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Transcript of Copyright © Information Resources, Inc. 2005. Confidential and proprietary. 1 March 01, 2005 The...
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
1
March 01, 2005
The Channels They Are A-Changin’
ANALYTIC SERVICES
Presented by: J.P. Beauchamp
Panel & Test Solutions Group
Information Resources, Inc.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
2
Objectives
Can the 40 year old TV business model, both recalcitrant and petulant, survive to see 50?
What of technology: Can new media be held accountable?
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
3
Agenda
The Death of Mass Media
The New Television Revolution
Media Accountability•Market Researcher’s Obligations
BehaviorScan.com
TV 2006
Radio Advertising Effectiveness Lab
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
4
The Death of Mass Media
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
5
The Halcyon DaysIn 1965, the average network
commercial break in primetime contained one :60 commercial.
This equated to 18% of non-program content.
And only 17% viewing done by individuals
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
6
But My How Things Change61% increase in clutter over the past forty years
29%28%
22%
18%
1965 1985 2001 2004
TV Dimensions 2004
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
7
Channels/Remotes Proliferate
Avg # of Channels
6 17100
1965 1985 Today
Channels now rising at 8-10 channels per year.Flipping is a sport in everyone’s home!
TV Dimensions 2004
Remote Penetration 97%45%
0%
1965 1985 Today
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
8
Too much of a good thing
77% 84%
10%35%
0%
50%
100%
1965 1985 2004
:60s:30s:15sOthers
We are addicted to :15s to add weeks or GRPs
TV Dimensions 2005
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
9
Business Model Begins to BreakdownWhile TV still delivers more
impressions accidentally than many media deliver purposely, there is that question of effectiveness.
Clutter is not just annoying – it affects recall.
• According the Cable TV Ad Bureau, unaided near coincidental recall was at a mere 2% in 2000.
• In 1965, it was 20%.
Program Quality: The “reality” is pretty bleak on broadcast.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
10
Less HHs For More MoneyPrime network ratings decrease 54% while cost increase 1000%.
02468
1012141618
1970 1980 1985 1990 1995 2000 2004
$0
$5
$10
$15
$20
$25
Avg Rating
Avg CPM
TV Dimensions 2004
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
11
The Prime Network Upfront MarketFor the last decade clients have threatened to not pay double digit increases for that next seasons programming
9%
-13%
15%17%
13%14%
10%
1998 1999 2000 2002 2003 2004
TV Dimensions 2005
2001
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
12
Are Marketers Moving Away From Television?Overall TV spending has increased 10% while prime network TV spending was flat from 2003 to 2004.
TNS Media Intelligence, 11/04
2004 vs 2003 % Dollar Increases
10%
18%
26%
17%16%
Tota
l TV
Cable
Synd
icatio
n
Outdo
or
Inte
rnet
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
13
CPG Ad Dollars Moving Away From NetworkAd spending was up a mere 9% in network TV from 2003 to 2004.
IRI Analysis of NMR MonitorPlus Data/TNS Media Intelligence Nov 04; AdAge, July 04
2004 vs 2003 % Dollar Increases
15%
28%25%25%
Cable Syndication Outdoor Internet
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
14
Forecast of On-Line SpendingMerrill Lynch forecasts that online ad spending will increase to 7% of total US Ad Spending.
0%
1%
2%
3%
4%
5%
6%
7%
8%
2004 2005 2006 2007 2008 2009
Merrill Lynch Forecast
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
15
A Sea of Discontent
As marketers move away from traditional TV… Where do they go?
In 1994 90% of P&G’s ad budget was on TVToday—Prilosec OTC launched with 25% TV
Closer to the consumer and purchase occasionPRProduct PlacementSpotIn-store
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
16
The New Television Revolution“JPTV”
HDTVDCT
ON DEMAND: TV on your schedule.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
17
“The future is here. It is just not widely distributed yet.” – William Gibson
Digital Cable provides one option•Channels options•VOD/SVOD•VOIP – Telephony•ITV•HDTV
Nearly 21% of TV HHs subscribe to digital cable (or 1/3 of cable HHs)
Data return path•Order fulfillment•Viewing data
CTAM, 7/04
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
18
Estimated DTV Household Growth in the US
eMarketer, 8/04
Digital TV is predicted to grow from 50 million HHs in 2004 to 70 million HHs in 2007.
0
10
20
30
40
50
60
70
(mil
lio
ns
)
2004 2005 2006 2007
HDTV
DVR
VOD
Digital TV
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19
Video On DemandVODs promise is unlimited choice:
•Variety of Content•Time Shifting•Ad Avoidance
SVOD allows consumers to watch premium programs without subscribing to premium services.
More than 36 million digital cable homes will have access to VOD by 2008.
VOD usage by consumers is expected to increase 33% by 2007.
Forbes 7/04, Fortune 10/04
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
20
Digital Video RecordersOffer ability to record programming and store it directly on
the machine’s hard drive
Unlimited playback control•Takes control away from the “suits”
No more missed moments•Pause live television
Currently 4.5% of US households
Expected to grow to 20% by end of 2006
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21
33%
PrimetimeOther
66%
34%“TV on my schedule”
“TiVo changed my life”
“There’s no going back!”
Source: Tivo
DVR Viewing Behavior70% of viewing is recorded.Drama and Sitcoms rarely watched
liveLive Viewing: Events, Reality, News,
and Sports may support :30s indefinitely!
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
22
New Technology “Sexes Up” The Status Quo
7 7
72
8
0
10
20
30
40
50
60
70
80
Before DVR After DVR
Extremly Satisfied
Somewhat Satisified
Neutral
Somewhat Dissatisfied
Extremely Dissatisified
Lyra Research – March/April 2004
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
23
Death of the :30Marketers still need to generate brand awareness and purchase
intent, but without relying solely on a :30 spot
•Improving CreativeCollaboration with Hollywood
•Innovative channel marketingProduct Integration
•AgenciesConstantly reevaluateP&G’s creative tracking
•ResearchersNew Media must be measurable (ROI)
•RetailersIn-store marketing critical in cluttered world
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
24
But New Media must be AccountableQuantify the impressions
•Accurate reckoning of OTS
Quantify the leads generated• Interactive nature of new media facilitates reallocation
Quantify the sales generated•How do you measure success
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
25
Technology is Moving Forward. Are You?
Marketers must go beyond concept testing• It is not so much if the technology works•But how well
We (researchers) have a responsibility•To be neutral arbiters of what works and what does not work•Design initiatives for the industry not just proprietary studies
Consumers are not standing still•Embracing technology that shakes up the status quo
But Neither are smart marketers•TV2006•RAEL
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
26
February 28, 2005
The Channels They Are A-Changin’
ANALYTIC SERVICES
JP Beauchamp
Vice President
Testing and Analytic Media Services
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
27
BehaviorScan.com BehaviorScan.com is a cross-marketing agreement between
IRI and comScore.
IRI will recruit current BehaviorScan panelists as well as cable subscribers who live in the BScan markets to participate in this program.
Participants will be required to download comScore software which will monitor Internet activity for appropriate individuals in each household.
Clients will have the opportunity to track:•Online advertising’s effect on offline sales through IRI’s UPC scanner data
•Offline advertising’s effect on online sales through comScore’s surveys and behavioral tracking data
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
28
TV 2006Ad skipping with Digital Video Recorders (DVRs) like
TiVo clearly have the potential to dramatically impact how companies use advertising as a marketing tool.
To date, little has been done to measure DVR impact or to investigate alternative media strategies.
IRI and a consortium of national advertisers, each with at least $100MM in ad expenditure, aim to determine the impact of DVRs in order to reduce the uncertainty of the television advertising investment decision in light of growing DVR technology adoption.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
29
TV 2006TV 2006™ is a large-scale BehaviorScan® test to measure the
impact of DVR technologies on television advertising practices.
Specifically, the TV 2006 Consortium will:Quantify the impact of DVR technology adoption on ad effectiveness.
Measure attitudinal differences between TiVo and non-TiVo users.
Directly measure TiVo ownership, ad exposure conditions and brand sales.
Determine the sales impact across major categories and brands.
Measure purchase behavior differences between TiVo and non-TiVo users.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
30
Radio Ad Effectiveness LabTV advertising tends to “swamp" the effects of radio
because of higher TV spend rates.
A structured test that eliminates impact of TV is necessary to tease out radio ROI.
BehaviorScan®, the gold standard of advertising testing, is being used to eliminate the impact of TV and measure the effectiveness of radio on brand’s sales.
Quantify radio’s ROI in a highly-controlled test environment. Learn how radio works in the presence of TV advertising and other media.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
31
Radio Ad Effectiveness LabRadio Effectiveness Laboratory (RAEL) was established
to further understand how radio advertising works and measure its effectiveness.
RAEL is funding an in-market test conducted by Millward Brown, LLC. and IRI to statistically measure the impact of radio advertising.
Test open to consortium of six advertisers for 2005 test wave.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
32
Current TV/Current Internet
Heavy TV/Current Internet
Test CellControl Cell
Service BehaviorScan®.com, powered by comScore and IRI Q2 2005 Launch
What It Does
Measures how offline advertising influences online sales (and vice-versa) by combining IRI’s BehaviorScan in-market testing with comScore’s online behavioral tracking capabilities.
Use It
ForTesting advertising spending levels, copy effectiveness and other ad variables to track online sales.
• FINDING: Increasing television advertising caused online sales to increase.
• INTERPRETATION: Offline advertising has an effect on online sales.
• IMPLICATIONS: Increase TV spend nationally.
CLIENT BENEFIT:The only way to accurately measure offline advertising’s effect on online behavior.
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
33Service TV 2006 Consortium™ Study
What It Does
Uses BehaviorScan to track the purchasing behavior of households with TiVo® vs. those without TiVo.
Use It
For
Calculate the impact of Digital Video Recorders like TiVo on your brand’s advertising effectiveness; alter your ad plan before U.S. DVR penetration reaches 20% in 2006.
CLIENT BENEFIT: The only timely and cost-effective way to measure the “TiVo Effect” across multiple brands and categories.
Adjusted Impact of DVRs on SalesHypothetical Results from Study
• FINDING: Brand-C’s sales were most adversely affected by TiVo.
• INTERPRETATION: TiVo households are “zapping” Brand-C’s ads more than other study brands.
• IMPLICATIONS: Brand-C’s sales will be hurt significantly as TiVo penetration grows.
-2%
-4%
-6%
-1%-2%
-3%
Brand A Brand B Brand C Brand DCategory
1Category
2
Copyright © Information Resources, Inc. 2005. Confidential and proprietary.
34Service Radio Ad Effectiveness Lab
What It Does
Features 4-cell, 6-month BehaviorScan test. HHs are divided into those with vs. without television advertising. Among these two groups, some receive high levels of radio advertising (100+ TRPs/week) and some receive no (or current) radio advertising.
Use It
ForTo create a controlled environment to measure the impact of radio in the absence of TV
CLIENT BENEFIT: Quantify radio’s return on investment (ROI) in a highly-controlled test environment. Learn how radio works in the presence of TV advertising and other media.
Isolate the impact of RadioTest Design if Advertiser using Network (Current) Radio
Then 4 Bscan test markets – 2 will need incremental radio
• Advertisers will not be charged for the research. Their contribution would be the purchase of radio time in the test DMA’s, as well as agree to monitor and report on activities in the test markets to help analysts understand causality.
• Measures of ROI will be derived from comparisons of key measures relative to the cost of media investment. In this way advertisers can assess the value of adding radio to their media mix.