About Byron Sharp

Dr Byron Sharp Professor of Marketing Science Director, Ehrenberg-Bass Institute, University of South Australia

Do TV commercials need a USP ?

The answer would appear to be no, given that much advertising does not even make the slightest attempt at saying the brand is better than others.  But a fair amount of advertising does – so is this particularly good advertising ?  Does it work better ?

David Stewart, a Professor at University of Southern California, has published several important large content analyses of TV advertising.  The 1980s US TV ads (more than 2000)  were analysed Continue reading

A problem with ad awareness norms to assess advertising quality

It is now common for market research agencies to promise their clients norms against which they can compare their advertising campaign.  For example, they might report…

“The new campaign for Fabulo achieved 37% ad awareness, this compares well to the average of 31% for new campaigns after 3 weeks”.

This sounds like good practice, but the norm is meaningless.

Better yet the research agency might compare against campaigns in a particular product category, or adjust for a particular GRP/TARP weight.  But this still isn’t good enough, GRPs (Gross Rating Points) tell us nothing about the reach and frequency of the campaign.

Worse still the metric confounds both media strategy effects and advertisement quality effects.  What is really needed is measurement immediately after the ad goes into the market, just of those consumers who had a potential exposure (OTS).  This can measure the ability of the advertisement to cut through and impact on memory structures, i.e. assess the quality of the advertisement live in-market.  Only then, when you know if the ad itself is working well or not, can you later use ad awareness metrics to evaluate the media strategy.

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Do different awareness measures measure the same thing ?

There is a history of discussion amongst marketers about the relative merits and meaning of different awareness measures. Then in 1995 an article was published that appeared to lay all this debate to rest:

Laurent, Gilles, Jean-Noel Kapferer, and Francoise Roussel (1995), “The Underlying Structure of Brand Awareness Scores,” Marketing Science, 14 (No. 3, Part 2), G170-G79.

Gilles Laurent and colleagues appeared to show that different brand awareness measures were systematically related, simply reflecting different levels of difficulty for respondents (i.e. brand prompted being easier than unprompted). So the different measures all tapped one construct, and a score on one measure could be used to accurately predict a score on another measure. We thought that was an incredibly important and practical finding. However, not was all that it seemed.

Nearly a decade later we replicated this research, and extended it to ad awareness. We achieved the same empirical results, but in doing so we were able to more clearly see what the previous research had, and had not, found. The measures tend to vary together, brand to brand, because some brands are much larger and more salient than others, so all their awareness metrics are higher too. However, we also examined the relationships between the loyalty metrics for each brand over time. Contrary to Laurent’s conclusion we empirically found that it isn’t possible to use their model to predict a brand’s score on one metric from its score on another.

So while all these brand awareness measures share something in common they do not perfectly tap one underlying construct. That’s as important a finding as Laurent’s might have been (if it had turned out to be true). Different awareness measures measure (somewhat) different things, even if they are all loosely related to the brand’s overall salience (and market share).

Romaniuk, Jenni, Byron Sharp, Samantha Paech, and Carl Driesener (2004) “Brand and advertising awareness: A replication and extension of a known empirical generalisation” Australasian Marketing Journal, 12 (3), 70-80.

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The concept of brand awareness has been hijacked by poor measures

When marketers first came up with the very worthy concept of brand awareness they were thinking, obviously, about the number of consumers who know the brand. Intuitively you would measure this by showing it to consumers and asking them if they are familiar with it, but last century this was expensive, phone surveys were cost effective but the brand couldn’t be shown (and printing pictures in mail surveys was expensive).

So rapidly the measures of brand awareness became verbal/written product category prompts, e.g. “what brands of fabric conditioner are you aware of ?” The problem with this type of measure is that it doesn’t really fit the concept. This measure doesn’t so much measure awareness as association of the brand with the product category cue. It also assumes that consumers can remember and say or write the brand name. Continue reading

Media buyers fail to deliver reach

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 costs, and by and large this has meant that their 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 silliness in the media buying industry.

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Should cheap low quality ads be charged more for their TV air time ?

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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The power of familiarity

I few years ago Emma Macdonald and I published this work showing the power of familiarity. When we did this in the late 1990s there wasn’t a great deal of interest in heuristics, snap judgements, and gut feeling. But today psychologists and behavioural economists are gaining a great deal of attention for their work showing how reluctant consumers are undertake a lot of cognitive effort when buying.

I’ve often said it is wrong to call much buying “consumer decision making”, it’s more buying (doing) than decision making (thinking).

Macdonald, Emma and Byron Sharp (2000) “Brand Awareness Effects on Consumer Decision Making for a Common, Repeat Purchase Product: A Replication” Journal of Business Research, 48 (Number 1, April), 5-15.

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Snake (oil) and loyalty ladders

Many market research houses now market a “loyalty ladder” or “loyalty pyramid” product. These dissect a brand’s customer base into 4-6 groups, starting with something like “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 Continue reading

Differentiation vs Distinctiveness

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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Reasons not to buy

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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Market-based Assets (early article)

Here is my 1995 article which introduced the term “Market-based Assets” which was picked up by Raj Srivastava in his excellent 1998 JM article “Market-Based Assets and Shareholder Value”:

Sharp, Byron (1995), “Brand Equity and Market-Based Assets of Professional Service Firms,” Journal of Professional Services Marketing, 13 (1), 3-13.My article is very hard to obtain now, I couldn’t find it on the web and even on my computer it was in an old file format. So before it is lost to the world I thought I should post it here. It might be of interest to some readers.

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Do Loyalty Programs Increase Brand Loyalty ?

Do loyalty programs really affect consumer loyalty ? What effect do loyalty programs have ?

Back in 1997 Anne Sharp and I published the first empirical evaluation of a large scale loyalty program:

Sharp, Byron; Sharp, Anne (1997) “Loyalty Programs and their Impact on Repeat-purchase Loyalty Patterns”, International Journal of Research in Marketing, Vol 14, No. 5, p.473-486.

By using Dirichlet benchmarks we were able to assess the loyalty program’s affect on repeat-buying while avoiding the problem of self-selection (i.e. more loyal buyers of the brand are more likely to join the program). We documented weak effects.

Since this study we, and others have done more work. All using real world panel (i.e. individuals repeat buying) data. This evidence will be brought together in a forthcoming report, and possibly a chapter in my forthcoming book “Laws of Growth”.

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How to measure Brand Salience

Jenni Romaniuk and I developed the concept we called Brand Salience as “the propensity of the brand to be noticed or come to mind in buying situations”.

So how do we think this construct should be measured ?

Salience is cue dependent, it is based on the memories associated with the brand, and so different cues have different tendency to elicit the brand. To measure salience we need to get a handle on these cues. Traditional awareness measures (top of mind etc) share the common failing that they use only one single cue and that is the name of the product category. This single cue can’t tell us about the propensity of the brand to come to mind in real world buying where a substantial range of cues can trigger noticing/recall of the brand.

Fortunately we don’t need to measure consumers reactions to the full vast range cues. In the same way we don’t need to sample everyone in China to know the Chinese view on a particular topic, we just need a smaller representative sample. We just need a sample of cues, a sample of brand associations.

We set out the characteristics for choosing cues in Report 41 for corporate members of the Ehrenberg-Bass Institute. We also explain how to measure these brand associations. To then test if the selection and number of cues is adequate to measure Salience we expect the distribution of survey responses to follow the same distribution of repeat-buying of brands (NBD-Dirichlet). This is because we expect Brand Salience to have the same structure as individuals’ brand buying repertoires. So this statistical distribution can be used to shape the set of brand attributes.

So most brand perception tracking surveys can be adapted to measure Brand Salience. The biggest fault we find with existing brand tracking surveys is that they have an emphasis on evaluation, so contain many attributes that don’t measure memory but rather measure attitude (which means they measure past usage). It also means they have a great deal of redundancy. All of this can be fixed.

In addition to the group of attributes that are used to measure Brand Salience, we encourage adding some descriptive assets to track the brand’s distinctive assets (e.g. tone, colours, logos, slogans, characters). These can’t be used in the Salience measure because they skew substantially to particular brands (e.g. American or red for Coca-cola) and so bias the estimate.  But there is value in measuring these perceptions because they allow communication to be branded (and therefore build salience) and these cues are used by consumers in noticing brands.

Corporate members who are interested in measuring Brand Salience, or mining their tracking data to produce Salience metrics should contact Jenni.

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Engagement and time spent with the ad

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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Do 9 out of 10 new product launches fail ?

You’ve heard this line ? Or maybe something more conservative, say 7 out of ten ?

It sounds awful, but gives solace to marketers who have an under-performing new brand. It’s used by consultants to stress the importance of marketing (and the advice or services they are selling).

But is this claim supported by empirical evidence – it seems not. More than half of real-world (i.e. not test) launches succeed. As Cooper in 1996 wrote“sources citing the failure rate at launch to be as high as 90% tend to be unsubstantiated and are likely wildly overstated”.

The full article can be downloaded from this journal, here is the abstract:

“Managers’ Knowledge of Marketing Principles: The Case of New Product Development”, Steven Cierpicki, Malcolm Wright, and Byron Sharp , Journal of Empirical Generalisations in Marketing Science, 2000, Vol. 5, p.771-790.

Abstract: Do marketing managers have well-established marketing principles to guide decision making? We addressed this question by examining 15 principles of new product development obtained from an expert panel of Australian senior marketing practitioners. Of these 15, three turned out to be tautologies, six had at least some empirical support, and six were partly or fully contradicted by empirical studies. In examining the literature for evidence, we were also able to identify five wellestablished ‘empirical generalisations’ about new product development. These results indicate that while principles of new product development do exist, there are fewer of them than we might have thought, and practitioners appear unable to distinguish between good and bad principles.

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