the seismic shift in targeted advertising and media

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Confidential & Proprietary • Copyright © 2009 The Nielsen Company Media & Money Conference Randall Beard, Global EVP at Nielsen IAG -- CPG

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At the recent "Media & Money" conference in New York, I gave a presentation on "The Seismic Shift in Targeted Advertising and Media," or Yield Management: What Advertisers Can Learn From the Airlines. For all of its negative press and terrible operating results, the airline industry has produced one brilliant success which has the potential to turn the advertising and media business upside down: yield management. Advertisers now have all the pieces of the yield management puzzle--and just need to put them together to vastly improve their marketing efforts.

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Page 1: The Seismic Shift in Targeted Advertising and Media

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

Media & Money ConferenceRandall Beard, Global EVP at Nielsen IAG -- CPG

Page 2: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

The Seismic Shift in Targeted Advertising and Media

•Current State

• Analogue: Airlines

• Yield Management in Marketing?

• TV Engagement

• Ad Engagement

• Implications & Future State

Page 3: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Approach Rules of Thumb

Target Audience

Measurement

Primary Focus

Financial Impact

Timing

Broad

Viewership

1 Screen

Unclear Outcomes

Annual

Advertising & Media – Current State

Page 4: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Introduction of Yield Management

• Optimize Revenue

• Perishable Resource

• Price Discrimination

Analogue: Birth of Yield Management

Airline Industry circa 1985

• Peoples Express

• Highly profitable

• AA launches SuperSavers

• Peoples bankruptcy

Page 5: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

“the single most important

technical development in

transportation management

since we entered deregulation”

Robert CrandallFormer Chairman & CEO of American Airlines

Yield Management – Disruptive

Page 6: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

For Advertisers

• Right Ad

• Right Consumer

• Right Program

• Right Price

For Airlines

• Right Seat

• Right Customer

• Right Time

• Right Price

Yield Management: Airlines to Marketing ?

Page 7: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Digital

Cross Media Measurement

New Measurement Tools

• Precision Targeting

• TV Engagement

• Ad Engagement

• Purchase Data link

Real Time

Accountability

Yield Management in Marketing – Key Enablers

Page 8: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

PROBLEM

Inadequate real-time tools and measurement

Advertisers willing to pay for ad and media effectiveness

BUT

Yield Management: Airlines to Marketing

Page 9: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

TV Program Engagement

•What is it?

•Does it Matter?

TV Program Engagement

Page 10: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

0%

10%

20%

30%

40%

50%

60%

70%

80%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

When viewers are paying more attention to a TV program, they also pay more attention to the ads that air within that program

Gen

eral

Rec

all

Program Engagement

Program Engagement Impacts Ad Recall

Page 11: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Ad Engagement

• What is it?

• Does Context Matter?

Advertising Engagement

Page 12: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Source: Nielsen IAG Ad Data, 09.15.07 - 02.27.08. Based on A18-54 with Household Income $50K+

Purchase Intent Differs By Program Genre For the Same Creative Unit

Program Genre Purchase Intent (Top 2 Box)

Auto Racing 173

Sports Magazines 158

Professional Football–Pre-Game 119

Drama/Adventure 119

Animation 104

Feature Film 104

Reality 96

Situation Comedy 92

Game Show 92

Professional Football–Game 88

Talk Format 81

College Football–Game 77

Documentary/Salute/Tribute 69

Total 100

Advertising Engagement – By Program Genre

Page 13: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Where is all this leading ?

Yield Management in Marketing – What’s Next

Page 14: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Science / Algorithms

Advertising & Media – Broad Trends

Broad Target

Viewership

1 Screen

Unclear Outcomes

Annual

Rules of Thumb

Precision Targets

Engagement

3 Screens

Purchase / ROI

Real Time Replanning

Page 15: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Advertisers will move toward Yield Management• Right Audience – Demo + Psycho, Behavioral

• Right Program – Ratings + TV Program Engagement

• Right Ad – Creative + Ad Engagement

• Right Time – Annual + Periodic Replanning

All linked to consumer purchase behavior…

…with Marketing ROI as key outcome

Future State: Marketing Yield Management

Page 16: The Seismic Shift in Targeted Advertising and Media

04/08/23 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

The Future – Closer Than You Think

ROI Driven Advertising & Media

“…Get on board soon or

risk being grounded…”

Page 17: The Seismic Shift in Targeted Advertising and Media

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

Discussion / Q&A

For more, go to:http://blog.nielsen.com/nielsenwire/