Download Nielsen`s presentation - Television Bureau of Canada

Nielsen Lessons for Effective Advertising
Presented to: CARF
March 6th, 2008
Summer Vallillee, Client Consultant
Jessica Avery, Client Consultant
Confidential & Proprietary
Copyright © 2007 The Nielsen Company
Pressure on Canadian Manufacturers
• IfCanadian
American
trends
can predict
Canadian trends, we can
Dollar
increasing
in value
Rising
commodity
prices
Prices
Surge
to RecordinHigh”
Associated Press,
Dec ’07
–“Wheat
Manufacturer
Implications:
expect
to see
a
decline
Advertising
spending
when the
“Rising
Dairydeclines
Prices
Signal
Globalization
– Retailers
demand
lower
prices ” Business Week, Sept ’07
economy
Increased
scrutiny
Canadian
“Oil –Prices
Nudges
to NewtoHistoric
Highmarketing
” Associatedexpenses
Press, Mar ’08
– Consumer Implications:
– Consumers are taking notice of US vs Can pricing
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Page 2
Agenda
Given pressure on marketing expenses, it is imperative to
invest efficiently. A review of the following will shed light on
the long-term effects of reducing TV spend and how to
make your advertising dollars work more efficiently
•
•
•
•
Long-Term implications of cutting TV Spend
Targeting your consumer more efficiently
Effectively matching the quantity of spending
with concept
Efficiently matching vehicle with concept
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Page 3
Trade ROI is usually better than TV in the
short term, but what are the long term
implications of cutting TV?
Long-Term ROI – TV vs Trade
Short-term ROI by Vehicle
125
Yr 1
Yr 2
107
80
85
Print
TV
Coupon
Yr 3
Cum 3 Year Effect
2 X More!
TV
Trade
Trade is more attractive in the
immediate future
Trade
Effects of TV continue to support base
growth 3 years down the road
Lesson Learned: ROI of TV doubles after 3 years resulting in
cumulative ROI higher than Trade
Source: Nielsen Analytic Consulting; Lessons Learned from Marketing Mix Analyses, 2006
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Page 4
With a $10M Marketing budget, how would
profit growth differ with variations in Trade
and TV spending?
Case Study:
Scenario 1 – Brand A spends $5M TV and $5M on Trade
Scenario 2 – Brand A cuts TV spending and puts $10M in Trade
Yr 1
Yr 2
Yr 3
Total Profit
+18% Profit
14.75
16,000,000
12.5
Profits
12,000,000
12.5
10.5
8,000,000
4,000,000
2.55
1.7
0
0
0
Scenario 1
Scenario 2
Lesson Learned: Investing in TV in addition to other vehicles,
such as Trade, will derive better profitability in the long-term
Source: Nielsen Analytic Consulting; Lessons Learned from Marketing Mix Analyses, 2006
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Page 5
Efficient Targeting
Unique deliverable of the Consumer
Marketing Mix is understanding of ROI at the
Consumer Group Level
Multiplying
the
Consumption
Index
byisolation
the Response
Index
gives
usthe
an$ROI
Looking
the
Consumption
Index
in
can
be
misleading…
Layering
the
Response
the
we
canROI
see
that
the
advertising
Lastly,
weaton
can
compare
thistoto
themedium,
Average
Hhlds
to
see
what
Index
byderived
Consumer
Group.
This
fact
quantifies
return
for targeting
each
actually
higher
responses
from
Younger
Adults
without
Children
In
the case
of Brand
A, TV
was
skewed
towardsthe
Smaller
Families
with Kids
potential
is
for
each
Consumer
Group
consumer group
Television
Television Advertising
Advertising
Television
Advertising
Response/ROI
Response/ROI Summary
Summary
Response/ROI
Summary
Spectra
Spectra BehaviourStage
BehaviourStage
Spectra
BehaviourStage
Lifestages
Lifestages ––– Brand
Brand A
A
Lifestages
Brand
A
Without
Without
Children
Children
Children
With Children
With
Startup
StartupFamilies
Families
Startup
Families
Small
SmallScale
ScaleFamilies
Families
Small
Scale
Families
Younger
YoungerBustling
BustlingFamilies
Families
Younger
Bustling
Families
Older
OlderBustling
BustlingFamilies
Families
Older
Bustling
Families
Young
YoungTransitionals
Transitionals
Young
Transitionals
Independent
IndependentSingles
Singles
Independent
Singles
Senior
SeniorSingles
Singles
Senior
Singles
Established
EstablishedCouples
Couples
Established
Couples
Empty
EmptyNest
NestCouples
Couples
Empty
Nest
Couples
Senior
SeniorCouples
Couples
Senior
Couples
Average
AverageHousehold
Household
Average
Household
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Consumption
Consumption
Consumption
Index
Index
Index
Response
Response
Response
Index
Index
Index
ROI
ROI
ROI
Index
Index
Index
TV
TVAdvertising
Advertising
TV
Advertising
ROI
ROIPotential
Potential
ROI
Potential
136
136
136
125
125
125
113
113
113
97
97
97
118
118
118
115
115
115
78
78
78
98
98
98
82
82
82
76
76
76
100
100
100
72
72
72
68
68
68
45
45
45
22
22
22
157
157
157
168
168
168
11
11
11
134
134
134
64
64
64
39
39
39
100
100
100
98
98
98
85
85
85
51
51
51
21
21
21
185
185
185
193
193
193
999
131
131
131
52
52
52
30
30
30
100
100
100
$1.38
$1.38
$1.38
$1.20
$1.20
$1.20
$0.72
$0.72
$0.72
$0.30
$0.30
$0.30
$2.61
$2.61
$2.61
$2.72
$2.72
$2.72
$0.12
$0.12
$0.12
$1.85
$1.85
$1.85
$0.74
$0.74
$0.74
$0.42
$0.42
$0.42
$1.41
$1.41
$1.41
Copyright © 2007 The Nielsen Company
Page 7
Determine which Consumer Groups are most
efficient to target based on the Consumption
and ROI Index
Change
Tactic
HIGH
Invest!
Optimize ROI
Startup Families
Young Transitionals
Small Scale Families
Independent Singles
Young Bustling Families
Avg ROI: $2.67
Avg ROI: $1.10
Target Marketing
Strategy Matrix:
Brand A
Older Bustling Families
Senior Singles
Empty Nest Couples
Senior Couples
Established
Couples
Avg ROI: $1.85
Avg ROI: $0.39
Forget It
LOW
LOW
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Invest?
Opportunity
Responsiveness
Copyright © 2007 The Nielsen Company
HIGH
Page 8
Target the “Invest! Optimize ROI” consumer
groups by understanding their media and
lifestyle habits
Determine How To Reach Them
Current Media
Dateline NBC
Law and Order
60 Minutes
Grey's Anatomy
Lost
Hockey Night in Canada
Current Target
Index
135
129
127
125
119
117
Recommended Media
Prison Break
Family Guy
Simpsons
24
House
CSI
Current Target
Index
105
69
76
99
92
102
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High ROI!
Optimize
Target
95
86
105
72
107
110
High ROI!
Optimize
Target
137
131
128
125
115
112
Copyright © 2007 The Nielsen Company
Consumer
habits/interests
are linked to each
of the Consumer
Groups via PMB
Data
Source: Nielsen Spectra / Print Measurement
Page 9
Skewing the TV advertising towards the
Invest! Optimize consumer group will drive
greater ROI
Invest! Optimize ROI
All Other
Total ROI
Current
Avg ROI
$2.67
$0.84
Old
Old Media
Media New
New Media
Media
Viewership
Viewership Viewership
Viewership
31%
31%
39%
39%
69%
69%
61%
61%
$1.41
$1.41
$1.55
$1.55
+10% ROI
Lesson Learned: When every Marketing Dollar counts, it is
imperative to understand the ROI Index and Viewing preferences
of your target consumers in order optimize ROI
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Page 10
Efficient Quantity
The match of advertising spend with the quality
of the idea maximizes return.
Portfolio Management
Product One: Weak
Scenario 1
$5MM
Product Two: Average
$5MM
Product Three: Strong
$5MM
Total Spend
Portfolio ROI
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$15MM
$0.40
Copyright © 2007 The Nielsen Company
Page 12
The match of advertising spend with the quality
of the idea maximizes return.
Portfolio Management
Scenario 1
$5MM
Scenario 2
$0
Product Two: Average
$5MM
$5MM
Product Three: Strong
$5MM
$10MM
$15MM
$0.40
$15MM
$0.50
Product One: Weak
Total Spend
Portfolio ROI
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Page 13
Traditional TV advertising remains the #1 way
consumers become aware of products outside
of store.
Source: BASES Sources of New Product Awareness Tracking - Canada
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Page 14
The more sources of awareness –
the stronger the persuasion
• Even in a potential time of recession, it remains important to reach consumers
through a variety of means.
Purchase interest by number of sources of awareness
(indexed to total)
One source only
Two sources
Three sources
Four or more sources
0.5
1.0
1.5
Note: Some of this effect may be due to self-selection – consumers who are primary targets for the
proposition or have a clear need for the product may also be more receptive to marketing.
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Page 15
Efficient Vehicles
Consumer Metrics can help guide the optimal
media mix for generating awareness
Communication
Effectively
convey your
distinct consumer
proposition
Simple
Message
Understandability through simplicity of
message is critical to successful
communication
Focused
Message
Consumer takeaway is maximized
with a limited number of messages in
an uncluttered communication
Credibility
Given interest in your benefits,
consumers evaluate whether they
believe you will deliver
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Page 17
The risk of using the inappropriate media type
for a complex message is large.
Complex Message
Simple Message
120
100
100
95
Persuasion Index
100
80
62
60
40
20
0
Persuasion with TV
Ad
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Persuasion via
Billboard
Persuasion with TV
Ad
Copyright © 2007 The Nielsen Company
Persuasion via
Billboard
Page 18
Understandable Message
Simple
Do you think that this idea is a simple idea
or a complicated idea?
Top Fifth versus Database
29
51
Complicated
19
4.1
Extremely Simple
Very Complicated
Very Simple
Extremely Complicated
Neither Simple Nor
Complicated
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•
Focused Message
Convey the key message you intend to impart with support, and no clutter
Focused
How well do you think the description of
this product is focused on a main point?
Bottom Fifth versus Database
23
Unfocused
56
Sample Beverage Headline:
The great tasting, nutritious
drink that keeps your children
mentally sharp and physically
active
18
2.9
Extremely Focused
Slightly Focused
Very Focused
Not at all Focused
Somewhat Focused
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Credibility
•
Additionally, consumers have to believe the claims being made – and the type of
media pursued is key to communicating the credibility of the initiative
Scrubbing Bubbles Automatic
Shower Cleaner
How do you feel about the believability of
the statements made about this product?
Middle Fifth versus Database
32
41
20
6
Completely Believable
Somewhat Believable
Neither Believable nor Unbelievable
Somewhat Unbelievable
Completely Unbelievable
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When credibility is an issue, TV ads with their
ability to show demos are the most compelling
mean of communication.
•
Small brands especially need to use the appropriate media vehicles to convince consumers
their message is credible.
Influence on Purchase
TV Ad
Friend or Family told You
Demos/Samples
Magazine Ad
Coupons
Read about it in a magazine or newspaper
Internet
Source: BASES Sources of New Product Awareness Tracking - Canada
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The simplicity and credibility profile should
define the optimal media type(s).
High
Billboard
Internet Banner Ads
Longer TV Ads
At-Shelf Communication
Credibility
Print
On Package
Communication
Television
Re-evaluate copy and
messaging
Demos
Samples
Low
High
Simplicity/Focused
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Lessons Learned
• With pressures to maximize advertising efficiency,
consider the following efficiency measures:
– Don’t jump to cut your media spending – it pays off in
the long term!
–If you’re a small brand, it’s also a great time to get
aggressive.
– Understand response by consumer group as well as
consumption by consumer group to maximize ROI
– Spend to the quality of the idea
– Consider the simplicity, focus, and credibility of the
message; the consumer measures can guide use of
media types with the best ROI
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