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MASB’s Game Changing Brand Investment and Valuation Project – Part I

July 20th, 2015 Comments off

How much is my brand worth in financial terms?  How much will my marketing grow its value?

Despite their seeming simplicity, these two questions have frustrated brand practitioners for decades.  It is well accepted that there is a link between brand building activities and corporate profits.  After all, the entire field of marketing is based upon this proposition.  Yet it is equally well accepted that there is no standardized approach that companies can rely on to quantify brand value in the dollar-and-cents terms applied to other assets.  This puts marketing at a severe disadvantage within boardroom discussions of resource allocations, as its expenditures are all too often seen as pure costs rather than investments in the business.  And this is despite a growing realization that intangibles account for up to eighty percent of overall corporate value with brands being at the top of the list.

But one industry group is actively working to change this.  The Marketing Accountability Standards Board (MASB) created the Brand Investment and Valuation (BIV) project to establish the quantitative linkages between marketing and financial metrics.   The solution they have proposed is as simple as the questions themselves:  Identify a “brand strength” metric which captures the impact of all branding activities, understand how this metric translates into financial returns (ultimately cash flow), and then use this to calculate a brand value and to project the return from future marketing investments.

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Of course this begs the question, does such a “brand strength” metric exist?  And if so, is it practical enough to be used?  After an exhaustive search of research literature, MASB identified brand preference as the most likely candidate for the brand strength metric.  Brand preference (also known as brand choice) is defined within the common language in marketing dictionary as:

One of the indicators of the strength of a brand in the hearts and minds of customers, brand preference represents which brands are preferred under assumptions of equality in price and availability.

The ability of brand preference to isolate brand strength from other market factors (e.g., price and distribution) separates it from other marketing measures.  Furthermore, previous studies demonstrated that the behavioral brand preference approach pioneered by MSW•ARS met MASB’s predetermined ten criteria of an ideal metric:

  1. Relevant:  It has been proven to capture the impact of all types of marketing and PR activities.  Over the last 45 years it has been used to measure the effectiveness of all forms of media (e.g. television, print, radio, out-of-home, digital), events (e.g. celebrity and event sponsorships), and brand news (e.g. product recalls, green initiatives).  It has also been shown to capture both conscious and unconscious customer motivations and so applies equally to rational, emotional, and mixed branding strategies.
  2. Predictive:  Its ability to accurately forecast financial outcomes has been demonstrated in a number of studies.  This includes studies comparing preference to sales results calculated from store audits, in-store scanners, pharmaceutical prescription fulfillments and new car registrations.  When applied to advertising, changes in brand preference have been proven to predict changes in the above sales sources from control market tests, split media tests, pre-to-post share analysis and market mix modeling.  In fact, Quirk’s Magazine noted over a decade ago that “this measurement has been validated to actual business results more than any other advertising measurement in the business”.
  3. Objective:  It is purely an empirical measure by nature.  No subjective interpretation is needed.
  4. Calibrated:  It has been applied to the broad spectrum of brands and categories and its correlation to sales has proven consistent across geographies.  Furthermore, it self-adjusts to the marketplace where it is collected so it has the same interpretation without any need for historic benchmarks.

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  1. Reliable:  It has been shown to be as reliable as the laws of random sampling allow.  This is true both for brand preference gathered at a point in time and for changes over time caused by marketing activities.  The table below summarizes this consistency in measuring changes.  Changes in brand preference caused by 49 campaigns were each measured twice among independent groups of costumers.  Observed variation between the pairs was compared to what would be expected from random sampling.  The ‘not significant’ conclusion confirms that the measure is as reliable as the laws of random sampling allow.

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  1. Sensitive:  It is able to detect the impact of media even from one brand building exposure (e.g., a single television ad shown once).
  2. Simple:  It is easily applied and understood.  It can be incorporated within any type of customer research including tracking, pre-testing, post-testing, segmentation, strategy, product concept.
  3. Causal:  While it captures the effect of product experience, it is not driven by just product experience.  In fact, it has been proven predictive of trial for new products for which consumers have no experience.
  4. Transparent:  It doesn’t rely on ‘block box’ models or norms.
  5. Quality Assured:  Its reliability and predictability are subject to continuous review.

To verify its suitability as the brand strength metric, MASB included an aggressive trial of brand preference as part of its BIV project.  A cornerstone of this endeavor was a longitudinal tracking study sponsored by six blue chip corporations and conducted by MSW•ARS Research.  The two year study covers one hundred twenty brands across twelve categories with a variety of market conditions.  In part II of this article we will review several of the key findings from this project, which are already changing industry perceptions on measuring brand value and making brand building investments.

The MSW•ARS Brand Preference measure can be incorporated into a wide variety of research and can even become a standard key performance indicator in your reporting, particularly in your tracking data.  In future blog posts we will discuss this and how you can easily apply it.

If you don’t want to wait then please contact your MSW•ARS representative to learn more about our brand preference approach.

It Made Me Laugh, It Made Me Cry – But Did It Make Me Buy?

July 13th, 2015 Comments off

Due to his Vulcan upbringing, Star Trek’s Mr. Spock was known for his ability to detach himself from emotion and arrive at decisions from a purely logical standpoint.  As for the rest of us – not so much.  Humans are emotional creatures.  We may diligently do our homework in gathering the facts – fuel economy, horsepower, crash test results, resale track record, finance options… But less objective features – styling, image, color, plush interior, feel for the road, acceleration – those get our attention, make our heart beat a little faster, and tug our mind away from a purely rational decision making process.

And so it is with advertising.  Much is made of the dichotomy of a rational approach versus an emotional approach.  However, in reality it is not an either/or proposition.  The key to successful advertising is in making both a rational and emotional connection with our audience, as has been quantified in MSW●ARS studies of advertising pre-test results – those ads with strong emotional and rational responses are supercharged in terms of likelihood to achieve superior sales performance.

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The importance of a strong emotional response to advertising is bolstered by a recent Procter & Gamble in-house review of advertising performance.  As reported by WARC, this study found that ads generating an emotional response were nine times more likely to be successful.  P&G marketing director/creative strategist Pete Carter noted “Indifference is the killer here.  And that’s what you want to avoid.  I think … discovering all the different kinds of emotions that are out there:  that’s where the real meat is right now.”

The options for how advertising content can be designed to elicit an emotional response will be informed by the brand’s strategy and existing personality.  There are no set rules on how this can be done.  However, an MSW●ARS review of television advertisements which were able to leverage an emotional connection into high levels of sales effectiveness has led to some broad rules of thumb for how emotional content can be successfully incorporated into advertising.

Portray an emotional benefit:  The products we choose perform a needed function – clean the clothes, keep our hair in place, quench our thirst.  But they can also provide important emotional benefits – peace of mind, confidence, fun, exhilaration.  Depicting how the product can make you feel has proven to be the most consistently effective emotional approach.  Dick’s Sporting Goods not only showed how a new basketball hoop could make a little girl feel, but also how the product became a centerpiece of the family’s life.

 

 

Create a need state for the product:  We all have needs, from the very basics such as food and shelter to higher order needs such as feelings of security, romance or social inclusion.  Advertisements can use emotionally charged imagery, plot lines and music to depict the feelings of need for a product that can in turn create a need state for the product among viewers.  This imaginative ad from Perrier uses extreme visuals and effective music to build an urgent sense of need for the thirst quenching power of Perrier – and also ultimately depicts the benefit in an emotional payoff when the protagonist finally is able to indulge in a bottle of Perrier.

 

 

Be Aspirational:  At the top of Maslow’s hierarchy of needs are esteem and self-actualization.  We all aspire for something better – to fulfill our potential and to be valued by others.  The literature has suggested that advertisements which play to the aspiration for personal enhancement can be powerful – and the MSW•ARS database has confirmed the utility of this approach.  This celebrity ad featuring LeBron James is aspirational as it depicts his roots in his community and how he found his “thirst” or motivation to succeed from their “passion” and “love”.  The ad shows how Sprite helps him to give back to the community to quench their thirst for a better life – and promotes Sprite as the ultimate thirst quencher.

 

 

Portray Excitement and Adventure: There is a trend in spending, especially among younger people, away from tangible items such as clothing and toward technology and, notably, experiences.  Brands that can tap into this growing appetite for excitement and experience through their advertising and marketing plan are likely to benefit when the depicted feelings are transferred onto the brand and are appropriate for the brand’s image.  This ad from Red Bull uses the world record sky-diving event, sponsored by Red Bull, to create an intense sense of excitement and adventure.  It works for the brand due to its image and purpose – to bring energy and excitement to life.

 

 

Deploy Humor Strategically:  The basis for much of what we find to be humorous is the misfortune of others.  Did you see that guy slip on the banana peel – it was hilarious!  Likewise, humor in advertising has been seen to be particularly effective when it is used to poke fun at a competitor, as Taco Bell successfully did with its clever dig at McDonald’s in its “Guess Who’s Coming to Breakfast” spot promoting its new breakfast menu.

 

 

Humor has also been used to great effect in emphasizing how effective the advertised product is, perhaps through a device such as exaggeration, or highlighting an important aspect of the product.  This ad for Oikos Greek Yogurt uses exaggerated behavior to humorously and effectively illustrate how irresistible tasting the product is.

 

 

Beware Disassociation:  It is vital that the use of emotion is in support of the product and its selling strategy.   Ads with weak emotional associations to the brand are rarely successful.  Oftentimes such ads attempt to use an emotional approach to gain attention or create a feeling they hope to have associated with the product, but the connection of the drama to the brand is vague.  While the Budweiser ‘Puppy Love’ ad won accolades and Super Bowl ad popularity contests, the connection between the story and the brand is tenuous suggesting the ad may have been more popular than sales effective for the brand.

 

 

Given the importance of an emotional connection, evaluative techniques based on neuro-scientific research can be particularly valuable.  For example, facial coding or EEG techniques can give a read on emotional engagement that is temporally discriminating to allow assessment of emotional engagement in the critical early seconds of an ad and to identify any segments where there is potential for viewer disengagement.

One example from MSW●ARS’s application of these techniques involves an ad’s soundtrack.  While historically music was used to tie a brand to specific benefits by highlighting brand features in the lyrics, as in a jingle, in modern form music ties the brand to specific emotions by highlighting personal experiences.  In the example, neuroscience tools isolated why a particular ad underperformed for a key target group.  The background soundtrack led to disengagement (detected from EEG) and avoidance activation (detected from galvanic response) at several points within the ad among the target group.

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Bill Bernback once said “You can say the right thing about a product and nobody will listen.  You’ve got to say it in such a way that people will feel it in their gut.  Because if they don’t feel it, nothing will happen.”  His experience led him to the same conclusion that P&G’s recent study came to – that emotional indifference is the biggest enemy our advertising campaigns face.

Please contact your MSW●ARS representative to learn more about how our TouchPoint*Plus platform and neuro-science techniques can be used to assess the effectiveness of your brand’s advertising and assess how it is connecting emotionally with viewers.

 

Categories: Ad Pre-Testing, Emotion, Neuroscience Tags: