Optimize For The Consumer

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In 1979 I predicted in Media Science Newsletter that television and computers would evolve into advertising media where individuals could be reached with addressable ad messages that were so relevant the recipients would be grateful and would supply information to help achieve that relevancy. In the 90s I spearheaded the effort to create privacy principles through the CASIE committee that was formed by ANA, AAAA and ARF, and warned in my newsletter that if the ad industry veered from these principles, they would destroy addressable commercials.

The rest is history. As an industry, we let a few who had a bad attitude toward privacy contaminate the whole idea of targeting. On March 8, 2011 David Vladeck, Director of the FTC's Bureau of Consumer Protection, speaking at the 4As annual meeting, warned agencies that if they and the Internet media did not create a Do Not Track Registry, the government would. Even before this happened, in fear response to the ongoing Wall Street Journal series of articles, four of the largest setters of Internet cookies for the industry pulled back on setting and selling cookies to ad networks. This same WSJ series has also caused research companies to put a freeze on new initiatives for Internet measurement that could provide huge steps forward for Internet advertising value.

There is still time to save the baby. In this blogpost I suggest a way I think will work to save the day for addressable commercials as well as the Internet, in terms of privacy.

Also in the 90s, Next Century Media (which I chaired) led the way with the Addressable Advertising Coalition, a group we founded with Discovery Networks Chairman and founder John Hendricks. The top 20 agencies all joined and six of them paid voluntary dues to support the nonprofit. P&G, GM and many other advertisers joined, as did all the major cable, satellite, and set-top box companies.

We should have included more people from the Internet side, especially since that is where all the privacy gaffes were made. Again, it is not too late to turn back to the right privacy solutions — reflecting the CASIE principles of full disclosure, consumer choice, and anonymity.

As pivotal as privacy is, solving the larger issue behind privacy is the key to solving it all. The real umbrella question is: how does technology optimize the link between individual tastes and desires, and the content that is suggested to the individual based on these interests?

This larger question contains the question: What is the ideal privacy solution?

We can see in light of this hidden larger question that there is a benefit to the consumer up to a certain point, in the “push” of addressable information packets, whether they be wrapped up as commercials/ads or as Amazon book suggestions or as Pandora music suggestions, and so on.

What the consumer objects to is when the information packet turns out not to be something he/she wants, and especially when it is embarrassing or disturbing to the consumer that the advertiser has a specific image of him or her — e.g. ads related to health matters, sex, or other touchy subjects.

Next Century Media’s (NCM’s) solution was to allow ad recipients to “punish” the system for ads delivered that were not appreciated, and to request notification via ads for brands in product/service categories where the person was actively shopping. “Punishing” was by means of a Boo button that would train the system to avoid serving ads that had metatags (keywords) the same as the ads that had been booed. (There was also an Applause button which today we see widely implemented as the Like button. It is not too late to add the Boo button alongside the Like button.)

Based on the NCM solution and the principles behind it, the best of breed answer to targeting algorithms in the future will reflect the idea: Optimize for the consumer. In other words, the machine learning systems must please the consumer at all costs, even if it means not delivering some ad to some person an advertiser would have liked to reach.

As my good friend Bob DeSena points out, if we do this right there will be no conflict between optimizing for the consumer and optimizing for the advertiser.

All of this implies allowing people to choose with whom you are allowed to share their information.

This was confirmed by a Gallup study whose results were released on December 23, 2010, which found that young and affluent Internet users would rather choose the advertisers they allow to target ads at them, rather than block all such targeted ads entirely. More recently released findings from a Ball State study show the same thing, adding that the same person has entirely different views on privacy depending on the context and what the incentives are.

It also suggests that brands themselves take an active positive role in identifying themselves as the good guys in terms of privacy — so that consumers include them in the good-guy list rather than the blocked list. Doing so will build strong relationships of trust and affinity with consumers.

The best of breed way to do this is by a means we call Branded In-Context Notification. (The ANA and IAB have a similar idea they call In-Context Notification, but in that paradigm the brand is not credited with the courtesy of offering full disclosure and choice; it is not Branded. The consumer may be grateful, but doesn’t know who to thank.) Next to a banner or other display/rich media ad on the Internet picture a smaller banner that has the brand’s logo and says “Privacy click here”. When the user clicks he/she sees a page also branded by the advertiser of the adjoining ad, in which there is full disclosure of how and why data are used to try to improve experience for the consumer, how the consumer can Boo/Applaud on the specific ad, how the consumer can opt out and reasons why the consumer benefits by not opting out.

Being willing to trust a company based on little or no real information is a pervasive hesitation that is generally overcome when the company provides tangible evidence that it is a good guy. This can be done by cause marketing, true sponsorship (no hard-sell advertising)*, and as we suggest here by taking a friendly step toward the consumer on the Internet with regard to privacy: Branded In-Context Notification.

One ounce of positive emotion is worth lots of tonnage of emotionless GRPs. Beyond today’s sales there is the endless relationship with the consumer – where true economic value lies.

How would this proposed solution be better than what the government wants, namely a Do Not Track Registry? With such a Registry, consumers could just click once and resign from all addressable advertising forever; tens of millions might go this way. With our proposed solution, they would only block addressable messaging from one advertiser at a time, punishing them for mishandling the privilege of addressable targeting. The Registry would punish all advertisers for the mistakes of a few.

If we’re going to do this, the time is now, before the Do Not Track movement becomes unstoppable. Perhaps it is already too late for the Internet, but maybe there is still time to save television addressable commercials before they too come under fire.

Also, let's stop calling them consumers — they are us,  just people. It will be more conducive to establishing the kind of relationship we want to have with them to think of them simply as people and not as things that consume our products.

This Branded In-Context Notification solution can also work on TV. When an addressable commercial is shown on TV, assuming it is in a system that also supports interactivity, there can be a banner across the bottom of the commercial throughout its duration which says (let’s assume it’s a Sam Adams commercial sent only to beer purchasing homes) “Sam Adams wants to protect your privacy – click Select for details”. Viewers clicking Select (or whatever button is assigned) telescope to a video where possible or to a still text frame where necessary.

Needs to be tested to see what the effect is on purchasing. It could be that even viewers who miss almost all of the commercial still increase purchasing as result of increased trust and affinity for the brand.

Let’s bring back the promise of addressable commercials, and solve the privacy challenge once and for all, by total ethical proactive transparency with audiences. That was the concept all along.

Key Takeaways:

  • The addressable ad recipient should be so grateful for the targeted message that he or she would not say “take me off list” to the sender.
  • Your brand should become a source that they trust to send content of interest to them specifically.
  • To achieve this informed relevancy, in addition to knowing the anonymous ID’s purchase behavior so you know if you want to reach them, you need to know that ID’s interests so you can optimize the content you send them.

Best to all,

Bill

*In the December 2006 edition of ARF’s Journal of Advertising Research, Stu Gray, Gerry Despain and I reported results of 28 studies showing consistently that true sponsorship on the Internet has 7X the average persuasion effect of 30-second TV commercials; a couple of the studies involved direct response where true sponsorship resulted in double-digit ROI. Years ago I measured the persuasion effectiveness of a TV special involving fully-integrated soft-sell cast-presenter commercials and the scores were far higher than the client’s norms. The less we “sell”, the more we sell.

The Acceleritis™ Theory

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My studies have led to this theory I’d like to share with you. Like all theories it sprang into being to answer some question. In this case the question was, “How is it that the human race has managed to bungle things to quite this degree?”

In short, my theory is that it’s Acceleritis™ — a pandemic shock reaction to information overload.

For years we media researchers have been estimating how many ads a person sees in a given day. Ed Papazian did it and so did I. Not hard, given that monitoring and rating services provide benchmarks for making macro estimates.

I added the notion of estimating the other events impinging on consciousness in everyman’s and everywoman’s typical day. There I used a reducing rule (for ads too), that to qualify as experiential, the event would have to be consciously noticed by consciousness. This can be measured by EEG P300 waves — the brain signature for noticing that some sensory information differs from expectation. The challenging ethnographic research is yet to be done (and can never measure the past), but some preliminary estimates have been made.

Imagine being a shepherd a mere 400 years ago. The P300 waves you would normally get in a day would be centered around human interactions, and even those would tend to be predictable, and so you could go through quite a few human interactions with familiar people without any P300 waves. Sometimes animal life, the weather, plant life, the stars and moon would do unpredictable things, though less often than people are unpredictable. Rarely, there would be something truly extraordinary like a plague or an invasion that would give you a huge spike in P300 waves.

Making assumptions such as these we began to cautiously construct the graph below. The numbers are undoubtedly wrong but are probably directionally right.

With the vertical scale having to deal in large numbers because of the recent past, the small numbers of daily P300s is so low that it’s hard to see a line until after the printing press. As the population makes a startling shift to big cities in the first half of the 20th Century, and as cinema, radio, newspapers, magazines, and outdoor signs proliferate, the rate goes up to est. 3000 noticed events per day by 1950. Something like 500 of these being ads. Another 1500 or so being evoked by media program/editorial portions — mostly radio and print at that time.

From 1950-1990 TV, with its dominance of nonworking awake time, brings the pressure up to est. 15,000. From 1990-2010 the ubiquitous Internet and Mobile, plus the cultural shift to multitasking, raises it to an est. 40,000.

This is 1000X higher than when we started “texting” only 6000 years ago. Prior to text (written language) our oral-only language was a powerful communication tool, allowing us to cooperate in the hunt to become initially successful as a warrior race (at war initially with predators), and to cooperate in tool development. Written language then moved language into the visual sense, which happens to be the dominant sense of all primates including the apes and us. This effectively kicked off Acceleritis.

In the last 6000 years — a mere 300 generations — we have been inventing things at an accelerated rate, and these things now change society more than once a year — sometimes it feels like once a day, and it seems to be headed there.

This is why I consider psychotechnology, which prepares people with techniques to stay focused through complexity, to be so important.

All the best, Bill

Estimates of Noticed Events

The Bill Harvey newsletter is back

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Many of you will remember and may have subscribed to the newsletter I wrote from 1979 to 2000, which predicted many of today’s media/technology trends:  reality TV, audiences creating media, the proliferation of interactive screens, addressable commercials (1979), passive portable peoplemeters (1979), the privacy principles of full disclosure/consumer choice/anonymity before they became the ANA/AAAA/ARF CASIE Principles, forecast (1980) the 30-point share drop (90 to 60) for the big 3 networks 1980-1990, and coined the terms clickstream and clickthrough.

For the first few years the newsletter came out twice a month and was called MEDIA SCIENCE NEWSLETTER. J. Walter Thompson was the first subscriber. During that period we made some of our riskiest projections, including penetration levels for basic and pay cable and every other form of the New Electronic Media. Then Viacom chief Jewels Haimovitz reminded me years later how accurate those projections turned out to be. The press referred to me as a media futurist. The late and beloved reporter Ben Bodec tracked my progress in Media Decisions.

In those early days we were still very turned on by the idea of media optimization. After successfully conducting many optimizations across all media at Interpublic however we gradually became more and more interested in optimizing more than just the eyeball exposure of media. How about optimizing the whole marketing budget? Against Sales, not eyeballs?

I had seen the early marketing mix modeling work Herb Krugman did at Interpublic, and saw that if you could automate that, run it backwards, and quantify the objective function – ROI or Consumer Lifetime Value or stock price or whatever – you could find a way to collect or estimate all the data you needed, and optimize the whole shebang.

At that point in time the name of the newsletter changed to THE MARKETING PULSE. We brought to light important studies by Motivac in France, suggesting that passive peoplemeters were ready for rollout – shortly before Percy rolled them out in the US ahead of Arbitron. We revealed important findings that the press had ignored, such as Leslie Woods and Walter Reichel’s measurement of the effect of Recency on actual sales. We became more interested in sales measurement, consulted for ScanAmerica and analyzed its sales lift findings relative to TV in the pages of the newsletter. We reported that IRI had found incremental TV to be ROI-positive twice as often as incremental promotion – 40% of the time vs. 20%.

Some of you may recall that 30 years ago I founded a nonprofit organization, the Human Effectiveness Institute, with the aim of improving decision making by optimization of thought. THEI put out a book which was rewritten this century as FREEING CREATIVE EFFECTIVENESS.

The book became used as a course text at 35 universities including NYU and UCLA. On behalf of THEI I’ve provided workshops around the book to futurist groups within government and spoken about it at the World Future Society annual conference, on television and radio, on a panel with Bucky Fuller, and at West Point.

The idea of the “book” is that it breaks form with bookness, and by shattering expectations creates a mood conducive to mental optimization. The content is all about mental optimization and the resulting better decisions – decisions that work better in the real world. THEI is the publisher of this blog and therefore the topics of my new newsletter/blog will range far beyond media to include the important questions of the day, all of which rest on a foundational need for better decision making:

  • How does the US regain its competitive lead on the world market?
  • If times ahead will reduce actual spending power for most people, what less obvious changes will result?
  • Is it possible to put back even more meaning into our lives?
  • How do brands actually bond best with consumers?

The newsletter/blog will however stop referring to people as consumers, because that lens is counterproductive to the relationship brands wish to have with people.

Of course the topics you’d expect will always be covered:

  • How will cultural changes change the media and vice versa?
  • Different media create different measurable brain states
  • Programming gaps to be filled
  • Forecasts of changes in the media landscape
  • Nontraditional, experiential, and social marketing – best and worst practices – and what’s to come
  • At the cutting edge of marketing/media research
  • The optimization of effectiveness
  • Recommendations

I hope you’ll tell our mutual friends that the BH newsletter is back, or anyone you think might be interested in reading my “crazy” ideas again.  Thanks!

All the best, Bill