Archive for the ‘Digital Practice’ Category

How to Turn the Cord Cutting Trend into an Advantage

January 21st, 2015 Comments off

For many years, cable and satellite television services have been viewed almost as a utility akin to electric, water or telephone service – as an essential. However, recent trends toward cord cutting – the discontinuation of cable service – and cord shaving – changing to smaller and less expensive television packages – is dramatically changing how television content is viewed and the corresponding advertising opportunities.cord_cutter_image_01

There are three primary drivers of the trend toward cord cutting.  The first is the escalation of prices charged to consumers.  The NPD Group reported that the average monthly cable bill for 2011 in the US was $86 and projected this to increase to $123 by 2015 (costs include premium TV channels).  In the current environment of stagnant household income, these increases are not trivial.  Consumers are also frustrated by the necessity to purchase bundles of channels, many if not most of which they never watch.  In fact, a recent consumer survey from cg42 found that:

72% of current customers feel their cable provider engages in predatory practices and takes advantage of consumers’ lack of choice.

The second driver is the surge in alternative providers of video content available through consumers’ internet connections, which has been fueled by broadband penetration which has now reached 79 percent in the US according to Leichtman Research Group.  Most popular among these are video on demand providers Netflix (which just reported its best quarter ever, adding 4.3 million subscribers in Q4 of 2014), Hulu Plus and Amazon Instant Video, each of which provides a huge amount of syndicated content at a relatively low cost.  Included within these subscriptions is a growing amount of original content not available through traditional television channels.   And most recently, Dish Network announced its new web-based Sling service which will provide a small number of the most popular networks for only $20 per month with the option to add on targeted modules such as children’s networks.   Most notably this new service will include the ESPN channels, challenging the last stronghold of the traditional distributors, real time sports coverage.


The third driver is a fundamental change in how television content is consumed.  For most of its history the serial nature of television programming led to viewers scheduling their calendar around their favorite programs.  But with each improvement in time shifting technology, from VCR to DVR, there has been a movement to fitting television around other items on their calendar.  Now the broad availability of video enabled mobile devices such as smart phones and tablets is growing a sentiment of IWWIWWIWI – I Want What I Want When I Want It.  This is giving a tailwind to streaming video providers who not only give access to all these devices, but also provide on demand access to complete archives of programs.


Evidence of the cord cutting trend is a 16% increase from 2012 to 2014 in the number of U.S. households that purchase broadband service but not cable television according to SNL Kagan.  But regardless of whether consumers are cutting the cord, shaving the cord, or just supplementing cable offerings with streaming video, the upshot is that substantial video viewing time is migrating to internet-based platforms.

Not surprisingly, the group leading the move away from cable television is Millennials.  A comScore study reported that “18-34 year olds are 77 percent more likely than average to be a cord-never household… and 67% more likely than average to be a cord-cutter household.”  So to better target this attractive but relatively hard to reach demographic, savvy advertisers are diversifying their media mix to include video advertising on the online platforms that Millennials increasingly frequent.


While many of the paid subscription video-on-demand services such as Netflix and Amazon do not carry advertising, most other online streaming alternatives to the cable cord are ad supported.  These include Hulu and Hulu Plus, YouTube, Crackle and network sites like  Given that one of the major motivating factors in cutting the cord is the cost of cable, it is likely that most viewers fleeing the grip of the cable companies are willing to engage with the advertising to realize the cost savings afforded by on-line viewing.  And many providers are experimenting with ways to make the advertising served as relevant as possible.  For example on Hulu users can tailor the types of ads they are served by completing an online survey of category usage.  Another Hulu capability allows viewers to swap ads in real time.


Advertisers who combine digital video with television in their media mix can significantly boost the reach of their campaigns, particularly among younger viewers who have cut the cord or just prefer accessing television content online.  In fact, a comScore study of ten cross-platform campaigns found that on average, television reached 49 percent of the population while digital platforms uniquely contributed an incremental 5.8 percent to overall reach.

While cord cutters can be reached through online advertising, some may question whether video ads embedded in online content can be as effective as advertising viewed on television.  After all, television has a long and well documented history of delivering sales and strong ROI to advertisers.  While some internet-based video viewing occurs on television sets using devices such as Roku or Apple TV, much of this viewing occurs on the smaller screens of computers, tablets or even smartphones for which the viewing experience may differ.

To investigate whether any differences exist in relative advertising effectiveness for video ads viewed online versus on TV, MSW●ARS undertook a large scale experiment.  Specifically, we tested the same video ads in two different ways among separate samples of consumers: as television ads viewed on standard television screens, and as pre-roll ads viewed online prior to short-form video.  This study encompassed tests of 30 different ads for 15 different brands.

MSW●ARS’s sales-validated CCPersuasion™ and Related Recall™ metrics were used to evaluate the effectiveness of the advertising tested in each of these two environments.  The results were highly correlated for both metrics, as can be seen in the charts below.  This suggests that an ad that is effective when viewed on television is also highly likely to work well in an online video format – what works creatively on the television screen will translate to the online viewing environment.  It also suggests that video advertising on digital platforms can be as effective as advertising on television, perhaps even more so when digital techniques to improve relevancy are employed (these techniques were not examined in the experiment).


So, advertisers can turn the cord cutting phenomenon to their advantage by following this audience online.  And many are already doing so.  According to a recent comScore study, advertising already comprises 15.8 percent of online viewing time of premium (long-form) video.  This represents two thirds of the comparable percent for television (23.3 percent).  These advertisers are using online video to improve upon TV-only reach levels – especially among the younger demographic – and can be confident it will move the sales-needle as expected.  Furthermore, they will get a leg up on the competition in terms of building equity among Millennials, while those who fail to follow suit risk losing the next generation to competitors.

With the unique TouchPoint™ system for testing advertising’s effectiveness on any media platform – including online video – and the patented outlook media planner for optimizing media spend, MSW●ARS has the tools to help advertisers capitalize on the changing media environment and turn the cord cutting trend into an advantage.

Please contact your MSW●ARS representative to find out more about how we can help your brand evaluate and optimize online video advertising as well as other touchpoints in your media mix.

Mobile Ads – The Timely Pocket-Sized Ads with Big Potential

October 29th, 2014 Comments off

Not since the advent of the television ad in 1941 has the potential for new ad formats been so great. The emergence of digital platforms is enabling marketers to experiment with a number of new ad formats, each of which could revolutionize marketing as we know it. Throughout 2014 we have been highlighting the most effective techniques being broadly adopted.  Here in Part VII of our series we address Mobile ads.


Part VII:  Mobile Ads and the Recency Phenomenon

Everyone these days has a mobile device.  Or two.  Or three.  This rapid rise in adoption isn’t restricted to the developed world.  While a sad commentary on the lack of sanitation infrastructure in less developed countries, a UN report indicating that more people globally own a mobile phone than have access to a flush toilet is an astonishing testament to mobile penetration.  More vital than the fact that six out of every seven people in the world owns a mobile phone is that we take them nearly everywhere we go.

With the introduction of the iPhone in 2007 spurring the transition of mobile devices from a communication tool to a platform for digesting content, advertising inevitably followed to allow monetization of content.  As smart phone penetration built, so did mobile ad revenues.  In fact, ever since the Interactive Advertising Bureau (IAB) started reporting mobile ad revenue in the US, growth has been explosive – more than doubling year-on-year for three straight years:


And in their 2014 mid-year report, the IAB indicated that in Q2 of 2014 mobile ad revenue constituted 24% of total internet ad revenue, confirming that mobile advertising has truly arrived!

This tremendous growth in the use of micro ads on mobile devices has been accompanied by remarkable innovation in ad formats.  There are numerous approaches to mobile advertising – static display, rich media, in-app, search, video, text messaging and branded apps.  Innovative formats such as the IAB “Rising Stars” are being designed to increase user interaction.  Add in the unique features of mobile devices (cameras, GPS, interactivity, vibration) that ads can leverage in creative ways and the potential for engaging users is tremendous.  In fact, a comScore study showed mobile ads having substantially higher engagement levels when compared to ads served to desktop computers.


But beyond format, the portable nature of mobile devices allows advertisers a unique opportunity to exploit a vital dimension in advertising effectiveness – the recency phenomenon.  Recency research suggests that the closer in time advertising exposure is to an actual purchase occasion, the more likely the advertising will influence the buying decision.  The impact of recency is well-proven in traditional media.  Perhaps a study of Nielsen data by Colin McDonald illustrates this best.  The impact of an ad on share change was shown to steadily decline as the time following ad exposure increased.  This includes a drop of 16% from the first day following exposure to the second day.


This decline can be partially explained by a rapid decay in advertising memories.  An MSW●ARS study showed that proven ad recall after incidental advertising exposure faded by nearly fifty percent in the first three days after exposure.


So what does this have to do with mobile?  First, despite the fantastic and on-going growth in e-commerce, we still buy a lot of stuff the old fashioned way – at a physical store.  But, mobile devices are often used as an aid in the process.  In fact, comScore has reported that “nearly 3 out of every 4 mobile phone searches that end in a purchase bring customers into brick-and-mortar stores.”  So with consumers using mobile devices as part of the shopping process, the potential exists for ad exposure in real time – recency taken to its extreme.

Using location-targeting methods, advertisers can utilize either geo-fence targeting (creating a virtual area around a specific location such as a restaurant or retail store and serving ads to mobile device users who are detected entering the area) or geo-aware targeting (using the mobile device’s current location to serve ads relevant to the device owner’s proximity) to target temporally relevant advertising.  The IAB lists eight location targeting technologies by precision, with GPS being most precise, though use of multiple technologies is recommended due to inherent limitations with each (e.g., GPS works best with clear skyward sightlines).


Given that location-targeted ads are intended for use in the moment, it isn’t surprising that store location and special offers/coupons are commonly leveraged in these types of ads.  A McDonald’s campaign intended to direct potential late-night customers to locations with extended hours won an EMMA (Effective Mobile Marketing Award) with such an ad:

This campaign was designed to drive downloads of a ‘restaurant finder … it employed location-based technology and geo-targeted above-the-line messaging, to avoid sending potential customers to a locked door. Banner ads were served to smartphones on sites that the target audience of late-night travelers and shift workers were known to browse, when the recipient was in close proximity to an open restaurant…The app was downloaded 1.3m times over the course of the campaign, and when the sales uplift was calculated, the campaign delivered an ROI of 2:1.

–              EMMA Summary excerpt

Another EMMA winner illustrates how global marketers can creatively take advantage of local targeting.  Colgate used the occasion of Kumbh Mela, a Hindu pilgrimage in India billed as the largest gathering of humanity in the world (over 80 million visitors), to promote the new Ayurvedic toothpaste.  A geo-fence was created around the festival’s Colgate promotional booth and pilgrims entering this radius were sent a message on their mobile phones encouraging them to visit the Colgate location.  Due to low literacy rates, a voice message using a well-known radio personality was employed.  Visits to the Colgate booth increased over 300% compared to pre-promotion levels.


Vincent Van Gogh once observed “Great things are done by a series of small things brought together”.  When it comes to mobile advertising this observation definitely rings true.

Please contact your MSW●ARS representative to learn about techniques for evaluating the performance of mobile advertising campaigns.

Digital Just Got BIGGER – OOH!

October 8th, 2014 Comments off

Not since the advent of the television ad in 1941 has the potential for new ad formats been so great. The emergence of digital platforms is enabling marketers to experiment with a number of new ad formats, each of which could revolutionize marketing as we know it. Throughout 2014 we have been highlighting the most effective techniques being broadly adopted.


Part VI: Digital Billboard

The billboard (also known as a hoarding outside of the United States) is one of the most iconic advertising forms.  Designed in the early eighteen hundreds to notify the public of upcoming circus performances, its use as an awareness builder for events is still going strong.  Few advertising forms today communicate “NOW” as impressively as a well-executed billboard.


When placed along commuter routes, the built-in frequency from billboards can gently nudge a brand up the awareness continuum, helping a relatively unknown brand vault to the top of a consumer’s evoked set.  And when placed near a retail area, the recency to the shopping event can cue the consumer for a desired purchase decision.


However the short, static nature of billboards has often led to them being pigeonholed into tactical uses within the media plan.  This is similar to the early days of online display advertising when the channel saw little use for strategic messaging such as brand differentiation, new product/feature information, superiority claims and advocacy content.  It wasn’t until the “richer” motion-based display experiences were introduced that the incidence of strategic uses broke double digits and started to approach those of other media such as television.


We see the same trend playing out for digital billboards.  Like static display ads, digital billboards were first promoted for their low cost, speed of deployment, and media planning flexibility.  By eliminating physical printing, start-up costs are minimized and initial designs and subsequent changes to creative can be made more quickly.  And since the cost structure is managed on an impression basis (as opposed to an installation basis) exposure rates can be manipulated across multiple digital billboards to better optimize frequency and reach ratios.  But from a creative standpoint, this type of digital billboard still presents a static viewer experience and therefore the same content density as its traditional counterpart.

Example Digital Billboard with Rotating Static Exposures


But brands are now starting to experiment with the dynamic and interactive capabilities of digital billboards.  This new generation holds much promise for elevating the medium into the realm of strategic campaigns.  The following case studies showcase some of the best examples of brands using digital billboards in strategic ways.


New Product Feature: Coca-Cola ‘Share-a-Coke’ Australia Launch


Brand Differentiation: Forever 21 Times Square


Superiority Claim: British Airways


Of course digital billboards will still be used for the time-honored tradition of event notification.  Only now they will be shows in themselves!


Event Notification: Cirque du Soleil McNamara Airport



Please contact your MSW●ARS representative to learn more about techniques for evaluating the performance of out-of-home advertising.