May 4, 2008
It’s a provocative title, but it could have been worse – “media buyers don’t understand media” is almost as apt. The reality of modern media buying is that media agencies are essentially buyers of media, not planners. They have been pushed into this situation by uneducated advertisers who find it hard to know what is good media strategy from bad, but do appreciate costs. So media agencies have squeezed out much of the costs that don’t deliver value to their advertiser clients, and by and large this means that the investment in media knowledge has shrunk to almost nil.
It’s a sad situation for advertisers, but of their own making, though Universities also share much of the blame for sending graduate marketers out into the world with almost no training in media.
Yesterday I came across an example of the distorted crazy market for media. According to Regional Television Marketing figures, 36% of Australia’s population lives in regional areas, but just 17% of the marketing dollars spent by national advertisers appear on our television screens. This is in spite of these regional areas featuring some large cities, and a population with higher than average spending power.
Why do big brands ignore regional TV ? They distribute their brands into regional Australia, but they don’t advertise them there. The reason is that regional TV is more difficult to buy, i.e. more costly for media agencies, it can’t be bought from a “single desk”. Also media agencies, under pressure to demonstrate their “buying power”, bulk buy metro TV space in advance. They seldom do this for regional TV. So they have a huge incentive to shift the space they have, if they don’t sell this their profits take a serious blow.
So it’s common practice to recommend metro TV and ignore regional TV. This can be subtle, just part of the company culture where all the attention goes to metro TV, or overt where regional TV is actively discouraged – this is unethical behaviour, but it happens.
So, for an Australian advertiser, the most simple cost effective way of gaining some pure reach is to split out some of the metro TV budget and allocate it to regional TV. It’s an astonishingly easy way to enhance the sales effectiveness of the ad spend.
I’m sure there are hundreds of similar examples around the world of madness in the media buying industry.

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Business, Marketing, advertising, media |
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Posted by byronsharp
April 26, 2008
Now that the US has finally got ratings for the commercial breaks (via minute by minute recording) the TV networks are all interested in maximising their ratings during the break (ie not losing too many viewers while the ads are on). Which is all good news for advertisers.
One of the things that affects viewing of the ad breaks is the quality of the ads. Low quality ads turn viewers away, and ruin things for all the other advertisers. Put around the other way, poor quality ads enjoy a bit of a ‘free ride’ on the audiences retained by the good quality ads. So should networks give discounts for higher quality, more entertaining advertisements ? And charge more for annoying and boring advertisements ?
Advertising agencies should encourage it, as it would be a further incentive for marketers to commission bigger budget advertisements. In fact it is potentially a win-win situation for everyone. Consumers get ads they actually want to watch. Advertisers get a financial incentive to produce these ads. And networks that feature higher quality ads should enjoy better ratings.
I’m hopeful that innovative networks will begin offering pricing along these lines and/or agencies or clients will start negotiating deals along these lines.

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Business, Marketing, advertising, media |
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Posted by byronsharp
April 11, 2008
Many market research houses now market a “loyalty ladder” product. These dissect a brand’s customer base into 4-6 groups, say starting with “no awareness” at the bottom and ending with something like “passionate loyals” at the top. This classification is usually based on behaviour (or claimed behaviour) such as share of category purchases devoted to the brand in question. Some add attitudinal statements into the customer classification. Others, like The Conversion Model, claim to be entirely attitidudinal.
All these do is reflect the brand’s relative popularity (i.e. market share) and random sampling error (which looms large when you have 4-6 groups).
Marketing Science has known for decades that loyal behaviours and attitudes follow a set statistical distribution, and so any brand’s true loyalty ladder can be accurately predicted simply from knowing its size compared to rivals. And if it has 100% relative share, then all customers will be at the top of the ladder, but not until then.
I suppose these ladders are attractive because intuitively marketers feel it’s their job to move people along this path, sorry up this ladder. Yet I notice that my practitioner colleagues rarely draw any practical insights from these ladder metrics, they provide more entertainment value (”that looks interesting”) than knowledge. Which is fine, because that’s all they are, an entertaining expensive way of presenting, and obscuring, loyalty metrics.

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Loyalty Marketing, Market Research, Marketing Myths, marketing metrics |
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Posted by byronsharp
April 10, 2008
Differentiation’s role in marketing strategy is rethought in this journal article (which builds on an earlier report for corporate members). It presents a small mountain of varied empirical evidence, including direct measures of perceived difference:
Romaniuk, Jenni, Byron Sharp, and Andrew Ehrenberg (2007), “Evidence concerning the importance of perceived brand differentiation,” Australasian Marketing Journal, Vol.15 (2), pages 42-54.
(Download journal version of differentiation)
Differentiation (a benefit or “reason to buy” for the consumer) and Distinctiveness (a brand looking like itself) are different things. This isn’t just semantics, as any lawyer or judge will tell you. Distinctiveness (branding) is legally defensible, while differentiation is not (other than time limited patent protection).

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Business, Marketing, Marketing Myths, advertising, branding |
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Posted by byronsharp
March 28, 2008
Evaluation is over-rated. Brands largely compete in terms of mental and physical availability. See Sharp 2006, Corporate Member report 39. This isn’t to say that product features, and consumer evaluation, aren’t important – just that they operate within this ‘battle for attention’.
When a person goes to buy a brand, a huge part of the choice process, yet a part they hardly notice (they don’t even think of it as part of the choice decision), is the act of not considering most options. Evaluation occurs between a very limited number of brands, the ones that are noticed or recalled – which often can be a single brand.
So while positive features/perceptions do help a brand get chosen they do so after this massive culling of brands. Over time, however feature advantages can build salience, with time they assist in gaining mental and physical availability.
This means that product feature advantages, while important, are far less so than the business press makes out. This is especially true for established brands with significant market-based assets.
Another way of putting this, is that brands that are easier to buy for more people, get bought more. Which reminds me that reasons not to buy, can therefore be much more important (to sales) than reasons to buy. Generally marketers are quite sensitive to ‘reasons not to buy’, or at least to negative publicity. Yet it is not uncommon for marketers to spend much effort trying to communicate a “reason to buy” (”value proposition”, USP, differentiating factor etc) and yet be quite blasé about features that turn some consumers away.
For example, there are still many food products that contain Trans Fats when they don’t need to. In some countries they means they have to carry a small warning (like “contains hydrogenated fat”) – you’d think this would be enough to catch their markers attention and concern.
It’s very difficult to get consumers to notice your brand, when you succeed consumers reward you with a degree of loyalty (largely due to habit and inertia), but you can ruin this if they see a reason not to buy. Smart marketers should always be on the look out for such features. This is one of the reasons that differentiation needs to be approached with caution, being different while appealing to one group in the market can sometimes turn other consumers away.

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Marketing, advertising, buying behaviour |
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Posted by byronsharp
March 25, 2008
Consumers are very good at screening out advertising, paying little or no active attention.
Much radio advertising is ‘wallpaper’ with little active attention paid to the advertising. We flick past much magazine, newspaper and web advertising. TV advertising also often just washes over us and there is active, physical avoidance too.
Now this isn’t to say that engagement is essential for advertising to affect consumers’ memory structures. It isn’t. But some active processing is helpful.
And this is where TV has a simple physical advantage, as do cinema ads, and some radio. Consumers simply spend more time with the ad. Consumers consumption of individual ads varies, situation to situation, mood to mood, etc. It can vary second by second. Out in the real world (away from forced exposure tests) longer ads work better largely because they have more chance of catching some attention, not the full 30 seconds but part of it.
Zapping (fast forwarding) sounds like a major threat to this effect, but it isn’t because the action of fast-forwarding requires consumers to pay more attention to the screen.
Another marketing implication is that viewers will seldom really watch the whole ad, in the sense of not paying attention to it all the way through. Remember this when designing and evaluating your new advertisement. Will it work if consumers only see a fraction of it ?

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Business, Marketing, advertising |
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Posted by byronsharp