FIVE KEYS TO EFFECTIVE ADVERTISING
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1 PLEASE WAIT. THE WEBINAR WILL BEGIN SHORTLY. FIVE KEYS TO EFFECTIVE ADVERTISING MAXIMIZING CREATIVE WITH CONSUMER NEUROSCIENCE TOOLS Leslie Wood, Ph.D. Chief Research Officer, Nielsen Catalina Solutions Dr. Carl Marci EVP/Chief Neuroscientist Nielsen, Consumer Neuroscience
2 FIVE KEYS TO EFFECTIVE ADVERTISING Webinar: October 25, 2017 Leslie Wood, Ph.D. Chief Research Officer, Nielsen Catalina Solutions
3 Who Is Nielsen Catalina Solutions? All Outlet Purchase TV Viewership Verified HHs 90 Million HHs Frequent Shopper Card Data Target, Optimize In-Flight & Measure ACTIVATE NCS DATA ON ANY MEDIA PLATFORM Target & Measure CPG Measure ROAS Only ONLINE MOBILE TELEVISION IN- PRINT RADIO STORE CRM Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 3
4 Big Question: Do Advertising Basics Still Matter? When it comes to driving sales, which of the advertising principles are most important? Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 4
5 Meet the Studies Meta-Study #1 Objective: Determine the relative contribution that a campaign s creative and media factors might have on sales. Nearly 500 CPG campaigns that ran in 2016 and Q1 of 2017 all REAL DATA! All major media platforms: linear and addressable television, online digital and video, mobile, magazines and radio. Multiple Analyses on all: Sales Effect 13-Cell Segmentation Decompositions to isolate the effects of the media from the creative elements Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 5
6 NCS Connects the Media People Consume With the Products They Buy Exposure Data NCS Publisher Data, Nielsen Media Data Buy Data Set Top Box Data 4.3 MM HH Mobile 80 MM HH Catalina Frequent Shopper Card Data Digital 100 MM HH Client Proprietary Print 50 MM HH Radio 29K HH Anonymous Single Source Households 90 MM HH Nielsen Homescan All-Outlet Data Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 6
7 How Do We Know if Advertising Drove Sales? 1 NCS connects the media people consume with the products they buy 2 Match exposed & unexposed HHs on hundreds of variables to isolate ad impact Matched on 500+ Variables 3 Measure exposed and unexposed sales to determine incremental sales impact +14% Exposure Data Buy Data Demographics Purchase Cycle +4 % Unexposed HHs Exposed HHs Anonymous Single-Source Exposed Household Product Preference Campaign Campaign Start End Incremental Sales Lift Unexposed HHs Exposed HHs Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 7
8 Percent Sales Contribution by Advertising Element Context Targeting 2% 9% Recency 5% Reach 22% Creative 47% Brand 15% Source: Nielsen Catalina Solutions 2017; Period 2016-Q Nearly 500 campaigns across all media platforms. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 8
9 Balance of Creative vs. Media Then & Now 2006 Project Apollo 2016 Q Media 15% "Other" 20% Creative 65% Media 36% Creative 49% Brand 15% Source: Nielsen Catalina Solutions 2017; Period 2016-Q Nearly 500 campaigns across all media platforms. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 9
10 Traditional Lift Calculation $$$ REACH INCREMENTAL $/HH TOTAL $ LIFT Reach alone doesn t discriminate for Timing (Seasonality, Flighting) or Targeting Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 10
11 What is the Sales Productivity Metric? INCREMENTAL SALES EXPOSED CATEGORY TRIPS PRODUCTIVITY METRIC Unexposed HHs +14% Exposed HHs Exposed Purchase Occasions Unexposed Purchase Occasions 28 Days Prior Incremental Cents per Exposed Category Purchase YARDSTICK FOR INCREMENTAL SALES PER EXPOSED PURCHASE Weak Creative Less than 2 cents Average Creative Between 2 and 7 cents Strong Creative 7 cents or more Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 11
12 Media Delivery and Creative In Context Drive Incremental Sales CALCULATION USING PURCHASE OCCASIONS $$$ MEDIA FACTORS Coverage (Reach) of Purchases within X Days CREATIVE FACTORS Incremental $ per Exposed Purchases TOTAL $ LIFT Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 12
13 Sales Productivity All TV vs. All Digital TV (Linear & Addressable) Sales Contribution 12% 37% 50% Creative Productivity Metric & Standard Deviation -$0.12 $0.08 +$0.12 Digital (Video Display & Mobile) 15% 56% 30% -$0.21 $0.08 +$0.21 Brand Creative Media Source: Nielsen Catalina Solutions 2017; Period 2016-Q Nearly 500 campaigns across all media platforms. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 13
14 TV and Digital by Creative Performance TV Sales Contribution Creative Productivity Metric Digital Sales Contribution Creative Productivity Metric Weak 30% 6% 63% $0.01 Weak 14% 16% 71% $0.01 Avg 10% 38% 53% $0.04 Avg 14% 60% 26% $0.04 Strong 3% 80% 18% $0.19 Strong 6% 89% 5% $0.24 Brand Creative Media Source: Nielsen Catalina Solutions 2017; Period 2016-Q Nearly 500 campaigns across all media platforms. Brand Creative Media Note: Display, Video & Mobile yielded nearly identical results Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 14
15 Meet the Studies Meta-Study #2 REACH FOCUS Objective: to understand the reach of TV and digital campaigns, and measure the unduplicated reach of cross media campaigns. DAR TAR 863 campaigns that ran on both linear TV and digital platforms Tagged by Nielsen Total Audience Ratings (TAR) and Nielsen Digital Ad Ratings (DAR) Included ALL cross media campaigns that ran in Q4, 2016 and Q1, All verticals/television networks no cherry picking Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 15
16 Reach % TV & Digital Reach Curve for Cross Media Campaigns Digital Reach + TV Reach Curve Cross Media Campaigns , , , , , Millions Impressions TV Campaign Reach Digital Campaign Reach Nielsen: 863 TV & digital cross media campaigns from Q Q on P13+; No advertiser verticals excluded. Analysis performed by Nielsen Catalina Solutions Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 16
17 Understanding Duplication is Critical! Combined reach is less than random for all campaigns until there is at least 50% reach Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 17
18 All Media: On-Buyer Target vs. Off-Buyer Target Sales Contribution Weighted Average All Media 15% 48% 37% 100% On- Buyer Target 10% 41% 49% 47% Off- Buyer Target 18% 59% 23% 53% Brand Creative Media Source: Nielsen Catalina Solutions 2017; Period 2016-Q Nearly 500 campaigns across all media platforms. On-Buyer Target targeted to correlate delivery to brand and campaign buyers Targeting contributes much more when targeted to buyers Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 18
19 TV & Digital All Television Campaigns Digital Campaigns On-Buyer Target 80% On-Buyer Target 31% Off-Buyer Target 20% Off-Buyer Target 69% On-Buyer Target is defined as campaigns with higher than.2 correlation of either brand or category sales; Off-Buyer Target is defined as anything below that which include no skew or negatively correlated to sales. Source: Nielsen Catalina Solutions 2017; Period 2016-Q Nearly 500 campaigns across all media platforms. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 19
20 What s Recency Theory? Definition: Theory that advertisements and promotions are most effective when they air immediately prior to the time of decision, and that the influence of ad exposure diminishes with time. Less Recent More Recent Purchase Occasion Exposed Purchase Occasions Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 20
21 Recency Thursday/Friday Prime Drives Weekend Sales Sales Index vs. Any Other Programming Thursday Prime Friday Prime Thu/Fri Prime Note: Advertising lift measured on a 3-day rolling exposure window. Thursday/Friday Prime does not include: News, Sports, Children s or Spanish Language. Source: Nielsen Catalina Solutions 2017 Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 21
22 Summary: The Basics Really do Matter! Still the most important factor for driving sales, though media is playing a larger role. Critical to reach enough people! Only consumers exposed to advertising can respond. Focus on buyers -- buyers are more responsive to advertising. Exposure just prior to purchase is most effective. More work to be done. Stay tuned! Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 22
23 Best-Practice Recommendations Be accountable to sales measure, measure, measure or potentially lose the dollars. Test & optimize your creative: Getting it right increases ROAS significantly especially digital TV creative is generally good don t lower expectations and continue to test them thoroughly Use TV strategically to build reach Examine your targeting approach there s a lot of room for improvement, and big potential payoffs. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 23
24 MAXIMIZING CREATIVE WITH CONSUMER NEUROSCIENCE TOOLS Dr. Carl Marci EVP/Chief Neuroscientist Nielsen, Consumer Neuroscience Nielsen Webinar with NCS Copyright 2017 The Nielsen Company. Confidential and proprietary.
25 Copyright 2017 The Nielsen Company. Confidential and proprietary. ENGAGING IN THE AGE OF DISTRACTION 25
26 Copyright 2017 The Nielsen Company. Confidential and proprietary. VIDEO: SPINNING BRAIN 26
27 Copyright 2017 The Nielsen Company. Confidential and proprietary. SYSTEM 1 & SYSTEM 2 Based on D. Kahneman, Thinking, Fast and Slow
28 Copyright 2017 The Nielsen Company. Confidential and proprietary. COMPREHENSIVE VIEW OF ENGAGEMENT EEG BIOMETRICS* FACIAL CODING EYE TRACKING SELF- REPORT 32 sensors collect data 500 times every second to fully capture activity across all brain regions Overall level of emotional engagement, the most and least engaging moments. Discrete facially expressed emotions, such as surprise, confusion, joy and sadness. Pinpoint visual attention to content, including specific areas that attract the most and least attention. What consumers say they think, do or plan to do. 28
29 Copyright 2017 The Nielsen Company. Confidential and proprietary. PERCEPTIONS OF CONSUMER NEUROSCIENCE: 90% OF MARKETERS SAY IT IS HERE TO STAY ANA Survey 2017: Nearly 25 percent of marketers believe that consumer neuroscience techniques will eventually replace traditional research techniques (N=187). 29
30 Copyright 2017 The Nielsen Company. Confidential and proprietary. Hours per Week OVERALL MEDIA USAGE IS INCREASING Weekly Time Spent Based on the Total US Population Based on Qtr 2, P Tablet Smartphone PC M-media Device VCR Game Console DVD / Blu-Ray Time-Shifted TV Live TV Radio Source: Nielsen Total Audience Report and Audience Insights Analysis 30
31 Copyright 2017 The Nielsen Company. Confidential and proprietary. Average Number of Platform Switches per Hour 60% ASCENT IN SWITCHING BETWEEN PLATFORMS Average Number of Platform Switches Per Non-Working Hour % increase Digital Natives Natives (Ages 21-27) Digital Immigrants Immigrants (Ages 31-55) Source: Time Warner-Innerscope Research study presented at 2012 ARF Conference 31
32 Copyright 2017 The Nielsen Company. Confidential and proprietary. VIEWING BEHAVIOR WITH 2 ND SCREEN Sample Individual Participants During Natural Viewing Behavior Solo Viewing Viewer Ad Channel Change Content Co-Viewing w/ 2 nd Screen Ad, 2nd Screen, Conversation Ad, 2nd Screen Ad, Conversation Ad Channel Change, 2nd Screen, Conversation Channel Change, 2nd Screen, Channel Change, Conversation, Channel Change Content 2nd Screen, Conversation Content, 2nd Screen, Content, Conversation Content Source: Council of Research Excellence Report, September
33 Copyright 2017 The Nielsen Company. Confidential and proprietary. Digital TV CREATIVE IS STILL KING Contribution of Campaign Elements to Driving Sales Sales Contribution with Strong Performing Creative Targeting 9% Recency 5% Context 2% Strong 3% Brand Creative Media 80% 18% Reach 22% Creative 47% Strong 6% 89% 5% Brand 15% Source: Nielsen Catalina Solutions, 500 campaigns across all media platforms, 2016-Q Strong = $0.07 or greater lift in sales in exposed households. 33
34 Copyright 2017 The Nielsen Company. Confidential and proprietary. UNDERSTANDING THE NON-CONSCIOUS Our technologies focus on three key brain processes related to consumer engagement ATTENTION The act or state of applying focus to something; a selective narrowing of brain resources EMOTION Set of relatively brief, coordinated brain, autonomic and behavioral changes in response to information MEMORY The process of storing and retrieving discrete pieces of information about a brand, product, or message 34
35 Copyright 2017 The Nielsen Company. Confidential and proprietary. SUCCESSFUL ADVERTISING CREATES NEW AND REINFORCES EXISTING MEMORY NETWORKS Advertising creative helps build mental availability by creating and strengthening longterm memory associations 35
36 Copyright 2017 The Nielsen Company. Confidential and proprietary. SUCCESSFUL CREATIVE PERFORMS MULTIPLE JOBS AND PROVIDES A COMPETITIVE ADVANTAGE ENGAGE Captivate, emotionally engage, and deliver associations and brand-relevant imagery MESSAGE Deliver and/or reinforce relevant messages and associations BRAND Tag imagery and associations distinctively to your brand 36
37 CASE STUDY THE SHELTER PET PROJECT Copyright 2017 The Nielsen Company. Confidential and proprietary.
38 Copyright 2017 The Nielsen Company. Confidential and proprietary. VIDEO: CASE STUDY SHELTER PET 38
39 Copyright 2017 The Nielsen Company. Confidential and proprietary. TOO MUCH OF A GOOD THING? Eye Tracking indicates Jules competes with messaging, branding and call-to-action Competition for Message Competition with Brand and CTA 39
40 Copyright 2017 The Nielsen Company. Confidential and proprietary. VIDEO: CASE STUDY SHELTER PET REV 40
41 Copyright 2017 The Nielsen Company. Confidential and proprietary. ROI: SIGNIFICANT LIFT IN KEY METRICS 133% Increase in website visits 28% Rise in pet finder database searches 41
42 Copyright 2017 The Nielsen Company. Confidential and proprietary. HIGHEST LEVEL OF PREDICTION FROM COMBINATION Percent of In-Store Sales Variance Explained* 77% 84% 62% 24% 27% 9% Facial Coding Survey Biometrics EEG Neuro Combined Neuro + Survey *Preliminary results Source: 2016 ARF Audience Measurement joint presentation in collaboration with Nielsen Catalina Solutions and CBS 42
43 Copyright 2017 The Nielsen Company. Confidential and proprietary. PERSONAL RELEVANCE IS KEY: PRECUNEUS Engaging ads also generate greater brain activity in the area related to personal relevance 43
44 Thank you! Questions??? For more information please contact: Leslie Wood, Ph.D. Chief Research Officer, Nielsen Catalina Solutions Dr. Carl Marci EVP/Chief Neuroscientist Nielsen, Consumer Neuroscience
45 Copyright 2017 The Nielsen Company. Confidential and proprietary.
46 Appendix
47 Methodology Deep-Dive How Did We?
48 The Most Common Questions How Do We Determine the Strength of the Creative? How Did We Isolate the Effect of the Media & Creative? How did we Determine Targeting Effectiveness? Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 48
49 Traditional Lift Calculation $$$ REACH INCREMENTAL $/HH TOTAL $ LIFT Reach alone doesn t discriminate for Timing (Seasonality, Flighting) or Targeting Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 49
50 Coverage of Purchases Accounts for: Reach, Targeting & Timing Exposed to TV & Digital 28-Day Exposure Interval Reach of Households Exposed 66.7% (2/3) Exposed Unexposed Coverage of Purchases 12.5% (1/8) Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 50
51 Media Delivery and Creative In Context Drive Incremental Sales CALCULATION USING PURCHASE OCCASIONS $$$ MEDIA FACTORS Coverage (Reach) of Purchases within X Days CREATIVE FACTORS Incremental $ per Exposed Purchases TOTAL $ LIFT Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 51
52 Decompose Media & Creative Effectiveness By Cell Using Segmentation Framework Metric 1: Coverage of Category Purchases Media Effectiveness Incorporates Reach, Targeting, Recency/Timing Prior Non- Category Buyers* New Brand Buyers Non- Loyal Brand Buyers Switchers Loyals Metric 2: Incremental Sales/ Exposed Purchases Creative Effectiveness The Sales Response by segment shows the strength of the creative in context Light Category Buyers Medium Category Buyers Heavy Category Buyers *Note: HHs fall into the segmentation grid based on the 52-weeks prior to the study. The results are then reported for the campaign period. This is why data appears in the prior non-category buyers group since some non-category buyers in the pre-period become category buyers due to the influence of the ads. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 52
53 Isolating the Media Delivery and Creative Sales Response Metric 1: Coverage of Category Purchases Measure of Media Delivery Effectiveness Metric 2: Sales Lift/Exposed Category Purchases Measure of Creative Effectiveness Prior Non- Category Buyers* New Brand Buyers Non- Loyal Brand Buyers Switchers Loyals Prior Non- Category Buyers* New Brand Buyers Non- Loyal Brand Buyers Switchers Loyals Light Category Buyers 23% 27% 24% 22% Light Category Buyers $0.14 $0.26 $0.52 $1.31 Medium Category Buyers 21% 24% 23% 23% 21% Medium Category Buyers $0.20 $0.18 $0.31 $0.73 $1.74 Heavy Category Buyers 24% 24% 23% 24% Heavy Category Buyers $0.22 $0.38 $0.82 $2.16 The lift within each segment was reweighted to equal the %population to remove the media delivery variable. Creative Skews Shows Effectiveness by Segment Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 53
54 Good Creative Can Deliver 18x the Sales of Bad Creative Metric 2: Sales Lift/Exposed Category Purchases Measure of Creative Effectiveness Sister brands (similar budget & reach) Metric 2: Sales Lift/Exposed Category Purchases Measure of Creative Effectiveness Prior Non- Category Buyers* New Brand Buyers Non- Loyal Brand Buyers Switchers Loyals Prior Non- Category Buyers* New Brand Buyers Non- Loyal Brand Buyers Switchers Loyals Light Category Buyers $0.00 $0.03 $0.02 $0.15 Light Category Buyers $0.25 $0.55 $0.28 $1.41 Medium Category Buyers $0.01 $0.00 $0.02 $0.00 $0.02 Medium Category Buyers $0.13 $0.11 $0.21 $0.27 $0.28 Heavy Category Buyers $0.00 $0.01 $0.02 $0.03 Heavy Category Buyers $0.16 $0.43 $0.24 $0.79 Total Incremental Sales: $16.00 Total Incremental Sales: $ Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 54
55 Targeting Framework Aligning Media with Purchases For each brand, the 13-cell buyer segment grid shows how the media delivery is aligned with brand/category purchases Incremental Sales / Exposed Category PO Topline $/Exposed Category Purchase Prior Non- Category Buyers* New Brand Buyers Brand Buyers Non-Loyal Switchers Loyal TOTAL Light Category Buyers $0.09 $0.11 $0.21 $0.24 Medium Category Buyers $0.06 $0.04 $0.11 $0.22 $0.51 $0.13 Heavy Category Buyers $0.03 $0.15 $0.42 $0.74 *Note: HHs fall into the segmentation grid based on the 52-weeks prior to the study. The results are then reported for the campaign period. This is why data appears in the prior non-category buyers group since some non-category buyers in the pre-period become category buyers due to the influence of the ads. Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 55
56 Targeting Framework Aligning Media with Purchases Incremental Sales / Exposed Category Purchases Topline $/Exposed Category Purchase Light Category Buyers Prior Non- Category Buyers* New Brand Buyers Brand Buyers Non-Loyal Switchers Loyal $0.09 $0.11 $0.21 $0.24 Medium Category Buyers $0.06 $0.04 $0.11 $0.22 $0.51 Heavy Category Buyers $0.03 $0.15 $0.42 $0.74 Coverage of Category Purchase Occasions TOTAL $0.13 On-Brand Target The media delivery across 13-cells in this case is well-aligned with the responsiveness of those same cells. Coverage of Category Purchase Occasions Prior Non- Category Buyers* New Brand Buyers Brand Buyers Non-Loyal Switchers Loyal TOTAL Light Category Buyers 61.2% 61.3% 61.9% 62.7% Medium Category Buyers 61.1% 60.1% 61.5% 62.1% 64.0% 61.0% Heavy Category Buyers 59.9% 61.9% 63.4% 65.7% Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 56
57 Targeting Framework Aligning Media with Purchases Incremental Sales / Exposed Category Purchases Topline $/Exposed Category Purchase Light Category Buyers Prior Non- Category Buyers* New Brand Buyers Brand Buyers Non-Loyal Switchers Loyal $0.09 $0.11 $0.21 $0.24 Medium Category Buyers $0.06 $0.04 $0.11 $0.22 $0.51 Heavy Category Buyers $0.03 $0.15 $0.42 $0.74 Coverage of Category Purchase Occasions TOTAL $0.13 Off-Brand Target The media delivery across 13-cells is not well-aligned with the responsiveness of those same cells. Coverage of Category Purchase Occasions New Category Buyers New Brand Buyers Brand Buyers Non-Loyal Switchers Loyal TOTAL Light Category Buyers 62.7% 65.7% 63.4% 61.2% Medium Category Buyers 64.0% 61.1% 61.5% 61.3% 62.1% 61.5% Heavy Category Buyers 60.1% 61.9% 61.9% 59.9% Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 57
58 Deep-Dive Methodology Summary Key Metric #1: Coverage of Purchases Accounts for reach, targeting & recency Media factors Key Metric #2: Incremental $ales/exposed Purchases A measure of sales responsiveness Creative Factors Both metrics are determined for each bucket in the13- Cell Segmentation Grid Correlations between these by cell show the strength of the creative and whether the media deliver is reaching buyers Copyright 2017 Nielsen Catalina Solutions Confidential & Proprietary 58
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