The Forrester Blog For Marketing Leadership Professionals

Advertisers Are Increasingly Disenchanted With TV Advertising

David Cooperstein — Mon, 08 Feb 2010 08:48:32 -0500

On the heels of ad-centric Super Bowl Sunday, we just completed a report based on our survey of 104 national advertisers in a joint study with the ANA, fielded in December 2009 and January 2010. The results illustrate marketers’ continued lack of confidence in the effectiveness of television ads. And while they still express faith in the future of the 30-second spot, advertisers feel that the fundamentals to support their use is in need of an overhaul. Specifically, they express dissatisfaction with the current measurement techniques, an interest in more targeted ads, and a desire for less ad clutter and more relevance.

Respondents to the Association of National Advertisers/Forrester study of national advertisers said their TV ad spending will remain flat this year. Some of the other findings include:

A lack of confidence in TV ad effectiveness. Sixty-two percent of respondents think that TV ads have become less effective in the past two years driven largely by ad clutter

Renewed faith in the 30-second commercial. Only 19 percent of respondents believe that the 30-second spot will be dead in 10 years, down from 28 percent a year ago.

A desire for more targeted TV ads but reluctance to pay for them. Seventy-eight percent of respondents say they would be interested in the ability to target consumers more precisely, but only 59 percent would be willing to pay a premium for it.

Dissatisfaction with measurement. Nearly all advertisers who responded think that the TV industry needs new audience metrics beyond reach and frequency, and 82% of respondents would be interested in ratings for individual commercials.

High interest in branded entertainment and interactive media. Eighty percent of advertisers agree that branded entertainment will play much more of a role in TV advertising, and 38 percent plan to spend more on branded entertainment in 2010 as an alternative to the 30-second spot. Social media, web advertising and search are stealing budgets from TV and other media.

I will be presenting the survey results at the ANA’s TV & Everything Video Forum in New York on February 11, 2010. Any feedback before or after the event are welcome.

Full survey results are available to select Forrester clients in the new Forrester report “TV Advertising Budgets Are Under Siege.” ANA members can access the report at http://www.ana.net/thoughtleadership.

Aussie ecommerce practitioners: let's hear from you

Steven Noble — Wed, 03 Feb 2010 20:10:44 -0500

[Posted by Steven Noble]

Almost everyone I meet in Australia's online sector has an opinion about where we are as a nation when it comes to ecommerce, and where the situation needs to improve.

Well, this is your chance to share your experiences.

Let us know what practices you've embraced in Australia, which you've so far avoided, and why.

The Australian Online Retailing Study awaits your input.

My Innovation Conundrum

Mary Beth Kemp — Tue, 02 Feb 2010 05:20:23 -0500

[Posted by Mary Beth Kemp]

Follow me @mbkmbk

One of the 'hot topics' CMOs tell us they want to spend more time and thought on is innovaitons. Rightly so, given that it is a sweet spot for top executives - 93% cite innovation as a top priority.

Unfortunately, innovation has the traits of a great buzz word. Everyone wants it, but what does it actually mean for a CMO? At a recent team meeting we debated the definition of innovation for marketing leaders and ended up with a few interesting directions…and no consensus.

Could marketing innovation mean testing new media like mobile and social; building direct-to-consumer distribution; getting and involving customers or defining new products or even new product and service couplings? Sure, all those and then some. I think part of the challenge – and the fun - is that there are so many possibilities. Innovation and marketing are a good mix.

Seems like a great place for research.

I’m working on a framework to help CMOs tie experimentation together into a marketing innovation strategy. Central to this strategy will be posing a vision of how their company will interact with and relate to customers in the future. The framework will help them explore the many different options and assemble a roadmap to begin planning how their organization should test and evolve to get to their future vision.

If this topic interests you, and you’d like to contribute, please ping me. I’m in the early stages and welcome insights, stories and debate. If there are related questions you’re working through, send them along too.

So to my conundrum: I’d like to set a relevant definition for innovation before going much further. There are, as you would suspect, plenty of choices. I’m tossing around two. This first one feels closer to our jobs as marketers. In particular, I like the call out to customers : Innovation is creating new value for the both the customer and the company. The second is broader, with a nice nod to the balance of creative and commercial: Innovation is the transformation of ideas to value.

Which of these describe the potential of marketing innovation? Or do you have another idea entirely? New possibilities welcome.

National, regional and global marketing: tell your story

Steven Noble — Tue, 02 Feb 2010 00:26:35 -0500

[Posted by Steven Noble]

We’re seeing high growth in much of Asia and the developing world, and low or negative growth in many parts of the industrial world.

We’re seeing rapid evolution in consumer tastes, and massive, leap-frogging investments in broadband infrastructure in a number of markets.

Consumers increasingly travel, migrate and sustain global interpersonal relationships.

More than ever before, they consume media and products from other markets.

It’s time to reinvent the relationship between global HQ and national and regional heads of marketing to harness new realities.

For this new research, I'd like to hear from national, regional and global heads of marketing from around the world who can discuss:

How the relative importance of various national markets is changing for your organization
The ways in which global HQ monitors or supervises national and regional marketing
The ways in which global HQ enables and supports national and regional marketing
The ways in which national marketing teams support each other horizontally
The ways in which local experiences worldwide shape global marketing strategy

I'm hoping to speak with marketing leaders within Fortune 1000 companies from any industry and every geography. If that sounds like you, please email me.

My view of 2010: beyond the predictions

Steven Noble — Tue, 26 Jan 2010 19:30:39 -0500

[Posted by Steven Noble]

Late last night, as Aussies nationwide enjoyed Australia Day fireworks or a post-barbecue slumber, Forrester published my "Australian Marketing Predictions For 2010".

For this report, I interviewed Australian marketing leaders from many sectors — retail, hospitality, telecommunications, pharmaceuticals, consumer electronics and music — about their plans for the year ahead. I cross-checked my findings with other conversations I'd held recently with finance, FMCG and other companies to build a comprehensive picture of how marketing in Australia will change in 2010.

The short version: expect significant initiatives in the areas of interactive marketing, customer experience and customer intelligence. For the detail, please see the report.

While the report is about changes that will certainly affect Australia's marketing sector as a whole, these shifts will of course play out in quite different ways for individual brands, marketers, media operators and agencies. So, there's a role for discussing possibilities in this blog post, in addition to the predictions I make in the report. For example:

Some of the large Australian organisations that collect rich customer data through their loyalty programs could launch their own database marketing agencies, building on the commercial partnerships they already form with brands that want to access their data.

As MNCs strive to make their marketing more adaptive, they could start to borrow from those Australian marketers who, with low budgets and low levels of corporate supervision, have long been forced to start small and learn as they go.

Tired of losing revenue to pureplays and overseas rivals, more traditional Australian retailers could significantly step up their ecommerce efforts.

At least one icon of Australian traditional media — broadcast or print — could either go bust or switch to an online-only model run by a fraction of its previous staff.

Australia's laws against parallel imports could become a topic of debate once more, as traditional retailers find it harder than ever to compete with ebooks and other electronic media.

Will these five possibilities come to pass? Well, that will depend on the decisions of countless individuals. But we can be absolutely certain of one thing: Australian marketers will launch significant initiatives in the areas of interactive marketing, customer experience and customer intelligence in 2010. To see how and why, please grab a copy of the report.

Help Shape Our Media Mix Research!

Kim Le Quoc — Mon, 25 Jan 2010 09:40:22 -0500

The Marketing Leadership team at Forrester has just launched our most recent global executive panel survey on Media Mix Strategy. The goal of the survey is to understand how Marketing Leaders like you:

Drive their media buying strategy
Experiment with new media vehicles
Spend in traditional and new media for advertising

Interested in the results? Become part of our Global Marketing Leadership Panel of over 500 senior marketing executives like you. Just click here to join our panel and participate in the current Global Marketing Leaders Online Survey.

The survey should take about 15 minutes to complete.

In exchange for your valuable time, we will:

Send you the results from this research before its official release date.
We will also provide you with access to a free piece of research of your choice, once you have completed the survey. The reports we are offering include:
A: "We Are All Media Companies Now", by Nick Thomas
B: "Adding Branded Content To The Mix", by Mary Beth Kemp
C: "Three Steps To Measuring Social Media Marketing" by Nate Elliott

If you have any question at all, please drop me an email at klequoc@forrester.com or comment here.

Leno, O'Brien, and the Future of Media Measurement

David Cooperstein — Mon, 25 Jan 2010 06:00:00 -0500

[Posted by David Cooperstein]

Follow me @minicooper

With all of the news about Leno and O'Brien fighting for time slots on NBC's nightly post-prime time schedule, their ratings have shot up. But the fight for those slots is tough for NBC to justify since two talk show host did not equal more audience, and left the NBC affiliates and Fallon in the dust. While the ratings have risen temporarily, the overall trends has been a downward spiral. Some of the big beneficiaries have been the blog sites, driving traffic with rumor and speculation on the outcome.With Conan out the door carrying a big wad of cash, he may have lost traction but may have benefited from TV's inherent problems.

What this fight reminds us of is that television remains the dominant mass medium in the US, and TV ad spending is usually the biggest line item in consumer marketers' budgets for the reach it delivers. The recession caused marketers to take pause and rethink their spending. The result? TV lost traction. As the economy recovers, Forrester forecasts that TV spending will see a modest recovery in 2010, growing 1% to $69.5 billion. Longer-term, cable TV will recognize the benefits of advanced TV advertising technologies like addressability and interactivity first and will drive the five-year forecast to approach a 4% CAGR. See the detail behind this forecast in our new report, "US TV Ad Spending Forecast, 2009 To 2014" (Forrester client access only).

The longer term tale this battle foreshadows is the one where you can watch Leno, or O'Brien, or get the Top 10 lists from Letterman, on non-broadcast sites like Hulu, or redistributed through Boxee. Then the challenge to the marketers is to evaluate the distribution of their message, not in one inefficient reach vehicle, but for the same or less across a wide variety of end points.

But marketers can't extract value in multichannel marketing until they can measure it. TV spending is still the biggest above-the-line expense, even as Internet usage increases and mass media audiences fragment. Yet 65% of marketing leaders think Internet measurement is more useful than TV measurement. The ecosystem in measured media — media planning and buying agencies, media companies, and measurement vendors — as well as marketers themselves, has entrenched practices that don't deliver effective accountability. Change is in the air, as online video sparks the need for interactive measurement practices to start comparing the two media in a way that allows direct comparisons. We believe that the measurement of TV advertising will become more like that of interactive marketing, not the other way around, and as such branding efforts will be held to the stricter accountability that has driven direct marketing spending from the mail and digital eras. Our take on the changes in media measurement are contained in our other "made (mostly) for TV" report, "The Future of Measured Media" that we just published (Forrester client access only)

In an upcoming report and speech, we will be reporting on the changes in TV budgets in a joint study we did with the Association of National Advertisers, which I will present at the TV and Everything Video Conference on February 11 at the Marriot Marquis in New York. That will round out our take on the TV landscape circa 2010 and beyond.

What is your take on changing TV landscape? Are you changing your approach to TV advertising? If so, why? If not, why is TV still working for you? Let me know either here or via Twitter @minicooper.

CMOs: Its time to mandate the customer experience

David Cooperstein — Thu, 07 Jan 2010 11:49:20 -0500

[Posted by David Cooperstein]

Follow me @minicooper

The role of the CMO is changing from "head of marketing" to "corporate executive," but only when stars align in two ways. The first is when the CMO is a general manager with marketing expertise. The second is when the CEO declares marketing and the brand experience to be corporate objectives rather than execution against. In either case, the CMO recruited to this task must drive change across the organization, connecting the dots to achieve a coherent brand experience regardless of the point at which the customer interacts with the company.

Mary Beth Kemp has written about this in her report, "Marketing Mandate: Connect the Dots" (Forrester clients, click here to read the report) and I have written a piece on Forbes' CMO Network on the topic.

Do you agree that the CMO should lead beyond Marketing? Which CMOs do you see doing the best job at this?

Social Media is the New Super Bowl: Pepsi Refresh and What It Means to Marketers

Augie Ray — Thu, 31 Dec 2009 12:55:56 -0500

If you track Social Media news, I'm sure you saw the eye-catching headline: "Pepsi's Big Gamble: Ditching Super Bowl for Social Media". For the first time in 23 years--23 years!--the brand will not be purchasing a Super Bowl spot. Instead, it is sinking $20M into a Social Media program called Pepsi Refresh. The Pepsi Refresh site will allow people to vote for worthwhile community projects, and Pepsi expects to sponsor thousands of local efforts via this program.

What does this news mean to marketers? Some potential ramifications (and non-ramifications) include:

No, this doesn't mean TV is going away, but it will be fighting for marketing dollars on an increasingly level playing field with Social and Interactive tactics. Despite the meltdown in traditional media, TV advertising will continue to be a big line item in the marketing budget for top consumer brands, but expect it to continue to shrink as a portion of the overall marketing budget. Shar VanBoskirk said it well: "Advertising budgets will decline. But marketing investments won't." Moreover, as Lisa Bradner points out in her report, Adaptive Brand Marketing, the era of annual TV budgets is ending. Expect more iterative budget setting based on "test and learn" cycles where the best and most successful ideas can quickly command more funding regardless of channel.
Social Media programs don't begin and end with Social Media: There can be a mistaken assumption that Social Media Marketing means brands being on Twitter and Facebook. As the Pepsi program demonstrates, Social Media is the means to an end, and not the end itself.

It doesn't matter that you have followers, fans, or a community; those are assets, not return. It is how you use those assets that matters. In Pepsi's case, they've clearly found a way to gain new followers and fans, but that's not the objective of the program; instead, the brand is putting Social Media to work for a higher goal--making the world a better place and associating the brand with that vision.
Social Media measurement = brand measurement: Do you think Pepsi is going to measure the effectiveness of this program merely by how many fans or page views they get? They may count retweets, but what are the chances the $20M investment will be evaluated based upon 140-character pass-alongs?

The success of this program won't be measured primarily with Social Media metrics (fans, followers, RTs, votes, etc.) but on traditional brand and marketing metrics. How much PR does Pepsi earn from the program and the funding of thousands of community projects? How many people hear about the program, and how does it affect their purchase intent for the brand? How many points increase does Pepsi see when it asks questions such as, "Pepsi is a brand that cares about me and my community?" and "Pepsi is a brand I'd recommend to friends?" Does the brand see a lift in sales? Those are the types of metrics that matter in this (or most every other) marketing program. My peer Nate Elliot points out that you must "choose metrics based on objectives rather than technologies."
Another nail in the coffin of merely likable advertising. Super Bowl advertising has become its own kind of sport. Shortly after the big game, the scoreboard goes up (USA Today's Ad Meter) and the winning team does an end zone victory dance (agency press releases bragging about the results). All this hullabaloo implies that ads are entertainment and likability is all that matters, but it is just one element--and hardly the most important--in effective advertising.

Pepsi's actions demonstrate a commitment to something deeper than jokey ads. Pepsi is betting the brand can win by making a deeper connection (consumer involvement versus seeing an ad) for a greater purpose (making the world a better place versus a laugh at the end of a 30-second spot.) As my online friend Brandon Sutton recently wrote on his blog, "Instead of trying to get clever with your messaging, why not try thinking smarter by understanding how humans think and behave and how your brand fits into the bigger picture of this dynamic?"
Social Media changes everything. Social Media alters the playing field for everyone within the enterprise; formerly successful strategies and tactics are being challenged, while old and tired methodologies are getting new legs. For example, Best Buy is using Social Media to improve its customer support in new ways; Starbucks is embracing consumers' ideas and driving innovation and loyalty; and, as we see, Pepsi is using Social Media to give new energy to cause marketing.

Cause marketing is hardly new, but Social Media gives brands the ability to power it in new ways. Previously, cause marketing tended to be about a company making a donation and leveraging that for PR, advertising and in-bound links. Today, cause marketing can be about embracing customers' values and ideas about how to spend charitable dollars and then energizing consumers and employees to get involved and make a difference. Social Media offers us new ways to breathe life into this old marketing idea!

Early next year we'll find out how Pepsi's decision to trade the Super Bowl for Social Media plays out, but it's already earned the brand enormous visibility. Articles about their decision can be found on ABC, CNN, NPR, Reuters, AP, Wall Street Journal, and others. Of course, the first brand to dump Super Bowl advertising in place of Social Media marketing will earn headlines; the fifth brand to do so will not.

So, how are you going to use Social Media to give old tactics and strategies new life in 2010?

Is Marketing As We Know It Dead?

David Cooperstein — Thu, 17 Dec 2009 17:42:07 -0500

[Posted by David Cooperstein]

Follow me @minicooper

As we come to the end of the year, many predictions are made by many pundits and Forrester is responsible for a number of them. On the Marketing Leadership team, we have been writing about the future of brand management, the role of the CMO across the company, and the impact of the Media Meltdown on Marketers (note, these link to report excerpts for Forrester clients).

Our latest colleague to write, research, blog, and tweet about the world we live in as marketers is Augie Ray, who joined Forrester a few months ago from Fullhouse, an agency in Milwaukee, WI to write for Interactive Marketing professionals. He's is on board with a number of ideas that we have put out, and has put out his first blog post -- a predictive view of the Marketing discipline - here.

Do you agree with Augie? Let us know where you think the reinvention of marketing will take us in 2010 and beyond.