xmos 2004 creative imperatives, sales impact (boston)
TRANSCRIPT
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XMOS 2004: XMOS 2004: Creative Imperatives, Creative Imperatives,
Sales ImpactSales Impact
XMOS 2004: XMOS 2004: Creative Imperatives, Creative Imperatives,
Sales ImpactSales Impact
IAB 2004 Road Show - BostonIAB 2004 Road Show - Boston
Greg StuartGreg StuartSeptember 2004September 2004
Insights from the Cross Media Optimization Study series
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Test Your Internet Knowledge:Test Your Internet Knowledge:Myths or TruthsMyths or Truths
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Internet’s: Truth or MythInternet’s: Truth or Myth
Q: Internet’s total reach will surpass Cable TV’s reach in 2004
Truth! Internet is projected to have greater penetration than Cable TV this year
eMarketer sourced - AC Nielsen 12/03 for Cable & NNR, comScore, etc for Internet
InternetInternet
Radio & Television
Cable TV ~ 67%
98%
Magazines 84%
Newspapers 55%
2004: 68%2004: 68%
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Internet’s: Truth or MythInternet’s: Truth or Myth
Q: Online Advertising is the Fastest Growing Medium?
Truth: Absolutely!
Medium Est % Growth
Internet 15.8%Spot TV 14.3%Radio (Ntwk, Spot, Local) 11.5%Cable TV 9.9%Network TV 9.8%Syndication 9.8%Outdoor 8.4%Magazines (Consumer) 6.4%Newspapers (Nat’l & Local) 6.4%Magazines(B2B) -.1%
Source: TNS Media Intelligence/CMR2004 Estimated Growth versus YAG
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Internet’s: Truth or MythInternet’s: Truth or Myth
Q: In 6 of the 12 XMOS Studies, Online was the most Cost Effective Medium?
Myth! Actually, in 9 out of 12 studies Online was proven to be the most cost effective medium in influencing a brand’s branding or sales metrics
$Source: IAB XMOS
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Internet’s: Truth or MythInternet’s: Truth or Myth
Q: 50% of Households who access the Internet have Broadband?
Truth! By 2005, nearly 40 million homes, or 53% are expected to have Broadband access.
Source: eMarketer Nielsen NetRatings
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Rich M
edia Share of Ad M
arket
Broadband Share of Internet Users
Rich Media Share of Ad Impressions
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Internet’s: Truth or MythInternet’s: Truth or Myth
Q: According to Tipper Gore, “Kids are great…with the Internet and all, they practically raise themselves.”
A: Myth! It was actually Homer Simpson who realized this unique capability of the Internet.
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10 Myths 10 Myths
1. Online is not a Branding Medium2. Online is not a Mass Reach vehicle3. Online does not generate offline sales4. We need to get the job done in our primary media5. Online is less impactful/efficient than TV6. Our Target audience segment is not Online7. We are already Online; we have a web site8. The sales channel won’t let us use Online9. We don’t know how to compare Online and Offline10. The client doesn’t like Online
www.iab.net/2004xmos
Loves
Demands we
Mix
FactsFacts
More
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“We are a people of tradition, but the past no
longer serves us. Learn from the present and
focus on the future.”
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The Media Landscape The Media Landscape Has ChangedHas Changed
Have you re-evaluated your marketing mix?
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The Past is OutdatedThe Past is OutdatedIn the Beginning, Media Mesmerized UsIn the Beginning, Media Mesmerized Us
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There was a time when radio could hold attentionThere was a time when radio could hold attention
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Television then… Television then… TV Now…TV Now…
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Television then… Television then… TV Now…TV Now…
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Advertising WallpaperAdvertising Wallpaper
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It takes a lot of courage to release the familiar and It takes a lot of courage to release the familiar and seemingly secure, to embrace the new. seemingly secure, to embrace the new.
Alan Cohen
But there is no real security in what is no longer But there is no real security in what is no longer meaningful. meaningful.
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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!
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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)
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The IAB XMOS ProjectThe IAB XMOS Project
2 ½ years, 15 major brands, 18 ad agencies, 27 online publishers,
thousands educated, million$ optimized,billion$ in sales gained
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XMOS 1.0Unilever’s Dove
XMOS Branding - 1st waveMcDonald’sColgate TotalKimberly Clark Kleenex AstraZeneca NexiumXMOS Branding - 2nd waveUniversal Pictures Home Video INGVeriSignSensodyne (UK)Carlsberg (Denmark)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
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Conducted with Numerous Agency PartnersConducted with Numerous Agency Partners
Zubi
Saatchi
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Thanks to the XMOS I SponsorsThanks to the XMOS I Sponsors
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Better ResultsBetter ResultsBetter ResultsBetter ResultsSame BudgetSame BudgetSame BudgetSame Budget
The Conclusion
8% to 34% increases in Awareness and Brand Image8% to 34% increases in Awareness and Brand Image
5% to +1000% increases in Purchase Intent5% to +1000% increases in Purchase Intent
Plus, increases in Sales for Ford, P&G, Kraft, morePlus, increases in Sales for Ford, P&G, Kraft, more
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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 actual optimized level, but considered an interim increaseNot the actual optimized level, but considered an interim increase
**** 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
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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
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Lighter TV users are Lighter TV users are Heavier Online UsersHeavier Online Users
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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
CoverageCoverage
EffectivenessEffectiveness
ValueValue
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Build awareness, reinforce key image attributes and boost purchase intent
Generate sales
Brand differentiation and sales
Generate purchase intention and sales
Marketing ObjectivesMarketing Objectives
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Universal Home Video – E.T. DVD ReleaseUniversal Home Video – E.T. DVD ReleaseLaunch 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
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The Power of Good Creative The Power of Good Creative
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Online was Better at Affecting Online was Better at Affecting Overall Branding GoalsOverall Branding Goals
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)
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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
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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
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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.
CPM ($ per Thousand) 100 299 169
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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
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Jell-O Ad Examples Jell-O Ad Examples
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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%
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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%
Sales Lift: Sales Lift:
++7.5%7.5%
Incremental Volume
+.1 oz Online advertising resulted in a 7.5% sales volume lift
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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
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The Coffee-Mate Online CampaignThe Coffee-Mate Online Campaign
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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
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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
Sales Lift: Sales Lift:
++10%10%
Sales Lift: Sales Lift:
++10%10%
Online advertising resulted in a 10% sales volume lift
Incremental Volume
+1.3oz
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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
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The All New 2004 The All New 2004
Ford F-150Ford F-150
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“The Most Important Launch In the History Of Ford”
- Bill Ford
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One Day Reach = 40%!!!One Day Reach = 40%!!!Digital
Roadblock
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TV vs. Online RoadblocksTV vs. Online Roadblocks(Purchase Intent)(Purchase Intent)
Both are effective
But the roadblock
is more cost efficient
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Individual Media Effects Led by OnlineIndividual Media Effects Led by OnlineBranding Metrics Summary – 1Branding Metrics Summary – 1stst Two Mos. Data Two Mos. Data
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
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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.
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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
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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
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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
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The Evidence is In: The Evidence is In:
Online DRIVES Sales!Online DRIVES Sales!
Sales lift:Nexium 6.0%Jell-O 7.5%Coffee-mate 10.0%Olay 12.5%*Ford F-150 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
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The The Power of Power of
Good CreativeGood Creative
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How Bad is Online Creative?How Bad is Online Creative?
Of the last 5 XMOS programs, creative testing was done prior to the study launch
Only 1 brand’s ads required no adjustment
2 brands found 1/2 the ads were not effective
Diluting the effectiveness of the campaign
2 brands discarded ALL ads & started all over
Both developed better ads that scored much better
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Nothing Else Matters if Creative is WrongNothing Else Matters if Creative is Wrong
BB
AA
Better creative can make the difference between success and failure
Source: XMOS
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Colgate Purchase Intent for Online OnlyColgate Purchase Intent for Online Only
Ad B, 2
Ad A, 20
0 5 10 15 20 25 30
PurchaseIntent
Percent that Intend to Buy Colgate
*sig
Better creative can make the difference between success
and absolute failure
Ad AAd A
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Another Case in Point: OlayAnother Case in Point: Olay
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Online AdsOnline Ads
AD4
AD5
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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
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Revised Ads Produced Better ResultsRevised Ads Produced Better Results
Try the “Glance test”
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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
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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
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The Old Marketing Mix Is The Old Marketing Mix Is NO LONGER OPTIMALNO LONGER OPTIMAL
Billions are lost due to sub-optimal marketing mix
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What Does XMOS Really Mean to the Industry?What Does XMOS Really Mean to the Industry?
There is $17 Billion to
$85 Billion$85 Billion of
InefficiencyInefficiency in the
U.S. Advertising Marketplace today
Assumes total U.S. Advertising Budget of $250 Billion and a minimum recorded Assumes total U.S. Advertising Budget of $250 Billion and a minimum recorded gains from optimization of 7% for KCC (250B x 7% = $17B) up to 34% for Colgate gains from optimization of 7% for KCC (250B x 7% = $17B) up to 34% for Colgate (250B x 34% = $85B)(250B x 34% = $85B)
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What If Brand Optimized & Competitor Didn’t?What If Brand Optimized & Competitor Didn’t?Assumes category growth 3%, optimized sales increase of 11%Assumes category growth 3%, optimized sales increase of 11%
Optimized Non Optimized
Brand’s Share Brand’s Share
Starting Share 25.0% 25.0%
Year I 26.9% 24.4%
Year II 29.0% 23.7%
Year III 31.3% 22.9%
Year IV 33.7% 22.1%
Year V 36.3% 21.2% Overall Sales ChangeOverall Sales Change +69%+69% -2%-2%
Example assumes overall category growth of 3% and average annual gain in sales based on XMOS Example assumes overall category growth of 3% and average annual gain in sales based on XMOS
studies gain of 11% in total sales growth due to Online. All other variables assumed constantstudies gain of 11% in total sales growth due to Online. All other variables assumed constant
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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
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Beware of Beware of Media Planning InertiaMedia Planning Inertia
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Updating last years mix
with minor tweaks is NOT
a solution
Instead, use zero based media planning
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Accountability is not measurement…
It is doing something about the measurement.
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Make Sure EVERYTHING Works!Make Sure EVERYTHING Works!
Same Media Budget Same Media Budget 310% Increase 310% IncreaseSource: InsightExpress
Imps (M)Brand
PerformanceContri-bution
Creative 1 10.0 -15.9% (1.59) Creative 2 10.0 13.8% 1.38 Creative 3 10.0 11.3% 1.13
Total 30.0 0.92
Imps (M)Brand
PerformanceContri-bution
Creative 1 -- -- --Creative 2 15.0 13.8% 2.07 Creative 3 15.0 11.3% 1.70
Total 30.0 3.77
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Next Steps: New Round of Studies Next Steps: New Round of Studies
XMO$XMO$Sales & BrandingSales & Branding
Seeking 4 marketers to measure SALES & Branding impact of all media.
The IAB will pay half the cost of each study
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Closing ThoughtsClosing Thoughts
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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 actual optimized level, but considered an interim increaseNot the actual optimized level, but considered an interim increase
**** 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
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A bit of advice given to a young Native American at the time of his initiation:
‘As you go the way of life, you will see a great chasm.
Joseph Campbell
Jump.
It is not as wide as you think.’
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ThanksThanksThanksThanks
IAB 2004 Road Show - BostonIAB 2004 Road Show - Boston
Greg StuartGreg StuartSeptember 2004September 2004