Ford won the first-ever Nielsen Automotive Green Marketer of the Year award at a presentation at the Los Angeles International Auto Show. The award recognized the brand that made the greatest strides in gaining consumer awareness and positively shifting consumer perceptions for their environmentally friendly marketing initiatives.

Ford has built significant awareness over the past year around their hybrid vehicles and fuel-efficient cars with key campaigns for Fiesta and Fusion Hybrid, as well as their Drive One 2.0 brand ads featuring hybrids and miles-per-gallon (MPG) related ads. In addition, Ford’s official sponsorship of Fox’s reality show American Idol, which put specific emphasis on the hybrid offerings, has helped drive increased awareness of their green message among millions of people every week. Last season, American Idol’s popular Ford Music Video Challenge, in which exclusive Ford music videos aired each week, featured the Fusion Hybrid and Escape Hybrid, successfully grabbing the attention of consumers. Meanwhile, the company continued to break ground in social media with the launch of new apps aimed at expanding its reach to a new class of prospective car-buyers.

“The Automotive Green Marketer of the Year award is not just about great creative, although we all know that’s a crucial element of any effective ad campaign,” said Lois Miller, President, Nielsen Automotive. “However, this is bigger than one creative. This award is for the auto marketer who was most effective at leveraging its brand to further the ‘green’ movement and create positive awareness for all the auto industry is doing to drive fuel-efficiency and eco-friendly practices. This was best exemplified by Ford.”

To determine the finalists and winner of the Automotive Green Marketer of the Year, Nielsen leveraged three research studies – a cross-media survey of nearly 7,000 U.S. consumers, and separate analyses of data on TV advertising effectiveness and social media “buzz.” These three studies were then analyzed to understand awareness levels and perceptions for ‘green’ auto marketing across media types. Auto manufacturers that ran any national TV ads with “green” themes between October 2009 and September 2010 were eligible for consideration.

Nielsen research found:

• 85% of consumers said they recalled seeing a ‘green’ auto ad recently and, on average across the 23 brands measured, 67% of consumers said they had a more positive opinion of green marketing after seeing the ad.

• Further to that, 41% of consumers said the ad increased their consideration to buy the featured vehicle.

• Green auto ads resonated better than the average auto ad with 12% higher Message Recall, the percentage in which a viewer can recall an ad, the brand or vehicle featured in the ad, and the green message conveyed.

• Among nearly 60,000 social media messages analyzed for auto brands, consumers view their green auto marketing efforts in a favorable light with 12 times more positive “buzz” than negative.

To determine the finalists and winner, Nielsen leveraged three research studies to incorporate awareness levels and perceptions across media types. The studies included:

• A custom survey of nearly 7,000 consumers’ cross-media awareness and perceptions of environmental messages by automotive brand
• Response data from 2.5 million viewers of national television advertising collected by Nielsen’s ad effectiveness measurements service, focusing on green automotive ads
• Measuring social media “buzz” sentiment within green-related discussion threads

The results showed that consumers have definite high awareness of environmentally friendly ad campaigns, with eight in 10 consumers in the cross-media awareness survey reporting seeing “green” auto ads recently. Also notable is the generally positive nature of discussion surrounding green topics for auto brands in consumer-generated media (CGM). Less than 1 percent of discussion was negative on average. This is also reflected in the number of consumers who said green ads shift their opinion of the brand, with two-thirds saying their opinion was more positive after seeing these ads.

“We have seen a heightened awareness among consumers for environmental initiatives in the auto sector,” said Lois Miller, President of Nielsen Automotive. “The key benefit is that with this awareness is also a more positive view of the brand and ultimately, this can help auto manufacturers reach consumers that may not have considered their brand before.”

Marketing around “green” vehicles continues to be an important factor in driving sales for the auto category. In a recent  study of more than 1,700 U.S. consumers and their electric vehicle purchase consideration, Nielsen saw that seven  out of 10 U.S. consumers would consider purchasing an electric vehicle, and 63 percent would consider them for their positive environmental impact. However, price continues to be a barrier with only 35 percent saying they would pay more for these vehicles. Also, looking at online discussion (“buzz”) about EVs, consumers still often mention anxiety about how far these vehicles can go on a charge. With the current limited availability of charging stations, some question the wide-spread use of a car that needs to be charged frequently.

In order to overcome these obstacles, it will be crucial for marketers to get the message out about the benefits of electric cars and other green vehicles by effectively touting points such as fuel efficiency and environmental friendliness. As these vehicles become available for purchase, marketing will play a key role in providing consumers with solid evidence to make the purchase.

Recognizing the potential impact a successful marketing campaign can have on the industry, Nielsen has joined with the Los Angeles Auto Show to create the 1^st annual Nielsen Automotive Green Marketer of the Year Award. Measuring the most effective green marketer will focus on understanding which auto brand was able to raise the awareness and change perceptions around environmental issues most effectively, and will be based on three components:

1. A custom survey of consumers to understand their awareness and perceptions of environmental messages by manufacturer
2. Response data from 2.5 million viewers of national television advertising collected by Nielsen, focusing on green automotive ads
3. Measuring internet “buzz” sentiment changes in social media within green-related discussion threads

Stay tuned for more information regarding the finalists and winner of the first Nielsen Automotive Green Marketer of the Year Award, which will be announced November 18 at the LA Auto Show.

Edison realized that marketing and invention must be joined at the hip. “Anything that won’t sell, I don’t want to invent,” he said. “Its sale is proof of utility, and utility is success.” He realized he needed to put the customers’ needs first and tailor his thinking accordingly, despite any temptation to invent for invention’s sake. This mindset paved the way for tremendous marketing success. The six industries (and their offshoots) Edison pioneered between 1873 and 1905 are estimated to be worth more than $1 trillion today.

In putting customers needs first, Edison became one of the world’s earliest market researchers. He literally went to homes and places of work to analyze how people struggled in order to gain the insight he needed to invent products that could help them do it better, faster and more efficiently. He looked first for unmet needs and then applied science and creativity to fill them. Perhaps the only time American industry has ever operated on a concerted basis in this fashion was the period between 1939 and 1945, when the gathering storm of world war and its reality concentrated the combined creativity of industry leaders and consumers in a way it has not been seen before or since. Today, in trends like “marketing to the bottom of the pyramid,” we see that the free world still has huge consumer needs to fill, and Edison’s powerful approach can help us here as well.

The first example of Edison’s success using a “needs-first” approach to invention is one we seldom associate with him: Document duplication. The inkling of pursuing invention work in the insurance industry came to him while reading post-Civil War newspaper articles documenting the re-building of the South, and the tremendous demand it created for insurance policies. Edison got permission from insurance agents to watch their clerks at work. He saw that most of their day was spent hand-copying documents for each party to the insurance sale instead of selling insurance. Edison realized that if he could invent something that would save both the insurance clerks and agents’ time writing, they could all make more money. And who doesn’t like to make more money?

Edison’s first solution was the Edison Electric Pen and Press. Introduced in 1873, it could make as many as 5,000 copies of a single document. A few years later, his second-generation solution superseded the first by bringing a more automated process into play: The Edison Mimeograph Machine. He sold the patent for the mimeograph to the A.B. Dick Company, providing Edison money to invest in his new laboratory at Menlo Park, New Jersey. The mimeograph machine is familiar to anyone over age 40 who remembers that mysteriously addicting smell emanating from the Principal’s office, where hundreds of take-home math worksheets were printed using funky purple ink.

In the marketing industry, Edison’s name and achievements are honored each year through recognition of outstanding product innovations at the Edison Awards. It will come as no surprise that Procter & Gamble took home the most Edison Awards in 2010 with five, dominating the Consumer Packaged Goods category. P&G has always put customer needs before “invention for invention’s sake.” Importantly, under the recently retired CEO, A.G. Lafley, P&G adopted an “open-innovation” strategy that boosted its new product success rate from a 10 percent to 50. “Open-Innovation” is one important cure for the “not invented here” syndrome, which often blinds marketers to products that did not originate in their own R&D departments. Open-Innovation allowed P&G to respond even faster to customer needs by inviting the scientific community to compete with its internal development folks for minimal financial investment. Mr. Lafley also received the 2010 Edison Achievement Award for his significant contribution to innovation, marketing and human-centered design throughout his career.

Thomas Edison, inventor of the light bulb, the phonograph, the storage battery and moving pictures, was also one of the greatest marketers of all time. Beyond his mastery of bringing inspiration, perseverance and mental acuity to his work, he believed in the power of practical, honest market research to spur product innovation. And he put customer needs first rather than simply invent for invention’s sake.

Marketing success requires a quixotic blend of bravado and humility. Bravado in applying creativity to developing and promoting the product; humility in submitting marketing intellect to consumer research insights. The impact of having an Edison Best New Product Award® bestowed upon your innovation can be tremendous, reaching well beyond recognition by your peers and competitors and out into the world marketplace.

Marketers today seeking inspiration need look no further than the world-changing methods of Thomas Edison. I invite you to go beyond the history books. Read Edison’s own notebooks, written in his own hand — there are more than 3,000 of them archived at The Edison Papers at Rutgers University in New Jersey. Edison’s legacy offers us a marketing road map if we are intrepid enough to follow it.

• The 2011 call for nominations are now open at www.edisonawards.com.

The Nielsen Company recently analyzed the demographics of Brazil, Chile, Colombia, Mexico and Puerto Rico, and estimates that people age 50+ currently make up 19% of the population.  But that number will rise to 26% by 2025 and 38% by 2050.  Households with mature housewives (who drive buying decisions in the home) account for 30% of the region’s populace.  In Puerto Rico, such households make up more than half (54%), while in Chile they represent 40%, in Colombia 35%, in Brazil 29% and 28% in Mexico.

Per Capita Spending Power
These older households – while being 13% smaller than the average home – have higher levels of per capita spending than other age groups:

• Chile: 17% higher
• Brazil: 15%
• Mexico: 15%
• Colombia:13%
• Puerto Rico: 12%

“In the next 10 to 12 years, one of every four consumers will be over age 50, and as in other countries around the world, older Latin Americans are defying the traditional stereotypes.  They are more affluent, spend more money and are open to new brands and products,” said Mary Paz Roman, Consumer Panel Services, Product Leadership Latin America at Nielsen.

Categories that currently attract a greater preference among more mature Latin Americans include hot and cold beverages, sweeteners/sugar, pet food and hair dyes and coloring, and retailers and manufacturers can expect increased popularity in years to come.  But other categories that could benefit – if manufacturers innovate and appeal specifically to this demographic – include a number of health and beauty segments such as shampoo, conditioners and deodorants.

“As competition for a greater share of consumers’ pesos, reals and dollars grows more intense, retailers and manufacturers should re-assess how they view this consumer group if they hope to seize the opportunities this new reality offers,” concluded Roman.

With all eyes on the economic recession in the U.S., it’s easy to underestimate the major trends currently reshaping the consumer packaged goods (CPG) industry. According to The Nielsen Company’s Retail 2015 Forecast, the pace of change is only accelerating as technology, marketing trends and retail formats converge to redefine how CPG retailers and manufacturers interact with consumers.

Big Winners
By 2015, we predict mass supercenters and e-commerce to be the big winners by dollar share gains, growing by a combined five share points between 2009 and 2015. Warehouse club, dollar store and pet store share will also grow share positions. Nielsen forecasts that supermarkets will continue to lose share, but at a declining rate. While both high-end and low-end niche grocers will grow share, overall share positions will remain fairly low given lower per-store sales compared to larger formats. Other key CPG channels, including drug stores, mass merchandisers and convenience stores, will grow dollar sales but will suffer share losses.

Nielsen expects to see further CPG retail consolidation as retailers look for scale and opportunities to expand their footprint into existing and new areas. Retail consolidation will be most active within the supermarket and convenience channels in the race for scale. Today’s big players will only grow bigger. Industry change will grow faster and more intense in the next five years, requiring advanced, future-focused change management skills among CPG professionals.

Out with the Paper Shopping List, in with the Smartphone
One of the biggest CPG shifts by 2015 is already underway: the use of smartphones to engage consumers and help them make better shopping choices. According to Nielsen, smartphone penetration stands at 23% of all mobile subscribers and is expected to overtake feature phones in the U.S. by the end of 2011. Nielsen predicts that by 2015, smart phones will be the primary enabler of consumer shopping engagements and new technology innovations will generate additional opportunities for retailers and manufacturers.

Coming to a Smartphone Near You: a Personalized Shopping Experience
Driving the rapid adoption of smartphones is the seemingly endless variety of apps, which take full advantage of the smart phone’s geographic location and interactive capabilities. Retailers are already using smartphones as a replacement for frequent shopper cards, sending store coupons and deals directly to a shopper’s phone. Nielsen expects CPG companies to further leverage the smartphone’s location tracking abilities to target communications and promotions to shoppers both in and out of stores, and up sell consumers on other items based on prior purchases. In addition, consumers will have the ability to locate the best available price for a given item, access real-time product reviews and promotions and manage everything from household budgets and pantry inventory to tax preparation and filing.

Prepare for the Future
Consumer packaged goods retailers and manufacturers should focus on the following initiatives now to position their businesses for future success:

• Develop or buy online/digital/social marketing expertise. If you don’t have this expertise today, get it.
• Plan for diminishing returns from traditional media. Newspaper feature ads and free standing insert (paper-based) coupons dominate today, but for how long?
• Nurture retailer/supplier relationships. Have contingency plans dealing with consolidation impact.
• Get more flexible with format planning. Consumers today are flexible and completely mobile, which means we need to get more flexible about how and where we sell our products. Study emerging economies to understand flexible markets. Think about future format planning for your next one to three generations of formats.
• Demand forecasting by category and consumer segment. Understand how changes in demand at the category and consumer level will provide risks or opportunities
• Expand via regional or global opportunities. With slowing domestic population growth impacting sales growth, seek opportunities outside traditional geographies to reach more households.
• Make future management a company strength. Given the pace of change that we will experience over the next five years, future management needs to be a core competency or the chances of your stores or brands being a part of the future will be in serious jeopardy.
• Understand the new faces of opportunity. With an increasingly aging and ethnic population, you can’t afford to ignore generational and multi-cultural consumers. It is critical for marketers to adapt in order to gain the attention and brand/shopper loyalty of diverse generations and multi-cultural families of the future.

Gone are the days when online marketing was led solely by the dotcoms of the world. Today, many CPG companies have embraced online and social marketing and are pushing the envelope further each day. In the midst of considerable consolidation and change, the future will be owned by those companies that harness technology to the make the consumer shopping experience easy, efficient and fun.

Continued unemployment means more sensitivity to price changes and promotion activities. Even optimistic views of the economy see a shopper impacted by stubbornly high unemployment, which is predicted to remain around 8-9% over the next three years. As consumer packaged goods (CPG) marketers plan for the future, understanding the nuances of price sensitivity and the consumer’s shifting value paradigm will be critical to success.

During the “Great Recession,” we have seen consumers make dramatic changes to their buying habits. In the “new normal,” these changes are expected to stick:

• More dining at home and less dining out
• Shopping for in home meals with shopping lists
• Finding better values by shopping alternative channels
• Trading down across categories and within categories or opting out of categories all together

Trends that started before the recession and are likely to continue include:

• Health & Wellness: U.S. consumers are still looking to lead healthier lives, but economic pressures have led some consumers to alter their prior habits & practices.
• Convenience: convenient & easily accessible store locations; convenient & easy-to-find in-store or on-shelf product location; food & non-food solutions that save time from our busy lives “aren’t going to get less important.”
• Demographic Trends: aging population & multi-cultural consumers were target consumer groups for many retailers & manufacturers prior to this recession.

Given the rise and length of the unemployment situation, unemployment is now another way to segment consumers to target specific price and promotion programs. This group of consumers will also provide opportunities for those companies who understand them best and respond accordingly.

Pricing and promotions are becoming a more defining factor

Stores in higher unemployment areas have a higher frequency of promotion, and the gap in incremental promoted volume between high and low unemployment areas is widening. As such, the amount of volume sold on promotions in high unemployment areas has been increasing at a greater rate than in low unemployment areas.

When looking at consumer response to both everyday price and promotional pricing, we find that consumers in higher unemployment areas are more 6.5% more sensitive than consumers in low unemployment areas to changes in everyday price.

Private Label growth fueled by high employment areas
Private label developed faster and continues to be more developed in stores in high unemployment areas. However in both 2008 and 2009, private label grew significantly in all areas.

Since consumer are looking for low prices both within store (upper left) and between channels (lower left) – especially true for areas with higher unemployment.

Strategies for the “Left Side of the Grid”

• Competition on price is crucial – be competitive across and within stores
• Focus on efficiency of trade dollars
• For retailers, use weekly the circular on the categories to draw consumers to your store
• For manufactures, focus on price to be competitive.

Strategies for the “Right Side of the Grid”

• Use smaller discounts on temporary price reductions especially for categories that see large increases in feature or display responsiveness in high unemployment areas
• There may be opportunities to take price up for profit
• Manufacturers need to highlight quality through advertising focusing on brand building and consumer benefits
• Maintain promotional spending, but there is no need to focus on Price

At the Nielsen Consumer 360 conference, secrets were revealed as to why some companies see tremendous success when they are developing and launching new consumer packaged goods (CPG) products and others don’t.

The big takeaway? Manage ideas lightly and manage process precisely.

Companies with less senior management involvement in the new product development process generate 80% more new product revenue than those with heavy senior management involvement. And companies with rigid stage gates average 130% more new product revenue.

There’s More to Innovation than Ideas
Thousands of companies are searching for answers on how to successfully develop and launch news products. Having an innovation emperor like Jobs at Apple and removing the constraints and getting more ideas is always a great start, but there is more to innovation than ideas. Excellence in selection, development, execution and learning make a huge difference on performance and results. For example:

• Using an outside ideation firms (vs. not) tends to result in a 15-20% improvement.
• Selecting the right idea and commercializing it correctly can deliver a 130% increase.
• Learning from mistakes can create an uplift of 50% to 90%.

To understand how successful companies win at new product development, Nielsen conducted a study among 30 CPG companies and identified about two dozen best practices that drive better-than-average incremental revenue from new products.

Manage Ideas Lightly
Simply being physically near corporate headquarters can actually stifle new idea generation. In fact, having no “Blue Sky” innovation team at all is better than having a team on-site at corporate headquarters. The best place for your breakthrough innovators? Far, far away. According to Nielsen’s research, companies with an off-site Blue Sky innovation team report 5.7% of revenues coming from new products, compared to 2.7% when the team is on-site.

One key insight from the study is that heavy involvement in new product development from the senior staff can destroy value. Senior management is often too quick to get involved in the creative process, especially when things are not going well. Their mere presence can stifle free-thinking and boundary-less ideas, which can doom the new product development process to failure.

Manage the Process Precisely
One of the important keys to success is to precisely manage the new product development process, not the ideas themselves. CPG companies with rigid stage gates – decision points in the process where a new product idea must pass certain criteria to proceed forward – average 130% more new product revenue than companies with loose processes.

The most successful new products tend to have:

• Two to three stage gates that are strictly followed across the organization. The first stage gate is typically designed to identify ideas that will then be developed into a concept and prototype, while the last stage gate is usually designed to determine whether a product should be committed to production and market.
• A focus on growing brands, not ones acquired or designated by senior management.
• An innovation planning cycle that spans several years.
• A formal scorecard to evaluate financial results.
• A standardized and required post-mortem on all new product development efforts.
• A knowledge management system to retain key lessons and insights from previous product launches.

The truth is, companies with successful innovation track records go to great lengths to create an ideal creative environment and the right behaviors, supporting policies and procedures. When they execute well, the best ideas rise to the surface and into consumers’ homes.

SUMMARY: No matter where consumers live, healthcare is important. But where they live often determines how minor ailments are treated. While Europeans put their trust in the neighborhood pharmacist, North Americans rely more on the advice of doctors. In countries where healthcare infrastructures and economies are evolving, opportunities exist to lessen the considerable burden consumers currently put on doctors and help governments reduce their healthcare expenditure.

The sore throat and cough that accompany the onset of a cold usually sends the typical American to his local drug store to purchase a preferred over-the-counter remedy, chosen because of past experience with the product. Rarely—if ever—is the pharmacist consulted, and almost never is a doctor called for such a common malady. But in Europe, consumers have been taught that pharmacists are an important source of health care information and they are likely to be consulted almost as frequently as a doctor, according to a new global study by The Nielsen Company.

Surveying more than 27,000 consumers in 54 countries, Nielsen has benchmarked the incidence of 17 common minor ailments—all of which can be treated with non-prescription medicines—as well as how consumers typically deal with them. Globally, respondents suffered from an average of almost four (3.9) such ailments in the last 12 months. The most common ailments: headaches, endured by 44% of respondents, followed by cold (38%) and cough (34%). A hearty 13% suffered from none of the 17 conditions listed.

Latin Americans are most prone to suffering from minor ailments (4.73 out of 17) while consumers in Asia Pacific are least prone (3.48 suffered). On a country basis, the Dutch suffered least from these ailments, with an average of 2.47 followed by the Japanese and the Chinese. At the other end of the spectrum, consumers in South Africa have the highest levels of incidence at 5.47 followed by Philippines and New Zealand.

Consult the Doctor or Pharmacist?
Having established the level of incidence by country for each of the 17 ailments, Nielsen’s study explored whether the consumer would seek advice from either a doctor or a pharmacist in helping them with their ailment. Respondents were presented with four options:

1. Every time I suffer
2. Only when I experience symptoms I have not had before
3. Only when the symptoms are more severe than normal
4. Never

Consumer responses varied significantly across the ailments, and between doctor and pharmacist. Analysis of those who said they would never seek the advice of a doctor or pharmacist highlights the gap that still exists with consumers with respect to seeing the pharmacist as a point of care, rather than a retailer of products. For all the ailments (except hangover), a higher proportion of consumers said they would never seek advice from a pharmacist relative to the proportion who would never seek advice from a doctor. This gap, however, is generally lower in Europe, where the pharmacist has been promoted as a key part of the primary healthcare system in a number of countries, and generally higher in Latin America where the doctor remains embedded in the mindset of consumers as the place to go for advice.

Across the categories, a high percentage of flu sufferers will always seek advice from doctor and pharmacist, but generally speaking, consumers mostly seek advice for these minor ailments from a doctor and/or a pharmacist only when symptoms are more severe than they would normally experience. This finding indicates that for the vast majority of consumers suffering from these minor ailments, there is a willingness to work through the ailment without professional advice, either through routine self-medication with non-prescription medicines or other traditional remedies, or by letting the body self-correct. This finding further reinforces the need for manufacturers to drive brand equity within the self-medication sector, and build loyalty with their suffering consumers.

A more detailed analysis of two most common ailments shows strong regional differences. The headache ailment is the most commonly suffered globally, and it follows that the analgesics category is the largest in sales globally with over $9.5 billion of sales in 2008, according to OTC industry expert Nicholas Hall & Company. The cough ailment is the third most commonly suffered, but consumers are much more likely to engage with either a doctor or pharmacist for this ailment than with a headache.

On the global level, 34% of headache sufferers will never seek advice from a doctor about the ailment, compared to 44% who will never seek advice from a pharmacist—a 10 point gap in favor of the doctor. Similarly for coughers, there is a 13 point gap in favor of the doctor. When these gaps are viewed regionally, the gap narrows considerably in Europe to only 2% and 4% respectively. And the gap broadens significantly in Latin America to 24% and 26% respectively.

The many campaigns run by European governments and healthcare providers to position the pharmacist as a point of primary care are paying off, and consumers are more engaged with the pharmacist than in other parts of the world.

Interestingly, North America is similar to Latin America in terms of the doctor/pharmacist gap, but this can be attributed to the wide availability of non-prescription medicines that can be purchased without any pharmacist intervention. The role of the pharmacist in relation to minor ailments has been lessened through this process.

The Take-Away
Pharmacists in North America tend to be viewed as retailers, while in Europe they are viewed as a go-to for minor ailments. These views are fairly solid in consumers’ mindsets in their respective regions. But the real opportunity lies in Latin America, where evolving healthcare infrastructures and economies provide a chance to educate consumers to use the pharmacist as a point of primary care and advice. This will lessen the considerable burden consumers currently put on doctors in the region for advice about minor ailments and by extension help governments reduce their healthcare expenditure.

Consumers tend to want to treat minor ailments on their own, and the pharmacist can play an important role in helping consumers do that by helping them understand which medication might be best for what ails them. Additionally, manufacturers of OTC products need to understand the dynamics in each region and tailor marketing efforts to fully capitalize on growth opportunities. In the U.S., that may mean marketing direct to consumers; in Europe, marketing towards pharmacists may be more effective.

Chang Park, Executive Director, Nielsen Analytic Consulting, Greater China

SUMMARY: Today’s tough economic marketplace, coupled with highly price-conscious consumers, is forcing companies to take a look at which marketing activities maximize their return on advertising dollars. Nielsen has developed eight guiding principles to show marketers how to increase ad effectiveness.

With consumers becoming increasingly price conscious in a highly competitive marketplace, maximizing the return on their advertising spend is more important than ever.

Marketing return on investment (ROI) is the amount of sales achieved for every dollar spent on marketing/advertising. In today’s tough economy, measuring this return is vital to ensure that ad dollars are allocated to those activities that best maximize sales. The steps necessary to achieve the greatest return differ across brands, and an evolving tailored strategy is necessary.

Measuring marketing performance at the brand level will ensure that good advertising spend isn’t thrown behind underperforming marketing tactics. Through numerous studies conducted worldwide, Nielsen found that the average short-term ROI (sales within three months of media execution) is 9%.

Room for improvement
When looking at the overall efficiency of marketing strategies in achieving that 9% return, Nielsen discovered that there is room for improvement. Research found that, on average, advertising effectiveness could be increased 30–40%. The only investment necessary to achieve this increase is to take a closer look at how well each media and promotion type worked for each brand.

Eight guiding principles can help marketers maximize ROI.

1. Consider both the short- and long-term sales impact of marketing programs.
   An advertising campaign is only effective in building sales if the right marketing tactic is employed. Online campaigns and co-op programs are effective in boosting short-terms sales, while television and PR remain key to ensuring long-term brand loyalty.
2. Choose the right portals and campaigns for online success.
   The Internet is a powerful medium that can reach billions of consumers. To capitalize on its reach, you need to understand the percentage of the target market using the web, how they use it and for how long. Then tailor the campaign accordingly.
3. Influence target groups with magazine advertising.
   Unlike daily newspapers that have a broad reader base, magazines have a clearly segmented target group. In addition, newspapers are disposable, whereas magazines are read after their published date.
4. Focus on campaigns that create the greatest halo effect.
   Marketing initiatives that positively impact the sales of the advertised brand and other brands in the portfolio should be invested in further.
5. Drive brand loyalty with TV advertising.
   TV advertising remains the most valuable driver of brand equity due to its effectiveness at building brand awareness and subsequently sales. TV’s residual effect on stimulating sales is greater than any other media.
6. Create synergies across media to produce additional uplift.
   Regardless of the media being consumed, a constant brand message must be conveyed tailored to how the consumer interacts with that specific media.
7. Create brand awareness through in-store advertisements.
   Excessive discounting and promotion erodes the brand’s equity. Using displays and features are more useful at building long-term incremental sales due to its emphasis on building brand awareness and value.
8. Invest in consumers with premium gift packs.
   Although more costly in the short-term, an expensive giveaway can deliver better long-term sales volume because of the perceived value to shoppers.

Marketers have the opportunity to optimize advertising effectiveness by up to 40% by being mindful of how each piece of the marketing mix performs for each brand.

• Download the full report, Is Your Marketing Investment Delivering Expected Returns?