Communication:  Command Attention (Clutter breaking) ->  Be Relevant

This holds true even for communication among two individuals or two groups of people or for television commercials (TVCs). For the rest of this blog we will discuss it in the context of TVCs.

Though the rules seem simple, commanding attention is itself a very daunting task in this fragmented and cluttered world of media. On top of it, the message is driven home only if you are relevant to your fragmented consumer segments. Currently, we shall focus on the first part of the problem – clutter breaking and commanding attention.

What have commercials been doing to break clutter?

Historically, entertainment has proved to be one of the most effective ways to command attention of people. Entertainment is a very pervasive element of television ads today. Research shows that creative entertainment increases the attention to view the entire ad, reduces the resistance to persuasion, and has positive effects on purchase intention.

Wikipedia defines entertainment as – “Entertainment is something that holds the attention and interest of an audience or gives pleasure and delight.”  Psychologists define entertainment as “attainment of gratification of senses”.

Though people have different personal preferences of entertainment, it has been observed that across cultures and time there are recognisable and familiar forms of entertainment such as story-telling, music, dance, drama, sex, sports, horror etc. So, most ads today have atleast one form of content used to entertain consumer such as humour, music, and creative stories, etc.

The answer to the question is – Commercials have been using entertainment as one of the effective ways to break clutter and maintain attention levels, increasing people’s interest to view the entire ad, and research shows that creative entertainment has positive effects on persuasion and purchase intentions.

If all is well, what is the problem about entertainment in commercials?

One observation that always intrigued and puzzled me is that the commercials that are very entertaining and enjoyable don’t always drive home the intended purpose. There are many commercials that are enjoyed a lot and has high ad recall, but they just become only a source of entertainment for the audience.

My observation of several ads and people made me come to the hypothesis that the entertainment provided in the ad actually fulfils the consumer and conflicts with the consumers’ process of synthesizing the brand/product message.  This negative influence of entertainment is especially seen when the brand purpose is not weaved into the story provided for entertainment. For example, in ads where the entertainment part comes first and the brand is shown very late in the ad and they are not so well connected. If entertainment is used to break clutter, then it is important that the brand is shown as a part of the entertainment at the beginning of the ad, else there is a risk that the TVC may be very entertaining but not serving the objective of the ad.

Harvard professor Thales Teixeira has conducted interesting research on this regard and wrote a paper – “Why, When, and How much to entertain consumers in advertisements?” This is based on a facial tracking study (software used to track the facial emotions) in response to the TVCs. This is a first of its kind study and is the latest (dated January 2013).

One of the key hypotheses for the study is – Does high entertainment in advertisements have detrimental effects on persuasion and purchase intent, while having beneficial effects on a person’s willingness to watch the ad?

Key Results from the Study:

1. Entertainment can overcrowd your product message.

2. Viewers tend to pay less attention to the message associated with the brand once they’re already entertained.

3. If entertainment is not brand-associated (brand comes first and then the entertainment part starts or both at once), then it works only as an attention capturing device.

4. An excessive amount of entertainment is ineffective because it reduces the ad’s persuasiveness, as the entertainment conflicts with the persuasiveness.

5. Medium level of positive entertainment leads to a higher intent to purchase the advertised brand than low or high levels.

Entertainment plays both a co-operating and a conflicting role

Prof. Teixeira found that entertainment plays both a co-operating and a conflicting role, depending on its type (i.e., location in the ad). Entertainment that is associated with the brand is co-operating, as it acts as a persuasion device both in the interest and purchase stages. Entertainment that is not associated with the brand acts predominantly as an attraction device at the interest stage, thus indirectly cooperating but also directly conflicting with the ultimate goal of the ad.

The paper talks about the role of the location of entertainment and brand in the ad and its effects on the purchase funnel. If the ad is solely intended to induce purchase from previously aware or interested consumers, early placement of the brand is recommended. This might be the case for established brands or mature products. Yet, if the purpose of the ad is to generate awareness and interest, for example for new brands or products, and other marketing tools will be used to trigger purchase, then placing the brand later in the ad will be more effective to increase its attractiveness. Lastly, for ads intended to increase interest and purchase, ad persuasiveness and attractiveness should be balanced.

The study shows that entertainment, while increasing interest, can hurt purchase intent, especially if it appears before the brand, and can help purchase intent, when it occurs after the brand. So having the brand appear later may work if the objective is more towards building awareness. But still I am not a strong supporter of entertainment coming first and then brand later. If you want to be safe, make sure that the brand has an appearance somewhere in the beginning of the ad (especially when entertainment is used for clutter-breakthrough).

Thank you.

Similar Posts on this blog:

http://brandalyzer.wordpress.com/2012/09/20/centuryplys-latest-gorilla-tvc/

http://brandalyzer.wordpress.com/2012/01/15/television-advertisements-and-relevance/

http://brandalyzer.wordpress.com/2011/09/03/flipkart-attacks-the-online-fears-with-its-new-set-of-tvcs/

References for this post:

http://brandalyzer.wordpress.com/2012/01/15/television-advertisements-and-relevance/

http://www.hbs.edu/faculty/Pages/event.aspx?num=387

http://www.affectiva.com/assets/Entertainment-effects-on-Purchase-Funnel.pdf

Youth are increasingly adopting e-commerce

India has the biggest youth market that is adopting technology quickly.  Indian youth are comfortable using technology and are preferring to shop online. From books and apparel  to FMCG goods, everything is being sold online today. The apprehensions of buying online are subtly fading away for the Indian consumers and online retail is showing positive signs for the future.

India online retail is growing at 35% which would take its value of around 3000 crores ($ 600 million) currently to around 7000 crores ($ 1.5 billion) in 2015. Some of the largest retailers in terms of unique visitors are – Amazon, Flipkart, Jabong, Myntra, Indiatimes, Snapdeal, and Homeshop18 (in decreasing order).

Great signs for online retailing:

• Indian online retail is growing at 35% though the overall size is only 3000 crores.
• Sites such as Flipkart have their apps loaded in 40-50% of the smart phones in India.
• As per Assocham, 58% of the online shoppers shop using debit cards inspite of the cash on delivery option.
• Increase in assortment in online retailing ranging from books, apparel, shoes, electronics, to specialized FMCG, furtniture, etc.
• Categories such as apparel have witnessed strong acceptance and growth in online buying
• Increasing time spent on smart phones in browsing online retail websites. In 2012, upto 20% of the traffic for Snapdeal came from smartphones.

Category-wise growth

According to Assocham, apparel and consumer goods are the fastest growing categories in e-commerce.

Source: Assocham and comScore

Browse offline, Buy Online

Consumers who are comfortable and convinced to buy online are popularly using the method of browsing items in the shop and then buying the item online. This is especially observed in books, shoes, electronics, etc. Consumers are reaping the benefits of both the trades (look and feel from the brick and mortar stores, and discount benefits from online) and this is an important clue for the retailers.

Online retail has made a dent in the $ 500 billion Indian retail market. However, there is a long way to go and it is a big task to even reach the modern retail market size of $ 30 billion. Indian consumers are simultaneously witnessing three revolutions – modern retail revolution, smart phone revolution, and e-commerce revolution. With FDI in retail, increasing smart phones and internet penetration there is strong optimism for the growth of all the three and how these three revolutions converge into a giant consumption basket.

Choice based Conjoint (CBC) is a research technique based on the observation that consumers always choose products among a set of products in the marketplace, and a simulation of it is the closest to the real consumer behaviour. CBC is a technique wherein the respondent is shown a set of concepts (with specifications) and is asked for his/her preferences. This technique hopes to simulate the tradeoffs that consumers make in their daily buying experiences; the tradeoffs could be among the attributes of the product or among the products and brands listed. This technique is generally used to understand the interaction among the attributes, and for pricing studies.

One needs to list down the attributes and the levels for each of the attribute. For example, to conduct a CBC to understand the importance of the features of a smartphone; an example of an attribute could be “RAM Size” and the levels could be 512MB, 1GB, 2GB or whatever options you would like to present to your consumers. The options should be as close to the actual product as possible and the attributes and the levels should be given an extra-ordinary amount of thought. CBC should ideally be done on a sample of around 300-600 respondents who are aware of the products and the category.

One of the issues I faced while deciding on the attributes and the levels is that it is a little on the easier side for a very functional product like a smartphone or a car, where you can easily distinguish between different engines or processors, (different features like power steering, windows, etc…). The features and levels in functional products are easily distinguishable and conceivable. On the other hand, for products such as biscuits, toothpastes, sanitary napkins, etc. I am not sure how well people can distinguish and conceive different product benefits in such categories where you know the product only by experiencing it.

History of CBC

Limitations of CBC

• Not all brands are  equally known to the consumers, and there is a risk of popular brands mostly being preferred in a CBC study.
• CBC doesn’t take promotions and distribution into consideration, and it assumes that all brands are available and have enough media spends.
• It assumes that the consumer has the ability to buy the product.
• The number of questions involving different choice sets could easily increase, causing respondent fatigue.

Brand Price Trade Off

BPTO is a simpler version of a conjoint analysis where a set of brand/price combinations are shown to the respondent. As the respondent choses a particular brand, the price of that particular brand is increased and the consumer is again asked to choose among the new set of brand/price combinations. This technique helps us understand how the consumer trades off the brand and price, and what is the best  price point or price band for your product.

The one biggest advantage of this method is its simplicity, while it has quite a few critics in the market. One of the disadvantages of BPTO is that consumers may become conscious and may start playing around with the lowest price, or consumers may be protective of their brand and may always prefer a brand and take it to unrealistic pricing levels.

Technorati Claim Token: 9GYQZA35NG7P

The evolution of Modern Trade is just meeting the demands of these consumers and together causing rapid growth in modern retail. With increased exposure to Modern Trade, the consumer today is becoming more and more comfortable and loyal with Modern Trade.  Nielsen says that a fifth of the Urban India Shoppers now regularly shop at Modern Trade stores. (refer http://www.indiaretailing.com/upload/ContentImage/Market_Research_pdf/NielsenShopperTrends110912.pdf)

Technopak forecasts that the penetration of Modern Trade in India will triple to about 15-20% in the nextfive years by 2018.

From the consumer point of view, modern trade results in:

• Consumers feel that they are smart buyers
• Increased availability of choice in brands and categories
• Promises better prices and value to the consumers
• Better quality products
• Enjoyable shopping experience with product and brand voyeurism
• Perceptual benefits of improved standard of living

Consumers feel smart as they have more control in Modern Trade

With increased brand choice, freedom to browse the products, and the visibility of deals and promotions, the modern trade consumer perceives his buying experience as a smarter way of buying things. It also leads to the consumer willing to experiment more, buying new brands and categories in the modern trade store. It is observed that the modern trade consumers look to buy large packs and aggressively look for promotions, trying to get more value out of every buy.

A family shopping experience with enjoyable product and brand voyeurism

The modern trade consumer is most likely to be accompanied by family and friends, and is not so likely to shop alone. It is increasingly seen that kids sit in the shopping cart, and the mother and father discussing about the product. This increases the fun in the buying experience and provides more opportunity for the retailers to increase the basket size and increase interaction with wide array of brands.

Moreover, the large displays, islands, and the strict arrangement of brands always make the consumers be voyeuristic of the brands and products. This makes them checkout products that were never in their consideration and drop it in the basket.  Modern Trade consumers’ willingness to buy new products and niche variants is making manufacturers add high-end variants to upgrade the consumers.

The rise of mini-modern stores to meet the “modern consumer” needs

The Sarvodaya supermarket in Mumbai is an example of a growing trend of traditional stores adopting modern practices to meet changing consumer needs. There are about 100 such stores in Mumbai, and this trend is soon catching up in smaller towns too.

The future implications of Modern trade evolution are obvious as more and more consumers flock to the modern trade stores, and as more global retailers look to enter India after the FDI approval.

In the Indian FMCG market, we have broadly two types of wholesellers:

1. Modern Wholesale stores such as Metro, Wal-Mart BestPrice, etc.

2.  The neighbourhood wholesellers around the streets in India

Wholesale distributors buy in bulk (high volumes) bargaining low prices from manufacturers. Wholesellers in turn buy products in demand (what retailers ask for?) at low prices from wholesale distributors. Because of this reason that wholesale distributors are bulk buyers, it is generally seen that wholesale is cheaper than retail. But, it also depends on how many middlemen it passes through, as each middleman adds his margin to the selling price.

What’s in it for the retailer?

Few reasons why retailers buy from the wholesellers:

• No direct distribution of a brand to their stores
• Low margins by distributors
• Direct distributors dictating terms
• Better deals at wholesale
• To be aware of the high selling products and brands

Retailers also face some disadvantages in buying from wholesellers:

• Buying goods on immediate cash
• Transportation costs of the goods
• Wholesellers may not take back the unsold inventory/stock

What’s in it for the manufacturer?

The wholesale channel helps the manufacturers achieve sales from markets where they are not directly able to handle retail sales and their shipments. In a country like India, where 95% of the retail environment is unorganized, and spanning across millions  of small stores, it is impossible to reach all the stores directly through your distributors.

Most companies will have strong direct distribution in cities like Mumbai, but as you go deep into India, the dependence on wholesale indirect channels increases. Most top selling brands and categories have a good amount of wholesale component. For example, a brand which is selling in Pan-India (across the regions in India) may have a wholesale component ranging from 20% to as high as 50-70% depending on the category/brand’s dependence on Rural India. It is obvious that most of the sales in Rural India happen through wholesellers. In Rural India, you will have strong wholesellers for every group of villages or in the nearby town, where retailers go and replenish their stocks.

Manufacturers would always like to have a higher contribution of retail sales to their overall shipments, as this helps them directly to control the nuts and bolts in the operations such as trade promotions and schemes, in-store visibility, relationship with retailers, pushing and increasing their assortment within the stores, maximising profitability, increased visibility of their sales, etc. The top FMCG companies are driving their direct distribution in Rural India as they mine the Gold at the Bottom of the Pyramid.

In this blog post, we shall evaluate this TVC from Century Plyboard and understand if it met its objectives. Please watch the TVC below.

TVC

Objectives:

Though Century Plyboard is a major brand in India and consumers trusted the brand, research suggested that it is not an aspirational brand in the eyes of the consumers. So, Century Plyboard wanted to build a campaign that brings out the brand as a “lifestyle brand” and truly make it aspirational. As we all know, for any brand, the ultimate apex in brand hierarchy is to be aspirational for its target group.

However, in process of making it a lifestyle/aspirational brand, Century Plyboard also wanted to communicate a key functional aspect – “durability of the furniture“.

Let us check the TVC on some of the key parameters.

1. Does it command the attention of the recipient?  √

No doubt that the thrown car and the angry gorilla at the beginning of TVC attracts your attention, and is clutter-breaking among any group of advertisements. I would say 100 out of 100 for the Bates team for such a clearly clutter-breaking start for the TVC.

Great! Now that it got the attention of the consumer, it would have to be relevant and communicate the message.

2. Communication of Durability √

As the consumer watches attentively, the next scene that attracts attention is that the gorilla is not able to break the door and it enters the house breaking through the roof. As the gorilla lands on a dining-table, the dining table doesn’t break and the gorilla chases the person in the scene to the cupboard. Until this point, the consumer is still attentively wondering “what is the gorilla upto?”.

Now, as it turns out that the gorilla is the husband’s imagination of his wife’s anger, it brings out an element of empathy and fun making the whole commercial very enjoyable. The message in the background also re-emphasizes on the visual communication.

It is a great story with an element of suspense, and clearly communicating the durability of the furniture.  I give 100/100 in the communication of the functional aspect “durability”.

3. Does it bring the Lifestyle/Aspirational element? Χ

Though the advertisement communicates the durability aspect, it communicates it in a raw manner and definitely doesn’t communicate it creating an aspiration for the brand. The point of concern is: is “durability” a differentiated factor among branded furniture or is it a hygiene factor where the consumer is looking for more than durability. This is why Century Plyboard as a brand should become a lifestyle brand and be more aspirational in the consumer’s mind. This helps to enhance the product portfolio and target the up-class consumers, together bringing in the brand aspiration.

The TVC clearly falls short in the aspect of creating aspiration. The commercial is definitely enjoyable and it has the brand recall with “CENTURY PLY” cards at the end of the ad. The advertisement would have been perfect, had the situation been that people don’t have much trust in its durability. However, the situation here is to somehow create an element of aspiration for the brand.

On the whole, it definitely does well on breaking the clutter, consumers will enjoy the ad, communicates the aspect of durability and increases the awareness of “CENTURYPLY”. However it falls short in creating aspiration.

The term gross refers to the total amount made as a result of some activity. It can refer to things such as total profit or total sales.

Net:

Net (or Nett) refers to the amount left over after all deductions are made. Once the net value is attained, nothing further is subtracted. The net value is not allowed to be made lower.

Gross refers to the total and Net refers to the part of the total that really matters. For example, net income for a business is the profit after all expenses, overheads, taxes and interest payments are deducted from the gross income. Similarly, gross Weight refers to the total weight of the goods and the container and packaging. On the other hand, net weight refers to only the weight of the goods in question. For most food products, manufacturers print the net weight on the packaging for the benefit of consumers.

In economics, gross means before deductions (brutto), e.g. Gross Domestic Product (GDP) refers to the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year). Net Domestic Product (NDP) refers to the Gross Domestic Product (GDP) minus depreciation on a country’s Capital (economics) goods. (The NDP is thus, in effect, an estimate of how much the country has to spend to maintain the current GDP.)

In accounting, for a P&L (Profit and Loss) statement, Gross profit, or Gross income, or Gross operating profit is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments. Net profit is equal to the gross profit minus overheads minus interest payable plus one off items for a given time period.

For a business, income refers to net profit i.e. what remains after expenses and taxes are subtracted fromrevenue. Revenue is the total amount of money the business receives from its customers for its products and services. For individuals, however, “income” generally refers to the total wages, salaries, tips, rents, interest or dividend received for a specific time period.

When income is represented as a percentage of revenue, it’s called profit margin.

Source: http://www.diffen.com/difference/Gross_vs_Net

watch?v=s2jsCGLO56g&feature=player_embedded

The new commercial plays out at a traditional wedding ceremony. A teenage girl and boy exchange notes on how every family has a “dancing uncle/aunty” and an “allergy aunty/uncle”. They quickly realize that the two families have much more in common than they thought. When the girl excitedly asks, “Tumhaari family mein mere jaisa kaun hai?” the boy smiles and replies ”Main”. A piece of Cadbury Dairy Milk is exchanged to celebrate their new found friendship and the closing VO states, ”Nayi Dosti Ka Shubh Aarambh. Also, the commercial plays the same jingle which would help establish a strong brand recall.

On Air on July 21

It is set to hit TV screens nationwide on July 21, 2012 and is expected to have a presence in over 70 television channels. To further
strengthen the brand’s digital presence, the TVC was released online on YouTube and Facebook on July 13.

Ad Timing: Friendship Day and College Re-opening

The campaign is perfectly timed to be on-air two weeks before the Friendship Day on 5th August. Also, with most colleges opening in June of the year, it also has good timing with students just starting to make new friends in colleges. CDM wants to be the chocolate through which the students express their emotions of the ‘friendship moments’.

The TVC will be supported by a robust integrated marketing campaign, including on-ground activations in 80 colleges, creative print placements, interesting radio capsules in leading radio stations across many cities and outdoor, to urge people to make new friends and celebrate special “friendship moments”.

Symbol of different things in different contextual situations

Cadbury Dairy Milk is trying to own every sweet moment of celebration and expression in your lives. This is part of the long-term brand building campaign ‘Shubh Aarambh‘. CDM has taken a very difficult challenge  and it has done a decent  job by partly owning the festival and family celebrations with its product line ‘Cadbury Celebrations’. It later built on the valentine moment between a boy and a girl.

It now comes up with this intelligent TVC trying to own the moment of ‘friendship’ with the message and building on its earlier moments – valentine, family, and celebration – with the background of marriage.  This is intelligent, as CDM is trying to become the message itself within different contexts, and bringing all the moments together.

It is very encouraging to see Kraft Foods continuing its strong brand-building activities, despite the inflationary times. With the consumers feeling the price increases on all products, consumers are already decreasing their discretionary spends such as chocolates. So, it is very interesting to see whether this will translate into sales in the short-term or not, but it definitely is going to help the brand in the long-term.  This is a classic example of a strong campaign with a long-term vision for the brand.

The press release for this advertisement has been shared by the strategic communications agency, The PRactice (www.the-practice.net).

For the below reading, it is first important to understand the difference between accuracy and precision.

ACCURACY

Accuracy is the proximity to truth. If we knew the truth we would totally not estimate it altogether. So, accuracy of an estimate is a totally useless concept altogether for population statistic estimation.

PRECISION

Suppose you have the task of adding up long list of numbers – perhaps your daily expenditures over a month. You do your sum and get a particular result. But you’re not sure whether you got it right. You may have made a mistake in adding or punching in the numbers if you were using a calculator.

What do you do? You do the sum again. And if you’re a cautious accountant you might even do it a third time. If you get the same result every time you feel you have got it right.

Lesson: When in doubt, repeat. Repeatability of the result generates confidence in it. Repeatability is reliability.

Actually, our example of adding up a list of numbers is not a good one. Because, in this case there is only one true answer and we shall get it every time we do our sum correctly. But, the real life situations that we are interested in are the results that we get from measuring a sample of people from some universe. Again, we are not sure if the results are true. So, in line with our commonsense philosophy, we should be repeating the sampling exercise. If we did, it is highly unlikely that we would get exactly the same result, because different people would be included this time. In fact, if we repeated the sampling exercise many times and measured the same thing on different samples of people, we would find that most of the results fall within a range.

We would be entitled to come to a conclusion that, most probably, the truth that we are trying to estimate must lie somewhere in that range.

If we had a method of being more precise and if we could say, for example, that after repeating the sampling exercise many times, 95 percent of the results would fall within a certain range, then there would be a 95 percent chance that the truth would lie in that range.

The width of this range is a measure of the precision of our estimate - narrower the range, higher the precision. Our objective is to narrow this range as much as possible, because that would bring us closer to the elusive truth. Precision replaces the concept of accuracy. We will never be able to say how accurate is our estimate of the truth, but we can say how precise it is.

But how do we get a fix on this range? Taking just one sample in real life is problematic and costly enough. Repeating the exercise many times may be conceptually brilliant, but completely undoable in practice.

Actually, you don’t have to repeat the sampling exercise. This is where the science of inferential statistics comes in. By analysing the data in one sample that you have taken, specifically the variation contained in it, and by making some assumptions about the pattern of variation in the total universe, it can calculate the 95 percent or 99 percent or any other precision range that would actually come to pass if you did take the repeated samples. The whole purpose of inferential statistics is to save you the trouble of actually repeating the sampling exercise by inferring what would happen if you did.

It sounds like magic, but it is only logic. This logic completely depends on a crucial aspect of reality, namely the ‘Laws of Chance’, more commonly known as ‘Probability’.

So, the whole stuff is all about how precise are we in our estimate of a population statistic. After all, we all know the statistics of the sample. The problem is to understand the average height of the population in India, if you have a sample whose average height is known. This is where it all starts, and this is the role of the Central Limit Theorem (CLT).  CLT assumes the population to have a normal distribution, else the ‘n’ value has to be a minimum of 30.

CLT says that if you have a sample mean (x-bar) and the standard deviation of the sample is σ, then the probability that the population mean(µ) lies between the confidence intervals for a desired confidence level (z) (read it as a confidence level for now, I will come back to it later)

which is nothing but

For now, understand that CLT will provide with a confidence limit for the population statistic if you know the sample statistic and the standard deviation. Understanding the nuances of how CLT works and what its details are decently complicated and I will come back to it later.

Let us take a practical requirement for our understanding. Take for example, we have done a product test among men and women in a population and we asked the purchase intention of a product. Let us say, the results look as follows: (the numbers quoted are just for understanding the concept and may not hold the law of statistics)

Since we want to examine the differences in scores between men and women, we formulate the ‘null’ hypothesis that ‘there are no differences in the real scores in the population among men and women’ implying that the differences in the scores in the sample have come about by chance, and if we had repeated the sampling exercise, the differences would have disappeared.

The first thing to do is to calculate the confidence belts for both the scores by analysing the ‘variance’(using CLT) in the sample scores among men and women. Various situations can arise as follows:

Situation 1

Sample Size: 100 each

95% of range of scores of men is: 4.5———-4———–3.5

95% of range of scores of women is:                                      3.4———–3————2.5

There is only a small chance that men’s scores will be lower than 3.5 and women’s scores higher than 3.4. Therefore, the statement that ‘Men score higher than women’ has only a 5% chance of being wrong. Scores are significantly different at 5% level.

So if the 95% confidence belts don’t overlap much, then we can say that the scores are significantly different and cannot come by chance. So, we reject the null hypothesis. Here the degree of risk in rejecting the hypothesis is 5%.

Situation 2

Sample Size: 100 each

95% of range of scores of men is: 6———-4———–2

95% of range of scores of women is:    5———–3————1

No evidence for believing men score higher.

Scores are not significantly different at 5% level. We therefore don’t reject the null hypothesis.

Scores are not significantly different at 5% level. We therefore don’t reject the null hypothesis.

We can make this case to be significantly different by taking decreasing the confidence level or increasing the sample size as follows:

90% range of men: 4.6———–4———–3.6

90% range of women: 3.5———-3———–2.5

Scores significantly different at the increased risk level of 10%

We can also increase the sample size

Situation

Sample Size: 200 (As we increase the sample size, the range for confidence level will decrease which may lead to significant difference even when the confidence level)

95% range of scores of men: 4.2———-4————3.8

95% range of scores of women: 3.3———–3————2.7

Scores significantly different at 5% level

Therefore, increasing sample size will make smaller differences significant.

Interpretation of Significant Results

The fact that a survey result is found to be significant, by carrying out a statistical significance test, often leads to confusion when such a result is presented to people unfamiliar with recent methodology. The layman, when told that something is significant, often assumes that the researcher considers the result to be “important”.  Always remember when the researcher says significant he means that the result is statistically significant. In statistical terms, if, for example, a difference between two percentages is declared significant, it simply means that this difference, no matter whether it is a large or small difference, cannot have occurred by chance.

References:

http://dsearls.org/courses/M120Concepts/ClassNotes/Statistics/530_conf_int_mean.htm

http://dsearls.org/courses/M120Concepts/ClassNotes/Statistics/530G_Derivation.htm

http://lssacademy.com/2007/07/16/explaining-the-central-limit-theorem/

http://www.southalabama.edu/coe/bset/johnson/lectures/lec16.htm

http://www.socialresearchmethods.net/kb/stat_t.php

AdStock helps to:

1. Optimize your advertisement scheduling
2. Used in marketing-mix modelling to come up with advertising ROIs, etc.
3. Helps you decide when to be off-air and when to be on-air
4. Helps you understand the advertising decay behaviour

How advertising builds and decays?

Let us take awareness as a parameter to understand the concept of AdStock.  As a consumer watches an advertisement for the first time, let us assume that consumer gains certain awareness of the brand, category, etc. Now, when the same consumer watches the advertisement for the second time, the advertisement builds on the awareness. The advertisement hopefully will strengthen the awareness, recall, preferences, etc. So, advertising builds on itself and that is why we call it as a campaign building.

Similar to the way it builds, an advertisement also decays in similar fashion. If a consumer has seen an advertisement A1 10 times in a week and the same consumer has seen an advertisement A2 only once in a week, then the way the consumer forgets the advertisements is very different.  The decay rate of an advertisement depends on various parameters such as: the strength of the advertisement itself, media plan, media vehicles chosen, category involvement of the consumer, etc.

The normal GRP data doesn’t take into account the build and decay rates. So it doesn’t take into account the residual effect of advertising, though a company doesn’t advertise in a specific period. AdStock is nothing but the GRP data taking into account of the build and decay of advertising, which is more sensible in marketing applications.

Optimize your advertisement scheduling

As explained, the AdStock GRPs are the GRPs weighted for the advertising build and decay rates.

Let us look at case to optimize the scheduling strategy for an advertisement. For this case, the advertisement is assumed to have a half-life of 6 weeks (hypothetical). This will come out for a decay rate of 12.24% as shown in the table below.

We have four options of scheduling, each using roughly the same (1200-1500 GRPs) amount of GRPs. Once we translate these raw GRPs into AdStock GRPs, it will help us decide which scheduling strategy is the most optimum as explained below.

The AdStock GRPs are adjusted based on the decay rate.  For example, the number 469 in Wk 2 is arrived by: (250 of Wk2) plus (250*87.8) (decayed GRPs of Week 1) = 469.

Similarly, 662 in Week 3 is arrived by: (250 of Wk 3) + (250*87.8) (decay of Wk 2) +(250*77.0)(decay of Wk 1)= 469

From the above, it is clear that Option 1 gives the maximum ROI. The other parameter important for selection of an option is the off-air time. Which of the above options gives me the maximum off-air time (when you don’t air the advertisement)?

From the above table, it is clear that Option 1 gives the maximum off-air time for the advertisement by still maintaining more than 500 GRPs. In the above example, 500 GRPs is considered as the threshold and if it goes below, then the advertisement has to come on-air.

To sum it up, AdStock helps marketers understand ‘When to advertise‘? AdStock is commonly used in scheduling, marketing-mix modelling, etc.

Any comments on this regard are most welcome.

Thank you.