From our intrepid tinseltown chronicler Steve Peace
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When I woke this morning I expected to be greeted by a purple sky, or to find that everyone now spoke Esperanto, or to learn that peace had spontaneously broken out in the Middle East . In short, I expected that the historic results of yesterday’s election would have sparked some immediate and dramatic difference in the world, such was the feeling of electricity and redemption in the air. However, I was greeted instead by traffic on the 101. Obama is probably going to need more than 12 hours to effect massive change, I suppose. The guy probably deserves a few days off, in fact, after two straight years of campaigning.
Marketers, however, never tire of plying their craft. We are always there, the lubrication in the engine of capitalism. So, when my President asks for me to work harder than ever in service of my country – I hit the blogs. To work. Today’s topic is about zeroing in on the right size target universe for any given movie marketing campaign.
In previous posts we’ve discussed both how to choose the right target and how to establish the right overall budget for a film’s media campaign. Both of those decisions rely on quite a bit of subjectivity (as noted), which generally makes me kind of queasy given the amount of dollars riding on such decisions. Regardless, we soldier on. Let’s say we’ve got a budget of $12 million and we’ve identified our audience as men and women 18-49 that enjoy watching R-rated comedies. The question then becomes, are we targeting too many people, not enough people, and what can we expect to make?
A quick look at MRI tells us that there are two hierarchies of R-rated comedy watchers, those that have seen one in the last 6 months and those that have seen one in the last month. Or, light R-rated comedy watchers and heavy R-rated comedy watchers. The first group is comprised of 19.2 million people, the second group is 7.3 million. Now we’re going to make some numbers up, and you really shouldn’t try this at work. If you’ve got access to a database of past performance, you can plug real numbers in place of the ones I’m going to make up. Let’s say that the light R-rated comedy watchers have a lower overall response rate to advertising than the heavy R-rated comedy watchers. Our quick peak at our historical database shows us that 9% of the light watchers responded to advertising on the opening weekend in the past while 15% of the heavy watchers responded (I’m lying, of course, I made up the response rates).
If we multiply our response rates, we find that we can expect 1.73 million light watchers and 1.1 million heavy watchers to actually attend the film. At an average ticket purchase of $6.88 (according to the MPAA) that would yield $19.4 million in gross revenues. If you take a look at historical box office revenue figures, you’ll find that an opening weekend gross to advertising ratio of 1.4 to 1.7 is generally considered a success. In this example, we’ve got a ratio of 1.62, which puts us right in the zone. We’ve got the right sized target universe to yield our box office goals, assuming that we can plan our campaign effectively enough to cover the audience with an appropriate mix and frequency of messaging.
In a real life situation, there would be quite a bit of rejiggering to arrive at the right numbers to make all of this turn out correctly. And, it would be especially important to ensure that your research capabilities match your planning needs. In other words, you’d actually need to have the ability to look at the response rates of different segments of consumers to your past advertising efforts. Alternatively, average response rates across all those that viewed advertising could be used to yield a simpler model.
That’s all for today. Enjoy the post-election glow and happy marketing.
Showing posts with label Movie Marketing. Show all posts
Showing posts with label Movie Marketing. Show all posts
Thursday, November 6, 2008
Thursday, October 30, 2008
Your Flight Is Now Departing. Is It To The Web, Or The Tube?
I am always a little giddy when I get a post from our Red Carpet Correspondent Steve Peace because I always learn a little something. He's one smart Fig Newman.
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The word “flighting” has always sounded ephemeral, light, and insubstantial to me. It brings to mind an image. That of tossing a few million dollars into the wind and letting the fates scatter it across time and the media landscape. Not exactly the sort of methodology you might espouse to a client in a plan presentation about how decisions were made to apportion dollars across time. How then, do movie marketers make decisions on the flighting of dollars?
An examination of historical flighting schedules reveals that 70% to 100% of media dollars in support of theatrical releases are spent in the final three weeks before open (Source: TNS Media data). Media support for a film typically begins anywhere from 10 weeks to 3 weeks before release. The determining variable in whether a movie receives a lengthy flight or a brief one, or one that is more broadly distributed or more concentrated, seems to be an entirely subjective one. The key question is, “How big do you THINK the film will be?”
Ok, a number of you might cry foul at this point. How big a film is, how much interest can be generated in it, is not entirely subjective. One can look at objective measures such as the box office draw of the lead talent or director, whether or not it’s based on a popular book, or use the production budget as a proxy for saleability. True. But, all of those measures are incomplete. The true measure of a film’s box office potential is subjectively determined.
If a film is thought to be a blockbuster, it should receive a lengthy flighting schedule with a broader distribution of dollars over time. The idea is that a better film is able to hold attention within the marketplace for a longer period of time. And that anticipation can be maintained and built until the day of launch. This strategy can backfire pretty severely if the studio overestimates a film’s saleability. People just get sick of hearing about a movie after awhile. No matter how big. Which brings us to ramping dollars.
Almost all movie marketing campaigns are ramped over time. This ramping can be categorized into 3 broad buckets. First, information about the film is seeded into the marketplace, which acts as an introduction that the film exists, to get people comfortable with the notion of its existence and to fan any devotional flames that might exist (e.g. fans of the talent, book, director, etc.). In the build phase, weight is hiked up to increase reach across the broadest definition of the audience and to debut a rich story about the value of the movie. Finally, in the launch phase, frequencies are ratcheted to build a frenzy of anticipation and to compete with other dollars in the marketplace vying for a similar audience. During this phase, there might also be a course correction on the messaging (if tracking numbers are lower than anticipated) or a part two to the marketing story.
With very large releases, this ramp can occur over an extended period of time. With small releases, resources must be concentrated to be effective against competitive dollars. Below is a chart with a typical flighting schedule for a film with a large marketing budget:
Many of you will have noticed that Internet dollars are flighted differently than traditional dollars and might be asking yourselves, “What gives?” This is due to the distinct nature of the Internet in comparison with other traditional forms of communication. Television and Out-of-Home are great for introducing a film to a broad swath of the population. But, no one turns on the T.V. or walks outside when they want to find out what’s playing. Directed research about movies is mostly performed online (yes, there are still people that read the newspaper, but that population is declining and most everyone now augments reading the paper with going online). So, it’s a perfect medium for seeding early messaging about a film to the most rabid fans that are actively trolling for this kind of information.
There is research that was performed by Dynamic Logic that indicates that flighting dollars online 4 weeks before a release provides better results than flighting dollars more closely to the release date. One theory to explain this data is that once opinions are formed about a movie, they are communicated quickly online. Therefore, getting ahead of the rumors online about the quality of a film might be an effective way to influence perceptions.
That’s the latest news from southland. Happy marketing.
Steve
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The word “flighting” has always sounded ephemeral, light, and insubstantial to me. It brings to mind an image. That of tossing a few million dollars into the wind and letting the fates scatter it across time and the media landscape. Not exactly the sort of methodology you might espouse to a client in a plan presentation about how decisions were made to apportion dollars across time
An examination of historical flighting schedules reveals that 70% to 100% of media dollars in support of theatrical releases are spent in the final three weeks before open (Source: TNS Media data). Media support for a film typically begins anywhere from 10 weeks to 3 weeks before release. The determining variable in whether a movie receives a lengthy flight or a brief one, or one that is more broadly distributed or more concentrated, seems to be an entirely subjective one. The key question is, “How big do you THINK the film will be?”
Ok, a number of you might cry foul at this point. How big a film is, how much interest can be generated in it, is not entirely subjective. One can look at objective measures such as the box office draw of the lead talent or director, whether or not it’s based on a popular book, or use the production budget as a proxy for saleability. True. But, all of those measures are incomplete. The true measure of a film’s box office potential is subjectively determined.
If a film is thought to be a blockbuster, it should receive a lengthy flighting schedule with a broader distribution of dollars over time. The idea is that a better film is able to hold attention within the marketplace for a longer period of time. And that anticipation can be maintained and built until the day of launch. This strategy can backfire pretty severely if the studio overestimates a film’s saleability. People just get sick of hearing about a movie after awhile. No matter how big. Which brings us to ramping dollars.
Almost all movie marketing campaigns are ramped over time. This ramping can be categorized into 3 broad buckets. First, information about the film is seeded into the marketplace, which acts as an introduction that the film exists, to get people comfortable with the notion of its existence and to fan any devotional flames that might exist (e.g. fans of the talent, book, director, etc.). In the build phase, weight is hiked up to increase reach across the broadest definition of the audience and to debut a rich story about the value of the movie. Finally, in the launch phase, frequencies are ratcheted to build a frenzy of anticipation and to compete with other dollars in the marketplace vying for a similar audience. During this phase, there might also be a course correction on the messaging (if tracking numbers are lower than anticipated) or a part two to the marketing story.
With very large releases, this ramp can occur over an extended period of time. With small releases, resources must be concentrated to be effective against competitive dollars. Below is a chart with a typical flighting schedule for a film with a large marketing budget:
Many of you will have noticed that Internet dollars are flighted differently than traditional dollars and might be asking yourselves, “What gives?” This is due to the distinct nature of the Internet in comparison with other traditional forms of communication. Television and Out-of-Home are great for introducing a film to a broad swath of the population. But, no one turns on the T.V. or walks outside when they want to find out what’s playing. Directed research about movies is mostly performed online (yes, there are still people that read the newspaper, but that population is declining and most everyone now augments reading the paper with going online). So, it’s a perfect medium for seeding early messaging about a film to the most rabid fans that are actively trolling for this kind of information.
There is research that was performed by Dynamic Logic that indicates that flighting dollars online 4 weeks before a release provides better results than flighting dollars more closely to the release date. One theory to explain this data is that once opinions are formed about a movie, they are communicated quickly online. Therefore, getting ahead of the rumors online about the quality of a film might be an effective way to influence perceptions.
That’s the latest news from southland. Happy marketing.
Steve
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Thursday, October 23, 2008
The Billboard Mnemonic Strategy
Another fine post from out intrepid Entertainment Editor in H-Wood, Steve Peace. Many thanks, Steve.
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What’s the last billboard you remember seeing? Two crop up in my mind. One is a billboard for a wedding shop that I see every day on Santa Monica Blvd. right around the 405. The other is a billboard for “Zack and Miri Make a Porno.” They have more in common than you might think. The wedding shop billboard shows a smarmy guy in a tux shirt dancing with a woman, presumably his new wife, with her back to the camera. She’s bare-backed and a sliver of chest sideage reveals that she’s also bare-chested. Classy stuff. I’m hoping they’re at their hotel room and not in their first dance at the reception.
You’re probably seen the Zack and Miri billboard if you live in a relatively large city. It’s got hand drawn stick-figure versions of Seth Rogan and Elizabeth Banks along with some text about the film. It’s very not salacious, even though you might expect the content of the film to be. Just the opposite of the sleazy billboard about marriage, traditionally a respectable subject. In the case of the wedding shop, the company seems to be betting that the arresting image will stick in the viewer’s mind (as it has in my case – bad brain!). Because it’s a retail business, out of home makes a lot of sense, being geographically situated close to the store. But, one might strongly question the amount of media waste (you can’t expect that any more than 5%, the U.S. average, of the commuters that pass by are in the market for a wedding dress – maybe even less for a hoochy momma wedding dress).
How good a deal is using out of home for Zack and Miri or for other movies, in general?
The Zack and Miri billboard doesn’t tell you much about the film. It’s got the names of the stars, the title of the movie, and the stick figures. How effective could that be? Arguably, not all that valuable as an isolated component of media, given that sight, sound, and motion provide more rich opportunities to sell a film. But, as a way to reference other components of the media plan, it is my theory that out of home is an incredibly good deal for movie marketers. The real value of a billboard is as a mnemonic device. In a well crafted movie marketing plan television will be flighted in advance of the out of home buy (unless the OOH is a teaser campaign, like, “Forgetting Sarah Marshall”) so that when the billboard is viewed – it reminds the viewer of the television spot. OOH then becomes a way to amplify the television buy, on the cheap.
And OOH is quite cheap. On average (according to Intermedia Dimensions) the CPM for OOH is $3.40. In comparison, an average CPM for Television across all viewers is $15.49. A conservative estimate of the time spent by consumers in proximity to OOH advertising is 6%, which represents the % of media time the average American spends on their daily commute. 12-24 year olds spend more time walking, riding bikes, and taking public transportation, making the % of time spent in front of OOH far higher than 6%, and those are the people in the U.S. that have the highest index against regular movie watching.
Based on how good a deal OOH is, and taking into account the average % of time spent in front of it, a movie marketer could make a rationale case for spending as much as 9-10% of their ad budget on OOH for large releases. Zack and Miri definitely got my attention and I only saw the trailer once.
Steve
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Post script. The Zack and Miri website offers a Pornstar ID maker that I availed myself of.
Not sure it worked out all that well for me, but give it a whirl yourself.
Thursday, October 9, 2008
A "W" Trailer Running on Whitehouse.Gov? Let's Get 'Er Done!
Another c'est magnifique post from consumer expert Steve Peace, our esteemed Hollywood reporter:
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Media efficiency is dead. Long live media efficiency. That’s what everyone says, in the blogs, on agency sites, in the trade pubs. Efficiency as a guiding principle for the development of a media plan is laughably unsophisticated, they say. It has been replaced by effectiveness, which is currently being defined by the word that everyone hates but still grudgingly uses, “Engagement.” To most communications planners the word is cringe inducing because of its vagueness, because of the lack of hard metrics associated with it. What does it mean? Does it mean more time spent on a website, interacting with a rich media unit, watching a show with a product placement? And, what do those things mean? Can we tie them to getting more butts in seats in the theatre? So, there are problems with the concept.
One thing media folks in the movie biz do seem to agree on is that media innovation is a good thing. New ways of presenting a message are generally considered more likely to capture the attention of a viewer than the same tired old ways we’ve always used. Engagement has become a shorthand way of referencing more innovative approaches to media placement. This line of thinking has led to the broad adoption of a communications platform that guides media choice. When applied to movie marketing, a communications platform becomes a way to take key themes in the movie and try to amplify them, as selling points, through the selection of media vehicles.
For example, let’s look at the movie Hairspray. It was generally considered a success based on box office performance, which was surprising to some given that it was a musical – a big question mark in terms of modern day box office appeal. The communications platform focused on the positives of a musical – of the innocent throwback joy exhibited in some of the great all time musicals, of the freedom that we all associate with expressing oneself through dance and song. Consequently, media environments were chosen based on their ability to communicate that simple truth, “singing and dancing is fun.” Final placements in the plan included bringing the cast of the movie to perform on popular primetime dance shows. Spots were placed on modern revue shows that represented content consistent with the theme. This ensured the message would be put in front of dance/song fans, but also that there would be editorial and content integration opportunities to give the consumer a closer look at the movie, beyond the trailer. This is what we all now know as engagement. Blech. Sorry to use the word.
The question still remains, though, of how much of a movie’s success in the box office depends on the use of a communications platform to amplify key selling points of the film vs. being smart about allocation, targeting, and flighting strategies. The pendulum of advertising theory seems to slowly, but continually, swing between the supremacy of right brain and left brain thinking. Is media more important in this age of fragmentation or is creative? That question now applies to media itself. Is creativity in media more important or is mathematical genius the secret ingredient. Like Obama, I’m a middle of the road, find the common ground, sort of pragmatist. I’d like to think that both aspects of media planning can coexist. That we can put together a plan that delivers the best coverage against the audience at the lowest cost and be able to highlight key selling points through innovation. Given the competitiveness of today’s film industry, maybe those are the entry stakes. Our challenge, as planners, is to put a value on the use of theme-based media planning, and this is where the tools of measurement have yet to catch up. It’s not yet cost effective to measure the value of each point of contact with a consumer through control/exposed studies. So, while we all believe in some of the principles that are now grouped under the widely loathed term of engagement, we still labor to find a way to more accurately measure its effects.
Thursday, October 2, 2008
Is 4 Quadrants Still Meaningful? - Guest Post From Carat's Steve Peace
Through the use of media panel data, customer databases, custom surveys, online ad serving, and a host of other tools/technologies it has never been easier for marketers to use a data-driven approach to identifying segments of the population that are most likely to buy any particular product. Unless you are a movie marketer. In which case, you might want to try licking your finger and holding it up in the air to feel which way the wind is blowing.
Necessarily, there is heavy subjectivity involved in the selection of target segments for a film. Planning of a campaign takes place long before the film is complete, so the marketer is not able to test the product to discover who responds most favorably. Instead, they must rely on techniques such as reading the script, relying on genre for general targeting, or developing a list of comparable titles. There are weaknesses inherent in each of these approaches. But, a comprehensive discussion of those weaknesses will have to wait for a future post. Instead, in this post I’d like to address the use of four quadrant targeting in movie marketing.
Traditionally, movie marketers have divided the movie-going population into four quadrants, of men and women and people older or younger than 25 years old. Based on the targeting techniques mentioned previously, they choose which of those quadrants they believe will respond favorably for any particular film. This is a relatively effective strategy for mass communication vehicles. Although television buying has become more targeted with the addressability of digital cable and burgeoning program options, it is still mostly bought using mass market targeting designations, such as four quadrants. For the Internet, though, the concept of four quadrants has little meaning. Given the sophistication of targeting technology on the Internet, limiting oneself to a four quadrant targeting scheme is like relying on a telegraph when a cell phone is available.
As Internet budgets increase above their current 8% of total ad dollars, there is a strong case for retiring the concept. Competition in the movie industry continues to heat up. There are over 600 major releases a year and box office has been flat or declining for years. In such an environment it makes more sense to develop a finely honed definition of one’s target and concentrate resources, rather than marketing broadly to the same segments as your competitors and hoping that the film finds its own audience. By figuring out how to more effectively use targeting technology that is currently available through the Internet, it will prepare theatrical entertainment marketers for a time when addressability is more broadly available across all forms of communication. This is the future. Let’s embrace it.
Necessarily, there is heavy subjectivity involved in the selection of target segments for a film. Planning of a campaign takes place long before the film is complete, so the marketer is not able to test the product to discover who responds most favorably. Instead, they must rely on techniques such as reading the script, relying on genre for general targeting, or developing a list of comparable titles. There are weaknesses inherent in each of these approaches. But, a comprehensive discussion of those weaknesses will have to wait for a future post. Instead, in this post I’d like to address the use of four quadrant targeting in movie marketing.
Traditionally, movie marketers have divided the movie-going population into four quadrants, of men and women and people older or younger than 25 years old. Based on the targeting techniques mentioned previously, they choose which of those quadrants they believe will respond favorably for any particular film. This is a relatively effective strategy for mass communication vehicles. Although television buying has become more targeted with the addressability of digital cable and burgeoning program options, it is still mostly bought using mass market targeting designations, such as four quadrants. For the Internet, though, the concept of four quadrants has little meaning. Given the sophistication of targeting technology on the Internet, limiting oneself to a four quadrant targeting scheme is like relying on a telegraph when a cell phone is available.
As Internet budgets increase above their current 8% of total ad dollars, there is a strong case for retiring the concept. Competition in the movie industry continues to heat up. There are over 600 major releases a year and box office has been flat or declining for years. In such an environment it makes more sense to develop a finely honed definition of one’s target and concentrate resources, rather than marketing broadly to the same segments as your competitors and hoping that the film finds its own audience. By figuring out how to more effectively use targeting technology that is currently available through the Internet, it will prepare theatrical entertainment marketers for a time when addressability is more broadly available across all forms of communication. This is the future. Let’s embrace it.
Thursday, September 18, 2008
World Peace? Nope. Peace World. An Interview With Consumer Expert Steve Peace
So, this kicks off what I hope will be a regular series of interviews with industry leaders. One of the best things about digital is that there are many people who have such strong and often contradictory views -- because we are in an environment of constant dynamism. I hope you enjoy reading these interviews as much as I do providing them!
So...Steve Peace. What can I tell you about one of my favorite people in the biz?
Steve is a nosy opinionated guy, which works out pretty well for him
professionally since he is paid to understand consumer behavior and
develop communication strategies. His nosiness was bred into him by a
theologian father and author mother, then cultivated through his studies
in cultural anthropology.
It was not until Steve worked in the governmental sector that the opinionated part really blossomed. A career in International Development work, including stints at the Harvard Institute of International Development and the Peace Corps
taught Steve that the best way to influence policy is through strong opinions backed by fact.
Steve began an online marketing career in San Francisco in 1997 where
his talents for asking questions and crafting arguments were put to good
use. He has worked both on the agency and client side through the boom and
subsequent bust, gaining exposure to many different product and service
categories. Currently, Steve is the Director of Communications Planning
at Carat, a division of the Aegis group, and lives in Los Angeles.
1. For the benefit of those who don't know you, Steve, can you summarize
a little about your role and responsibilities at Carat?
As the Director of Communications Planning at Carat, my job is to
develop strategies that guide the placement of media. This includes
understanding industry dynamics, developing media-focused target
segmentation, tracking media behaviors, building allocation models, and
developing new methodologies to measure the impact of marketing programs
on sales.
2. One of my strongest memories of you is the breadth of categories in which you have led projects. Give us a sense of that range.
A key benefit that agencies have to offer is the ability to
cross-pollinate experience and ideas across industries and product
categories. For example, CPG companies do measurement platforms very
well and Entertainment companies do innovation very well. They could
learn from one another, and agencies can be the broker of that
information.
I've been fortunate in my career so far to work across
many different industries, including; financial services, retailers, CPG
manufacturers, consumer electronics, telecommunications, high
technology, entertainment, food services, online services, apparel, and
the list goes on. Exposure to the dynamics and drivers of growth across
a broad range of industries can be a catalyst for freeing one's mind
from well worn pathways by creating greater flexibility of thought.
3. So, this is a blog about digital marketing. How do you think the
principles of DIGITAL marketing differ from traditional marketing? Or do they?
The principles of marketing have always been the same, given the fairly
stable mechanics of persuasion. But our tactics in digital marketing do
differ quite a bit from traditional marketing. There are a couple of
key dynamics in the digital space that require the use of new tactics:
1. Interactivity
2. Accountability
Interactivity is well understood as a concept, but we've yet to tap out
the various ways in which this concept can be taken advantage of from a
marketing standpoint. There has always been a transactional nature to
advertising. Meaning, the advertiser provides something valuable (like
information or entertainment) and the consumer provides their attention
in exchange. This transaction can be more explicit and intricate in the
online space. Widgets are a good example of advertisers providing
actual utility in exchange for attention.
Accountability is the other game changer. Because we can track users
with cookies, we have far greater access to data. This allows us to
more finely tune the ways in which we attribute ad spend online to a
final sale. Lately, we've seen this methodology extended to the
traditional space. Google bought a company that automatically inserts
radio ads into a station's format, controlled centrally by a server.
They then correlate the time of insertion to volume of searches on
related terms to attribute spend. That's basically an online
methodology making it into the traditional world. It's exciting to me
that the digital space is now pioneering techniques that can make all
advertising spending more accountable and efficient.
4. How has digital changed consumers?
It has made them better equipped as consumers. For the people that like
to do their homework before they make a purchase, the Internet has made
the task of product research far easier. There are some holdout
industries, like mattresses, that have done a pretty good job of
continuing to obfuscate in order to protect their margins. But for the
majority of businesses, the increased flow of information requires them
to sharpen their benefits and be more competitive, since it is easier
than ever to comparison shop.
Some might argue that MTV is responsible for the degradation of
America's attention span, with the popularization of the jump cut. But,
digital must take some credit, as well, and YouTube is reaping the
benefit of that dynamic. Entertainment is now snack-sized.
Finally, consumers take on-demand access to entertainment for granted.
When I was a child people had to take money out of the bank on Saturday
morning and make sure they had enough for the week. There were no ATMs.
The dispersed computational power and interactivity of the Internet has
taught consumers to expect on-demand everything. This changes one's
relationship with the environment. The world, in general, requires less
incremental planning on a daily basis.
5. How do you see digital changing entertainment?
There have been a spate of important music deals lately that illustrate
a fundamental shift in entertainment. MySpace signed deals with most of
the major labels to launch an iTunes competitor and BestBuy bought
Napster. The MySpace deal is most significant, since executives on
either side of the table expect to monetize the new service through
advertising.
Filmed entertainment is suffering from a similar upheaval, but has yet
to react in any major way. Attendance at the box office has been flat,
or declining, and the number of major releases have been increasing.
The theatre owners have reacted by raising ticket prices - which has
helped maintain revenues over the short term. But, high-priced CDs
didn't help the music labels for very long...
The digital space has made it easy to pass content among consumers (aka
stealing content). But, it has also made it easier to publish content
(aka UGC). So, major entertainment companies are being squeezed on
either end. More consumers are unwilling to pay a higher price for
their product and there is increased competition in the entertainment
space, from consumers themselves.
6. One of the biggest challenges in entertainment is setting a prudent ad budget in support of a title -- and spend it in the right places. What advice can you offer in those areas? What's your approach to entertainment challenges like these?
Every movie is a unique entity, which makes entertainment marketing
challenging and also really interesting. It is possible, though, to
make some very high level generalizations. And, since 600+ feature
films are released every year, there is a rich set of data on which to
pressure test these generalizations.
For example, we've found that there is actually a sweet spot for the
volume of dollars to spend in supporting a new release. That sweet spot
is determined by the number of screens on which the release will open.
In general, the films that spend around $7,000/screen in advertising
reap the highest opening week return on ad spend (and opening week
revenues have a very strong correlation with overall success). The
trick, then, is determining how many screens a film should open on.
This is a bit trickier, given the complexity around how that gets
determined between studios and theatre owners. But, testing of the film
with a sample audience can help.
In terms of allocation of the ad spend across media channels, we've had
some success in using media time usage as a foundational principle. In
other words, we measure the percentage of time our target audience
spends with T.V., radio, Internet, etc., and use that as a starting
point for allocation. It ensures we'll be in front of the audience in
multiple forms of media (which has a demonstrated greater impact and
efficiency than achieving reach through only one form of media).
From there, we apply several filters on the allocation. Those filters are
related to how well a medium carries the creative message, and whether
or not our audience actively seeks out a medium to learn about our
product. Finally, we have an algorithm that translates the % of media
time we'd like to achieve in a medium into a dollar allocation. It's a
really flexible model that can be fit to any sort of film, since it's
sensitive to different audience types and different creative messages.
7. Can you give an example of a company that you think is kicking butt in digital marketing?
Compete.com out of Boston has been kicking butt for several years now.
They purchase click path data from ISPs and analyze it to uncover really
exciting insights about various industries. For example, they can
measure fluctuations in the overall pool of demand that exists for a
particular product (like cars) based on the number of people visiting
car related sites - then measure the ability of a competitive set in
attracting that interest and converting it. This means we can now not
just track the ad spend of our client's competitors, but understand who
is doing the best at converting that spend into prospects. This is a
really powerful concept.
8. I don't recall a time when you and I ever agreed entirely on anything. Which BTW was a very good thing in my view. It's because I think in terms of mass markets and you in terms of niches and segmentation. Why is my approach flat wrong? ;-)
Ok, I'm going to have to disagree with you Jim, you're not wrong. Mass
market products still exist, I agree with that. But, even a mass market
product must tap into niche communities to succeed in the current
market. A good example is pay T.V. Anyone in America can use the
service and 85% of Americans pay for some type of T.V. service.
But, what are the drivers of adoption for a television service? One big
adoption driver is moving. That's just the mechanism that gets a
consumer in-market. More interesting is how a service is selected once
a consumer is in the market. If you are a sports fan, you might take a
look at the available sports packages. DirecTV is a clear winner in
that case. Other folks, especially high HHI families, might be more
interested in the high speed Internet packages that are available with
the T.V. service. Cable has a distinct edge in this realm. To sell pay
T.V. services, it's important to understand these differences and market
to them.
The point is that the world is getting bigger and bigger. There are
more people in the world now and more segmentable sub-groups of those
people that represent attractive chunks of revenue to a marketer.
Because of increasing competition, we have to find ways to be relevant
at a more and more incremental level - relating to the specific
interests of a group of people in relation to the product we are
selling. This makes our job more difficult, but also fraught with
interesting complexity.
9. We talk a lot about start ups here. What are your favorite new companies in the digital realm, and why? This, of course, is your chance to shill for your favorites.
This company isn't all that new, but I haven't seen broad adoption of
their services, so I think they are worth a mention. Neurofocus. They
test creative by hooking their subjects up to electrodes and reading
their brainwaves. What they read are neurological indications that
something has made it into long term memory, and they can tell you
exactly at what point in the ad drove that happened. It's brilliant
stuff.
10. What do you think separates a great consumer insights person from the pack?
A facility with and sensitivity to both qualitative and quantitative
data - and an understanding of when to apply each. A consumer insight
might be related to a keen understanding of cultural nuance that gives
creative work greater relevance. Or, it might be related to addressing
a segment that has been overlooked by other competitors. The best
planners have symmetrical brains. The left sides are as developed as
the right.
Putting up with, even embracing, the process of culling through large
amounts of information is a critical skill as well. Everyone in
marketing has access to mountains of data. The trick to great planning
is finding the organizing principle, the golden nugget, within that
stack of numbers. For example, the credit card industry is completely
mature. Competitors beat each other up for share of a finite pie. The
nature of that battleground is the key to understanding the space.
People going through life events are more likely than the average
consumer to apply for yet another card (e.g. moving, getting a new job,
getting married, having a baby). You only know that fact by looking
through reams of data.
11. Ultimately work is...work. How do you keep your passion for the business and for consumers?
The fact that total ad expenditures in the U.S. are somewhere north of
$230 billion. That's a lot of money devoted to convincing America of
'something.' Our work has a definable impact on the culture around us.
That can be either hugely deleterious, neutral, or even positive. The
folks controlling those dollars control the outcome of that impact.
12. What do you love about this industry?
The innovation just keeps coming. And it's creating some odd dynamics
that are fun to think about. For example, let's take a look at
historical feedback loops as an illustration of one such dynamic. Jazz
is a great feedback loop. Slaves that were shipped to the United States
in the early part of the 18th century brought their own music with them.
That music went through a number of transformations - influenced by the
music of America, one path of which produced American Jazz, others
produced gospel and R&B. What's interesting to me is you have guys like
Yussef Latif rereferencing modern African music in his Jazz. The loop
has not just been closed, it's feeding on itself and producing something
new. The Internet industry is like that, as well.
New technologies produce new ideas, which then feed on one another and produce even more technologies and ideas. It looks boundless and endlessly interesting.
13. What chaps your butt about this industry?
It can make me crazy when folks confuse the application of subjective
vs. objective decision making in the industry. Yes, marketing is an art
and a science. But, we've got a firm grasp at this stage of the game on
exactly which pieces are art and which pieces are science. You confuse
them at your own peril.
14. Can you leave us with a final thought?
As Frank Herbert would say, "Fear is the mind killer." We cannot fear
continual evolution of our methodologies and must embrace innovation in
the marketing world, or risk irrelevance.
Many thanks, Steve.
-----
I am happy to be able to announce that Steve will be a weekly contributor to Oldest Living, beginning next week. I am certain the discussion here will be the richer for it!
Thanks for reading, and don't forget to write.
So...Steve Peace. What can I tell you about one of my favorite people in the biz?
Steve is a nosy opinionated guy, which works out pretty well for him
professionally since he is paid to understand consumer behavior and
develop communication strategies. His nosiness was bred into him by a
theologian father and author mother, then cultivated through his studies
in cultural anthropology.
It was not until Steve worked in the governmental sector that the opinionated part really blossomed. A career in International Development work, including stints at the Harvard Institute of International Development and the Peace Corps
taught Steve that the best way to influence policy is through strong opinions backed by fact.
Steve began an online marketing career in San Francisco in 1997 where
his talents for asking questions and crafting arguments were put to good
use. He has worked both on the agency and client side through the boom and
subsequent bust, gaining exposure to many different product and service
categories. Currently, Steve is the Director of Communications Planning
at Carat, a division of the Aegis group, and lives in Los Angeles.
1. For the benefit of those who don't know you, Steve, can you summarize
a little about your role and responsibilities at Carat?
As the Director of Communications Planning at Carat, my job is to
develop strategies that guide the placement of media. This includes
understanding industry dynamics, developing media-focused target
segmentation, tracking media behaviors, building allocation models, and
developing new methodologies to measure the impact of marketing programs
on sales.
2. One of my strongest memories of you is the breadth of categories in which you have led projects. Give us a sense of that range.
A key benefit that agencies have to offer is the ability to
cross-pollinate experience and ideas across industries and product
categories. For example, CPG companies do measurement platforms very
well and Entertainment companies do innovation very well. They could
learn from one another, and agencies can be the broker of that
information.
I've been fortunate in my career so far to work across
many different industries, including; financial services, retailers, CPG
manufacturers, consumer electronics, telecommunications, high
technology, entertainment, food services, online services, apparel, and
the list goes on. Exposure to the dynamics and drivers of growth across
a broad range of industries can be a catalyst for freeing one's mind
from well worn pathways by creating greater flexibility of thought.
3. So, this is a blog about digital marketing. How do you think the
principles of DIGITAL marketing differ from traditional marketing? Or do they?
The principles of marketing have always been the same, given the fairly
stable mechanics of persuasion. But our tactics in digital marketing do
differ quite a bit from traditional marketing. There are a couple of
key dynamics in the digital space that require the use of new tactics:
1. Interactivity
2. Accountability
Interactivity is well understood as a concept, but we've yet to tap out
the various ways in which this concept can be taken advantage of from a
marketing standpoint. There has always been a transactional nature to
advertising. Meaning, the advertiser provides something valuable (like
information or entertainment) and the consumer provides their attention
in exchange. This transaction can be more explicit and intricate in the
online space. Widgets are a good example of advertisers providing
actual utility in exchange for attention.
Accountability is the other game changer. Because we can track users
with cookies, we have far greater access to data. This allows us to
more finely tune the ways in which we attribute ad spend online to a
final sale. Lately, we've seen this methodology extended to the
traditional space. Google bought a company that automatically inserts
radio ads into a station's format, controlled centrally by a server.
They then correlate the time of insertion to volume of searches on
related terms to attribute spend. That's basically an online
methodology making it into the traditional world. It's exciting to me
that the digital space is now pioneering techniques that can make all
advertising spending more accountable and efficient.
4. How has digital changed consumers?
It has made them better equipped as consumers. For the people that like
to do their homework before they make a purchase, the Internet has made
the task of product research far easier. There are some holdout
industries, like mattresses, that have done a pretty good job of
continuing to obfuscate in order to protect their margins. But for the
majority of businesses, the increased flow of information requires them
to sharpen their benefits and be more competitive, since it is easier
than ever to comparison shop.
Some might argue that MTV is responsible for the degradation of
America's attention span, with the popularization of the jump cut. But,
digital must take some credit, as well, and YouTube is reaping the
benefit of that dynamic. Entertainment is now snack-sized.
Finally, consumers take on-demand access to entertainment for granted.
When I was a child people had to take money out of the bank on Saturday
morning and make sure they had enough for the week. There were no ATMs.
The dispersed computational power and interactivity of the Internet has
taught consumers to expect on-demand everything. This changes one's
relationship with the environment. The world, in general, requires less
incremental planning on a daily basis.
5. How do you see digital changing entertainment?
There have been a spate of important music deals lately that illustrate
a fundamental shift in entertainment. MySpace signed deals with most of
the major labels to launch an iTunes competitor and BestBuy bought
Napster. The MySpace deal is most significant, since executives on
either side of the table expect to monetize the new service through
advertising.
Filmed entertainment is suffering from a similar upheaval, but has yet
to react in any major way. Attendance at the box office has been flat,
or declining, and the number of major releases have been increasing.
The theatre owners have reacted by raising ticket prices - which has
helped maintain revenues over the short term. But, high-priced CDs
didn't help the music labels for very long...
The digital space has made it easy to pass content among consumers (aka
stealing content). But, it has also made it easier to publish content
(aka UGC). So, major entertainment companies are being squeezed on
either end. More consumers are unwilling to pay a higher price for
their product and there is increased competition in the entertainment
space, from consumers themselves.
6. One of the biggest challenges in entertainment is setting a prudent ad budget in support of a title -- and spend it in the right places. What advice can you offer in those areas? What's your approach to entertainment challenges like these?
Every movie is a unique entity, which makes entertainment marketing
challenging and also really interesting. It is possible, though, to
make some very high level generalizations. And, since 600+ feature
films are released every year, there is a rich set of data on which to
pressure test these generalizations.
For example, we've found that there is actually a sweet spot for the
volume of dollars to spend in supporting a new release. That sweet spot
is determined by the number of screens on which the release will open.
In general, the films that spend around $7,000/screen in advertising
reap the highest opening week return on ad spend (and opening week
revenues have a very strong correlation with overall success). The
trick, then, is determining how many screens a film should open on.
This is a bit trickier, given the complexity around how that gets
determined between studios and theatre owners. But, testing of the film
with a sample audience can help.
In terms of allocation of the ad spend across media channels, we've had
some success in using media time usage as a foundational principle. In
other words, we measure the percentage of time our target audience
spends with T.V., radio, Internet, etc., and use that as a starting
point for allocation. It ensures we'll be in front of the audience in
multiple forms of media (which has a demonstrated greater impact and
efficiency than achieving reach through only one form of media).
From there, we apply several filters on the allocation. Those filters are
related to how well a medium carries the creative message, and whether
or not our audience actively seeks out a medium to learn about our
product. Finally, we have an algorithm that translates the % of media
time we'd like to achieve in a medium into a dollar allocation. It's a
really flexible model that can be fit to any sort of film, since it's
sensitive to different audience types and different creative messages.
7. Can you give an example of a company that you think is kicking butt in digital marketing?
Compete.com out of Boston has been kicking butt for several years now.
They purchase click path data from ISPs and analyze it to uncover really
exciting insights about various industries. For example, they can
measure fluctuations in the overall pool of demand that exists for a
particular product (like cars) based on the number of people visiting
car related sites - then measure the ability of a competitive set in
attracting that interest and converting it. This means we can now not
just track the ad spend of our client's competitors, but understand who
is doing the best at converting that spend into prospects. This is a
really powerful concept.
8. I don't recall a time when you and I ever agreed entirely on anything. Which BTW was a very good thing in my view. It's because I think in terms of mass markets and you in terms of niches and segmentation. Why is my approach flat wrong? ;-)
Ok, I'm going to have to disagree with you Jim, you're not wrong. Mass
market products still exist, I agree with that. But, even a mass market
product must tap into niche communities to succeed in the current
market. A good example is pay T.V. Anyone in America can use the
service and 85% of Americans pay for some type of T.V. service.
But, what are the drivers of adoption for a television service? One big
adoption driver is moving. That's just the mechanism that gets a
consumer in-market. More interesting is how a service is selected once
a consumer is in the market. If you are a sports fan, you might take a
look at the available sports packages. DirecTV is a clear winner in
that case. Other folks, especially high HHI families, might be more
interested in the high speed Internet packages that are available with
the T.V. service. Cable has a distinct edge in this realm. To sell pay
T.V. services, it's important to understand these differences and market
to them.
The point is that the world is getting bigger and bigger. There are
more people in the world now and more segmentable sub-groups of those
people that represent attractive chunks of revenue to a marketer.
Because of increasing competition, we have to find ways to be relevant
at a more and more incremental level - relating to the specific
interests of a group of people in relation to the product we are
selling. This makes our job more difficult, but also fraught with
interesting complexity.
9. We talk a lot about start ups here. What are your favorite new companies in the digital realm, and why? This, of course, is your chance to shill for your favorites.
This company isn't all that new, but I haven't seen broad adoption of
their services, so I think they are worth a mention. Neurofocus. They
test creative by hooking their subjects up to electrodes and reading
their brainwaves. What they read are neurological indications that
something has made it into long term memory, and they can tell you
exactly at what point in the ad drove that happened. It's brilliant
stuff.
10. What do you think separates a great consumer insights person from the pack?
A facility with and sensitivity to both qualitative and quantitative
data - and an understanding of when to apply each. A consumer insight
might be related to a keen understanding of cultural nuance that gives
creative work greater relevance. Or, it might be related to addressing
a segment that has been overlooked by other competitors. The best
planners have symmetrical brains. The left sides are as developed as
the right.
Putting up with, even embracing, the process of culling through large
amounts of information is a critical skill as well. Everyone in
marketing has access to mountains of data. The trick to great planning
is finding the organizing principle, the golden nugget, within that
stack of numbers. For example, the credit card industry is completely
mature. Competitors beat each other up for share of a finite pie. The
nature of that battleground is the key to understanding the space.
People going through life events are more likely than the average
consumer to apply for yet another card (e.g. moving, getting a new job,
getting married, having a baby). You only know that fact by looking
through reams of data.
11. Ultimately work is...work. How do you keep your passion for the business and for consumers?
The fact that total ad expenditures in the U.S. are somewhere north of
$230 billion. That's a lot of money devoted to convincing America of
'something.' Our work has a definable impact on the culture around us.
That can be either hugely deleterious, neutral, or even positive. The
folks controlling those dollars control the outcome of that impact.
12. What do you love about this industry?
The innovation just keeps coming. And it's creating some odd dynamics
that are fun to think about. For example, let's take a look at
historical feedback loops as an illustration of one such dynamic. Jazz
is a great feedback loop. Slaves that were shipped to the United States
in the early part of the 18th century brought their own music with them.
That music went through a number of transformations - influenced by the
music of America, one path of which produced American Jazz, others
produced gospel and R&B. What's interesting to me is you have guys like
Yussef Latif rereferencing modern African music in his Jazz. The loop
has not just been closed, it's feeding on itself and producing something
new. The Internet industry is like that, as well.
New technologies produce new ideas, which then feed on one another and produce even more technologies and ideas. It looks boundless and endlessly interesting.
13. What chaps your butt about this industry?
It can make me crazy when folks confuse the application of subjective
vs. objective decision making in the industry. Yes, marketing is an art
and a science. But, we've got a firm grasp at this stage of the game on
exactly which pieces are art and which pieces are science. You confuse
them at your own peril.
14. Can you leave us with a final thought?
As Frank Herbert would say, "Fear is the mind killer." We cannot fear
continual evolution of our methodologies and must embrace innovation in
the marketing world, or risk irrelevance.
Many thanks, Steve.
-----
I am happy to be able to announce that Steve will be a weekly contributor to Oldest Living, beginning next week. I am certain the discussion here will be the richer for it!
Thanks for reading, and don't forget to write.
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