Daily Research News Online no. 4625 - Ads Aside: Measuring Other Forms of Promotion

Ads Aside: Measuring Other Forms of Promotion

September 29 2005

Three recent studies from Intelliseek, MarketingExperiments and IRI throw new light on the effects of PR, word-of-mouth and merchandising on consumers. Meanwhile media measurement firm CARMA International has launched a service to track the effects of PR and media relations.

Intelliseek and Forrester - Consumer Generated Media and Word of Mouth

Consumers are 50% more likely to be influenced by word-of-mouth than by traditional advertising, according to the '2005 Consumer-Generated Media (CGM) and Engagement Study', by Forrester and word-of-mouth specialist Intelliseek. The study is based on a poll of a representative sample of 660 online consumers.

Analysing responses to the question 'To what degree would your decision to purchase a product or service be influenced by the following', the study gives 'positive word of mouth from someone you knew personally' a score of 134 (100 is the average score), while radio and TV ads score 82, and ads in newspapers or magazines score just 80. The industries most susceptible to CGM and WOM impact are health/medical, auto, electronics, video games and music.

The study also found that 'active ad skippers' (those who frequently skip or delete TV or online ads) are 25% more likely to create or use CGM such as Internet message boards, forums and blogs.

Intelliseek CEO Mike Nazzaro says changes in the advertising landscape are 'forcing marketers to broaden and redefine the concepts of media, influence and audience reach'. He points out that, if CGM is such an effective and trusted form of putting out messages, it is important that marketers can 'measure, manage and influence it and, equally importantly, heed the consequences when consumers turn the message against brands'.

Key findings from the research will be presented by Nazzaro during Advertising Week events this week, including OMMA and the Word-of-Mouth Marketing Association (WOMMA) conferences. Additional phases of the research will be released in October and November. Intelliseek is online at www.intelliseek.com

MarketingExperiments.com - PR Campaigns vs Pay Per Click

The Intelliseek study found that WOM/CGM has more impact on consumer attitudes than either positive or negative news coverage, though it does find that news coverage can create more influence than advertising. This finding is echoed by new research from online marketing research firm MarketingExperiments.com (MEC), whose study found that PR campaigns can deliver better returns than pay-per-click (PPC) advertising.

Over a six-month period, MEC sent out nine news releases over newswire services, and tracked the traffic and links to its site, as well as the resulting interview opportunities. Results showed that the cost per click of the PR efforts was less than the cost to drive traffic to the site through purchasing keywords in a PPC campaign. The news releases also created significant spikes in site traffic, and helped to create a five-fold increase in incoming links to MEC's site.

Flint McGlaughlin, Director of MEC Labs, found the results both surprising and fascinating. 'It's eye-opening to think that there are a lot of companies out there misguidedly using all of their marketing dollars on PPC when they should also be looking at PR'.

Details of the research are online in the Marketing Experiments Journal at www.marketingexperiments.com/pr.asp

IRI - CPG Merchandising Trends

In another analysis of alternatives to traditional advertising, IRI's study of the CPG marketplace concludes that merchandising (the use of feature ads, displays and/or price reductions in store) has become one of the most powerful consumer behaviour influencers, as mass media marketing becomes less effective.

The 'CPG Merchandising Trends: Activity, Effectiveness and Optimization' report is based on an analysis of scanner-based sales tracking. It concludes that, when properly used, merchandising can increase more than just short-term sales - helping to shape value perceptions of a brand or store, reach specific segments, and increase store traffic.

According to the study, more than two-thirds of CPG categories within food, drug and mass channels (excluding Wal-Mart) sell 30% or more of their volume with merchandising support. However, it also reveals that the overall effectiveness of merchandising activity is falling, and that different techniques should be employed for different categories. Display-only merchandise activity, for example, is most effective among foods, everyday necessities and certain impulse categories. Feature ads appear to work for stock-up categories and higher-ticket products with broad appeal, while price reduction remains relatively ineffective in less frequently purchased categories.

Janet Eden-Harris, Executive VP and Global Chief Marketing Officer at IRI, explains the significance of the report: 'To effectively reach today's savvy consumer, it's critical that manufacturers implement the right merchandising level and mix and that retailers effectively allocate limited feature ad and display space'.

The report is on the News & Events section of IRI's web site at www.infores.com

CARMA Journalist Relationship Management System

In acknowledgement of companies' need to measure the effects from all forms of marketing, US media measurement firm CARMA International has launched a service to track the effects of PR and media relations. The Journalist Relationship Management (JRM) system allows users to assess the impact of media relations on media coverage.

Users can compare an activity log of communications with a journalist with the stories written, providing a measurement of media outreach efforts. CARMA will soon add the ability to graphically view media relations activities and results over time. The new system forms part of CARMA Online, released in April. Prices for CARMA Online start at around $10,000 per year, depending on the complexity of research. The JRM System costs an additional $6,000 per year.

CARMA founder Albert Barr says the new system 'provides concrete data about what's working and what's not with key journalists'. He believes that, by integrating relationship management software with media measurement, the tool helps organisations streamline their PR services.

CARMA is online at www.carma.com.