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by Geoffrey Precourt, Warc
On the occasion of the Advertising Research Foundation's (ARF) Re:Think annual conference in March 2011, a conversation over the subject of neuroscience became so heated that one audience member had to be dragged - all but kicking and screaming - from the discussion.
The tenor of the ARF 2011 Audience Research Conference three months later was generally more subdued. As with most trade organizations with a shared interest, camaraderie generally overrules combativeness. But, invite a few outsiders onto the convention floor and the fur starts to fly.
Bob Liodice, President/CEO of the Association of National Advertisers - representing the interests of some 400 companies and 10,000-plus brands - minced no words when he called upon the research conventioneers to stop talking about the potential of a new generation of marketing research and start producing.
With the burgeoning technologies that have given marketers more direct contact with their key audiences, "We can mass-market on a one-to-one basis," the ANA head said. But without the research tools to interpret those conversations, he added, "The ability to make decisions is escaping us… We have all this information available to us, but to understand its impact, to make decisions about where to allocate resources, that's escaping us."
Leslie Picard, President/branded solutions at Time Inc., the magazine division of Time Warner, offered a vivid example of just how broken the research model has become. "Magazines are evaluated on price based on circulation. For Time magazine, that [base figure] is [paid circulation of] 3.3 million. When it's evaluated by syndicated research that looks at total audience, Time reaches 19 million US readers and another 4 million in the rest of the world." It also has another 14 million unique visitors online. Mobile is another 3.5 million; then there are Tweets (2.5 million) and Facebook fans (300,000), and a still indeterminate number of tablet readers. "Now that 3.3 million is coming up close to 50 million," Picard said. But research still feeds media planners and buyers the lower figure as a starting point.
The debate over paid circulation and total distribution is a familiar one in the magazine business. But the rules of reader engagement have changed the nature of audiences far beyond any pass-along readership considerations. As Picard told the ARF, Time Inc. contends that magazine content is magazine content, no matter where it lives or on what platform it happens to be distributed.
"It's about the consumer expectations," she explained. "It's about where they are. And they are everywhere. To be a viable business, we need to capture readership across all those platforms… We need to create the right valuation metric for all the people using our content."
In brief, the ANA's Liodice said, "The challenge is even more substantial than the opportunity."
Lending a note of immediacy to the discussion, the ANA head told the ARF audience that the goal for research was to "restore confidence" in its offerings throughout the marketing ecosystem. And, if the industry can't come up with the results, "at least give us a timeline… [Information] is running away from us. We need to call upon the industry to identify what the measurement vision is - to get to the point where it's usable. And, right now, we don't have that understanding."
The stakes, he continued, are considerable: "US marketers spend more than a half-trillion dollars a year. But, unless they can get better and more precise tools, they're going to remain really concerned" about the state of marketing research.
Technology is changing rapidly, "yet we're still measuring it the same way we did 30 years ago," echoed Rino Scanzoni, GroupM chief investment officer, as he chided an industry "busy measuring devices, not platforms."
Moreover, he added, so fast and so rich is data delivery, "We need an agnostic database that works across platforms… we're losing our position as every day goes by." And, he warned, "If we don't find a way to measure all the different new devices, it's going to be devastating to our business."
Just as timing was a important consideration for the ANA's Liodice and Time Inc.'s Picard, so did Scanzoni express concern over the slow pace of change in marketing research: "What should take nine months to a year takes three, four, or five years. And, when we get there, there will be new changes we'll have to react to."
While Picard demonstrated how inertia could cripple magazine publishing, Scanzoni painted an equally bleak picture for the television industry. "Television content is expensive to produce," he simply stated. And, if new devices draw audiences away from traditional distribution, those viewers will go unmeasured. "And that could deliver a severe economic blow to the industry."
"We're using the same yardsticks to measure 150 million homes that we used to measure 20,000 homes," added Steve Gigliotti, Scripps Networks' President/national ad sales and marketing. "New platforms demand new kinds of measuring stick."
Gigliotti did observe that there are exceptions. "Yes, there probably are some arrangements between media companies and advertisers that are based on something other than accountability of adults between the ages of 25 and 54." But these "bold plays" have "tended to be one-offs".
Antony Young, CEO of Optimedia US, offered a balanced economic counterpoint. "Our economics were built for a different purpose than what today's marketer wants. It was built for eyeballs, reach, and awareness. Marketing has gone more upstream, with more accountability. But we're stuck in this currency - [a place] where the initial purpose was trading, where buyers and sellers could trade. But that's out of step now."
Compounding the problem, he continued, "There are too many people with too many self interests… And it's impossible to pass on the costs of additional research to our clients. And, if I run my budget under pressure, I'm not going to be able to give my clients a competitive advantage. It takes dollars to do dollars to things that will help you grow your business. And a new currency is not a priority."
"Nielsen is expensive," observed Scripps' Gigliotti. "And media companies are going to have a difficult time signing up two or three times for a whole new set of metrics. But we have to go there. It's for the health of the business."
With an immediate mandate for change, Liodice had an open-source solution for marketers to help fund the next generation of innovation. "You can incentivize clients to pay if you can help them understand the value of mistakes they're making." To that end, he called upon the ARF community of researchers to "identify the productivity lost to bad decisions".
He added, "If we can all understand that figure - and I would guess it's several billion dollars - we can provide the incentive for clients to invest in upgrades. It will come down to that kind of investment. And it will have to be a universal commitment, from researchers, advertisers, and the entire agency industry.
"Right now, you're all operating in silos. There are many projects, but they're all [constituted] slice by slice. We need to come together as a larger industry."
"It has to be a consortium of advertisers, agencies, media companies, print and software companies that makes the investments needed to create a measurement methodology that crosses the bridge to the consumer," said Scripps Networks' Gigliotti. "It just doesn't many any sense if each agency adds its own twist on a yardstick to measure audiences."
Added GroupM's Scanzoni, "There are thousands of research companies investing in [new technologies], but they're all getting nowhere." Agreeing with Liodice, he ventured, "We all have to get together and invest in the fastest way to get us where we need to go."
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