MAXIMIZING MOMENTUM: INSIGHTS FROM VERIZON, SMG & CISCO
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A presentation entitled MAXIMIZING MOMENTUM: Insights from Verizon, SMG & Cisco, was given at the Advertising Research Foundation’s (ARF) AM 6.0 conference. Insights on Brand building were presented. Presenters included Patrick McLean-Executive Director at Verizon Interactive, Helen Katz-SVP/Research Director at Starcom MediaVest Group, & Charlie Treadwell-Marketing Strategy Manager Corporate Affairs Marketing at Cisco.
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MAXIMIZING MOMENTUM: INSIGHTS FROM VERIZON, SMG & CISCO
- 1. MAXIMIZING MOMENTUM Insights from Verizon, SMG & Cisco 1 June 13, 2011 © 2011 Kantar Media
- 2. 2 Featured Presenters Patrick McLean Executive Director Verizon Interactive Helen Katz SVP/Research Director Starcom MediaVest Group Charlie Treadwell Marketing Strategy Manager Corporate Affairs Marketing Cisco
- 3. Building a Digital Brand Patrick McLean Executive Director Verizon Interactive 3 June 13, 2011
- 5. 1 800 GET FIOS What people sometimes think is Verizon? 5
- 6. • Need to find a new way to talk to our customers • Ecommerce is growing > 20% per year • 50% of online adults now participate in social media • Consumers want content aggregated for them, not concerned with source • Consumers expect seamless integration across platforms and devices • Mobile rapidly becoming a main channel for video and social content • Digital ad spending growing at > 25% globally … but consumers are living digitally… … what we are doing about it? 6
- 7. We must transform to a Digital Brand Learn E-Commerce/ Sales My Verizon & Small Business Center Targeting and Personalization Customer Generated Content and Social Media Cross-Channel Integration Verizon Digital Brand Change our Culture & Incentives Drive Digital Conversations Evolve Online Platforms Strategic Imperatives: Market With a Digital Focus – Pricing, CTA, Spend 7
- 8. …and digital must become a part of Verizon’s DNA 8
- 9. Shifting marketing & sales to online requires a new strategy “When someone acknowledges us as individuals and personalizes our experience based on our unique characteristics, we feel understood and valued. Our feelings of good will increase. Our confidence grows. Our tolerance broadens. Personalization casts a powerful spell!” 9
- 10. Online Shopping Personas provide another layer of insight The Collaborator The Get It Done Decision Maker The Wheeler/ Dealer The Methodical Shopper The Opinion Seeker It’s difficult enough to meet everyone’s needs in the house – why does the process have to be so complex? Too much detail slows me down. I just want to check this off my to-do list as quickly as possible. I love the feeling of gaming the system and getting a great deal. The more I know, the less likely I am to be ripped off. I’d hate to make the wrong choice so I check with people who might know more than I do. 10
- 11. From “One Size Fits All” to Personalized Users User Segment / Persona Identified Learn Shop Order My Verizon Homepage First Time Visitor Learn Shop Order My Verizon Homepage “Switcher” Learn Shop Order My Verizon Homepage Wheeler and Dealer Learn Shop Order My Verizon Homepage Returning Non Qualified Visitor Learn Shop Order My Verizon Homepage First time visitors from NY Users Homepage Learn Shop Order My Verizon 11
- 12. Maximizing the Target Audience: SMG’s Learning on Addressable Advertising Helen Katz Senior Vice President/Research Director Starcom MediaVest Group 12 June 13, 2011
- 13. • Need to find a new way to talk to our customers – Consumers increasingly avoid ads – Advertisers ‘waste’ money in sending ad messages to everyone • Growing concern over quality and monetization of content – Three possible outcomes 1. Consumers pay more in subscription fees 2. Content quality diminishes – audiences leave 3. Advertisers pay significantly more, for less • Addressability can solve all three outcomes 13 Today’s challenges with TV advertising
- 14. • Delivering television ads to specific households based on characteristics of those households ‒ Combines targeting power of direct mail + internet ‒ Provides consumer engagement + relevance ‒ Offers growth engine for television industry 14 Addressable Advertising provides a solution
- 15. 15 The landscape is changing And we must change too Broadcast Programming Age/Sex Demos Broad messaging Unicast Context + Audiences Consumer based household characteristics Specific messaging Acceptance of waste Waste is managed
- 16. 16 Addressable advertising has four key benefits Locate the True Target Improve Relevancy Provide More Accountability Improve Efficiency
- 17. 17 Addressable goes beyond simple demographics • Geography • Socio-economic data • Media usage • Lifestyle habits • Retail and business data • Purchase behaviors
- 18. 18 SMG has worked with multiple partners in addressable TV Huntsville, AL Baltimore, MD 2008-09 Brooklyn, NY 2009 US 20112006-08
- 19. • Efficiency: – How much money can advertisers save by delivering ads to those homes in which they are interested? • Effectiveness: – Are homes exposed to a targeted, addressable ad less likely to tune away during that ad than homes exposed to a non-addressable ad? 19 Two ways to determine Addressable Advertising success
- 20. 20 Addressable advertising works! • In most recent trial saw these results: Effectiveness +32% Efficiency +65%
- 21. 21 In most recent test in Baltimore, targeted at least 2/3 of HHs Baltimore Advertiser A Advertiser B Advertiser C Advertiser D Advertiser E Target Segment 1 26% 26% 25% 3% 20% Target Segment 2 18% 18% 25% 19% 8% Target Segment 3 38% 29% 26% 38% 34% Total HHs Targeted 82% 73% 77% 60% 63% % Not Targeted 18% 27% 23% 40% 37% • Anywhere from 3% to 38% of homes in a target segment • Approximately 60,000 Unique Subscriber HHs
- 22. 22 An example of addressable multi-brand target segmentation Priority 1 Target Ad Priority 2 Target Ad Priority 3 Target Ad Priority 4 Default Ad Hispanic HH The Default Ad spot used separate Ad copy for the entire Trial period. Hispanic Health Care Advocates Care Givers HH with Women and kids, Interest in Healthy Living Adults Age 50+ Balance of unselected HH’s … plus Control Group NOTE: Each of the 3 Target Segments use different demographic selection criteria. HH’s that meet the targeting criteria for multiple Target Segments are de-duplicated based on Target Ad Priority sequence. Women 25-54
- 23. 23 Most advertisers saw significant efficiency savings Advertiser D/Brand A saved 88% in reaching just this target segment and not paying for any other group. Advertiser/Brand % Savings Advertiser A/Brand A 64% Advertiser A/Brand B 67% Advertiser A/Brand C 67% Advertiser B/Brand A 62% Advertiser B/Brand B 39% Advertiser B/Brand C 78% Advertiser C/Brand A 59% Advertiser C/Brand B 62% Advertiser C/Brand C 63% Advertiser D/Brand A 88% Advertiser D/Brand B 70% Advertiser D/Brand C 45% Advertiser E/Brand A 36% Advertiser E/Brand B 77% Advertiser E/Brand C 97% AVERAGE 65%
- 24. 24 Effectiveness measured by pre/post test v. control method • The control group consists of 10% of the homes selected for the trial and is isolated from receiving addressable ads for the duration of the test. • Differences in tuneaway (d1 – d2) are examined using t-tests to determine the statistical significance. Pre-AA (Baseline) Post-AA (Trial Months) Addressable Homes TA1 TA2 Control Homes TA3 TA4 Difference d1 d2 d1-d2
- 25. 25 While not all advertisers saw effectiveness increase, many did Advertiser/Brand % of Change (Overall % Diff. vs. Chg in Control) A/Brand A -12% A/Brand B 6% A/Brand C 114% B/Brand A 149% B/Brand B 109% B/Brand C 66% C/Brand A -44% C/Brand B -13% C/Brand C -21% D/Brand A 4% D/Brand B 71% D/Brand C -62% E/Brand A 42% E/Brand B 98% E/Brand C -5% Average 32%
- 26. 26 For one advertiser, two seemingly similar addressable targets watched different networks And neither watched the same as buying target Network Rating (%) Index Fox News .75 155 CNN .38 124 ABC Network 1.09 119 NBC Network 2.24 117 Discovery .28 115 TLC .22 112 HGTV .40 112 Comedy .23 110 CNN Headline .22 105 Nickelodeon .50 104 Network Rating Index HGTV .729 204 Fox News 1.055 151 CNN .776 148 Noggin .232 137 ABC 31 1.618 128 Westerns West .302 128 Hallmark .470 125 Cartoon .556 123 Nickelodeon .840 122 PBS 1.257 119 True Target (Client Database) LookalikeTarget
- 27. 27 Combined ratings and tuneaway for true targets to find ‘sweet spot’ networks Rating by Tuneaway Target Index vs. Control HIGH RATINGS/HIGH TUNEAWAY HIGH RATINGS/LOW TUNEAWAY LOW RATINGS/HIGH TUNEAWAY LOW RATINGS/LOW TUNEAWAY DISCOVERY CNNESPN HGTVLIFETIME TNT USA 0200 200 0 FOX NEWS ESPN, LIFETIME, TNT CNN, DISCOVERY, HGTV, USA
- 28. • Launch: Early 2012 • Full deployment will deliver addressable ads to 8-10MM homes • Insertions in “local” inventory on multiple cable networks • Advertiser only buys desired HHs; DR ad delivered to remainder 28 Up Next: DirecTV
- 29. Discussion Snapshot: HP Interop Keynote Charlie Treadwell Marketing Strategy Manager, Corporate Affairs Marketing Cisco 29 June 13, 2011
- 30. • How was HP’s keynote perceived by key stakeholders • Draw actionable insight from the discussion in traditional and social media, May 10-18, 2011 URL: bit.ly/mgHC3C Objectives and Approach 30
- 31. Number of stories/posts that discussed HP/Cisco and Interop, conference, Las Vegas 256 HP’s percentage of positive /negative Interop discussion 40%/40% 15%/25% Cisco’s percentage of positive /negative Interop discussion 164.7K HP’s negative Twitter reach about Interop 10.7K Cisco’s negative Twitter reach about Interop By the numbers 31
- 32. Reactions to HP’s Keynote 32
- 33. Responses to HP’s Keynote “Hewlett and Packard were known for innovation. Now HP is known for trash talk.” “I didn’t see Dave’s keynote but I did hear a lot of post-presentation commentary. Much of the networking crowd was aghast.” “Donatelli epitomizes everything that’s wrong with HP these days! No class and at the bottom end of IT pyramid.” “HP… should concentrate on making good products … not relishing in bluster and bullying.” “…I guess when you lack anything of substance, you'd better try and distract from that with a little bravado and noise.” “From the ‘awkward public moments series’: HP takes swipe at Cisco on Interop stage.” 33
- 34. 100 47 100 HP Positive Neutral Negative 40 146 63 Cisco Positive Neutral Negative Balance of the Conversation Sentiment 34
- 35. • Gloves are off… but, take the high road in large public settings. • Focus on newer solutions and leverage customers to help communicate about them. • Consider clear communication plans around the reorganization and how it will help Cisco to be focused and competitive. Conclusions and Recommendations 35
- 36. MAXIMIZING MOMENTUM Insights from Verizon, SMG & Cisco 36 June 13, 2011
Notes de l'éditeur
- Despite headlines peppered with strong language such as “HP takes swipes at Cisco on Interop stage” and “HP gunning for Cisco in computer network arena”, most coverage from traditional media sources was neutral or positive toward HP. Most traditional media stories mentioned HP’s FlexNetwork architecture and Donatelli’s digs to Cisco on innovation, complexity and costs. Most conveyed the message: “HP wants to transform networking.” Reaction to those stories via comments or via Twitter was unabashedly negative toward HP, as was the reaction from Interop attendees, according to some anecdotal evidence (such as ESG’s Jon Olsik).
- Several comments from readers and event attendees disapproved of the negative tactics used by Donatelli and HP, calling the attack ‘classless.’ Some commenters pointed out that HP chose not to focus on its own value proposition in favor of ‘taking the low road.’ The lack of HP customers at the event supporting the new products was also noted. Almost all Twitter coverage of the keynote was negative toward HP (86%) and neutral toward Cisco (95%). Very few bloggers from Cisco’s influential social media sources covered the story.
- Donatelli’s assertions that HP’s FlexNetwork architecture was more modern than ‘incumbent technology that is outdated and stifles innovation and collaboration’ was frequently picked up in traditional news sources. Some sources quoted Yankee Group’s Zeus Karravella, who warned that HP’s numbers need to be viewed carefully. “They’re comparing themselves to Cisco products that are a few years old now so there’s no doubt that it’s higher performing.” Karravella added that new HP switches are for campus networks, not data centers. The VAR Guy, on the other hand was more negative toward Cisco and upbeat toward HP. The head-to-head comparison approach was praised, as was the HP cloud positioning as ‘the backbone that keeps cloud afloat’. The blog even quoted HP about Cisco’s reorganization: “You can reorganize but that doesn’t make you more competitive.” One negative Reuters story written by Jim Finkle (May 10) got picked up by several sources. The article referenced HP’s Interop keynote as part of a larger discussion about aggressive competition, lagging products, the Gartner report about the single-vendor solution and the recent reorganization
- Recommendation: Gloves are off… but, Take the high road in large public settings. There is no question the gloves are off when it comes to HP. Our sales team should keep this in mind when in a competitive situation, however, in public forums like Interop, we should focus on solution selling that emphasizes value propositions and key differentiators without making negative statements about competitors’ products. Let Donatelli and HP continue to appear the bully while Cisco remains above the fray. Recommendation: Focus on newer solutions and leverage customers to help communicate about them. When discussions come up about this Interop session, make sure we emphasis that HP chose to reference older Cisco products – not making a fair comparison (Yankee Group / Zeus Karravella). Ensure that the media and networking followers understand that Cisco’s newer solutions are competitive and stress simplicity and cost-competitiveness. Utilizing customers in the narrative adds credibility to the story. Recommendation: Consider clear communication plans around the reorganization and how it will help Cisco to be focused and competitive. Help key influencers to understand how the organizational changes will positively impact the business in both the short and long term.