Which Success Levers Should the Buy Side Pull Hardest?

I put this slide together a few years ago to try to answer the same question What are these levers each worth relative to one anotherAcross all the campaigns around 80 brands several hundred campaigns aided by TRA on my watch the average improvement in incremental sales ROI was 28 This was caused by downshifting on demos and upshifting on reaching purchasers In many of those cases the purchasers we were trying to reach were Heavy Swing Purchasers HSPs people who buy the brand only occasionally which Joel Rubinson has given the much better name quotMovable MiddlequotContext effects are shown on this slide based on two studies of the increase in advertising effectiveness caused by placing an ad in an environment where there is alignment between the psychological characteristics of the ad and the context using the RMT DriverTag system 36 is the average of ROI effects across studies done by Nielsen NCS and others In this case we also have branding effects which tend to be higher based on a study done for one of the world39s largest advertisers by 605Interestingly the context effects show a higher impact than the targeting effects But this does not tell the whole story as I39ll explain after finishing our discussion of this slideThe one creative effect shown on the slide is the effect of what I call quotcreative weedingquot What that means is yanking specific creative executions as soon as ROI data show that they are not producing the sales effects desired This depends on the purchase cycle of the category involved and on average it39s about three months before the yanking takes place This weeding effect reflects removal of the bottom ad performers as opposed to the creating of terrific new ads But notice that it has more positive impact than either targeting or context How much greater would the impact be if we were talking about the impact of a terrific new ad It could be infinitely higher if the ads being used were all duds Logically the impact of better new creative has got to be the most important lever to pull Too bad one never knows whether it is a better ad until it39s too lateWhy is this the case Why doesn39t pretesting tell us in advance of spending the first media dime The main reason is because pennywise poundfoolish thinking has caused pretesting to not always be used nowadays This is an easily fixed problem Pretesting can be very quick nowadays and its typical cost range of 35K65K compares with how much will be spent if the dud ad airs and runs for three months before it is weeded that could typically be a waste of at least 3000000 media investmentBut the other reason is that pretesting is not a perfect predictor of ROI Done by one of the best pretesting companies pretesting is nearly perfect in predicting persuasion effects but not perfect in predicting immediate sales effects This is because persuasion is the key metric in branding the turning point in the funnel journey And all branding effects need time to simmer In the work published by ARF and done by TRA and Mars ads which had all been pretested by the best pretesters had the following average results a third had no sales effect at all in the first months of the campaign and were weeded a third had decent sales effect and a third had excellent sales effectConclusion Creative is what deserves the most attention Research that helps the creative process deserves much more attention than it getsLet39s look at the final lever on the slide above Fast reach let39s say reach per average day has more sales effect than slow reach and far more sales effect than low reach for obvious reasons By why should the speed of the reach make a difference It39s because of that phenomenon Erwin Ephron told us about recency The faster the reach the more recency no matter when the prospect goes shopping This is demonstrated in an ARF study I did with Dave Poltrack CBS and Leslie Wood Nielsen NCSLook at those short green lines and how the fast reach high rated schedule short green lines hover above the short red lines of the slow reach low rated schedule This is the effect of recencyImportantly fast reach can be achieved not only by using high rated programming but it can also be achieved by using a fast reach optimizer such as Simulmedia39s VAMOS system and our own OptiBrain systemNow let39s get back to the pin we put in it above comparing targeting and context effects for size There are three different classes of targetingTargeting by buying whole programs or websites content targetingTargeting based on deterministic 11 purchaseintentmotivation data in an addressable medium ID targetingLookalike targeting quotLALquotThe average 28 ROI lift shown above is for content targeting When the movable middle is targeted deterministically based on purchase history in an addressable medium the results can be far higher as we can see in the following slideAnother case where deterministic addressable targeting was used this time targeting IDs of people who based on their online content consumption had the same motivations as the ads used also showed a quintupling effectLookalike targeting however has rarely in my experience achieved better than 10 ROI lift So the size relationship between targeting and context varies depending on what kind of targeting one is talking about If it isn39t deterministic and addressable targeting and context are about equal to each other and to fast reach All should be used together And developing better creative deserves the most attentionClick the social buttons to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Which Success Levers Should the Buy Side Pull Hardest?

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Bill Harvey

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