Quantitative Advertising Research

Temple University
The School of Communications and Theater Department of Advertising Instructor: Terry Maher

Quantitative Advertising Research
ADV 3042 (Section 001) Spring 2011

February 3, 2011 Class #3
Brief History of Advertising Research

Where to Begin?

Some Definitions

Quantitative Advertising Research • Audience Research – Marketing Research • Who is Most Likely to Consume My Product/Service – Media Research • Who is Watching/Listening/Reading the Media Vehicles Where My Ads are Running? • How many are exposed to the commercials on these media? • Creative Research – What Effect is the Creative Message? • Ad Campaign Research – What Affect did the Combination of Creative and Media Have on the Marketer‟s – What were the results? Sales!! .

• Often. service. • This class will dig deeper into marketing research (mainly MRI) later in the semester. this is not completed (or even attempted) by the time the advertising is about to be planned.Marketing Research • Research that enables a marketer to identify the target for his product. etc. .

. Scarborough. comScore. and MRI dominate the industry. • I hope the class will know as much about these services as seasoned pros before the semester is over. Arbitron.Media Research • Research that measures the audiences of media • Syndicated services such as Nielsen.

Creative Research • Research that measures the effectiveness of the advertising‟s creative • This is primary research conducted specifically for each commercial • The class will dig deeper into this aspect of research in the second half of the semester .

Ad Campaign Research • What affect did the ad campaign have on the marketing objectives? • Was Awareness of the Advertised Brand Increased? • Sales? • Other? • We will learn to apply correlation and regression analysis to measure the effectiveness of an ad campaign .

Media Research • The bulk of quantitative advertising research is media research • More specifically – it‟s media audience measurement .

if not most. in the industry are thrust into media business and begin using the results of audience ratings without ever gaining an insight about the legitimacy of these audience measurements.Quantitative Media/Audience Research • Audience Measurement is the media industry‟s foundation for setting prices and justifying costs for their content. • Many. .

What is Audience Measurement? • It‟s the science of measuring the audiences of various media .

What‟s an audience? • Audience – a group of listeners or spectators. read the paper. etc. listen to the disc jockey. • Exposure: the opportunity to experience the medium (i.e.). watch the program. . (MerriamWebsters‟ dictionary) • In the media industry. an audience is number of people who are exposed to the medium.

Exposure Opportunity • Audience Measurement services estimate the number of people who had the opportunity to experience a medium. it measures the number of people who had an exposure opportunity to a ad message. . • For the advertising business.

Sample survey measurements Even if the entire population was included – i. a census was conducted – would the measurements accurately count the media audiences? Are personal interviews. diaries.Measurement An Exact Measurement? No syndicated service conducts a census.. meters entirely accurate in measuring what they‟re designed to measure? .e.

billboards.) • Radio • Television .How would you measure these media? • Newspapers • Magazines • Online • Outdoor (Out-of-Home -. etc.

billboards.) • Radio • Television . etc.Each Medium is Measured by Different Methodologies!! • Newspapers • Magazines • Online • Outdoor (Out-of-Home -.

• Just sit back and listen now. • Enjoy it • Consider it a very low budget documentary .

Brief History of Audience Measurement • Newspapers • 1704 First Newspaper Ad • A newspaper‟s circulation determined its value as an advertising medium and its value to the owner or potential owner Revenue = (Paid Circulation X Price) + Advertising Sales .

•Dropped their prices and circulation soared.circulation wars of the late 19th Century. only the wealthy could afford them • McClures and Munseys -. • A magazine‟s circulation determined its value as an advertising medium and its value to the owner or potential owner Revenue = (Paid Circulation X Price) + Advertising Sales .Brief History of Audience Measurement • Magazines • Prior to 1880.

•Audit Bureau of Circulation – 1914 –More than two centuries after first paid newspaper ad! –Less than two decades prior to a major media challenge .Circulation • Print media‟s audience measurement standard for decades (centuries).

Radio • 1885 Marconi sent the first radio transmission •1920 KDKA Pittsburgh •1922 WEAF New York sells the first commercial air time .

Radio • WEAF sells 10 minutes of commercial time for $100 •How did the advertiser determine if the commercials were worth $100? •How did WEAF determine how to price the commercials? .

Radio • How did they estimate the WEAF‟s radio audience? •Who had the bigger need to measure the radio audience? .

Radio Audience Measurement History • 1929 Archibald Crossley conducted the first telephone media measurement survey – measured radio audience for Eastman Kodak .

1930‟s Radio .

1930‟s Radio .

. • The surveys primarily measured network radio program listening – across the country.The Crossley Ratings • Telephone calls were made 4 different times per day • Respondents were asked to recall their radio listening for the previous 3-6 hours.

George Gallup • Young & Rubicam researcher • Telephone coincidental survey • “What are you listening to now?” .

• Coincidental method could not measure the outof-home radio audience. • More radio homes than telephone homes in the 1930‟s. • Both methods only measured people who lived in home that had telephones. Recall • Coincidental method reported less radio listening than the recall method. .Coincidental vs.

Coincidental vs. Recall Today‟s Radio Measurement? • Is it Coincidental? • Is it Recall? .

Coincidental vs. Recall Today‟s TV Measurement? • Is it Coincidental? • Is it Recall? .

Hooperatings • Claude Hooper and Montgomery Clark saw an opportunity • Clark-Hooper formed in 1934 • Syndicated radio ratings service in 16 cities .

Hooperatings •Were you listening to the radio just now? • To what program were you listening? • What station were you listening to? • What advertiser sponsors the program you were listening to? .

Hooper purchased CAB (the Crossley Ratings) • Eventually. .Crossley Ratings vs. Hooperatings • Crossley – Telephone Recall • Hooper – Telephone Coincidental • In the 1940‟s.C. Hooper sold his company to A. Nielsen.

Personal Interviews • 1920‟s and 30‟s. . Daniel Starch conducted personal interview surveys for various clients including NBC and CBS radio. The Pulse of New York. • Results were for internal information. not „currency‟ to buy and sell commercials. • 1939 – Sydney Rostow and Paul Lagarsfeld began a service that measured radio listening.

network radio) .The Pulse of New York • Randomly selected New Yorkers • Roster Recall – Each given a „roster‟ of radio programs to aid in their memory. Asked to list the programs listened to in the past several hours. while Hooper was national (spot radio vs. – The Pulse was local.

Quick Class Summary Through the 1930‟s • Newspapers and Magazines used circulation data to measure their audiences • Radio used telephone surveys and personal interviews to measure their audiences • TV wasn‟t viable yet • What type of recording methodology would you devise to measure radio (and TV) audiences if you were a broadcast pioneer? .

• Claude sold the patent to RCA. who owned NBC radio.Meters • 1929 Claude Robinson patented a device that recorded what station a radio was tuned at different times. • 1933-34 Robert Elder and Louis Woodruff invented the Audimeter • RCA had the patent rights to Robinson‟s similar device. • 1936 Audimeter field tested in Boston • Arthur Nielsen heard a speech by Elder and was fascinated. • 1938 Nielsen bought the device from Elder and Woodruff . • RCA gave Elder and Woodruff the approval to proceed.

The Audimeter

Arthur Nielsen

Arthur Nielsen
• Engineering graduate from University of Wisconsin •Tested industrial equipment •1923 Developed a consumer purchase measurement based on a panel of stores •A.C. Nielsen company counted store inventory at various intervals to determine what products were selling •1942 Launched Nielsen Radio Index (NRI) •800 homes were equipped with the Audimeter •Technicians came periodically to retrieve the paper with the data and to install more paper •Technicians also inventoried the household‟s food inventory •1950 Purchased Hooper‟s national ratings •1950 Nielsen Television Index (NTI) measured network TV

•1955 Nielsen Station Index (NSI) measured local radio and TV
•16mm file cartridge instead of paper (mailed by respondents to Nielsen headquarters – no more technicians). •1963 Ceased its radio Audimeter reports. Too many stations on the dial had compromised the device‟s accuracy.

Mailable Audimeter .

comScore and Nielsen Net Ratings use recording devices on personal computers (similar to meters) What about the diary? .Meters Today Nielsen NTI uses „people meters‟ Nielsen NSI uses household meters (similar to the early Audimeters) in 31 markets Nielsen uses Local People Meters currently in 25 markets Arbitron uses Portable Personal Meters in 33 Markets.

• 1950‟s Nielsen sent respondents in its metered households diaries to write down their TV viewing .Diaries • Meters measured household audiences • Advertisers need people audiences – demographic targets.

Diaries • Listening Table 1937 Garnet Garrison. University of Michigan professor • A diary with a grid from 6am to 12 midnight. and number of listeners • Hooper added diaries to his telephone coincidental to reach rural households • The first TV audience measurements used diaries . program. with quarter hour intervals • A program roster accompanied the diary • Respondents were asked to list the station.

• ARB tried to use meters that could send data over telephone lines – but Nielsen had a patent on almost every conceivable audience meter • 1973 ARB changed its name to Arbitron – still called ARB by many (especially older industry types) • November 1993 Arbitron abandoned its TV audience measurement service .4 rating. and San Francisco TV audiences • Measured every TV market at least twice a year • 1965 Nielsen quit the radio measurement business. a research company that measured Los Angeles. ARB began to use diaries to provide local radio reports.American Research Bureau (ARB) • • James Seiler – research director at NBC‟s Washington TV station Big proponent of diaries • • • • • Left NBC and started American Research Bureau May 11-18 1949. What‟s Wrong With this Rating? Survey data was included (respondent demos. response rates) Demographic information was reported 1951 Merged with Tele-Que. Ed Sullivan‟s Sunday night Toast of the Town had a 66. San Diego.

Two Left Standing • Nielsen .Television • Arbitron .Radio .

Quick Class Summary II Radio Audience Measurement Devices: Telephone recall (Crossley 1930) to meters (Nielsen 1942) to telephone coincidental (Hooper 1934) to diaries (ARB 1964) to meters (Arbitron 2007) Television Audience Measurement Devices: Diaries (ARB 1949) to Meters (Nielsen 1950) to Diaries (Nielsen 1955) to Meters (Nielsen 2001) .

Terms and Definitions • Coverage .The % of a target audience that a media vehicle „covers‟ or reaches = Vehicle Target Reach/Target Population .

Terms and Definitions • Composition .The % of a media vehicle that a particular demographic target „composes‟ Demographic Vehicle Audience/Total Vehicle Audience .

Terms and Definitions • Index .An indicator of the relative occurrence of a media vehicle‟s usage by a target demographic group in relation to its occurrence in the total population (or universe). = 100 x (% demo coverage/% universe coverage) = 100 x (% demo composition of vehicle/% demo composition of universe) The two equations always equal each other .

Terms and Definitions ABC Family Channel‟s Adults 18+ Universe Coverage = 57.887 = 25.302 / 225.4% .

196 = 36.531 / 34.Terms and Definitions „Coverage‟ ABC Family Channel‟s Women 18-34 Coverage = 12.6% .

9% .531 / 57.302 = 21.Terms and Definitions „Composition‟ ABC Family Channel‟s Women 18-34 Composition = 12.

6 / 25.5 .Terms and Definitions „Index‟ ABC Family Channel‟s Women 18-34 Index = (ABC Family Channel‟s W18-34 Coverage / ABC Family Channel‟s Universe Coverage) x 100 (36.4) x 100 = 144.

5 .1) x 100 = 144.Terms and Definitions „Index‟ ABC Family Channel‟s Women 18-34 Index = (ABC Family Channel‟s W18-34 Composition / Universe‟s W18-34 Composition) x 100 (21.9/ 15.

Terms and Definitions Rating The percentage of a target audience that is exposed to a medium. It‟s the share of current viewers tuned to a station HUT or PVT The percentage of a target audience that is watching television during a given measurement interval. HUT stands for households using television. PVT stands for persons viewing television . Expressed as a whole number rather than percentage Share The station‟s target audience divided by the number of target people who are watching TV at the time.

Female .Terms and Definitions News Programs‟ Audience Composition – Male .

Terms and Definitions News Programs‟ Audience Composition – Age .

MRI • Please sign-up to access the MRI database through the Temple library portal. .

Next Week’s Class: Syndicated Research Overview MRI+ Have a Good Week .

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