1. New Currencies for Television? Jim Spaeth President The Advertising Research Foundation

2. Evolving Media Currencies 1900:Circulation 1930:Household Ratings 1960:Total Audience (RPC) 1980:Persons Ratings 1996:Advertising Impression 1999:Advertising Clicks (almost!)

3. Evolving Media Currencies THREE OBSERVATIONS: 1.The basic mainstream currency has only changed once in 100 years 2.The pace of change is accelerating 3.Today four currencies co-exist: Impressions Ad Impressions Clicks/leads Cost per order

5. The New ARF Media Model (working draft) I. VEHICLE DISTRIBUTION II.VEHICLE EXPOSURE III.ADVERTISING EXPOSURE IV.ADVERTISING ATTENTIVENESS V. ADVERTISING COMMUNICATION VI.ADVERTISING PERSUASION VII.ADVERTISING RESPONSE VIII.SALES

6. WHY?

7. Circulation to Readers Readers favored magazines over newspapers Random sampling provided valid estimates of RPC and Readers Magazines invested in research Magazines benefited by getting credit for multiple readers per copy

8. Household to Persons Ratings Viewing became more individually based, less family based Product proliferation lead to consumer segmentation and media targeting Persons ratings better servedthe advertisers’ needs Television profited by selling a differentiated product

9. Program to Ad Ratings Identified as the “next step” for 40 years -- a step not taken! Immediate product of Web server log file analysis –The source of server based audience data and audits –Adopted without fanfare Forecast for Interactive Television?

10. Clicks? As Web Advertising emerged, P&G announced it would only pay for click-throughs. Higher level of value Rejected by marketplace as the only measure of value

11. Cost Per Order The currency of DRTV and Infomercials An element of many e-commerce deals Forecast for interactive television?

12. Evolving Currencies Evolving business models: –The Media –The Advertisers Evolving technology –Media –Marketing –Measurement Evolving economic values

13. Marketing ROI Demanded by advertisers About 3/4 currently setting budgets with ROI Ad Tracking, Marketing Mix Models, Matched Markets, Experimental Designs, Panel Data ….

14. Marketing ROI

17. Marketing ROI @ the ARF MAX, w/AAAA and MSI –Techniques are available –Senior management credibility at issue Methods & Practices Study w/ANA, in field Best Practices w/APQC, about to launch Media Accountability Council, applying these methods to media planing

18. Research ROI MARKETINGPROFIT PENETRATION PRICE PAID LOYALTY PRICE PROMOTION MEDIA TRADE DIRECT …. MARKETINGDECISIONS

19. Research ROI Planning Decisions –Marketing Mix Models? –Ad Tracking? Buying Decisions –Optimizers? Failure to prove value added Business process barriers

20. Marketing ROI Accountability: –Advertisers are seeking it –Research methods are providing it –The value of research is demonstrated by it –Some media will profit from it, others will lose –Will be a catalyst for changing currencies

21. New Media Technologies Internet / Television Hybrids Interactive Television PVR’s The Web as a model: –Unbundling of content from ads –E-commerce  TV-commerce? –Multiple currencies –New measurement technologies

22. New Media Technologies Evolving business models Evolving technologies Evolving economic values Evolving currencies managed for ROI How will the new media play?