Letter from the CEO
Bold Insights from the Trailblazers
As the pace of change accelerates, advertisers and researchers are “wrestling to adapt in real time to this complex, consumer-centric, marketplace,” writes Advertising Research Foundation (ARF) CEO & President, Gayle Fuguitt. “The media world will be a very different place at the end of this decade… And with imminent, massive changes facing our industry, the need to act has never been more urgent.” Fuguitt applauds the work of contributors to this edition of the Journal of Advertising Research (JAR) who “push their peers to get ahead of the sea change … offering practical advice, tools and strategic approaches that leaders need to architect their roadmap to growth.”
How Do Neurological Measures Work in Advertising?
JAR Editor Emeritus Geoffrey Precourt offers a summary of this issue’s special package on the myriad ways neuroscience is helping to shape the future of research. “Among marketing-research practitioners and academics, there is little doubt that science is adding new dimensions to the art of understanding consumer behavior,” Precourt writes. But insights shared by contributing thought leaders in research also demonstrate concerns for best practices, he notes.
Fraud in Digital Advertising: A Multibillion-Dollar Black Hole
How Marketers Can Minimize Losses Caused by Bogus Web Traffic
In late 2015 the Association of National Advertisers (ANA) estimated that marketers would waste as much as $7 billion globally in 2016, buying online advertisements that people do not see. The culprit: advertisement fraud rampant in the digital space, much of which occurs as a result of so-called invalid, or nonhuman, traffic (IVT). Adding to the problem, the consequences of fraud—viruses and malware resulting from malicious code run in third-party ads—has increased demand for ad blockers by consumers, making it even more difficult for marketers to communicate directly with them. And, in the universe of programmatic buying—which more and more advertisers use for better targeting and real-time optimization—ad fraud “has become a serious obstacle to the effective use of programmatic advertising,” writes Gian Fulgoni, comScore chairman emeritus and cofounder. Fulgoni identifies five major types of IVT and their specific impact on buyers and sellers of media and on audience and viewability measurement. How can marketers minimize these effects and ensure transparency? Among solutions Fulgoni proposes: Buyers and sellers of advertising should “use campaign measurement tools that accurately identify all forms of nonviewable advertisements, including both general and sophisticated IVT” while “insisting on viewable audience guarantees.” Additionally, advertisers need to “investigate ways to reach [young millennials who often use ad blocking software] that don’t just rely on digital advertisements. The use of branded native content is one such approach.”
Resisting the Siren Call of Popular Digital Media Measures:
Facebook Research Shows No Link between Trendy Online Measures and Ad Effectiveness
Brad Smallwood, VP measurement and insights and head of Facebook‘s Marketing Science team, describes the world’s biggest social-media platform’s early struggles with assessing the value of popular metrics—such as building a brand’s fan base and using the topic data. Facebook’s own research eventually found those metrics to have no impact on brands’ performance and, as a result, has diminished the stature of “shiny” metrics, such as users’ “Likes,” “Shares,” and message posts. Yet it admits to being complicit in the spread of “some that still litter your dashboards,” Smallwood writes. He urges C-suite executives to empower their organizations to become more data-literate and elevate the role of analytics in the decision-making process. “It will take courage, effort, and science to abandon the comfort of the easily measured and replace it with the relentless focus on value.”
The Hidden Factors Behind Sponsorship and Image Transfer:
Considerations for Bilateral Image Transfer among Sponsors and Events
Sponsorship is a major marketing communication tool; global spending, estimated at $60.2 billion (USD) in 2016, has doubled over the past 10 years, report Gerard Prendergast, professor and associate dean and Marc Mazodier, assistant professor, both at Hong Kong Baptist University School of Business, with Aishwarya Paliwal, executive director at Hong Kong-based Prosperity Investments Worldwide Ltd. (Mazodier also is a research associate at the Ehrenberg-Bass Institute for Marketing Science, University of South Australia). By paying for the opportunity to be associated with a given event, marketers hope that the event’s image will be transferred to their brands. Whereas previous research may have treated the concept of image transfer oversimplistically as “unidirectional,” the authors note, there is also potential for bidirectional transfer, whereby the image of the brand is transferred to the event. “There are multiple hidden factors that need to be considered in the sponsorship equation,” they write, notably: “customer’s feelings about a brand or event; congruity between an event and its sponsor; and the potential damage of ambush marketers on a sponsored event.”
The Personal-Data Tsunami and the Future of Marketing:
A Moments-Based Marketing Approach for the New People-Data Economy
Shawn O’Neal was instrumental in building Unilever’s global data and analytics capability for marketing. Now an independent consultant (SO-Analytics, in Oakland, N.J.), O’Neal cautions that personal data—information collected daily by every transaction made by humans—is swelling to tsunami proportions. “An ecosystem of information, communication, and methods driven by constantly evolving technology is upending 200 years of truisms… Marketers need to act now to build new business models (which take) into account that relationship building and everyday interactions with customers will convert today’s brands from one-way communicator to three- dimensional entities in the eyes of their customers.” O’Neal recommends a “moments-based” approached focused on “mapping consuming behavior so that you are marketing to the moment” and “fine-tuning that moment experience.” For example, a consumer’s milestones (first apartment, first car, heading to college) can be connected with related purchases currently and in the future, based on previous activity and behavior. “The challenge to all the existing players is how fast and how well they adapt” lest other brands “take their place in these more intimate, ongoing dialogues.”
Research Implications of the “Beyond Advertising” Paradigm:
A Model and Roadmap for Creating Value through All Media and Non-Media Touchpoints
“What if the most forward-thinking innovators from across disciplines and talents imagined what advertising and marketing could/should be, then provided steps to make it happen? What if all the forces of change now buffeting the advertising and marketing world came together to result in a far more desirable future?” The Wharton School‘s Yoram (Jerry) Wind and Catherine Findiesen Hays, creators of the Wharton Future of Advertising Program, started with these questions as they began interviewing more than 200 industry thought leaders from around the world—a massive project they called Advertising 2020. The responses informed their research which evolved into a book published this year, Beyond Advertising: Creating Value Through All Customer Touchpoints (John Wiley & Sons; Hoboken, NJ). This adapted excerpt explores the researchers’ four-part “All Touchpoint Value Creation Model,” which “aims to make sense of our roles, challenges, and opportunities during this era of profound transformation.” The authors believe their “research points the way to understanding how all interactions—online, real-time, in a store, on the street, in groups, or in the privacy of our homes—can be orchestrated and measured in a way that is beneficial not just to a company or brand but to the many parties involved and affected.”
Driving Customer-Centric Growth: A Practical Roadmap for Brand Marketing:
The Pivotal Role of Insights and Analytics in the Customer-Centric Organization
In 2015, Millward Brown Vermeer (renamed Kantar Vermeer in 2016), embarked on a research project with the goal of building the strategic framework for a customer- centric approach to marketing. The collaborative effort, which included the Advertising Research Foundation, ESOMAR, Korn Ferry, and LinkedIn, involved interviews with 337 business, marketing, and insights and analytics leaders, and an online survey of 10,495 practitioners from 60 countries. In this article, Kantar Vermeer executives Mario Simon (CEO), Frank van den Driest (COO), and Tom Wilms (senior global research director) offer an in-depth look at the Insights2020 findings, data, and methodology that informed their roadmap for companies to develop a customer-centric business model in which the insights and analytics function plays a critical role. Such a model, they believe, is what has led to strong revenue growth at “overperformers” (i.e. brands experiencing higher revenue growth than their peers across the category).
Assessing Ad-Spend Patterns to Predict Brand Health:
A Model for Advertisers to Determine Future Advertising-Budgeting Strategies
What makes a brand “healthy”? Four academics in Australia—Macquarie University’s Abas Mirzaei (lecturer) David Gray (senior lecturer), and Chris Baumann (associate professor); and Swinburne Business School professor Lester W. Johnson—see a link between a brand’s health with the company’s advertising-spending patterns. A “healthy brand,” according to the authors, “experiences year-on-year growth in brand sales over the long term.” By assessing the ad-spend patterns of what they viewed as “healthy” and “unhealthy” brands across the airline, banking, and department store categories over 12 years, the researchers identified four ad-spend patterns linked to brand performance. Understanding these patterns “potentially (enables) marketers to project the impact of various levels of advertising investment before formalizing advertising strategies and budgets.”
How to Use Neuromeasures to Make Better Advertising Decisions:
Questions Practitioners Should Ask Vendors and Research Priorities for Scholars
Traditional measures of advertising effectiveness are insufficient to “fully understand response to advertising,” and new testing approaches should be investigated, write Ehrenberg-Bass Institute‘s Rachel Kennedy and Haydn Northover in this point-of-view essay. But, they caution, marketers should be wary of the early over-promise of neuroscience. “Neuro-approaches are promising, but not yet perfect: The data needs to be manipulated to ‘see’ the patterns; the outputs require interpretation; and different software can give different answers.” Advancing theory, they add, “faces challenges until neuro-skills are developed more widely among more advertisers and more broadly across the different advertising conditions.” Kennedy and Northover identify issues with implementing such measures; provide questions for buyers of neuroscientific research to ask vendors; and encourage vendors to develop “robust answers underpinned by empirical validations.” Those validations, the authors believe, “will advance advertising understanding and practice.”
Decoding Neural Responses to Emotion in Television Commercials:
An Integrative Study of Self-Reporting and fMRI Measures
This study takes a measured view to neuroscience in marketing, proposing an integrative procedure combining a visual self-reporting scale with functional magnetic resonance imaging (fMRI) to measure emotional response to television commercials. “Current practice in the field of neuromarketing either regards physiological measures as superior to self-reporting or uses just one type of measure,” write Feng Shen, assistant professor at St. Joseph’s University in Philadelphia and Jon D. Morris, professor of advertising at College of Journalism and Communications at the University of Florida in Gainesville, FL. “But now there is evidence that these two approaches are not mutually exclusive.” To study compatibility, Shen and Morris used self-reporting scores to identify emotion dimensions in advertising, and they used fMRI to track brain responses to the emotion dimensions. They found, in fact: “Neither of the two types of measures need to be inherently better than the other. They are just used for different purposes and in different situations.”
Toward a Better Understanding of Advertising Stimuli Processing:
Exploring the Link between Consumers’ Eye-Fixation and Their Subconscious Responses
In an attempt to reconcile and improve existing neuromarketing tools with new service offerings, this study explores the link between attentional focus defined as eye fixation—particularly the length of focus—and consumers’ subconscious emotional responses. The authors write from both an academic and practitioner perspective: Michal Matukin is a social psychologist at Neurohm, neuro-research and technology provider based in Warsaw, Poland; Rafal Ohme is a professor of psychology at Warsaw’s University of Social Sciences and Humanities; and Christo Boshoff is professor in the department of business management at Stellenbosch University in South Africa. “Marketers and advertisers increasingly acknowledge that a large proportion of human decision making is intuitive, automatic, and often without conscious control or effort,” they write. “Using electroencephalography (EEG) and eye-tracking data, the study makes a contribution at two levels. First, it empirically explores the impact of consumers’ eye fixation on peripheral information. Second, it makes a methodological contribution in demonstrating how these two data-collection techniques can be integrated to better understand the relationship between where consumers look when exposed to a static advertisement (in this case a DVD cover) and their subsequent level of subconscious responses.” With that knowledge at hand, “Contemporary marketers … need to move beyond the verbally reported conscious feelings typical of our current way of thinking, by exploring subconscious emotions as well,” the authors suggest. “Neurophysiological methodologies put these insights within reasonably easy reach of advertisers, thanks to the growth and development of technological and computational capabilities.”
EEG-Based Measures versus Panel Ratings:
Predicting Social-Media Based Behavioral Responses to Super Bowl Ads
For decades, USA Today has enjoyed day-after dominance in the community of marketers with its Ad Meter ratings. Using panel-based methodology, the daily newspaper has enjoyed the reputation of being the go-to source of which advertisers made the tightest connection with viewers of America’s most-watched television event, the Super Bowl. But neurological measures may be even more effective in predicting consumer engagement with major media events, according to University of Memphis’ George D. Deitz (professor and research fellow at the university’s Customer NeuroInsights Research Lab); Marla B. Royne, (professor of marketing and chair of the department of marketing and supply chain management); and PhD candidates Michael C. Peasley, Jianping “Coco” Huang, and Joshua T. Coleman. The researchers explored consumer behavioral responses to Super Bowl ads on YouTube by comparing the predictive value of the self-report Ad Meter ratings with EEG-based neuroengagement scores. In fact, they found, “EEG analysis demonstrated that people’s brains seem to respond more to Super Bowl advertisements because they are aroused by the emotional power of the ads … suggesting this brain activity is a significant predictor” of the success of Super Bowl ads.
Coming in September: How Recall Works for Measuring Effectiveness
JAR Co-Executive Editor (North America) John B. Ford looks ahead to the September issue’s special package on “How Recall Works for Measuring Effectiveness,” summarizing the rich history of research on this topic published in the JAR over several decades.