1. Exploring The Comparative Communications Effectiveness of Advertising and Media Placement Initial Findings An Experimental Study Conducted By: Dr. David Michaelson Dr. Don Winslow Stacks

2. The Assumption Editorial coverage through public relations activities has a value that is greater than an equivalent advertisement Common assumption is that value* of public relations placements is upwards to three time greater than advertising if messages are the same * Often expressed as advertising value equivalence or AVE

3. The Reality To date, this increased value of public relations activities resulting in editorial coverage remains an assumption Other than Michaelson & Stacks (2004), there has never been a definitive test or experiment to determine if an increased value of public relations placements actually exists

4. The Research Objective Determine if editorial coverage and advertising perform differently on key measures Credibility of and homophily of message Brand knowledge Brand image and attributes Brand purchase intent or interest If differences do exist, do they support the concept that the performance of public relations efforts is greater than advertising?

5. Definitions Credibility – “ ethos ” the believability or trust in a source Authoritativeness, e.g., Respect Intelligence Information Character, e.g., Honesty Reputation Pleasant or goodness Homophily – the similarity between a source and individual Attitudinal Reflects how people think about others as similar to themselves Behavioral Reflects how people expect to behave as similar to themselves

6. Definitions, continued Awareness Knowledge that a product or brand exists However, depth of information may be quite limited beyond the basic level of product or brand recognition Purchase Intent The stated likelihood to buy a particular product or brand This likelihood is often based on exposure to communications that describe the product or brand and its benefits

7. History of This Project Initial study conducted in 2004 among students at University of Miami The hypothesis was that advertising and editorial coverage have equivalent performance on key measures was not supported In essence the editorial coverage may not have greater impact or effectiveness Findings, however not definitive Limited geography Small sample consisting only of students

8. History of This Project Outside funding provided resources for first phase of study that tests for the comparative effectiveness of editorial coverage and advertising among national sample of newspaper readers

9. Research Design Sample of 351 adults who read a newspaper at least once a week Sample divided into three parts: 150 respondents exposed to advertising message only 150 respondents exposed to news article only 51 respondents not exposed to any test materials and function as control group

10. Research Design Each respondent asked to complete self- administered questionnaire after exposure to test materials Sample weighted to reflect demographic profile of actual newspaper readers Each test cell statistically matched to eliminate biases in responses that may be associated with demographic differences

11. Research Design Data collected in five locations throughout the continental U.S. Interviews conducted in March 2006 at malls in the following locations: 1) Baltimore, MD 2) Duluth, GA (Suburb of Atlanta) 3) West Dundee, IL (Suburb of Chicago) 4) Fort Worth, TX 5) Santa Ana, CA (South of Los Angeles)

12. Test Concept “ Created ” product specifically created for this experiment to eliminate bias that may be associated with specific brand preferences Product is snack food called “ Zip Chips ” that has no sodium or fats Advertising and news article created with parallel messages

15. What We Learned There are differences between the impact of advertising and the impact of a news article But, these are not differences you might have expected

16. What We Found Zip Chips brand recognition was significantly higher than five competitors (all major national brands) No statistically significant difference between ad and editorial But, significantly greater recognition than control group Therefore experimental manipulation confirmed Zip Chip Brand Awareness

17. What We Found No statistically significant difference between ad and editorial groups on believability Zip Chip Brand Believability

18. What We Found Increased information does not translate into increased believability Zip Chip Brand Information

19. What We Found No statistically significant difference in purchase interest between ad and editorial However, those reading editorial showed less variance in overall interest Zip Chip Purchase Intent

20. What We Found Ad and editorial contributed equally to perceptions of brand attributes On composite and individual attribute questions Zip Chip Brand Attribute Ratings

21. What We Found Preference for Zip Chips identical regardless of source of information Zip Chip Brand Preference

22. What We Found High level of uncertainty about Zip Chips likely due to single exposure to a new brand Makes composite analysis of product credibility and product homophily challenging However, analysis of 14 credibility or homophily statements commonly used in research provided some insight when “ don ’ t knows ” were examined by medium Of the 14 statements tested, “ don ’ t know ” frequencies were lower for editorial in 12 cases Equivalent levels of “ don ’ t know ” responses not found on other measures In addition, there was a lack of significant differences between ad and editorial in 12 of 14 statements tested

23. Homophily Statements Credibility of Character The product has been presented honestly. Based on what I know of it, this product is very good. This product is very consumer unfriendly. Based on what I know of it, I find this product quite pleasant to use. This product is awful. Credibility of Authority Based on what I know of it, this product is an excellent choice for me. This product is a value for its price. I think this product is very reliable. Attitude Homophily This product is something that is like me. People who buy this product are very much like me. I would purchase this product because it reflects my lifestyle. Behavior Homophily This product is used by people in my economic class. This product reflects my social background. People who use this product are culturally similar to me.

24. Homophily Statements

25. What We Found Homophily Analysis No significant differences between ad/story for either credibility measure (p>.05) Significant differences between ad/story for both homophily measures (p<.05)

26. What Are The Implications? Unwarranted Assumption or Fact? – Is editorial coverage more effective than advertising? If assumption, what does this mean for the public relations profession? If assumption, what does this mean for systematic public relations measurement? If assumption, what what does this mean for the role of public relations in the broader communications world?

27. What Are The Implications? If fact, What is the relative value? How does the it work? Is it positive, neutral or negative? Are there multiple “ multipliers ” ? Is the it linear? What is the role of frequency for each medium as it relates to relative value?

28. Where Do We Go From Here? Take into account brand comparisons to better understand the relationship between media and outcome Create a more complex study allowing for multiple comparisons while extending the two studies conducted Refine brand credibility and homophily measures as related to medium

29. Exploring The Comparative Communications Effectiveness of Advertising and Media Placement Initial Findings An Experimental Study Conducted By: Dr. David Michaelson Dr. Don Winslow Stacks