News You Can Use

New Study Confirms Advertising as Key Driver of the U.S. Economy; Advertising is a Major Contributor to GDP, National Employment and Labor Income

• Posted: November 23, 2015

The Association of National Advertisers (ANA) and The Advertising Coalition commissioned a study which highlights the industry’s considerable economic benefits.  According to this study, advertising contributed $3.4 trillion to the U.S. GDP in 2014, which represents 19% of the nation’s total economic output.

The research by IHS Economics and Country Risk provides a comprehensive assessment of the contribution of advertising to national, state, and regional economic activity across 17 industries.  This study includes information on the positive impact of advertising on employment, salaries, wages, consumer sales, and the overall economy.

According to Bob Liodice, President and Chief Executive Officer of the ANA, “this new study underscores the essential nature of advertising in promoting both business and economic growth in this country.”

IHS researchers also examined the effect of a tax proposal that would alter the treatment of advertising as an ordinary and necessary business expense. The proposal would only allow businesses who advertise to deduct 50 percent of all annual advertising expenses with the balance to be amortized over five years.

Speaking about the impact of the tax proposal, Liodice commented, “The very fact that this industry contributes nearly 20 percent to the nation’s GDP sends a powerful reminder to policymakers that advertising is an essential stimulus to the U.S economy that should be promoted and not subjected to a tax. We have long known that the economic value of advertising extends into other sectors like manufacturing, agriculture, healthcare, retail, and numerous other areas of the economy. ANA is proud to see data that affirms that advertising is a major contributor of revenue and a true engine of job creation in the U.S.”

The full report, an executive summary, and related materials are available from the ANA.

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RIP Millennials: Marketing Will Be ‘Age Agnostic’ Next Year-Hotwire PR Study Finds Companies Will Target On Passion, Not Numbers

• Posted: November 23, 2015

According to the study, “Communications Trends Report,” released by Hotwire PR, marketing and communications professionals will focus on reaching millennials based on their passions rather than as a single demographic group. Brands will seek to engage consumers with age-agnostic content that emphasizes values.  This Advertising Age article by Lindsay Stein analyzes other findings from this study.

Additional trends from the Hotwire PR study include:

-The advertising industry is not prepared for mobile ad blocking, especially since Apple enabled apps that stop ads from popping up on smartphones and iPads through its iOS 9 operating system.

-The rise of virtual reality.

-The most successful campaigns in 2016 will offer relevant and useful services.

-Values will continue to be at the center of the communication strategies of many brands.

-Expanded use of hyper-targeted content will result in specific messages for each consumer subset within an audience.

This article discusses additional key marketing and communications trends for 2016.

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Brands Look Far and Wide For a Niche in Virtual Reality

• Posted: November 23, 2015

According to Robert D. Hof, writing for The New York Times, advertisers and agencies are hoping that virtual reality will be the next medium for influencing consumer purchasing behavior.  This article considers what types of ads are most likely to work on virtual reality platforms.

Devices that enable consumer interaction with virtual reality are becoming increasingly common. According to this article, virtual reality headsets, such as the Oculus Rift permit viewers to navigate three-dimensional videos and animations. In addition, virtual reality movies, shows, and stories are on the horizon.

According to Adrian Slobin, global innovation lead at the digital agency SapientNitro,

“VR is a way to create intense moments and rich, enveloping experiences that can help bolster a brand’s story.”

Among the points discussed by Hof:

-Advertising that occurs inside other virtual reality content will play a major role.

-The most effective ads will probably be interactive.

-Virtual reality apps that provide utility, such as virtual test-drive apps for car manufacturers, may attract consumers.

-The opportunity for native advertising exists.

Challenges related to virtual reality campaigns include:

-Uncertainty about the type of programming, besides games, that will catch on in virtual reality to provide a place for advertising.

-It is difficult to predict the form the advertising will ultimately take without a consensus on the type of content that will succeed in virtual reality.

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Connected TVs Marry New and Old Viewing Habits

• Posted: November 23, 2015

More than 50% of the U.S. population is expected to watch streaming content on connected TVs by 2016, and that percentage is expected to increase to 60% by 2019.  In the new eMarketer report, “US Connected TV Usage: Digital Content Gives the ‘First Screen’ New Life,” connected TVs are defined as TV sets connected to the internet through built-in internet capability or through another device, such as Blu-ray players, game consoles or set-top boxes.

In addition, it is important to note that connected TV is a household phenomenon more than a personal one, so that household penetration is an important metric.

According to this eMarketer article, viewing habits for connected TV more closely resemble linear TV than other digital platforms.  eMarketer refers to studies by both Nielsen and Tremor Video that found that the share of average US audience on connected TV devices peaks during primetime.

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The Relationship Between Product Placement and the Performance of Movies: Can Brand Promotion in Films Help or Hurt Moviegoers’ Experience?

• Posted: November 23, 2015

The authors of this September 2015 article in the Journal of Advertising Research, Reo Song, California State University, Long Beach; Jeffrey Meyer, Bowling Green State University, Bowling Green, Ohio; Kyoungnam Ha, University of New Haven, West Haven, Connecticut, studied the relationship between product placement and the performance of movies.

Their study examined how product placements related to the performance of the media context through word of mouth about the movies. The authors analyzed whether advertising in the form of product placements in films impacted consumer enjoyment of the movie, and, in turn, whether the related positive or negative WOM about the film impacted box-office revenues.

The authors investigated the relationship between product placements and the performance of 122 movies released between 2000 and 2007 and found that product placements had both helpful and harmful consequences. This finding elucidates the heretofore unknown relationship between product placements and programming performance.

-Product placements exhibited a positive relationship with movie revenues, but when used in excess the relationship with revenues turned negative.

-The relationship between product placement and the benefits a consumer receives from media programing is robust across movies with different budgets and qualities.

Important managerial implications suggested by this research:

-Both media programmers and advertisers may need to reevaluate the widely assumed negative effects of product placements based on the findings of this study.

-Firms that produce media programing and those that place advertising in such media can enjoy a win–win situation from product placements, especially if those placements involve major brands that are familiar to consumers.

-However, too much of this positive can become negative. As the number of placements passes a saturation point (44, as the current study demonstrated), the relationship with movie performance turns negative. In particular, programing firms that give in to the temptation to allow too many placements may suffer weaker programing performance when holding all other factors constant. The average number of placements in the current sample was 16, suggesting that movie studios might understand both the positive and the potential negative effects of product placements.

-Studios should continue to limit the number of product placements to a reasonable boundary and avoid excessive placements (e.g., more than 50), which generally appear associated with poorer box office performance.

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MRC Scraps Fully Loaded Requirement For Mobile Ads, Issues Updates On Viewability

• Posted: November 16, 2015

Joe Mandese discusses the updates issued by the Media Rating Council to its guidelines for mobile viewable impressions in this Media Post article.  These updates include a requirement for an ad fully “loaded” to be counted for measurement.

The MRC’s three significant updates:

-Elimination of the “Loaded Ad” concept. Since measurers can now successfully measure viewable impressions in mobile within the in-application environment,

the MRC has concluded that the “Loaded Ad” metric is no longer necessary.

-Additional evidence has been found that “Count on Decision” approaches for served ad impression measurement should be eliminated as a valid method for counting served impressions.  Therefore, as previously announced, the MRC will work with the IAB to eliminate Count on Decision as an acceptable method for counting served ad impressions in the near-term future.

-Cross-industry collaboration has been strengthened with a large working group of interested parties and organizations to obtain data in order to answer questions surrounding viewability requirements applied to mobile environments.

The MRC expects to release final guidelines for public comment in the first quarter of 2016.

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Mobile Messaging to Reach 1.4 Billion Worldwide in 2015

• Posted: November 16, 2015

Mobile phone messaging apps will be used by more than 1.4 billion consumers in 2015, up 31.6% from the previous year according to eMarketer. Seventy-five percent of smartphone users worldwide will use an over-the-top (OTT) mobile messaging app at least once a month in 2015. In addition, eMarketer predicts that the number of chat app users worldwide will reach 2 billion and represent 80% of smartphone users by 2018.

According to Cathy Boyle, eMarketer’s Senior Analyst, Mobile, some of the key drivers of mobile messaging’s growth are:

-The growing interest of consumers in intimate forums for social sharing.

-The multiple modes of communication offered by messaging apps.

-The growing number of features offered, including peer-to-peer payments and mcommerce.

On a regional basis, OTT messaging apps usage is high in the Asia-Pacific where 58% of the world’s messaging app population lives. In addition, Latin America shows strong usage with 68.1% of mobile internet users engaging with a mobile messaging app once a month.

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Interaction Helps Brands Stand Out in the Vast Volume of Video

• Posted: November 16, 2015

Mike O’Brien, writing for ClickZ, points out that video has become a standard expectation for digital campaigns.  As a result, it has become more difficult for a video to stand out.  O’Brien explains that brands are increasingly making their videos interactive.  Consumers who feel actively involved with the brand via interactive videos will likely have longer and deeper levels of brand engagement.

Erika Trautman, CEO of Rapt Media, suggests that “creating an opportunity for engagement creates connections with the audience and makes them more likely to come back again.”

O’Brien highlights two companies that have effectively used interactive videos: Dos Equis and L’Oreal.  In the Dos Equis video, the viewer is a guest at the masquerade party, and interacts with the Most Interesting Man in the World.  L’Oreal provides a tutorial to teach viewers how to use its products in unconventional ways.

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Branded Content Boosts Purchase Intent According to a Study by IPG and Google

• Posted: November 16, 2015

High-quality branded content is effective at increasing brand favorability and intent to purchase according to a study conducted by IPG Media Lab and Google. This global study surveyed 14,780 consumers and included brands in 19 categories in 10 countries. Jon Lafayette’s article in Broadcasting and Cable provides some of the conclusions from this study.

Among these conclusions:

-The companies defined branded content as content that lives on its own, produced by and for the brand, as opposed to content produced by someone else that the brand affixes it to.

-Consumers found branded content more entertaining, uplifting, educational, novel and exciting than standard video ads.

-The study found that high-quality content led to a 10% greater increase in purchase intent, compared to lower quality content.

According to Kara Manatt, VP Consumer Research Strategy at the IPG Media Lab, “Our data indicates there are clear best practices marketers can take advantage of when creating and deploying branded content. Naturally, marketers spend more time and budget creating this custom content, so having these guidelines based on improving brand perceptions and driving purchase intent is invaluable.”

Among these guidelines:

-Mentioning the brand more often increased the perception that the content was designed to “sell a product,” but the information was still trusted.

-For high-price purchases, purchase intent was higher with more brand mentions.

-Placing content on a premium site can have a halo effect on brand preference and intent to purchase. The more consumers liked the site, the greater the impact the branded content had on those consumers.

IPG Media Labs and Google plan to continue studying branded content.

For more on this topic, check out the Advertising Tab in Morning Coffee.

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The Effectiveness of Comparative Versus Non-Comparative Advertising: Do “Strictly” Comparative Ads Hurt Credibility of Non-Professional Service Brands?

• Posted: November 16, 2015

A September 2015 Journal of Advertising Research article by Fred Beard, University of Oklahoma, investigated the effectiveness of comparative advertising for a prominent service brand. Chevy’s certified service for automobile maintenance was compared with Ford’s certified service.

Results from this study included:

-The potential for negative outcomes is a strong possibility when prominent non-professional service brands identify one other by name in their campaigns.

-Services advertisers who use strictly comparative advertising are justified in doing so if their target audiences are mainly younger consumers and if claims of believability are not crucial for advertising effectiveness.

-If message or claim believability is critical, non-comparative advertising likely will be more effective than comparative advertising, regardless of target audience age.

The author presented the following guideline for marketers:

Prominent brand advertisers should be wary about using strictly comparative advertising, even that which could be considered low in negativity, and especially if older consumers are the target audience. The possibility that services consumers follow a fourth hierarchy-of-effects process—feel–do–learn—further suggests how serious negative affective and conative consumer responses might be for services advertisers especially.

The author notes that the results of the study were limited to comparative advertising in print media.

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