Is the Super Bowl the ultimate marketing ecosystem of paid and earned media? 2010 will be huge test, as the new reality of consumer expression and cross-platform integration create a powerful new dynamic hovering over the largest single-spot ad spend on record.

What marketers urgently need to understand is not only total ROI on that mega-media buy, but the full return on all the other activities triggered or reinforced by this paid media stimulus. How does paid media drive earned media? And to what degree does earned media halo future paid media efforts? These are critical questions that Marketers need answers to – along with a metric or common yardstick that quantifies the blending of the two.

Getting Real about Real-Time
In an more agile and flexible marketing environment, where there’s actually a chance of making real-time changes based on available data, marketers need to understand the real-time role they can play in making tactical interventions to grow earned media impressions and ultimately, increase odds of success.

Twitter brings a fresh dynamic and promise to Super Bowl media efficiency. The platform reached a reach tipping point in 2009 – so much so that marketers increasingly use it to fan the flames for events, interact with brand mavens or enthusiasts, and, in a growing number of cases, manage or sandbag tension points like customer disappointment or service shortfalls.

Tweets are also increasingly embedding themselves in Facebook feeds, blog entries, and Google search results, magnifying their long-term value. Translated to the Super Bowl, positive playback about Super Bowl ads can have a “latency” effect and provide brands with an almost endless annuity of “earned media.” The same dynamic will be at work with Facebook brand fan pages, which can see massive growth – hundreds of thousands – following a major ad campaign, offline or online.

Quantifying the Big Picture
In the end, Super Bowl spots today need to meet two distinct “torture” tests – one measurable based on traditional TV scoring, and another based on unique dynamics of cross-platform engagement, most notably word-of-mouth and conversation. On a pure TV-impression alone, one can argue that the Super Bowl has become such an unusual magnet for consumer attention and recall – the one day of the year that we “celebrate” advertising – that it is worth every penny. Indeed, curiosity, anticipation, guessing, nostalgia come into play big time before this festival of brand persuasion. Consumers, after all, want to see the ads, almost akin to seeing a movie.

The entertainment halo certainly matters. Over the last three years, Nielsen IAG research found Super Bowl spots achieved a 31% higher break-through and 93% higher likability than the typical ad on television. But it’s not that simple. Timing is also a factor. First and second quarter spots yield more yardage than second half spots, and 4th quarter spots are about comparable to a “normal” TV buy in terms of generating ad recall. The viewer’s ability to associate the correct brand with the ad, and reported likability levels similarly wane over the course of the game. Surprisingly, branded integration effectiveness shows an opposite trend. Recall and brand opinion are lowest pre-game, moderate during the game, and big gainers post game. For Marketers, the mix is clear: focus on ads early and branded integration efforts late. Lastly, the SuperBowl is a touchdown for brands generally: purchase consideration for the average ad the week after increases +13% versus the week prior.

So that’s the foundation of pure “paid” measurements. What about the “earned” side of the equation, which factors in free media, consumer conversation, participation, and the like? Clearly, the Super Bowl in particular shines light across a far more complicated mix of marketing activity and user-engagement. Great copy finds life in other places.

An engaging, even participatory Pepsi game spot, for instance, might trigger a site visit, a Google search, a tweet, retweet, fan-page sign-up, or DVR rewind. It might trigger a desire to share, forward, discuss, critique, rate, or review. It might bleed over into the social media stream of a New York Times or any media reporter (a growing number of whom leverage social media across all platforms.)

The good news is that this digital trail can be quantified with high levels of precision – by volume, reach, tone, source, or even depth of brand advocacy. And much of this can be delivered in real-time, empowering today’s brand manager to make real-time changes or adjustments to the site. Last year, for instance, a large percentage of brands buying spots on the Super Bowl made real-time adjustments to their websites or social media efforts based on pre-game variables.

This year, Frito-Lay’s Doritos brand sits on the extreme of early-adjustments, as the four spots they are running are sourced from user-participation events and contests. In this case, the “earned media” is stimulating the paid side of the equation. Then again, this can work in reverse. When P&G’s Tide brand ran a highly engaging “Talking Stain” spot two years ago, it triggered a user-generated contest that created an impressive annuity of online video that quickly reshaped the brand’s search results for the better. Three years ago, Nationwide insurance estimated that the “earned media” dividend from their Kevin Federline spot totaled over $20 million dollars.

So in the end, it’s just not as simple as “buying” high-reach media. The broader ecosystems truly matter. This year, Nielsen is putting its biggest effort into measuring and quantifying the full return of Super Bowl advertising, combining a comprehensive suite of paid media and earned media metrics into a total “engagement” score. And we don’t intend to stop at the Super Bowl. Over the course of 2010, we’ll be applying our new cross-platform engagement metrics across our work on the Winter Olympics, Academy Awards, and the World Cup.

Webinar: Learn more about Nielsen’s comprehensive approach to the Super Bowl. Join Pete Blackshaw and Randall Beard for a webinar Maximizing Advertising ROI in a Paid vs. Earned Media Environment on December 8 at 2:00PM EST.

A Brief History of Flight

In the mid-1980s, the highly regulated airline industry was relatively unsophisticated about how to price its main product, seats, until Peoples Express burst onto the scene. Peoples’ low fares quickly gained customers and market share. The big airlines took notice and responded in two ways–one obvious and one less so.

American Airlines responded with deep discount “Supersaver” fares, essentially matching Peoples on key routes. This was the obvious response. The less obvious response was the introduction of “yield management,” which gradually brought a level of sophistication and a data-driven pricing model that yielded a 3-8% revenue improvement, according to industry analysts. Yield management quickly spread to the hotel, car rental and other industries.

Yield management is an approach to maximizing revenue when a business has a fixed, perishable resource and can segment customers into groups willing to pay different prices for the same resource. In airlines, a seat is “perishable” as the revenue potential disappears once the flight has flown.

Simply stated, the airlines want to sell the right seat to the right passenger at the right time at the right price. Doing so requires sophisticated algorithms which account for capacity utilization, route scheduling, fuel prices, competitive pricing and the like. All those yield management algorithms are what’s behind the minute-to-minute price changes happening every time you book a flight.

Yield Management… For Marketing?

From an advertiser perspective, yield management is the ideal model:  place the right ad in the right program against the right target at the right price. In concept, it’s the same as selling airline seats, but on the buy side.

Making it Work

What’s required for yield management to work for advertisers?

• Digital – Digital is more easily measurable and therefore more usable in a yield management model.
• Cross-Media Measurement – Marketers must be able to measure viewership across TV, web and mobile to optimize media allocations.
• New Measurement Tools – Marketers must be able to target viewers based on any segmentation dimension, buy media based on ad effectiveness by program, and measure ROI.
• Real Time Data – All three of the above are needed in real time – 24/7/365.
• Accountability – Advertisers must demand greater accountability for every media dollar spent.

For some, the surprising news is that all of the above are either in place or rapidly becoming so. The future is closer than you think.

New Measurement Tools

Two new measurement tools are critical to moving to a real-time Yield Management Marketing Model:

1. TV Program Engagement – TV Program Engagement is a measure of how involved consumers are in a TV program. Is it really a surprise that viewers are more involved in “Desperate Housewives” than “America’s Greatest TV Stars?” Who cares? Marketers should, because TV program engagement is highly positively correlated with ad recall. Higher engagement = higher recall. So, buying ads in high engagement shows instead of low ones is more effective.
2. Advertising Effectiveness – Ads are more relevant to consumers if the equity of the ad fits the TV program they sit within. Is it any doubt that an ad for SlimFast is more effective on the “The Biggest Loser” than a program with different content but similar audience size and demographics? Now advertisers can buy media based on their brands Purchase Intent by program or genre.

Barriers

The advertising and media industry has had decades to build systems and processes to support the traditional media model. The systems for planning, buying and allocating media for brands won’t change overnight. But the trends are there to see, and the Marketing organizations with the most foresight and vision will see that reengineering these will yield great benefits.

So… When Do We Take Off?

There’s no doubt — all of the Yield Management puzzle pieces are now in place. In the future, advertisers will be able to:

• Target the Right Audience – Targeting will move from simple demographics to more sophisticated psychographic and behavioral targeting. And Marketers will be able to drive these segmentation schemes thru most of their marketing contact points.
• Identify the Right Program – Viewership will be supplemented with TV Program Engagement data. Marketers will become more sophisticated in identifying high engagement / high ad recall programs to improve their ad recall effectiveness.
• Match the Right Ad – Marketers will care about and measure the impact of program fit with their brands. This will enable them to match ads to programs based on purchase intent data, for optimal impact.
• At the Right Time – Media planning will move from an annual, exception-driven exercise to a real-time, algorithm driven process, fueled by continuously updated effectiveness metrics.

All of this will be connected to purchase panel data. So all of the buying, planning and allocation decisions will be held to simple question: did I get an acceptable ROI?

This is the coming “seismic” shift in Marketing—real-time ROI Marketing. Those who don’t get on board will be grounded in the new economy.

As with many of us who have spent our entire careers on the Internet, I have a bit of media establishment envy. Don’t get me wrong, I love the Internet; I’ve spent the past 10 years analyzing the Web and continue to believe the future is in truly interactive media. Sentiment aside, for the most part Internet professionals have spent much of our careers at the proverbial kids’ table. For far too long the Internet has been relegated to the “experimental” or “emerging media” categories.

Recent developments indicate the Internet is being taken more seriously. Case in point: NBC and Fox joining forces to create Hulu, if for no other reason than to solidify their participation in the increasingly important and transformative online video market. Google reaping ad-driven revenues that were once reserved only for the wilder fantasies of those working in print classifieds. Apple reshaping the entire music industry through innovation of the playback device, distribution and consumer experience. And the latest example of Facebook, transforming the way people congregate, communicate and navigate the Web today.

If the Internet has truly “arrived” and is being taken seriously, why have we not yet seen significant brand advertising dollars follow? Maybe it’s because we’re in the midst of one of the worst global recessions in history. Perhaps it’s because online creative units tend to replicate the print experience instead of redefining the consumer experience. Most likely is that the online ad industry has decided to remain independent—we speak our own, at times arcane, language; we use our own effectiveness measures reinforcing the belief that the Internet is a direct response media; and, we have yet to provide easy methods to help advertisers understand the role of the Internet in the entire marketing mix. In effect, we have made our lives, and potential livelihoods, very difficult.

The good news is there is hope. As a medium the Internet is quite the contender (and brand dollars are beginning to shift its way). To continue growing, the online ad world must take a hard look at itself as part of a broader, media industry-wide context and, as one prominent TV client put to me, “grow up.” The Internet does not exist in a vacuum and we’ve moved past the days when it is practical to operate like it does. Leading marketers look at media from a holistic perspective to reach today’s increasingly connected consumers. So too must anyone participating in the ad industry.

• For more about cross-media advertising, download the complete report: Integrated Measurement Solutions

The Boehringer-Ingelheim drug, which treats male urinary symptoms due to BPH, offered two creatives last season that were recalled at a rate 42% greater than the average based on all newly-launched prescription drug ads.  These latest installments of Flomax’s direct-to-consumer TV campaign feature men at a baseball game and men playing on a golf course.

“With relevant and consistent visuals that stand out from the rest, the Flomax ads prove that marketers can still be creative and memorable even within the restrictive pharmaceutical category,” said Fariba Zamaniyan, senior vice president at Nielsen IAG, Healthcare.

Cialis (Eli Lilly) and Gardasil (Merck) tied for second on the list with 32% greater recall than the average drug ad launched last season. The ad for Cialis, which treats erectile dysfunction in men, was an extension of its “What are you waiting for?” campaign and featured its iconic outdoor tubs and a variety of male and female couples. Gardasil, which guards against cervical cancer and HPV in women, filled its creative with images of moms and their daughters who “chose” to get vaccinated engaging in a variety of activities such as surfing, shopping and swimming.

Wyeth’s “Wind-Up Doll” TV campaign for Pristiq for the treatment of depression “winded up” the top three.  It was the only newcomer at the top of the DTC ranking this past TV season, with a recall index of 128.

A key takeaway from the rankings, said Ms. Zamaniyan, is that DTC advertising is not just successful when symptoms of the ailment treated by the advertised drug are shown.  Any prescription drug ad, she says, can still be memorable without the display of symptoms and still  connect with the audience while staying within FDA guidelines.

“The bar for creativity shouldn’t be lower for pharma because of the regulations in place,” Zamaniyan argues. “In fact,  it should be higher given the level of investment and volume of competitive activity on the airwaves.” 

Nielsen’s recall index is limited to responses among adults 18+ who correctly recalled the storyline of the ads they were exposed to within 24 hours after airing. Only ads airing during entertainment and sports programs on the five broadcast networks (ABC, CBS, NBC, FOX and CW) on Broadcast prime time,  Evening News, Late Night and Syndicated Prime Access (Jeopardy, Wheel of Fortune, Access Hollywood, Entertainment Tonight, Extra, Access Hollywood) were included in the ranking.  The ads are measured at comparable media weight to control for differing weight levels across the campaigns.

Automotive was still the largest spending product category  for Spanish-Language media ($381.7 million), despite a 40 percent cut in spending compared to the previous 12 months. Wireless Telephone Services (+4.8%), Quick Service Restaurants (+10.1%) and Direct Response Products (+18.1%) each saw an increase in Spanish-Language ad spend and fell within the top five product categories.

TOP 5 SPANISH-LANGUAGE MEDIA AD SPENDERS, PRODUCT CATEGORIES

Automotive’s African-American media budget saw a 33.5 percent plunge compared to the previous 12 months, even as it continued to top all other product categories. Quick Service Restaurants (-6.4%), Department Stores (-20.1%), Motion Pictures (-20%), and Wireless Telephone Services (-16.7%) rounded out the top five African-American ad spenders, despite each chopping their ad budgets.

TOP 5 AFRICAN-AMERICAN MEDIA AD SPENDERS, PRODUCT CATEGORIES

Download Nielsen’s full report on Multi-Cultural ad spending.

VIRGINIA: The ad race between Virginia gubernatorial candidates continues to be as tight as it was reported two weeks ago. Since September 21st Robert McDonnell(R) has out-placed Creigh Deeds (D) 6215 to 5718.

A breakdown of the Designated Market Areas (DMAs) within Virginia lends a better view of where the candidates are targeting their messages. McDonnell is dominating the airwaves in the Richmond and Norfolk markets, where his campaign has placed about 40% more ads than Deeds’s campaign since September 21st.  But Deeds, the Democratic candidate, is more of a presence on TVs in the rural Western part of the state, where he’s bought 16% more ads than the McDonnell campaign in the Roanoke-Lynchburg market and 19% more in the Tri-Cities market in the last month. In the Washington DC market, the two candidates are virtually tied, with each of the campaigns placing roughly 1700 ads from 9/21 to 10/19.

NEW JERSEY: In Nielsen’s last analysis of the governor’s race two weeks ago, incumbent Democrat John Corzine showed a big lead in ad buys over Republican challenger Chris Christie. And that lead hasn’t waivered, with Corzine’s campaign placing almost 2 1/2 times as many ads on New Jersey TVs as Christie’s, since September 21st through October 19th (4131 to 1786).

But ads placed by the campaigns alone do not tell the entire story in New Jersey.  The Republican Governors’ Association has chipped in with its own advertising on behalf of Christie. The RGA placed over 900 ads over the last month to help close the gap.

NEW YORK CITY: Incumbent Mike Bloomberg continues to dominate New York airwaves over his opponent Bill Thompson (D). Bloomberg’s 2,875 TV ads placed since September 21st, almost 1,300 more than the amount placed by Thompson over the same period.

While this growth is impressive, seven countries still recorded declines in ad spending in the second quarter of 2009, including South Korea (-17%) and Taiwan (-16%).

“Although declines in advertising activity were still evident across free to air TV, newspapers and magazines in a number of markets, there were clear signs of a reversal of contracting activity.    In the more dynamic markets of China and India, both of which saw sharp cutbacks in advertising activity in the first quarter, advertising bounced back strongly with double digit growth over the same quarter in 2008,” said Richard Basil-Jones, Managing Director, Asia Pacific at Nielsen.  “Positive economic signs across the region suggest that the recovery to pre-financial crisis advertising activity may occur earlier than industry observers had forecast at the beginning of the year.”

On a year-to-year basis, ad spend was up 9 percent, reaching an estimated $112 billion (US).  Television was the only main media to record growth (10%), while newspapers and magazines showed modest declines (-1% and -3%, respectively).

NEW YORK CITY: Incumbent Mayor Mike Bloomberg is dominating his competition in the ad buying race. Between June 1^st and September 20^th, Bloomberg purchased 4,706 TV ads in the New York market – no small feat considering New York is one of the most expensive markets in the country. The figure dwarfs the number of ads bought by Democratic challenger Bill Thompson, whose campaign bought just 14 TV ads over the same period – all of which ran on or after September 18^th.

NEW JERSEY: Recent polls show a slim lead for former prosecutor Chris Christie over incumbent Governor John Corzine. But since Christie was tapped as the Republican nominee back in June, the ad race has been much more lopsided in favor of his Democratic rival. Gov. Corzine has placed 3 ½ times more TV ads from June 3^rd to September 20^th, outscoring Christie 4,806 to 1,393 in the New York City and Philadelphia markets combined.

VIRGINIA: In the Old Dominion governor’s race, Republican Robert McDonnell hopes that history repeats itself as he takes on a Democratic opponent in Creigh Deeds whom he narrowly beat out for the attorney general seat four years ago. Since the Virginia primary ended in June, McDonnell has placed more ads across Virginia’s multiple TV markets with a score of 4,382 to 3,986 through September 20^th. But more recently, Deeds has been a bigger presence on Virginans’ TV sets with 3,028 ads in the first three weeks of September alone compared to 2,753 ad buys for McDonnell.

Jon Gibs, Vice President, Media Analytics, The Nielsen Company

SUMMARY: Why do advertisers still debate the value of online advertising? Because no precise measure of online audience delivery exists. The missing factor? Who—as in who is viewing your ads, not just how many ads were served. Does online advertising deliver the target audience? With current evaluation methods, it’s difficult to tell. What’s needed is a shift in metrics for audience targeting from impressions to dwell time, increasing the cost per thousand in the process.

Because of their simplicity, we in media research tend to overlook the core principles of successful advertising. These principles can be reduced to three basic questions:

• How many?
• Who?
• Did it work?

“How many?” is the volume of ads, using measures like impressions, gross rating points and the like. “Who?” is the targeted audience, whatever parameters are selected to define the desired population like age, income, education and household size. “Did it work?” is the effectiveness of the campaign. Did it change the thinking or behavior of viewers? Did it increase brand awareness? Did it drive purchase? The online advertising industry is very good at measuring “how many?” in the form of ad serving reports. We have also developed multiple models around “did it work?”, from branding studies to offline sales impact. We, however, have spent little time on the second question, “who?” The irony is that this question—the demographics of those people exposed to the ad campaign—is at the core of ad delivery reporting in almost all other media.

The missing link
Measures of demographic delivery are critical for every other form of media buying. The Internet, however, skipped over this link in the media value chain. Online publishers have spent a decade trying to answer the question “Does online advertising work?” The problem is, that’s the wrong question. This question has driven advertisers to focus on direct response metrics, such as click through, or short term brand lift, without any consideration of the long-term branding impacts on the advertisers’ targets.

The right question is “who does the advertising reach?” This is the question asked of almost all other media, where there is an understanding that a great deal of the impact of the advertising is related to the creative, rather than the media placement. To get to the answer of “who”, the industry needs to develop a standardized, robust, post-buy reporting structure to help keep the targeters on target, and prove from end-to-end, the value of Internet advertising.

Targeting for today
Targeting in the Internet world refers to any form of online advertising that is not run-of-site, run- of-network or content section-specific. I would argue that even contextual, content section specific ads are targeted. One of the great advantages of online advertising is that, unlike traditional media, targeting happens on the execution side, not just in planning. For online or mobile media, the first step in a campaign mirrors traditional media. Marketers determine a schedule of web sites, portals or ad networks that will deliver the desired audience.

The big difference: online media buyers can also buy actual audience segments based on elements like geo-coded inventory through a reverse IP look-up, modeled segmentation based on cookie or panel data, offline sales data, registered user data and a host of other possibilities. As this form of targeting grows in popularity, conventional census-based delivery reports become less useful as many only show raw server counts of impressions—rather than highlighting the ability of publishers to deliver on their promised targets.

Says who?
Another issue with actual online results is that they tend toward unreliable self-reporting. While reports cover impressions, they tend to skirt the issue of targeting accuracy. Some chalk it up to the fact that audience delivery metrics aren’t sexy, while a more cynical group asserts that it has more to do with not wanting agencies or publishers to look bad if results fall short.

Yet another opinion points to the fact that measurement firms have only recently started to produce post-buy reports. Since each research company uses a slightly different methodology, it is impossible to compare results across campaigns and vendors. Also, in many cases, these reports can’t be generated for some forms of behavioral targeting without the client revealing proprietary information.

Prime examples
Examples of online measurement at work for a mobile phone manufacturer include one case using household income as a segmentation criterion, the other using age as a criterion. In the first scenario, the company wanted to market a low-cost smart phone to middle income households in the $50,000–$75,000 per-year range.

According to a Nielsen analysis, the campaign failed badly. Only about 25% of advertising reached the targeted households. Even more disheartening, the supposedly targeted campaign impacted 9% fewer target audience members than a more general run-of-network buy. Three out of four ad dollars were wasted on other segments.

Killer app
In a second example, the mobile phone manufacturer was rolling out its new killer app—an iPhone substitute designed for young adults ages 18–24 primarily, and 25–34 secondarily. Results were better in this case, albeit mixed.

The good news: the campaign over-indexed significantly among the two targeted age groups, 56% more for the primary audience and 25% more for the secondary audience than a random campaign would deliver. The bad news: 62% of impressions accrued to consumers age 35+, outside of the preferred demographic. Although disappointing, it makes sense given the age distribution of the U.S. and online populations which skew older.

Timing is everything
Although ad impression counts traditionally have been the currency of the Internet, there is reason to believe that this accounting method itself had led to the decline of online advertising CPMs. Since publishers are paid on the number of ads served, many have created cluttered environments that increase inventory levels beyond demand—therefore driving down CPMs.

This decline in CPMs is made up by serving more ads and therefore, continuing to decrease the value of any individual ad unit. This cycle creates a financial situation where publishers are disincentivized in the short-term to provide a good advertising environment because they need to create more clutter. This clutter does not simply decreases CPMs, but also advertising effectiveness and therefore, the value of the media overall to advertisers.

In essence, because the Internet is the first medium with truly unlimited inventory potential (i.e., one can cut pages into tiny bits and there is no significant cost of delivery), an impression-based ad model has driven publishers to look for short-term gains at the expense of the long-term health of the industry.

So, what is the answer? When it comes to online advertising, time is the x-factor. Most research suggests that the longer a person is exposed to an ad, the more effective it will be—up to the point of diminishing returns. Perhaps the future of post-buy reporting—and online advertising—has more to do with time than impressions or page views.

The reason for this is that time is the only equalizing measure between the three core groups of online content—video, social media and standard content. Rather than simply counting the number of impressions served, the appropriate measure becomes the “dwell time” (time spent) on a page or with an impression. Using this method, we are also able to reduce inventory (and perhaps drive up CPMs) by saying that impressions that only have a “dwell time” above certain levels are actually counted as true impressions.

Time vs. frequency
A time-based post-buy measure rewards sites that surround advertising with a robust contextual environment, encouraging audience “dwelling.” As the graph illustrates, Site 3 provides a big bang for the buck on a per-target basis, generating fewer but much longer impressions, effectively increasing the value of each impression to the advertiser.

Conversely, Site 4 pursues an outdated approach of ramping up the number of impressions with much shorter exposure times, decreasing the value of each impression. As the value of each impression goes up, so should the CPM.

The way forward
If the Internet is to improve CPMs—and perhaps save the overall advertising market from its fate—we must focus on time-based post reporting. The post reporting itself provides brand advertisers with what they really need and understanding if their ads reach the audience they seek. The time element rewards those sites that limit their inventory by adding a financial incentive to create a good environment for advertising and also links inventory measures to a counting method that should produce more effective advertising overall.

Now that’s something to dwell on.