The DoubleThink » Insight

The US Census – Mother of all Surveys

Dimitri — Wed, 23 Jun 2010 21:56:38 +0000

Imagine this – a Census worker walks on dirt road deep in the woods somewhere in North Michigan. After half an hour she reaches a bungalow, the 1^st sign of life she’s seen in a while. Just as she pulls out her new 2010 Census form she sees a bag hanging from the doorknob. In it she finds a Census from 2000 … .

This is the story Dr Robert Groves used at the beginning of his presentation at the ARF Audience Measurement Conference in NY yesterday. He runs the US Census Bureau, the government bureau in charge of surveying every household in the US once every 10 years. The Census is used to obtain the vital demographic statistics that are necessary for government planning. Dr Groves’ story and subsequent presentation showed that it is probably one of the biggest logistical exercises in the world.

The scale of the operation is pretty incredible. The government sends out the questionnaires to 140 million households and looks for a 100% completion rate. In this year’s Census 72% of the US households mailed their survey back. That is the same response rate they had when they did the last census 10 years ago. Any direct marketer would dream of having response rates at the same level of 10 years ago so this was a phenomenal achievement. A 1% drop in response rate would have cost the Government $80 million. This is because if you don’t respond by mail, they will send around someone to your house to ask you to fill out the questionnaire. They have a small army of 600k census workers following up on the 47 million households who didn’t respond. This in-person follow-up visit costs the government on average $57. (This includes the costs of handling the 300 assaults on census workers committed by anti-government minded non-responders!). The cost of a response by mail is only 42 cents so with these economics it became crucial for Dr Groves’ team to drive up the response rate.

They did this in a number of ways. First they made the questionnaire shorter which always drives up response rate. Then they added 2 touches to their communications cadence. They sent out a pre-announcement card before the questionnaire was sent and they sent out an extra reminder after the 1^st questionnaire was sent. This apparently consumed the entire printing capacity of the US!! They also paid a lot of attention to language. The questionnaire came in 6 languages and they had completion guides for an additional 59 languages! They also activated 250 thousand grass roots organizations who would work in the local communities to ask people to fill out the questionnaire. This according to Dr Groves was one of the main contributors to the high response rate.

Then they did a marketing campaign which cost them $350 million, an investment they could easily show the positive ROI of (all they needed to achieve break even was a 4% increase in response rate …). This was a fascinating campaign, perhaps the biggest multicultural campaign ever. It included a K-12 campaign designed at informing children of immigrant families about the Census. These children are often the 1^st to learn English in the household and can therefore be the main influencers. The campaign was run by a consortium of ethnic agencies who had to buy media in 28 languages, including Farsi, Armenian, Uruguayan etc. I saw Khmer videos, Indonesian outdoor ads and native Hawaiian posters. I have never seen localization at that scale.

Equally impressive was the use of real time tracking, modeling and optimization. Dr Groves’ team implemented daily tracking studies and performed statistical analysis every night to determine the effect of their media investment on awareness and behavioral intent. This allowed them to identify pockets of the population that were lagging behind. 18-24 year olds were an example. They tend to think the Census is not for them – that it is only for old people … . The team saw this very quickly and acted immediately by sending out targeted messages and by activating grass roots organizations. Dr Groves said the government saved 100’s of millions of dollars through real time tracking and optimization.

At the end of the presentation we got a sneak peak at some early results. The big trends shouldn’t come as a surprise. The population will grow from 309m to 439m in 2050. 20% of all households will be over 65 years old in 2050. There will be significant growth in the Hispanic population from 8% in 1980 to 30% in 2050. The Asian population will grow significantly as well. Apparently 47% of the national fertility in the next decades will come from minorities. We could also see the emergence of a bi-modal income distribution with an increasing gap between 90th and 10th income percentile – $138k vs $12k.

The US Census is a remarkable project. In terms of scale it is maybe only rivaled by the Indian Census which, as I found out on my trip to Bangalore last week is scheduled for the first time in 2011. Imagine surveying a billion people, a large portion of which live in remote, underdeveloped rural areas. I wouldn’t want to be in charge of that job!

Next Generation Geo Marketing

Dimitri — Wed, 09 Jun 2010 12:00:06 +0000

A friend just sent me this beautiful visualization of where people are taking pictures in London. You can clearly see the high traffic areas around the tourist hotspots. It’s a great use of the type of data people are generating by going about their everyday lives. It also shows how this data could become really practical for marketers trying to find out who is where at what moment in time. I am sure the picture would change if we were to look at certain times of day, days of week, seasons or even profiles of the people that are taking pictures. The view would be very different for people who live in London vs those who don’t for example.

This type of location based behavioral data could give marketers very valuable information about when they need to be where in order to surround their target audience. It seems this data would be able to provide much more detailed information than what is currently available. While this particular application only looks at where people are taking photographs, other location based services like Foursquare generate tons of data about what people are doing where. Foursquare already automatically shows their users which locations are trending (ie becoming popular) real time.

The application of location based behavioral data will go well beyond location based targeting on mobile devices. I believe it will soon become the basis for the next generation of geo marketing tools. Retailers for example could use it to determine where to locate their stores and media planners could use it for planning their outdoor advertising. We could even use this new type of data to profile zip codes based on the activities of the people who live there. These zip code profiles could be used in the same way marketers are now using socio demographic profiles of zip codes for targeting. The current profiles are pretty static since they are based on more traditional sources like the Census. The behavioral location based profiles could be much more dynamic and a lot more detailed. A company like Foursquare, if it wanted to, could actually already very easily make these zip profiles available to marketing professionals. This would make them a real competitor to established 3^rd party data vendors like Acxiom and Experian.

The Value of Stories

Dimitri — Fri, 07 May 2010 21:01:18 +0000

What is the actual value of a story? Are people prepared to pay more for something if there is a story attached to it? It turns out that they are. That is the outcome of a very original experiment by writer / NYT columnist Rob Walker. I saw Rob speak about his Significant Objects project, a project which I think might have generated a very significant dataset.

Here is what Rob did. He purchased a bunch of random objects on Ebay, most of them for less than $4. He then distributed the objects to his friends, fellow writers and artists and asked them to write a short story about the object they were given. He then put the objects back up for sale on ebay with the story in the description to see if people would pay more for the object now there is a story attached to it.

It turned out they did. When he sold the first 100 objects, he essentially sold $120 worth of objects for $3,612 – a 2,776% significance markup as he calls it. The object in the pictire above was the highest seller of the 1st wave of products he sold – $193 for a statue he initially bought for $3. He even sold a 25c plastic banana for $75.

So people were prepared to pay a lot more than the initial value of the storyless object. In fact the difference was so big that Rob concluded that the real value was in the story – the object was merely the vehicle for the story.

That’s very interesting and it obviously gives us a view in how brands work. But what I find most interesting about the experiment is the dataset it created that showed the exact monetary value of stories. I would love to analyze that data to see what really drove the value of the story. Was it the object, the synergy between the story and the object, the reputation of the writer or are there any attributes in the story itself that give us clues about what creates its value.

The data is available on the website. I might play around with it if I find the time. Here is the video of Rob Walker’s presentation at PSFK.

What You Don’t Know Can Hurt You

colin — Sat, 01 May 2010 04:37:49 +0000

I was talking to Andy McMains of AdWeek today who asked me if “thoughtful blogger” wasn’t an oxymoron. I hope not.

I found Clive Thompson’s recent Wired post on “Why We Should Learn the Language of Data” thoughtful.

He argues that being “statistically illiterate” is bad for your health, and everyone else’s too. (Shouldn’t that be “innumerate”, talking of literacy?) Understanding the realities of global warming, the benefits of vaccines and the fate of the economy all depend on a basic understanding of statistics. “Statistics is the new grammar”, he posits.

This seems undeniable to me. Statistics should be a basic requirement in high school. I gained my shaky grasp of stats in an ad agency – surely not the best place to do so.

This is really part of a wider issue: the attack on science. Recently, in Kentucky, a bill was was introduced which proposed which would encourage teaching of “the advantages and disadvantages of scientific theories,” including “evolution, the origins of life, global warming and human cloning” in schools. Quite remarkable.

Michael Specter, the New Yorker writer, deals with this in his new book “Denialism: How Irrational Thinking Hinders Scientific Progress, Harms the Planet and Threatens our Lives”. He lashes out right and left, railing equally against global warming deniers and organic food fans. I recently saw him give a superb talk on this, which you can see here.

Culture Carrier

colin — Thu, 01 Apr 2010 22:20:40 +0000

Our latest Doublethink video is an interview with David Art Wales, Prime Minister at the Ministry of Culture.

I’ve known David for over a decade, and in that time he has become something of a fixture on the New York alternative research scene. I bumped into him again at a discussion between Moby and Walt Mossberg, the Wall Street Journal technology writer, at the Lincoln Center last summer. As I was walking in, I thought who on earth apart from me (and my friend Mike) would attend such an event. Sure enough, there was David.

It’s typical of the kind of curiosity that he digs out. Strange on its own, when it’s placed in a mosaic, it gives a new angle on the culture at large.

The Ministry of Culture has carved a unique niche in the space between documentary film-making and research. David started off in television production in Australia and he sees his work more as content than fact finding.

This approach turns many research orthodoxies on their heads. For example, in this film he talks about how, rather than using traditional recruitment to find “pure” respondents (who are usually anything but), he deliberately recruits the opinionated.

In fact, recruitment is the key to what he does. He is a people collector and has access to an eclectic bunch of tastemakers who can inform on just about any subject. (Check out Reverend Jen’s Lower East Side Troll Museum, which makes a brief appearance.)

Listening to David, you’ll begin to ask questions yourself about what information is and what is inspiration. Is there a difference?

The future of TV

Dimitri — Thu, 18 Mar 2010 23:56:02 +0000

In the last few posts we looked at the rising TV consumption, increasing effectiveness if TV advertising and the power of TV in creating emotional engagement. So what does the future hold for TV advertising? There is no doubt TV as a medium will need to face some challenges. Consumers’ insatiable appetite for content probably does not apply to advertising. Time Warner Cable viewers in the US get served 32 ads per hour. On Hulu they either get only four ads per hour, or one long ad at the beginning and then half an hour of uninterrupted viewing. This probably explains some of Hulu’s success. In July 2009, 38 million people streamed videos from Hulu – that’s more than Time Warner Cable … . DVR penetration is bound to grow and with it the volume of households who will timeshift and also skip ads.

But there are also plenty of opportunities in the future that will help make TV advertising become more effective. We will continue to become better at optimizing our TV advertising. The insights into the power of TV at the sub conscious level through the creation of emotional engagement are pretty recent and have not yet been applied to the majority of the TV advertising out there. Also, TV will become increasingly addressable. In traditional addressable media it is not uncommon to see double digit improvements in performance as a result of more sophisticated targeting. There is no reason why we shouldn’t expect similar improvements when these techniques will become common practice for TV. And then there TV’s liberation from the conventional living room TV set. I mentioned Hulu’s success before. Game consoles like the XBOX 360, PS3 and Wii have been innovating in this field and are now offering TV content as well as social media and web browsing capabilities all in one integrated multimedia platform. I just signed up on Netflix through my Xbox 360. This allows me to stream the movies to my TV without having to wait for the DVD’s to arrive. Finally there is the quality of the TV content itself which has been taken to a whole new level over the last years. Shows like Lost, 24 and Mad Men are produced in motion picture quality and have highly sophisticated plots that keep viewers hooked week after week.

While TV advertising might not be as dominant as it once was it most certainly will continue to a very viable and effective communications channel.

TV’s emotional impact

Dimitri — Fri, 12 Mar 2010 20:34:26 +0000

In my previous post I listed some empirical evidence that shows that TV advertising is becoming increasingly effective. One of the reasons is that TV is a superior medium for driving emotional engagement. The role of emotional engagement in driving purchasing behavior has been hotly debated in the last couple of years. This is as a result of advances in neuroscience that have demonstrated that the decisions people make are often a result of what happens in their sub-consciousness. As a result the traditional linear AIDA model, where the role of communications and advertising is to move customers down a linear path from awareness to interest to desire to action by grabbing their attention, has been severely challenged.

Robert Heath has published extensively on this topic and has shown that the role of emotions in the decision making process are very important. In a 2009 Admap article about how TV builds brands he said :”Early advertising models that addressed the role of emotion in advertising reflected the thinking of the time, which was that ‘conscious thinking’ leads to ‘feeling’, which leads to ‘attitude change’, which, in due course, leads to a purchase decision. They were not to know at the time, but they got it seriously wrong. Feelings and emotions are processed much more quickly than thoughts.” Heath has used brain scanning technology to show that we usually make decisions up to 1/5th of a second before we are aware of them. He says that “we always form an attitude about a decision through emotional and subconscious rational processing before we start to consciously and actively ‘think’ about it. So our conscious thinking tends either to support the decision or counter argue it. There is empirical evidence […] showing that the presence of brands inhibits processing of product attributes and encourages consumers to use shortcut to validate their brand choices.” This is illustrated in the diagram below.

If people use brands as subconscious short cuts, then brands need to be built through communicating at the subconscious level.

This is where TV is especially powerful. Contrary to other media such as print that require conscious processing of information (ie reading), TV more than any other medium can work at the subconscious level by evoking feelings through the uses of visuals and sound. This is why TV is such a powerful medium for creating brands. It does this through emotional communication. And Binet and Field have demonstrated, in the study of the IPA databank I mentioned in my previous post, that emotional campaigns consistently outperform rational campaigns in terms of driving sales, share, price elasticity, loyalty and penetration.

TV still works

Dimitri — Fri, 19 Feb 2010 16:00:06 +0000

In my previous post I talked about how, contrary to popular belief maybe, people are watching more TV than ever and that they are engaging with TV advertising. In this post we will look at whether TV is still an effective medium.

There is an increasing amount of empirical evidence that suggests TV advertising is getting increasingly effective. Perhaps the most often quoted analysis is the one done by Les Binet and Peter Field in 2008. They mined the IPA databank which holds more than 1000 marketing effectiveness case studies from around the world gathered as part of the IPA Marketing Effectiveness Awards. They found that campaigns that used TV have been growing in effectiveness over the past 3 decades. The graph below shows the average % increase in market share growth for campaigns that include TV for the 1980’s, 1990’s and 2000’s.

In June 2009 Joel Rubinson of the ARF performed one of the most extensive reviews of quantitative evidence available in an attempt to validate the hypothesis that TV is losing its effectiveness. He combined 7 different databases of quantitative evidence of the impact of TV campaigns on sales. They included data from the IRI panel, econometric modeling companies like PM Group, Dratfield and Marketing Evolution and research data from Pointlogic and Milward Brown. This combined database contained more than 300 cases across 74 different product categories. Rubinson was not able to validate the hypothesis that TV is becoming less effective. On the contrary – 6 out of the 7 databases showed that TV advertising has become more effective over time. The Pointlogic data for example showed that among 25 different types of touchpoints measured in their survey between 2004 and 2007, TV moved up from 7^th to 4^th in terms of people impacted per $1,000 spent. In an interview with Brandweek Rubinson said that his study concluded that “units sold numbers increased as a result of increased TV impressions. [When you observe it] across 388 case histories, I think you’ve got to believe it.

These findings are also confirmed by marketing science company MMA. “We haven’t seen a significant trend in the erosion of effectiveness of TV,” said Douglas Brooks, senior VP of MMA in an interview with Advertising Age in Feb 2009. In fact, MMA, which reports to clients each year on its findings regarding aggregate TV effectiveness, has seen a slight uptick in effectiveness in recent years.

People still watch TV

Dimitri — Mon, 08 Feb 2010 22:07:18 +0000

As usual, yesterday’s Superbowl was accompanied by the Ad Bowl the annual contest for best TV commercial during the most expensive airtime of the year. This seems to be the only time of the year where marketers are still allowed to get excited about TV advertising. For the most part, TV has become a dirty word in today’s marketing world. Most marketers can’t wait to move as many of their dollars away from it. They claim is the medium of the past – for obvious reasons. Most people, especially younger generations, seem to be spending all their time online. They can’t possibly have time to watch TV. And even if they are watching it, they are probably skipping the ads on their DVR’s. Also, with the fragmentation of TV channels, you couldn’t even reach them if you wanted to. It wouldn’t be cost efficient. Putting your money in TV is a bad idea. The majority of the US marketers feel TV is no longer working (The Association of National Advertisers did a survey in February 2008 that showed that 62% of US marketers believe that TV advertising had become less effective in the last couple of years). They have to be right.

But are they really? What do the facts tell us? That’s what I will explore in the next couple of posts. In this one we will take a closer look at TV consumption in general and TV advertising more specifically.

It may feel counter intuitive but people are watching more TV than ever. Deloitte’s 2009 “State of the Media Democracy” report showed a 26% increase in the number of Americans choosing TV as their favorite type of media compared to 2008. They spend nearly 18hrs per week watching TV programming – up from 16 hrs in 2008. Millenials (aged 14-26) showed the highest increase – 15hrs in 2009 compared to 10.5 in 2008.

Nielsen’s latest A2M2 Three Screen Report confirms this growth in TV consumption. It shows that online and mobile video are not replacing traditional TV – consumers seem to be adding them to their schedules. ”Americans today have an insatiable appetite for not only content, but also choice,” says Nic Covey, director of cross-platform insights at Nielsen. “Across all age groups, we see consumers adding the Internet and mobile devices to their media diet — consuming media anytime and anywhere possible.” The report also showed that while DVR and online video are showing solid growth, 99% of all video content is still consumed on traditional TV.

This is not just an American phenomenon. In the UK for example, where 40% of households have 3 or more TV’s in their home, the number of hrs of TV watched per person is the highest since 1993.

So if people are still watching TV, are they watching the ads as well? One of the common arguments against TV advertising is that people don’t notice the ads or skip them on their DVR’s. Let’s have a look at the facts. People in the US are exposed to more TV commercials than ever. The average customer of Time Warner Cable (the second biggest cable company in the US) gets served 32 ads per hour . That seems a lot but people still seem to engage with TV commercials. Thinkbox and ACB in the UK did a very interesting study where they installed video cameras within the TV sets of 74 individuals. They observed their behavior while they were watching TV commercials for a period of 3 weeks. They supplemented the study with quantitative research. Their findings were interesting. They found that when responders were sitting down watching the ads, 68% of them recorded some observable behavior that was related to the ad. Positive behaviors outnumbered negative by almost 2 to 1.

So people are watching a lot of ads and are often emotionally engaged when watching them. What about fast forwarding then? According to Nielsen the penetration of DVR’s among US households is 22.5%. While this has grown significantly over the last couple of years it still means that more than ¾ of the US population does not have the ability to skip ads. When we have a closer look at households with a DVR we see that they only 5% of their total time in front of the TV is watched timeshifted. The majority of the DVR owners still prefer to watch live TV in the traditional way.

When they are watching time shifted TV, 43% say they fast forward the ads. But even then they still seem to process parts of the TV ads. Neuromarketing company Innerscope did a study where they measured emotional engagement with TV content through the use of biometrics. They noticed that even when people fast forwarded their ads they still recalled them afterwards. During the fast forwarding viewers were also emotionally engaged, in a ‘hyper alert’ state and focused on the center of the screen.

So it sounds like the two myths that people are no longer watching TV and that they are immune to TV ads are false. In the next post I will take a closer look at TV’s effectiveness.

thedoublethink TV is here

Dimitri — Thu, 04 Feb 2010 23:13:56 +0000

You might have noticed the little video on the top right of our screen. We will be posting video interviews with interesting people Colin and I run in to. We will be adding more videos over the next few weeks. You will also be able to find them on our YouTube channel.

The first video is an interview with the fascinating Dr Carl Marci – the founder of neuroscience company Innerscope. I wrote about him in a previous post but nothing beats listening to the man himself!