Lesson 1

1. Lesson 1 What we will be studying in this course

2. The same neural knowledge that made the cover of Time this week

3. Addiction is neurological Addiction Habitual Purchase/behaviour Awareness

4. Addiction Habitual Purchase/behaviour Awareness Here is a list of addictions Considered Purchase/ behaviour

5. What you will learn: • How human memory works • How emotions influence advertising effectiveness • How emotions influence brand-loyalty (addiction) • That these can be measured • The biggest paradigm shift since it was realised that the earth is not the centre of the universe: • Emotions determine rationality

6. The biggest paradigm shift since it was realised that the earth is not centre of universe:Emotions determine rationality

7. Paradigm:Your view of the world Paradigm Shift: When everybody’s view of the world shifts • E.g.: • The world is round not flat, • The earth revolves around the sun, not the sun around the world • Etc.

8. The paradigm shift about emotions (happening now): Old Paradigm: Emotions interfere with Rationality New Paradigm: Emotions cause Rationality You are rational BECAUSE you are emotional

9. The Old Paradigm: • D’escarte (1596-1650): I think therefore I am. • Freud: Phobias and sub-conscious • The Hidden Persuaders • Left Brain – Right Brain theories • Herbert Krugman (1960’s) • Probably Robert Heath and Hidden Effect of Advertising

10. Emotional versus Rational Consumer Decisions: Important Infrequent Rational Bank Car House NO! Unimportant Habitual Cigarettes Cold Drink Emotional

11. Your Perception is Your Reality

12. Perception = Reality • Different people have a different perception of the same reality • Example: Zidane’s head-butt outrage at the 2006 FIFA Soccer World Cup as seen in different parts of the world: French soccer player Zinedine Zidane head-butts Italy’s Marco Materazzi during the 2006 World Cup final

13. Germany • France • Italy • Media • America Perception = Reality Emotions determine ‘How you think about it’,Not the other way around! EMOTION = Perception = Reality

14. We will be studying MEMORY People most concerned with the study of memory are COGNITIVE PSYCHOLOGY Objective: How to memorise (learn) better, How to teach better. What is the best way to memorise for an exam? Review the notes: On day of lecture, 1 day later 2 days later 4 days later 8 days later …. Review means ‘just read through and think’, don’t memorise

15. Prof. Bahrick, Ohio P99

16. Benefit • If you just review you will find some slides that you do not understand. • E-Mail me. • I will review those slides in the next class.

17. Course Program

18. My Way of Teaching: • 2 Books: • Reading: • Journal of Advertising Research March 2006 • Good synopsis of Advertised mind • 19 references to AM – relevance to today’s thinking • TIME: Addiction • I will be working to my own schedule, not the sequence of the books • I do not require pre-reading, but suggest post-reading as per the schedule I showed you • .PPT slides will be on website evening before class, use these to make notes on • There will be smoke-breaks • Ask questions as we go, I might decline to answer

19. Assignments and exam

20. Now: What we will be talking about the next 7 lessons Everything is integrated, Understanding only a few pieces of the puzzle is not good enough! Understanding how it all fits together is the most important outcome of this course

21. It is all integrated and interdependent • Brand • Marketing and business • Profits • Advertising • Consumer • The consumers brain • The consumers memories • Media Planning • Account Planning • Creativity • Emotions • Sales • Production, Human Resources, Etc. • Society • Culture • Etc. Etc. Etc. Etc.

22. Question I had to face: How do I teach you the things I feel I am expert on, And make you understand how they are interrelated? And, since a Business School is about practical things, how do I make it practical to you? My Approach: Tell it like a story, my story. The practical questions I had to face and answer. How I answered them. How I learned This I do in Lesson 1, and why Lesson 1 is important. At the end of the series of lectures return to this lecture.

23. The Road I walked: • Everything in this series of lectures relate to this, • Brief summary: • Information Manager at SFW, • Brand Manager at SFW, • Media Director BBDO, • Research Director BBDO, • Set up Impact Information – research company • Sold to Millward Brown • For each of these jobs there are different questions you ask!!! Never done any media planning, Spirits not advertised on TV

24. As Media Director BBDO • 1st or 2nd largest media spender in SA, • Media Director ‘sells’ client how he should invest his millions, • Just like an ‘agent’ – will come back to this, • Analyse a lot of numbers, • Make recommendations, • Say ‘In my Experience …’ • What is ‘experience’? • Well all the clients I recommended this to bought it, • So it must work. • No feedback!!!

25. Effect Effect Effect Frequency of Exposure Frequency of Exposure Frequency of Exposure Effect Frequency of Exposure At that time (1970’s)Response Curve 3+

26. To ‘sell’ my proposed media schedule I said: “American Research Says that …” Which is what all the USA agencies were saying!

27. What happened? • Everybody bought what I proposed. • 28 years old, no media experience, • Never any feedback on whether it worked or not, • But, • If this is what the Americans say, how can it be wrong? • It is called ‘EFFECTIVE FREQUENCY’ what a beautiful term to brand an idea with?

28. What does 3+ frequency say? • Irrespective of whether a 3 minute or 10 second? • Irrespective of creativity? • Irrespective of new brand or old? • Irrespective of Communication Objectives? • Etc. • All advertisements work on 3 plus?

29. 3+ was changed to :“inside shopping cycle” • Matches? • Cigarettes? • Motor cars? • House? • Job? • Canned food? • Take Away? • Well, we just looked at the budget and tried to work out how many 3+ exposures we can get you over the year.

30. So I started my own research company:Impact Information We needed a basic product to differentiate us: ADTRACK

31. The ADTRACK thinking: • How do we develop a product every marketer should need? • How do we minimize cost? • Obvious ‘idea’ was: • Feedback on media scheduling, all ads • I.e. omnibus: sell results off the shelve. • ADTRACK: • All TV ads (we had copies week after launch) • Phone two hundred people every week, ask: • Have you seen an advertisement for … • Describe it …

32. We had space in questionnaire: • What else can we ask? • Message? • Liking? • Clients of agency say: “I allways liked that ad?” • When new ad proposed say: “Our Job is not to entertain, but to sell” • They ‘bought’ the agency based on what ads they liked….? • So we asked: • (If verified) “How much do you like the ad in terms of points out of 10?”

33. Census (i.e. all TV ads in the country) • All ads measured at same time in life (about 2-3 weeks after first appearance) • Current database about 40 000 ads!! • By far the largest in the world • No biases (e.g. client or subscriber specific)

34. For every one of these 40 000 ads Since 1986 we knew: • How many people thought they saw it. • How many could describe it. (RECALL) • The length (sec.s) of the ad. • How much media pressure (TVRs) it had before we measured it. • How much people liked it (out of 10) • What it looked like (we had a hard-copy) • By demographic

35. From early days we knew: • Longer ads are better recalled than shorter ads, but not linear, • The more media pressure before we measure recall the better the recall, not linear, • Younger people remember the ads better than older people (contrary to viewing habits) • The more the ad is liked the better the recall.

36. Recall Liking Number Of ads Liking Best Predictor of Recall is Ad-liking

37. The ‘average’ Adtrack RECALL at that stage was about 20%!! • This was very unpopular among agencies and even clients that believed it should be closer to 100%, • Unilever took an ad that had about 4% recall and tested it with a competitive research company (showing the non-branded ad) and came back with 80% RECOGNITION, • The competitor worked up a paper for a local conference on why ‘Recognition’ is appropriate for TV advertising, not Recall (brain hemispheric theories and Krugman)

38. The essence of his argument was: • Kruggman: Brain Hemispheric Theories • TV should be measured by Recognition • Print should be measured by Recall The essence of my argument was: • There is only one memory of an ad, • Recognition and Recall are just two different measures of the same memory, • You will always get higher results from Recognition See JAResearch March 2006 for how this argument is still discussed

39. This started my interest how the brain (memory) works,what is known by the disciplines outside of advertising research etc. I.e. why I am here talking to you

40. Lets do a history review of copy testing The word ‘copy-testing’ is often used from the days when there was only print advertising and the ‘copy’ was tested. These days the word ‘pre-testing’ is an equivalent – i.e. what does the ad say (do) to you?

41. Lets be realistic: what questions can you ask about an advertisement? • Do you remember it? • Do you remember what Brand it is for? • What does it tell you about the brand? • That you knew – reinforce • That you did not know • Will this change what you think of the brand? • Will it make you buy the brand (if you did not do so before)? • Will it make you buy more of the brand? (If you used to buy it)

42. How do we test this? • I show you the ad and ask you the questions while you look at it. • I show it briefly and then ask you the questions. • I ask whether you have seen it before, then ask the questions.

43. What Happened in real life? P. 166 in ADV Mind • Starch (1932) • Showed people the ad and asked whether they ‘Recognise’ it, • Gallup • Asked them simply whether they ‘Recalled’ seeing it. • The argument about RECALL versus RECOGNITION became the issue!!! • Has the issue died?: JAR March 2006

44. Then came Pre-Testingusing Recall, because one cannot use recognition of something that has not appeared. • We show them a ‘show-reel’ of several ads and afterwards ask them to mention the names of the ads they saw. • The justification being that this simulates an ad-break on TV, and represents reality. • Since there is a primacy/recency effect we got more sophisticated and started to rotate the ad in the material. • Based on this we assume we can predict the ‘penetrative power’ of the ad.

45. Our experience with Palmolive • In SA Palmolive was positioned as a family soap, with two kids in a bath, etc. • Lux was positioned as the ‘beauty soap’ using movie stars. • Palmolive decided to out-sex Lux. • Wanted to use a TV ad produced in South America showing a very sexy lady prancing in the sea foam. (which turns into soap foam and was what made her so sexy). • We were asked to do a pre-test. Which was supervised by Palmolive management in USA, and local and the advertising agency. • This test included everything and the kitchen sink. • Based on the show-reel recognition results we (me) concluded that this ad will have no penetration problems!!

46. Client also bought the ADTRACK tracking results! • After launch we measured about 2% of people recalling the new palmolive ad, • We asked them to increase the ad-pressure (GRPs), they did and still only 3% of people recalled the ad, • We asked them to increase the branding, which they did and now only 4% recalled the ad • This is when they asked me to explain why I said, based on the pre-test show-reel, there will not be a penetration problem, and now I am the company saying there is a big problem • They actually asked me for a credit on either the pre-test or the Adtrack.

47. We were the only company (in the world) that had consistent post-measure of ad-penetration (ADTRACK) for every ad we ever pre-tested (using show-reels and recall) • I did an analysis of all the pre-tests we did compared to the Adtrack results, • In about 50% of the cases we were right, • In about 50% of the cases we were wrong. • Client might as well have flipped a coin!!! • What to do?: • We are the only one that does post-tracking, • So stop doing pre-testing!!! • We will then always be able to criticise them (at least 50% of the times)

48. What we also learned from ADTRACK: • The length of ads had an effect on ‘in-market recall’, • The amount of media pressure (GRPs) had an effect on ‘in market recall’, • The variable in our data base that had, by far, the most effect on ‘in market recall’ was the extent that people liked the ad.

49. Just before this the (American Advertising Research Foundation) ARF Copy Research Validation Study (CRVS) results were published! Serendipity??

50. I am now stepping outside the Impact (South Africa) story to what has happened in the USA. • The Best Reference for this is Alexander Biels paper: ‘Love the ad, buy the Product’ in ADMAP Sept 1990.