Blog Moves to a New Home

I’ve moved my blog to a new home. All my posts and comments are still available. Please visit me at blog.joelrubinson.net.

How Advertising Works; The Second Right Answer

There’s a rule in creative problem solving, “never accept the first right answer”. 

The second right answer is hard to come by.  It requires a good BS detector, perseverance at amassing facts, ferreting out case histories and then distilling all that into synthesized learning.  It must be compelling because you are challenging the incumbent; the first right answer.  The second right answer must come from knowledge.

In media, the first right answer seemed to be that consumers don’t want to be interrupted by advertising.  We heard, “The interrupt and repeat model is dead; it’s all about contagious conversation.”  If true, media chaos!  However, there is a second right answer and it is all available in a marvelous collection of 21 papers in the June issue of the ARF’s Journal of Advertising Research.   In this issue, we have proven empirical generalizations that are based on thousands of industry examples.  Assumption and thought pieces didn’t make the grade; table stakes were hard facts analyzed in a scientific manner as judged by our two guest editors, noted professors Jerry Wind and Byron Sharp.

This issue came from a collection of 40+ papers presented at Wharton in December from media and marketing leaders from around the world, on both the practitioner and academic side.

I think it was a great watershed moment for our industry that we chose to take a different path and embrace knowledge.  It undeniably proves what research and analytics can bring to the table… a second right answer that can reshape marketing thought.

Those who are coming to AM 4.0 will get a copy of this Journal issue and hear a special panel of some of the authors (I am proud to be one of those).  Also, if your organization belongs to the ARF you will get copies of this issue.  Those who receive it will have an advantage in the pursuit of advertising effectiveness and efficiency. (The issue is also available for purchase if you are not a member and not planning to attend the ARF Audience Measurement conference.)

Oh by the way, here are just a few of the 21 empirical generalizations:

• TV advertising works as well as in the past
• A simple formula for setting ad budgets to maximize profit is offered
• The impact on sales can be huge of online advertising that never involved a click
• Proof that in-store digital signage can lead to double-digit sales lift and learnings about how to maximize impact
• The average elasticity of sales to advertising is 0.1 (doubling advertising leads to a 10% immediate increase in sales), and the long-term multiplier is typically twice the short term effect.

Here’s to perseverance and second right answers.

Thinking About Research as a Brand

In March, the ARF completed executive interviews among 19 research leaders representing large marketers and media companies. Overall, Research got a passing grade, but certainly didn’t make honor roll.
While Research usually has strong executive support, as we dug down 1-2 levels, we saw something different. We heard that there was spotty support for research from internal customers; some felt it added value and some felt it was an impediment rather than an enabler, adding costs and timing to initiatives but not adding much beyond what “they already knew about their customers”. Some research leaders felt their main challenge was to get their staffs to translate insights into recommended action; we must go beyond feeling satisfied with good data leading to good analysis.
Pat Hanlon, author of Primal Branding, refers to brands as “belief systems”. Thinking this way led me to the conclusion that most marketing organizations do not have a pervasive belief system that research adds value. Some “believe”, but many are non-believers. As non-believers, they will not expect valuable strategic recommendations to come from researchers so even brilliant insights will go unnoticed. The decision-maker must believe or less grounded insights coming from consultants will have more impact on the company than their own research and insights teams even if they offer brilliant insights.
Research must fix its branding problem. To do this, it must understand how to engage in a new dialogue…a new narrative that will change the belief system of the organization. In July, the ARF Research Transformation initiative will bring selected leaders together for this branding analysis and subsequently publish its recommendations.
Of course, this new brand narrative must be somewhat aspirational. For example, if we convince people that research can inspire innovation based on human insights and that we do that in the cadence of the business, then we need to deliver. We can’t just talk a good game. Frankly, leaders are not sure their current staffs are equipped.
So it is time for us to practice what we preach. Research says it helps to build better brands, so let’s think of our profession as a brand and make it better. It will require the dance of vision, aspiration, communication, and capability enhancement. Then let’s make unforgettable success stories that become legendary proof of the value that research can bring to the enterprise; in the interviewing we uncovered some already, let’s make more.

A full report of our executive interviewing is available to arf members in their ‘myarf’ area.

Our shared future regarding online data quality

On Tuesday, the ARF Online Research Quality Council presented detailed findings from an unprecedented US R&D project regarding online data quality, called “Foundations of Quality” (FoQ).  Beyond the fact that it was about $1MM in research, it was unprecedented and quite remarkable as 17 leading online panel companies cooperated with each other and with large buyers of marketing research in a collaborative and transparent way.  We studied 700,000 panelists and over 100,000 completed survey responses from 17 panels in a rigorously designed research project.

Competitors and trading partners were drawn together at the ARF by a sense of urgency to reestablish the trustworthiness of online research. ..by our shared future.

Let me discuss findings against four of the big issues that were on the table.

Some high profile examples have been reported of study results not replicating.  Why is that?

FoQ data prove that, for each of the 17 panels, results replicate within panel (within the limits of sampling variation) but do not necessarily replicate across panels.  This means that buyers will need to be cautious about switching suppliers when data comparability to other study results is a main consideration.  Furthermore, because suppliers often draw on sample sources beyond their own panels, buyers must engage in conversations with suppliers about any change in sample source.

We found two reasons worth noting for lack of comparability but not powerful enough to fully explain differences across panels:

• Panelist longevity: newer recruits are more likely to give positive purchase intent towards concepts.  The longevity profile differed dramatically across panels.
• Those motivated by monetary rewards to take a survey appear to be more positive to concepts and some panels stress such rewards while others do not.

Some feared that there is a small group of “professional respondents” on everyone’s panel, doing it for the money, and gaming the system rather than providing thoughtful answers

FoQ proves that this is not true. Overlap is less than thought. Over 80% of e-mail addresses appear on only one panel and the collective pool of unique e-mails in the US is estimated at something over 5.5 million.  For historical comparison, this is probably 2-4 times greater than the pool of mail panelists that NFO, HTI, and Market Facts collectively had in the 80s-90s.  Also, mostly people are motivated to join online research panels by a desire to share their opinions, rather than for the incentives.  Perhaps the most telltale finding is that those who take MORE surveys per month (up to 10) provide MORE thoughtful answers (i.e. less likely to straightline their answers or fail trap questions.)  In other words, if anything, being “professional” is a GOOD thing as it relates to respondent engagement with the activity of survey-taking.

In fact, as it turns out, the biggest cause of not providing thoughtful answers is long surveys!

Are people taking the same survey more than once?

On studies where qualification criteria are not very restrictive, “duplication” is mostly a single digit issue (depends on the panel or pair of panels) but if the qualification criteria are more specialized, it can more prevalent and damaging. The industry must adopt practices that will address this.

Are things going to get better in the near future?

Yes! We all feel the sense of urgency so The ARF and industry leaders who have contributed their time and expertise will continue; we are committing to a 90 day plan.  With the cooperation of other industry associations, we will provide a program with recommendations regarding metrics and business practices, templates, definitions, and training that will enable buyers and sellers to work together to bring the industry to a better place in terms of data quality, comparability, and the trustworthiness of online research results.

The commitment to Storytelling at Levi, Strauss

Here is an interview with Michael Perman, Senior Director of Consumer Insights, Levi Strauss & Co. who has trained over 7,000 on storytelling and who is conducting, with Pat Hanlon, the ARF Workshop, “Stories Inspire” on June 22nd in NY. The interview with Pat Hanlon can be found here.
Joel: Michael, you are a huge proponent of storytelling to convey insights, having said that “stories inspire”. What is your best story that shows this? A story about a story, so to speak…
Michael Perman: I arrived in Willamette Valley, Oregon in the grey days of winter 1986, having been sent there from “headquarters” to be marketing director for a failing but sizeable beef jerky company. The team there was mired in the past and sales were languishing. Analysis of the data yielded no insights, other than small, local competitors were gaining on us…and that was a clue. I spent about three months riding in trucks with small jobbers who sold candy, tobacco and jerky. What an interesting aroma. I met the owners of small convenience stores in small farm and lumber towns. I also met the people who shopped in those stores. About two months into the journey we learned about Hershey’s selling big and thick chocolate bars that provided better value to consumers. Those big sizes were doing really well. The insight was that mobile consumers’ appetites for larger sized snacks were growing. So, we created a brand called “Long Haul” that made giant sized snacks for people on the go. We designed a counter display that looked like a truck and developed a few TV ads. Sales soared and we ended up selling the company for a nice gain. I fell in love with research.

Joel: Can stories be used to convey quantitative research findings too?
Michael Perman: Yes, but it’s a matter of focusing on a small number of facts that are truly meaningful. Maybe even on specific metric about consumption or equity. Too many reports try to cover too much ground and people lose sight of the big ideas. Also, facts sometimes need to be validated with human connections…not always the other way around.

Joel: Can you describe the training you do at Levi Strauss and how it impacts the organization?
Michael Perman: We’ve trained more than 7,000 employees around the world on developing innovation from insights. We’ve taught them how to observe and listen to consumers, how to tell stories about their experiences and how to synthesize cogent themes. Empathy is a company value. That ethos helps us get grounded in the reality of our consumers’ lives.

Proving the value of listening…ABOUT Research

I came across a really interesting exchange of comments on Flickr (not Facebook or My Space or Twitter) from an irate person who joined an online research panel. There are 3 great lessons here:
1—how lack of dialogue can lead to a tremendous level of misinterpretation then distrust about a business’ motives, leading to active animosity
2—how people want to be heard and how conversation can explain, and calm these feelings before they get toxic and go viral
3—how important a commitment to listening is, or this never would have been caught.
OK, here is the conversation (slightly shortened but not too much so I could preserve the flavor):
IRATE ONLINE RESEARCH PANELIST
I am posting this to warn you about this company called XYZ Research. They are a market research firm that conducts polls and surveys for their clients.

I am taking the time to write about this and warn you about them.

…But the worst part is the feeling of being lied to, being deceived and cheated upon. I’d like to spare you this experience, so bear with me.

To make matters worse, I was getting many invites to surveys that were obviously not addressing me. Usually, when you begin a survey, there are a couple of questions to find out if you’re part of the target audience. If you’re not, the survey ends and you get no reward points.

Fair enough, but usually I had already answered quite a lot of questions, giving out personal information which is extremely valuable for market researchers, before being told that I didn’t “fit in”. To me, it seemed like a scam: grab my personal info off me, and then tell me to bugger off. We just took your data, but no, you’re not getting any reward.

Sometimes, they would just kick me out because “the number of participants had already been reached”. Fine, but why do they make me answer part of the survey and then suddenly find out they already have enough of them? Things were starting to smell rather fishy.

So what about those product tests they talked about when they enticed me to register with them? But now I’m thinking nobody who registered with XYZ Research probably ever received anything.

They took my data and sold it to a couple of big-money companies. I got no reward. I feel lied to and cheated upon.

Today, I deleted my account. I have no idea what they are going to do with my personal data.

I got this e-mail confirmation (screenshot above), and it says it will take them a couple of weeks to delete my account. They must be joking: deleting an account is a database operation that takes a fraction of a second.

To me, XYZ Research is a scam operation. Don’t fall for them. I’ve certainly learned my lesson.

Pass this on to your friends to warn them if you think they’d fall into XYZ Research’s clutches.

EMPLOYEE RESPONSEDear Mr.

I work for XYZ Research.com.

We have seen your post on Flickr and feel very concerned about what you have said and of course by how disappointed you have been by our services.

XYZ Research is a panel operator that works with the biggest market research agencies in the world and is a listed company that employs nearly xxx people worldwide

Data privacy is at the heart of our business so we would like to ensure you that when you answer a survey on XYZ Research, your data are transferred to our clients in a anonymous way for statistical purposes only. If you cannot finish a survey for any reason, your questionnaire is considered as incomplete and your data is not transferred. Even XYZ Research does not keep this data.

After a member unsubscribes from our panel, all your data are removed from our database after 6 months (this is in case there has been an error and the user wishes to reopen their account). You can also request from us that all your data be removed immediately.

Cancellation of an account is immediate but in the past due to technical problems, some members have received emails from us a couple days after they unsubscribe. In order to prevent frustration in this unfortunate case, we have decided to tell users that the complete unsubscription process can take up to two weeks to avoid any bad surprises, even if this is very unlikely

Surveys work with quotas for statistical reasons. For example if the study requests 100 men aged 25-35 years old, if you try to finish the survey as the 101st person, the survey will close. It is impossible to invite only the exact number of respondents required, as response to surveys from respondents can vary according to many criteria (day, time, target, weather,..)

We try to keep the surveys below 20 minutes and we strongly recommend that our clients do so too, we also oppose surveys that would take more than 45 min to answer.

The number of products to test is shown on the test product page together with the list of testers. You can also check the opinion sections where testers write reviews about the product they received from XYZ Research.

XYZ Research is not really a place to make money. Our reward schemes simply aim to thank our members for giving their opinion and helping brands to improve their product and services. Nevertheless we send thousands of gift vouchers every week to our members and this is a very significant cost of our activity.

Once again we are very sorry that you didn’t enjoy your memberships on XYZ Research as many members have done worldwide over the last 8 years now, and hope that this email has clarified some important issues regarding our service.

RESULT (PEOPLE WANT TO BE HEARD)Thanks, Laurent, for taking the time to reply to my post. It is much appreciated that there is a human being at your company who listens to users.

Cracking the code; creating great brands

Patrick Hanlon

My interview with Pat Hanlon, author of Primal Branding on the role of stories at creating great brands.

Joel Rubinson: You have said that a great brand needs a great creation story. What do you mean by that and why is it so important?

Patrick Hanlon: Actually, what I have said is that great brands have great brand narratives. The ‘creation’ story is critical, because it is the foundation of the brand narrative. Every company was started somewhere by someone who had a great idea that was written on the back of a napkin, on an envelope, they thought they had a better way of doing things. Often these are superhuman stories of great courage—or even wrong-mindedness (Steve Jobs quit college, Bill Gates and Edwin Land dropped out of Harvard). We all know the stories of how eBay started in a spare bedroom, Google started in a dorm room, HP started in a garage, Burt’s Bees in a chicken coop, Phil Knight sold Nikes from the trunk of his car. These humble beginnings not only stir something in the American imagination. They also provide a frame for who you are, and what you stand for. This is critical in today’s world, where Enron, tainted Chinese products and faked identities on the Internet have started everyone wondering “Who are you—no, really?!”.

Avoid Marketing “Cling-ons”

A Klingon is one of the bad guys in Star Trek; a Marketing “Cling-on” is also dangerous…someone who clings on to rules of thumb from the past, believing the world is really not so different after all.
Trekkies know what a Klingon looks like, but how about a Marketing “Cling-on?” Here are some examples.
In a recent column in Ad Age, Al Ries talks about “Metrics Madness”. He contends that mathematics is logical but marketing is not; it is a discipline that can only be learned by exposure to marketing case histories over an extensive period of time. OK, from Star Trek to Yoda.
Ries says, “there are many situations where the ROI is zero and yet the marketing expenditures are worthwhile…Suppose a leading brand spends $50 million a year on advertising. And suppose that brand’s market share doesn’t budge at all. Was that $50 million wasted? Not necessarily.” Paraphrasing, he says that advertising is the best way to insure brand leadership positions.
Time travel…very 1980s. Cling-on to a simple world—consistent commitment to brand advertising and positioning and the ship will stay right on course.
In this economy, $50MM budgets do NOT remain sacrosanct without proof and optimization. Where is social media in this brand leadership blueprint? Certainly there is little insight about social media in case histories “over an extensive period of time” (Twitter is like two years old, right?) Math and marketing are oil and water? Isn’t Google basically math? Isn’t Tesco overtaking Sainsbury largely a triumph of insight emerging from terabytes of shopper data?
Another example of Marketing Cling-ons. A recent study from McCann Erickson UK reports that 67% of marketing executives confess they do not know enough about social media and 86% “admit” it is here to stay. Wow! Wouldn’t you like to know who the 14% are who do NOT think social media is here to stay? (“There’s no place like home, there’s no place like home…”) Wouldn’t you also like to know how many of the 33% who say they DO know enough about social media are even on Twitter or active on Facebook? I’m betting a lot aren’t.
One final example of a Marketing Cling-on. In a blog posting, I saw the quote that “social media is just one boat on the ocean of word of mouth” (implied, which has been around for countless years…). Social media is BIGGER than word of mouth! It has forever changed the way we live our lives, and how many marketers think, turning marketing from an announcement to a conversation. Come on people, skate to where the puck is going! Social media has put the human at the center of marketing thinking, placing the marketing research function at center stage. Mommy bloggers brought down a major ad campaign via social media. Newsrooms and tweeple are constantly monitoring social media for breaking stories. Susan Boyle has over 100 million views on youtube. Obama is president. This is NOT the world of word of mouth that has always existed.
Oh, by the way, this week it was reported that traffic to Twitter exceeded traffic to the NY Times. Two hours ago, I just saw a link posted by Pete Blackshaw of Nielsen Online in FB that “Hulu Grows Nearly 500% Since This Time Last Year”. Need I say more?

You can follow @joelrubinson on twitter.

In a Recession, Brands Must Become Loyal Friends

This is part two of a blog series on marketing in a recession. for part one, click here.

In my last blog posting, I made the case that there will be “no normal” to return to, once the recession is over.  People’s heightened search for value and economizing have changed brand choices and shopping patterns.  Private label brands are likely to keep much of their share gains as retailers seize their opportunity and squeeze marginal national brands out of the assortment.  Coupon use is up with online coupon sites have more than doubled their traffic. The media landscape will keep “media-morphising” as the long tail gets longer, as social media becomes mainstream and as TV adopts digital, 2-way technology platforms. 

However, the news is not grim for all national brands.  Brands that have become permanent casualties (like Circuit City and Pontiac), “free up” share points for remaining brands to gobble up.  There will be winners (and not just the private label brands) coming out of the recession. 

What can YOU do to be one of the winners?  Create momentum by starting to build the right kinds of relationships now.

1—Understand how people feel and befriend them.  At the ARF annual conference, Prof Zaltman (video here) showed results from his ZMET method that dramatized the pain; people see the economy metaphorically as a malevolent force of nature like a tornado/avalanche/tsunami…one that is destroying the American Dream, making them feel insecure about their future, and helpless.  Life has become much more complicated and anxiety-filled.

My recommendation… your brands need to befriend people.  Hyundai’s sales were up 5% in Jan/Feb as they offered to take over car payments if someone lost their job.  Jos A. Banks offered to take back the suit. Value brands and value offerings (Wal-Mart, Miller High Life, Bounty) have been reported to be doing well. Some brands become psychological “comfort food” by stressing family values (as Prof. Quelch from Harvard suggests); Shredded Wheat cereal is talking about putting the “no” in “innovation.  Still others are stressing sustainability.

Marketers should try to befriend people; sooth them, simplify their choices, help them make ends meet, and give them back a measure of control and dignity. This recommendation goes beyond the ad and the brand positioning; to fully build this type of relationship, marketers should find ways to create more conversation via social media and communities centered around the challenges and joys that people want to talk about.  Use research to gain insights into the right way, of these options, to activate a “befriending” approach for your brand.

2—Understand what has worked.  Brands that increase their advertising support while their competitors are cutting back come out of the recession in stronger market share positions.  In other words, this is the time to ramp up! This was the conclusion by Prof. Gerry Tellis from a re-analysis of 40 studies on marketing in a recession.  Burger King and Procter are two companies that are reported to be buying more, not fewer impressions, and they are doing it at very attractive rates (Procter is reported to be getting more impressions and actually spending less.)  However, referring to point 1, you might want to find a message that is timely rather than continuing pre-recession messaging.

3—Be bold and imaginative.  I know it’s hard to take risks in this environment, but once you accept that there is no normalcy to return to, it becomes easier.  For example, the coffee wars just heated up with McDonald’s announcing a $100MM ad campaign for the launch of McCafe and Starbucks simultaneously announcing an aggressive defense of their product superiority.  Burger King is greatly increasing messaging with very edgy Crispin-Porter work. Harley-Davidson is now reaching out to different demo groups (females, minorities) in a bold attempt to expand their base of brand enthusiasts…a risky move, but “playing it safe” is perhaps the riskiest strategy of all.

I think it’s time to reverse the marketing mindset about the directionality of loyalty; stop asking consumers to be loyal to your brand and start demonstrating that your brand is loyal to them!  Create advertising, conversations, and programs that show you care.

Research needs a seat at the social media table

The Research profession has perennially sought a “seat at the table”.  Last Tuesday, I had a seat at a (different kind of) table.  I was part of a keynote morning panel on innovation at Ad:Tech in San Francisco.  I was the only researcher there, sitting next to some pretty impressive people…the CEO and founder of BabyCenter (over 6MM uniques/month), VP Branding for Adobe, and SVP Audience/CTO for Hulu.  In other words, Pete Blackshaw EVP of Digital Strategic Services of Nielsen Online, the moderator, put together a “table” with a CEO, head of marketing, head of technology, and research leader.  I knew this was going to be an acid test of the ARF Research Transformation message in front of a young digital marketer audience.

The panel’s blend of perspectives turned out to be an effective mix, based on the tweets (and other feedback.) Tweets:
–I’m a professional cynic, but Pete Blackshaw’s “Innovate or Die” was one of smartest panels I’ve heard in a long time. #adtechsf
–Too much to say about the Innovate or Die roundtable. Obama as brand?Layer tennis? Database of wisdom of moms? Good stuff. #adtechsf
–@peteblackshaw. Fab roundtable keynote at #adtechsf
– Joel Rubinson -innovation comes from storytelling, brands should use consumer story to get others to tell their own story. Yes! #adtechsf
–@joelrubinson was really smart on the panel on innovation today #adtechsf

When I got back to the office, people asked, what did I say that had such impact?  Really all I did was stay on message with the ARF Research Transformation initiative.  I talked about how research does two things: quantifying the expected and listening for the unexpected.  I said that innovation starts with the unexpected and that happens by having research broaden its mission beyond the activity of surveys to include listening to social media and via communities.  Then I talked about communicating insights in unforgettable ways via storytelling.  I talked about the need to put humans at the center of our thinking rather than our brands.  Especially in social media, people control the agenda; they talk about what they want to talk about.

Last but not least, I mentioned that social media will transform marketing organizations because it lives at the intersection of advertising, PR, customer care, and perhaps most of all, insights.

Separately, I note that most marketers are still toddlers regarding social media strategies.  Facebook and Twitter are brand/celebrity-centered while community sites are often interest-based (e.g. Dove Campaign for Real Beauty, Beinggirl). Some marketers are big in Facebook but have little presence in Twitter.  Some are big in Facebook thanks to fans (Coke, Ford Mustang).  Some have had their brands hijacked by political causes. Some focus on viral videos (e.g. Blendtec, Cadbury gorilla).  Some build community everywhere (e.g. Harley-Davidson). In some cases the passion point is at the master brand level (e.g. Coca-cola) and for others passion is at the sub-brand level (e.g. Ford Mustang, McDonald’s French fries).

So, consider this:

1.      social media will transform organizations by providing a new organizing principle around brand/consumer conversation

2.      most marketers are still struggling to find a coherent social media strategy

3.      The passion points that could be at the center of a social media strategy might or might not yet be identified

4.      insights are the rich exhaust of that conversation

To mix metaphors, the insights function must buy a first class ticket before the social media train leaves the station and that’s a table we BETTER get a seat at! Ad:Tech reactions validated the importance of the research/insights role regarding a marketer’s social media strategy.  The ARF has no higher priority than to continue to work at a listening blueprint, including the relationship of social media and insights.

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