March 2019 (Vol. 59, Issue 1)
TV IN THE DIGITAL AGE
What Do We Know about TV in the Digital Age?
Editor-in-Chief John Ford walks us through the special package on TV in the Digital Age, and in his annual tradition gives special acknowledgement to the Ad Hoc reviewers who are not yet full members of the Journal’s Editorial Board but still participate in reviewing papers. “Their contributions not only balance out the reviewing burden for our regular board members but also bring specialized expertise to our oversight,” he writes.
The Relationship between Fake News and Advertising: Brand Management in the Era of Programmatic Advertising and Prolific Falsehood
The Speaker’s Box column seeks to bridge the gap between the length of time it takes to produce rigorous research and the acceleration of change within practice. This edition addresses the relatively new phenomenon of “fake news” and its complicated relationship with advertising. Professor Adam J. Mills (Loyola University New Orleans)—along with two doctoral candidates Christine Pitt (Royal Institute of Technology, Sweden) and Sara Lord Ferguson (Simon Fraser University, Canada)—highlight that advertising and fake news appear to be locked in a growth cycle driven by financial incentives. At the same time programmatic advertising has required advertisers to cede control over where their ads are displayed, the end result being that many of these ads end up on fake-news websites alongside controversial and inflammatory content. Beyond the ethical dilemma for brands is the potential loss of credibility. What does the future hold for brands along these lines?:
- For established brands, the situation is less dire: Research suggests that the credibility of the brand being advertised can override, to some extent, the lack of credibility of the website on which it is displayed (Choi and Rifon, 2002).
- For smaller, newer brands still building equity, however, it is even more critical that the websites on which they advertise be seen as credible.
- In the online advertising business, there appears to be an unmet need for a higher service option for advertisers to have a tighter control over when, where, how and to whom their ads are displayed.
- There may be room for a new category of “intelligent” intermediary to enter into the digital advertising space.
WHAT WE KNOW ABOUT TV IN THE DIGITAL AGE
Why Knowledge Gaps in Measurement Threaten the Value of Television Advertising: The Best Available Screen for Brand Building Is at a Crossroads
With the proliferation of new vehicles as entertainment options, multiple screens are cutting into the traditional lock that traditional TV has held on viewers. Artie Bulgrin, who was ESPN’s research chief for 21 years and recently joined MediaScience as EVP insights and strategy, suggests that television is clearly the best vehicle for brand building. But, “as television evolves with digital … gaps in knowledge about how to measure effectiveness are undermining advertisers’ confidence in the medium.” Bulgrin makes the case that “standardized, cross-platform measurement is necessary to truly leverage and balance television’s value at the top and the bottom of the marketing funnel.” Nevertheless, the data demonstrate that companies gradually are increasing their investments in digital-video advertising, which is taking away investments in traditional TV advertising, he asserts. Among his takeaways:
- Standardized, cross-platform measurement is necessary to truly leverage and balance television’s value at the top and the bottom of the marketing funnel.
- Without relevant measures, television’s effectiveness will be limited for brand advertisers, and the overall future value of the medium will be jeopardized if it becomes too reliant on activation.
- Industry players should aim for transparency, measures that focus on total reach, and overcoming technology barriers.
Allocating Spending on Digital-Video Advertising: A Longitudinal Analysis across Digital and Television
Companies continue to increase their investments in digital-video advertising at the expense of television advertising. Yet, the “efficacy of such moves has not been investigated in media-saturation studies,” according to a research trio that combined expertise from academia and industry. “Media agencies and brands do conduct various surveys and tests for both premarket and in-market performance of advertisement copies and campaigns, but these tests seldom capture the diminishing returns from increase in marketing investments,” assistant professors Nazrul I. Shaikh (University of Miami, also VP analytics at Market Fusion Analytics) and Mahima Hada (City University of New York), along with Niva Shrestha (SVP at Nielsen, Inc.), wrote. So, they asked:
- How do digital-video advertising and traditional television advertising compare with regard to their effectiveness and efficiency in driving retail footfalls and sales?
- How do the effectiveness and efficiency of digital-video advertising scale with increase in investments?
Shaikh, Hada, and Shrestha used a robust dataset to do their comparative study: “two years of weekly sales, footfalls, pricing, and all self- and competitive marketing information of a restaurant chain operating 781 quick-serve restaurants in the U.S.” Location, competitors, operating hours, and store quality-of-service ratings were included in the data. The authors used a “reduced-form dynamic model and a Kalman-filter-based estimation process (suggested by scholars in earlier studies) to assess the effectiveness and efficiency of digital and television advertising while controlling for all other marketing and environmental factors.” Among their findings:
- Digital-video advertising was highly effective and efficient but showed quicker saturation.
- These differences in efficiency decreased rapidly as investment levels behind digital-video advertising increased.
- At the spend level that yielded the highest ROIs, digital-video advertising provided a higher ROI than television advertising, because of its higher retention rates and lower execution costs.
- Companies should be cautious about a headlong plunge into moving dollars from traditional television to digital video.
Revisiting the Relationship between Ad Frequency and Purchase Intentions: How Affect and Cognition Mediate Outcomes at Different Levels of Advertising Frequency
How much advertising is too much, and how does repeated exposure to ads influence purchase intentions? These were the key questions posed by assistant professors Jennifer Lee Burton (University of Tampa) and Linda E. McNeely (Mississippi University for Women), as well as Jan Gollins (founder of Delta Modelling Group) and Danielle M. Walls (cofounder of BDJ Solutions). This academic/practitioner collaboration employed a sample of 651 consumers using Super Bowl television advertisements and the ability to repeat exposures and found that the traditional view of wear-out is no longer valid. In fact, the authors discovered, at least 10 exposures are necessary to ensure complete marketing efficiency, noting that “frequency … can serve as a proxy for consumers’ stage in the consumer decision-making process.” Among their findings:
- Contrary to dated research that did not account for media proliferation in society today, media planners should strive for an average frequency of greater than 10 to maximize purchase intentions.
- When targeting consumers who have seen an advertisement to two or fewer times, advertisers should use an emotional approach to capture consumers’ attention and trigger the problem-recognition phase of the purchase-decision process.
- Consumers who have seen an advertisement three to 10 times are persuaded most by cognitive approaches, which help guide them through the information search and alternative evaluation stages of the decision-making process.
- When consumers have seen an advertisement more than 10 times, the most effective approaches remind consumers of their summary evaluation of the product and provide them with the satisfaction of having made the right purchase decision.
An Examination of Television Consumption by Racial and Ethnic Audiences in the U.S.: Implications for Multicultural Media Planning and Media Measurement
Here’s a study that seeks to dispel myths about media planning and buying for television in order to reach increasingly valuable audiences: multicultural ones. “Over the years,” assistant professors J. P. James (Salem State University) and Tyrha Lindsey-Warren (Baylor University), write, “there has been controversy over the fact that television-audience measurement has not kept pace with the increasing diversity of the United States.” Nielsen, for example, was admonished for surveying “too few people of color with its People Meters to provide a statistically significant sample size of ethnic consumers to develop accurate multicultural television ratings (Napoli, 2005).” And, the authors note, advertisers historically have paid lower advertising rates for TV networks targeting multicultural audiences, in part because minority viewers are perceived to be easily and cost-effectively reached through general market networks. With this backdrop in mind, James and Lindsey-Warren (before academia, she spent 15 years in advertising for music and dance) decided to examine television consumption across a variety of U.S. ethnicities. Advertisers, the authors determined, should “segment ethnic audiences by demographics, psychographics, and attitudes—just like they do for the overall, general-market population.” They also advise against “(relegating) multicultural media planning solely to ethnic-media networks,” and conclude: “Television plays a substantial role in American society—especially among minority segments—as a medium to communicate entertainment, information, and news.” Among their practical takeaways:
- Program genres and media fragmentation (through the use of technology) partially mediate the relationship of television viewership and multicultural consumers.
- Specific program genres predict higher levels of media fragmentation, as demonstrated by the authors’ “multistep mediation model,” which takes into account viewers’ preferred genres (e.g. music programming, live sports) and the technology used for daily viewing.
- Context planning can leverage diverse audiences for multicultural media scheduling.
Converting People-Meter Data from Per-Minute to Per-Second Analysis: A Statistical Model Offers a Closer Look at TV Ad Avoidance and Effectiveness
For advertisers, advertising-effectiveness measurements are more important than program ratings—ideally second-by-second measures. But, as four researchers in China point out, “collecting individual viewing data that are accurate to the unit of one second is very difficult and expensive.” So, they envisioned a methodology that allowed for examining the value inherent in developing a mechanism that converts minute-by-minute people meter data to second-by-second ratings “under the condition of no additional cost or effort investment.” The technique developed by LianLian Song and Peng Zhou (Nanjing University of Aeronautics and Astronautics), Geoffrey Tso (City University of Hong Kong) and Hingpo Lo (University of Hong Kong) enabled advertisers to accurately see more clearly how people react to their ads in real time. They found that:
- People-meter data commonly are accurate to one minute.
- Advertisements usually are shorter than one minute—perhaps 15 seconds—and so minute data cannot indicate the change of audience number in each second of a commercial spot.
- Simulations of second-by-second audience numbers can be helpful in measuring advertising audience, assessing advertising strategies, and aiding in future media purchasing and pricing.
- Together with the prediction of audience program ratings, the proposed method can predict advertisement audience ratings when advertisers have chosen the time period and program type to broadcast their ads.
Advertisements in DVR Time: The Shelf Life of Recorded Television Commercials in Drama, Reality, and Sports Programs
“Time-shifted television can time-shift advertising.” This observation led three researchers to study time-shifted television viewing and advertisement exposure. Bob Kent, a University of Delaware associate professor, with Emory University doctoral candidate Buffy N. Mosley and professor David A. Schweidel, found that the majority of DVR advertisements (70 percent) are fast-forwarded by viewers, but this depends on the genre involved: “Dramas were viewed more often by DVR, often at longer delays from live, with consequences for the timing of normal-speed advertisement views.” Furthermore, they suggest: “Sports and reality programs with fewer day-shifted advertisement views may be beneficial when advertisement messages promote one-day sales or the opening weekend of new films.” The findings have a number of implications for practice:
- For television networks, some delayed advertisement views may not be monetized, as previous research has shown.
- Most U.S. television advertisement buys are now based on C3 measures; this study’s data thus suggest that about 6 percent of drama ad views and about 3 percent of performance reality ad views may not be compensated.
- In the high-stakes business of television ratings and revenue, the presence of more nonmonetized adds could affect program decisions, so longer DVR ad shelf life may be a financial issue for dramas.
- Still, dramas are a staple of television viewing and programming, so networks that already have boosted live programming levels eventually might seek relief from developing ad-insertion technologies.
- TV advertising’s impact is not as reduced as one might have expected: Between ad views in live sports and news, reality shows, and some scripted programs, even devoted DVR users may see normal-speed commercials.
OTHER FEATURE ARTICLES
Douglas C. West Creative Article 2019
Strategies for Creating Successful Soundless Video Ads: Speaking Volumes Through Silence
Every year, JAR editors select an article that aspires to deep thinking in the area of creativity, in the honor of Doug West, a former JAR executive editor and world-renowned expert on creativity. This year’s contribution is by Colin Campbell, assistant professor at University of San Diego and Erin Person, doctoral candidate at University of East Anglia, who used historical data from a global programmatic online video-ad distributor to test ads run with and without sound. They also interviewed advertising professionals experienced with soundless video to build novel understanding of the phenomenon of soundless advertising. The resulting strategic insights for creative practice and contribution to research are informed by Campbell’s knowledge of digital media and Pearson’s devotion to the study of American independent cinema:
- Video ads created for a sound-on environment typically do not perform well when viewed without sound, and subtitles typically are not an effective solution.
- To be successful in an online environment, video advertising should be designed with the assumption that it will be played soundlessly.
- Silence removes an important source of information for viewers and necessitates the use of compensatory strategies to remain effective.
- Advertising testing should be conducted with sound both on and off.
Impact of Media Context on Advertising Memory:
A Meta-Analysis of Advertising Effectiveness
“Media professionals and scholars have examined the influence of media context on advertising effectiveness for more than 50 years, but clarity regarding media-context effects remains lacking, amid an abundance of mixed results.” This observation by professors Eun Sook Kwon, (Rochester Institute of Technology), Karen Whitehill King (University of Georgia), Greg Nyilasy (University of Melbourne) and Leonard N. Reid (University of Georgia) prompted them to use “meta-analysis to investigate the relationship between media context and advertising memory in quantitative studies up to 2013. Effects sizes were significant by media-context factors, advertising-memory measures, and study characteristics, although these were correlated weakly or moderately.” Among the takeaways:
- The findings strongly reinforce the decision rule that media professionals should consider media context when making media decisions.
- Increased consumer media involvement, media-advertising-context congruency, and higher program liking are media-context factors that more likely will improve advertising memory.
- Programs with violent, sexual, and suspenseful content and ones that are humorous and induce higher consumer arousal will more likely inhibit advertising memory.
- Because advertising effectiveness is enhanced if media-context factors positively influence media users’ advertising memory beyond exposure indicators (e.g. ratings), influencing factors should be given serious consideration in media decision making.
Coming in June 2019:
What We Know about Segmenting and Targeting
As a preview to June’s special theme section on segmenting and targeting, John Ford reviews seminal work that JAR has published on this topic.