"Whom Should I Be Targeting?": Revisiting an Important Question - Bill Harvey - MediaBizBloggers

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In earlier blog postings we have written about this broad subject before. Today we will peel the onion back a little further, exposing some additional layers worth considering.

Everyone has always known targeting is important. My 1979 article predicting addressable commercials was eventually followed by real technologies from NCM and Invidi in television, and by TACODA and everybody and his cousin on the Internet. However, today's privacy microscope (predicted in one of my 1990s articles "Don't Step On The Privacy Landmine" – but many did) has interrupted the rollout of single-household/single-browser targeting, and so today as I write about targeting what I mean is the improved selection of TV programs so as to increase the percent of total impressions that fall upon the households/people you want to reach.

Now that TRA is matching set top box data with actual purchase data at the individual household level (without ascription/fusion/estimation/inferencing), advertisers/agencies have real choices. Now you can reach heavy category purchasers, heavy brand purchasers, light brand purchasers, heavy switchers in the category, a specific competitor's purchasers, heavy category purchasers who are your brand's light purchasers, etc.

The main focus of today's post is to better explain TRA's concept of Heavy Swing Purchasers (HSPs), a target choice that TRA invented. The most interesting thing about HSPs is that early TRA analyses continue to consistently show that if one buys programs with high indices against your brand's HSPs, this is correlated with higher ROI for your brand.

One could, without or before understanding the phenomenon any further, simply use the HSP targeting approach for this reason – that it increases the odds of higher ROI – something that so far has not be proven to apply to any other TV targeting scheme e.g. W25-54, etc. (I was involved in some work for TACODA a few years ago which showed a few cases in which Behavioral Targeting increased ROI on the Internet, but nothing as consistent as the HSP pattern in TV.)

Why does HSP work? To answer this we need a better understanding of HSP. Many people think that HSPs are heavy switchers. This is not what they are.

If one analyzes a category and finds heavy switchers, one will find that most of these people are heavy switchers because they have a strategy of buying at the lowest price and act as if they perceive that all brands in the category are at parity in terms of the benefits delivered. Aiming at that group with media does not make much sense since media deliver messages about brand value, and these switchers start from the fixed belief that there is no brand value, so such messages would be wasted. Besides, the three-times-larger promotion budget is already aimed at these people, so why aim media money at them as well?

HSP is not heavy switchers. If it were, it would probably not be correlated with ROI.

HSP, although it is a TRA invention, was inspired by an earlier invention by a man named Yanni Hofmyer. Yanni invented Conversion Theory, a theory of how advertising works. He based this theory upon the stages of religious conversion – since before becoming one of the world's leading advertising researchers, he was a minister.

Applying Conversion Theory to brands, Yanni found how to ask a battery of 5 questions that would identify the degree to which an individual was attracted to a brand. This allowed him to identify a brand's Convertibles – people not yet loyally purchasing a brand, but predisposed positively to that brand.

He reasoned that Convertibles would be the most sensible people to target media ad messages at, because these are the people most likely to increase their purchase of the advertised brand as a result of receiving such messages.

When we were studying Yanni's work a few years ago there had already been thousands of studies done worldwide which licensed his Conversion Scales.

I was struck by his work because it resonated with one finding I had come up with years back when I was EVP of BRI (forerunner of U.S. TGI and MRI). BRI one year re-interviewed 15,000 adults who had filled out a BRI questionnaire six months earlier. This allowed us to see brand switching without depending on memory.

BRI's brand usage scale was "Put a 1 next to your first choice brand, a 2 next to your second choice brand, and a 3 next to any other brand(s) in the category that you would consider."

The finding I had come up with was that, across 23 CPG categories, 82.3% of those who made a brand a "1" in the re-interview when it was not a "1" six months prior, had given that brand a "2" six months prior.

In other words, I concluded: "Let's pick media to target our brand's #2s – people who consider our brand their second choice – because that's where our dollars would do the most good work."

This was a very similar idea to Yanni's. Both ideas – Second Choice Brand (Norton Garfinkle's idea – he was the founder and CEO of BRI, coming out of DDB) and Convertibles (Yanni Hofmyer's idea) were based on survey questionnaires.

Enter the new era – TRA. Suddenly, we have hard purchase data to play with. How would we come up with something like Convertibles based on purchase data?

The answer: provide TRA clients with a Dashboard allowing them to pick whatever category heaviness definition they wanted, and whatever brand "share of requirements" (SOR, the brand's share within the household) definition they wanted, by means of a few clicks. The idea was clients can filter for category heaviness (always a good idea, due to the 20/80 rule which Norton had discovered – the heavies are a small group accounting for the lion's share of the dollars) and then pick homes with a slight proclivity to buy the client's brand. This would be the TRA version of Convertibles. We called it Heavy Swing Purchasers, the "Swing" idea coming from the idea of Swing Voters as used in all political advertising – spend your money where it can make a difference, not where behaviors are so fixed the dollars will be wasted.

We have recommended that our clients use our Media TRAnalytics™ to set 1-75% SOR as the criterion for the "Swing" part, and the top 3 boxes in terms of category heaviness, whatever the defaults happen to be in the particular category. Of course, all the defaults are customizable by the TRA client. The reason for our use of 0-75% SOR is to maximize sample size (vs. using say 50-75% which might be closer to the "Second Choice" definition).

As we go forward, we and our clients will be experimenting with a great variety of different settings for HSPs and other refined targeting schemes, some of which we will be able to report here.

The one thought I'd like to leave you with is that HSPs are NOT heavy switchers per se. They are purchase data analog of Convertibles.

Bill Harvey has spent over 35 years leading the way in the area of media research with special emphasis on the New Media. Bill can be contacted at bill@traglobal.com.

Read all Bill’s MediaBizBloggers commentaries at Bill Harvey - MediaBizBloggers.

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