Mark Leiter, President, Professional Services, North America
At the turn of the last century, the retailer John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
In today’s world, his estimate of wasted advertising might exceed 80% in certain economic sectors. If more than $400 billion is spent each year on advertising worldwide, just how much of that money is truly well spent and how much is simply wasted? Which advertising really works to engage and motivate consumers, and which advertising simply becomes background noise?
Going Back to the Future
To start to answer this question, we must go back to the future: Thirty years ago, the average American family had access to only seven different television channels. Television, card games and a ping-pong table in the basement were the popular choices in home entertainment. We watched every TV commercial, and we placed a much greater trust in brands and advertising, principally because it was a one-sided conversation. There weren’t websites with content to challenge the claims businesses were making about their products.
Viewing habits were largely uniform across the country for the same reasons: we didn’t have the expanded choices of multiple cable TV channels, DVRs, the Internet (…not even a home computer), mobile phones, video games and email. With the exception of cable TV, these new communication channels wouldn’t become available until the early 1990s.
In contrast, consumers today live in a world overflowing with a thousand television channels and billions of Internet websites. Despite the proliferation of media choices and increased viewing much of the marketing and media industry still depends on the same basic systems for guiding, buying and selling more traditional forms of advertising that were employed during the early 1990s.
Against this backdrop, it isn’t at all surprising that Chief Marketing Officers will tell us that they are unconvinced that a majority of their advertising is reaching their desired audience. Frequently, CMOs are equally concerned that their messaging is insufficiently engaging to motivate consumer behavior. For all their concerns, CMOs all agree that they have no choice other than to make continued investments to bring faster more accurate information, science and technology to the process of steering marketing expenditures.
A major advancement in answering John Wanamaker’s question
So, why hasn’t the science and technology for guiding marketing dollars kept pace with the media revolution? Today at The Nielsen Company we announced an exciting new joint venture with Catalina Marketing that will give marketers in the consumer packaged goods industry the tools to make marketing significantly more efficient and effective.
Today’s announcement starts to put in place the information and analysis that gets to the heart of uncovering what actually drives consumers, along with an accelerated development of technology, tools and processes to direct the right message to the right audience using the right media at just the right time.
Building on significant investments Nielsen has made over the last several years, this is another major innovation that advances our journey to help our clients navigate today’s marketing landscape and create substantially more impact from their marketing and advertising expenditures.
In a world where overall consumer demand is contracting due to rising unemployment rates, flat incomes and declining access to credit it is even more important to make these investments because it is going to get even harder to motivate consumers who are now saving money again to start spending it on your brands.
The Nielsen Company is committed to helping our clients connect the dots between what consumers are watching, learning and discussing across all media, and how that directly shapes the decisions they make for where they shop and what they buy.
Each year we are all getting closer to answering the biggest enduring marketing question of all time. By improving the science of how these decisions are made, we believe we will create benefits for both marketers and media companies in the coming years.
No one has yet figured out how to fully answer John Wanamaker’s famous question, but today’s announcement of the Nielsen Catalina joint venture brings us closer to a more precise answer than ever before.