produce better Why does increasing Online produce better results within the same budget?results within the same budget?

Online advertising affects branding metrics

Online advertising is typically more cost efficient at producing branding gains

Online reaches those who would otherwise not get the advertising message

CoverageCoverage

EffectivenessEffectiveness

ValueValue

Lighter TV users are Lighter TV users are Heavier Online UsersHeavier Online Users




CoverageCoverage


ValueValue

Build awareness, reinforce key image attributes and boost purchase intent

Generate sales

Brand differentiation and sales

Generate purchase intention and sales

Marketing ObjectivesMarketing Objectives

Universal Home Video – E.T. DVD ReleaseUniversal Home Video – E.T. DVD Release• Launch Goals:

Communicate the release of E.T. DVD

Position brand as one of the most beloved movies of all time, with new footage & enhanced visual effect, a must buy DVD

• Primary Objective: Generate purchase interest

The Power of Good Creative The Power of Good Creative

Summary of branding gainsSummary of branding gains

An unforgettable masterpiece for the whole family

37.5%

38.9%

43.0%

47.9%

10% 20% 30% 40% 50%

Stat sig.

Stat sig.

TV + Rich Media Overlay

TV + Online

TV Only

Pre-Campaign

Based upon what you have seen or heard, how much would you say each statement describes the movie E.T. The Extraterrestrial on DVD and video…(Describes completely/Describes somewhat)

Thinking about E.T. The Extraterrestrial, how likely are you to buy the DVD or Video

However, TV & Online do Drive Purchase IntentHowever, TV & Online do Drive Purchase Intent

Definitely will/Probably will buy (net)

21.4%

19.9%

22.7%

25.4%

0% 10% 20% 30%

Stat sig.

Stat sig.

TV + Rich Media Overlay

TV + Online

TV Only

Pre-Campaign

Findings: TV alone does not affect purchase intent

However, the combination of Online advertising and TV does produce a statistically significant impact

Moreover, TV and the overlay Online execution makes an even bigger impact

TV Built Awareness but Not Purchase IntentTV Built Awareness but Not Purchase Intent

0

10

20

30

40

50

60

70

80

Brand Awareness

Purchase IntentPurchase Intent

% Pre-TVTV

Campaign Post TV Campaign

Rich Media 6½x More Cost Effective TVRich Media 6½x More Cost Effective TVBased on Relative Cost Index against EffectivenessBased on Relative Cost Index against Effectiveness

Summary

Rich Media

OverlayOnline

Banners TV

DVD Release Awareness 100 1079 192

Brand Image Avg (top box) 100 339 648

Purchase Intent (def/probably) 100 315 No liftN.A.

However, the CPM was only 2X However, the CPM was only 2X Online Online 100100TV TV 169169 Rich Media OverlayRich Media Overlay 299299

However, the CPM was only 2X However, the CPM was only 2X Online Online 100100TV TV 169169 Rich Media OverlayRich Media Overlay 299299

Universal: Major Gains with OnlineUniversal: Major Gains with Online

0%

2%

4%

6%

8%

10%

12%

14%

Before After

PurchaseIntent

Brand Image

ReleaseAwareness

+31%

+1491%

+107%

Absolute gains (bar chart) and % lift

2%

81%

17%6%

94%

TV

Online

Rich Media

Offline Sales ResultsOffline Sales Results

• XMOS:– Ford– AstraZeneca– Procter & Gamble Olay– Kraft Jell-O– Nestle Coffee-mate

• Other sales studies– A dozen CPG/FMCG studies by IRI– Ten CPG/FMCG studies by AC Nielsen– Pharma marketing mix by DoubleClick

Jell-O Ad Examples Jell-O Ad Examples

70.4%

77.4%

The Addition of Online Builds BrandThe Addition of Online Builds Brand

Control n= 468; Branded n=469; Coupon n= 465

Purchase Intent: The next time you buy dry gelatin mix that comes in a box, what is the probability that you will buy Jell-O gelatin mix? (Top 2 box- 11 point Juster Scale)

All significant values are at a 95% confidence level

• Online advertising increases purchase intent by 7 points

Offline Offline +

Online

Purchase Purchase Intent Lift: Intent Lift:

++7%7%

Purchase Purchase Intent Lift: Intent Lift:

++7%7%

Online Sells Product OfflineOnline Sells Product Offline

*All volume numbers above are weekly volume per 100 Households

0.920.99

Control* Exposed to Online Ad

Average Weekly Volume per 100 HouseholdsMeasured in Ounces

Sales Lift: Sales Lift:

++7.5%7.5%


++7.5%7.5%

Incremental Volume

+.1 oz •Online advertising resulted in a 7.5% sales volume lift

Jell-O Sales ROIJell-O Sales ROI

23

53

-4

-21

-51

30

83

Online frequency

=9.8

Online frequency

=7.0

Calculated National Theoretical Recommended

frequency level

ROI: Payback of Each Media Vehicle per Dollar Spent

Above average

ROI

Below average

ROI

Direct TV

Direct Print

Radio Trade FSI

Online

The Coffee-Mate Online CampaignThe Coffee-Mate Online Campaign

43.0%

50.0%

The Addition of Online Builds BrandThe Addition of Online Builds Brand

Brand Image: Considering everything you have seen or heard about Coffee-mate Non-Dairy Liquid Creamer and your own personal opinions, please indicate the degree to which you Agree or Disagree with the following statements: (Top-Two box- 5 Point Scale)

• Online advertising increases five out of eight key metrics

Offline Offline +

Online

Average Average increase increase

++7%7%

Average Average increase increase

++7%7%

Control n= 468; Branded n=469; Coupon n= 465

Results shown are for branded campaign using an average of all attributes

*All significant values are at a 95% confidence level

And Again, Online Builds SalesAnd Again, Online Builds Sales

*Control Panel=606 Exposed Panel=1,127. All volume numbers above are weekly volume per 100 Households**Statistically Significant at the 95% confidence level

12.914.2

Control* Exposed to Online Ad

Average Weekly Volume per 100 HouseholdsMeasured in Ounces


++10%10%


++10%10%

•Online advertising resulted in a 10% sales volume lift

Incremental Volume

+1.3oz

Coffee-mate Sales ROICoffee-mate Sales ROI150

-20-29

28

Online Recommended

Level

ROI: Payback of Each Media Vehicle per Dollar Spent

TV

Consumer Promotions Trade

Online

Above average

ROI

Below average

ROI

The All New 2004 The All New 2004

Ford F-150Ford F-150

“The Most Important Launch In the History Of Ford”

- Bill Ford

One Day Reach = 40%!!!One Day Reach = 40%!!!

Roadblock

Campaign Launched With Digital Road Campaign Launched With Digital Road BlockBlock

TV and Online RoadblocksTV and Online Roadblocks(Purchase Intention)(Purchase Intention)

Both are effective

But the roadblock

is more cost efficient

Individual Media Effects Led by OnlineIndividual Media Effects Led by OnlineBranding Metrics SummaryBranding Metrics Summary

TVMaga-zines

Road-block Online

Ad Recall +3pts +13pts +6pts +15pts

Familiarity Not Sig +11pts Not Sig +10pts

Avg Brand Image Attributes Not Sig +8pts Not Sig +9pts

Purchase Consideration +5pts +6pts +4pts +6pts

Shopping Not Sig +4pts +6pts +6pts

Purchase Intention (unaided) +2pts +3pts +5pts +12pts

Online is a MAJOR contributor to successOnline is a MAJOR contributor to success

Intern

etIn

ternet R

eachR

each

55%55%

or2.22.2

MillionMillion Consumers Consumers interested in interested in buying F-150 buying F-150 because of because of Online adsOnline adsOnline’s ImpactOnline’s Impact

==P

urch

aseP

urch

ase In

tentio

n In

tentio

n

+6.8%+6.8%

•Weighted average of Roadblock and Online (impact of roadblock x reach of roadblock + impact of online in-market + reach of in-market) / sum of reach = weighted impact

Purchase Consideration Impact Efficiency Purchase Consideration Impact Efficiency Relative Cost IndexRelative Cost Index (ROMO)(ROMO)

Brand Metric:Purchase Consideration (top 2)

Relative Cost Index

Sample Cost

TV 2153 $21.53

Magazine 354 $3.54

Roadblock 196 $1.96

Online 100 $1.00

Interpretation: If it cost Online $1 (indexed of 100) to increase purchase consideration, then it cost $1.96 for the roadblock, $3.54 for magazine and $21.54 to TV to achieve the same increase.

Online’s contribution to Online’s contribution to salessales

Roadblock

In-market ads

21% sales lift over control group**

That’s 6% of total sales caused by Online advertising

** 28% actual lift, 21% represents a more conservative figure to account for heavier media delivery. 21% lift accounts for 6% of total all new F-150 trucks during measurement period.

Ford Sales AnalysisFord Sales Analysis

• 500,000 F-150’s sold annually

• Online was 6% of sales, or 30,000 trucks

• Results in $750,000,000 annual F-150 sales

Tracked Buying of Control & Exposed Group

Tracked Buying of Control & Exposed Group

@ $25,000 per Truck

@ $25,000 per Truck

What if Ford Ran Increased Online?What if Ford Ran Increased Online?

• Online included Roadblocks & In-Market

• Plan would then sell +5%, or 25,000 trucks

• Results in additional $625,000,000 annual sales

Optimization and Judgment suggested

+6% increase in Online

Optimization and Judgment suggested

+6% increase in Online

@ $25,000 per Truck

@ $25,000 per Truck

Brand Tracking And ROI ModelingBrand Tracking And ROI Modeling

SalesHiLow

Branding

Hi

Low

Sales lift:Sales lift:NexiumNexium 6.0% 6.0%Jell-OJell-O 7.5% 7.5%Coffee-mateCoffee-mate 10.0%10.0%OlayOlay 12.5%*12.5%*Ford F-150Ford F-150 21.0%**21.0%**

*Mid-point data only. Campaign is still in field, Reported % increase in household buy-rate. Actual volume increase were higher.** 28% actual lift, 21% represents a more conservative figure to account for heavier media delivery

Jell-O

OlayCoffee-mate

The The Power of Power of

Good CreativeGood Creative

Room for improvementRoom for improvement

• Of the last 5 XMOS program, creative testing was done prior to the study launch

– 2 brands found 1/2 the ads were not effective

• Diluting the effectiveness of the campaign

– 2 brands discarded ALL ads, starting all over

• Both developed better ads that scored much better

– Only 1 brand’s ads required no adjustment

Case in Point: OlayCase in Point: Olay

Online AdsOnline Ads

AD4

AD5

Measuring Effectiveness:Measuring Effectiveness:Creative TestingCreative Testing

Branding Metrics #4

Awareness- Unaided not sig

Awareness- Aided +3%

Purchase Probability (top 2 box)* not sig

Average Branding Attributes not sig

Message Association (love the skin your in) +4%

* Ad 5 show directionally positive increases in purchase probability

Point difference over control

Revised Ads Produced Better ResultsRevised Ads Produced Better Results

• Try the “Glance test”

Online AdsOnline Ads

Individual Media EffectsIndividual Media EffectsBranding Metrics

Online (revised)

Awareness- Unaided +11%

Awareness- Aided not sig

Average Branding Attributes +9%

Purchase Probability (top 2 box) +12%Offline n =573

Offline +Online n =547

Point difference over control

The The Power of Power of

Good CreativeGood Creative




Online reaches those who would otherwise not get the advertising message

CoverageCoverage


ValueValue

The Old Marketing Mix Is The Old Marketing Mix Is NO LONGER OPTIMALNO LONGER OPTIMAL

Billions are lost due to sub-optimal marketing mix

The Key To Improving Marketing ROIThe Key To Improving Marketing ROI

• Set aside old, outdated assumptions and measure what produces the best ROI

• If you hope to make advertising more profitable, you had better measure what’s working, and what’s not

Applying the New Learning:Applying the New Learning:

Beware of Beware of Media Planning InertiaMedia Planning Inertia

Updating last years mix

with minor tweaks is NOT

a solution

Instead, use zero based media planning


• What is the quality of your ads? – Do you run a live pre-test to optimize them?

• BEWARE of norms (make sure the comparisons are meaningful)

– The financial value of strong creative can’t overstated

Have An Online Spend Growth PlanHave An Online Spend Growth Plan

The Art and Science of The Art and Science of Developing a Strategy is Developing a Strategy is

SIMPLESIMPLE

SIMPLE– Strategic – Insights, – Measurement, – Planned – Learning by – Experimentation

SIMPLE - ExplainedSIMPLE - Explained

• Strategic Insights– Research provided knowledge about the consumer’s motivations– Research provided insight about competitive positioning– Defining and segmenting your audience based on motivations and

reachability through media– Understanding and developing the soul of your brand

• Measurement– Advertising delivery and effectiveness measurement

• Strategic (XMOS) versus tactical measurement (GRPs)

• Planned Learning by Experimentation – Planned learning is different from ad hoc research. – It begins by pin-pointing knowledge gaps, prioritizing learning and

taking a longer-view of addressing these issues

4 stage approach to using research to understand the impact and value of Online in your media mix.

Phase 1: Online campaign branding effectivenessPhase 2: XMOS Branding or Online Sales impactPhase 3: XMOS: Online in Marketing Mix ModelsPhase 4: XMOS: Ongoing Marketing Mix and Brand Tracking Measurement

Research Roadmap for Integrating Online MediaResearch Roadmap for Integrating Online MediaB

rand

’s T

otal

O

nlin

e S

pend

Time

$1,000k

$500k

$100k

Phase 1 Phase 2

Phase 3

Phase 4

Accountability is not measurement…

It is doing something about the measurement.

RecommendationsRecommendations

What can you do?Form a working group

• Include key brand, agency and measurement team members

1. Examine your key target audience share of time with each media

2. Make measuring relative effectiveness a priority – Ensure that online is properly quantified -- Old RDD tracking

studies fail at measuring online

3. Review and update marketing mix annually


Identify Leaders and Curmudgeons• Engage them both

– Example: Marketing Evolution’s Scenario planning

Consider re-vamping the entire marketing metrics and decision process

• Do you measure the right things?• Is everyone trained on marketing measurement?• Is there a process for changing based on research

learning?

Closing ThoughtsClosing Thoughts

A bit of advice given to a young Native A bit of advice given to a young Native

American at the time of his initiationAmerican at the time of his initiation::

‘As you go the way of life, ‘As you go the way of life, you will see a great chasm. you will see a great chasm.

Joseph CampbellJoseph Campbell

Jump. Jump.

It is not as wide as you think.’It is not as wide as you think.’

Test, Learn, EvolveTest, Learn, Evolve

Rex Briggs

[email protected]

xmos research review the new marketing mix rex briggs, marketing evolution

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