History of Ad Research

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Quantitative AdvertisingResearch

Instructor: Terry Maher

Temple University

The School of Communications and Theater

Department of Advertising


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Quantitative Advertising Research

February 3, 2011

Class #3

Brief History of Advertising Research

ADV 3042 (Section 001) Spring 2011


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Where to Begin?

Some Definitions


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Quantitative Advertising Research

Audience Research Marketing Research

Who is Most Likely to Consume My Product/Service

Media Research Who is Watching/Listening/Reading the Media Vehicles

Where My Ads are Running? How many are exposed to the commercials on these media?

Creative Research What Effect is the Creative Message?

Ad Campaign Research What Affect did the Combination of Creative and Media Have on

the Marketers

What were the results? Sales!!


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Marketing Research

Research that enables a marketer toidentify the target for his product, service,etc.

Often, this is not completed (or evenattempted) by the time the advertising isabout to be planned.

This class will dig deeper into marketingresearch (mainly MRI) later in thesemester.


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Media Research

Research that measures the audiences ofmedia

Syndicated services such as Nielsen,Arbitron, comScore, Scarborough, andMRI dominate the industry.

I hope the class will know as much aboutthese services as seasoned pros beforethe semester is over.


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Creative Research

Research that measures the effectivenessof the advertisings creative

This is primary research conductedspecifically for each commercial

The class will dig deeper into this aspectof research in the second half of thesemester


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Ad Campaign Research

What affect did the ad campaign have onthe marketing objectives?

Was Awareness of the Advertised Brand

Increased? Sales?

Other?

We will learn to apply correlation andregression analysis to measure theeffectiveness of an ad campaign


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Media Research

The bulk of quantitative advertisingresearch is media research

More specificallyits media audiencemeasurement


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Quantitative Media/Audience Research

Audience Measurement is the media industrysfoundation for setting prices and justifying costs for theircontent.

Many, if not most, in the industry are thrust into media

business and begin using the results of audienceratings without ever gaining an insight about thelegitimacy of these audience measurements.


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What is Audience Measurement?

Its the science of measuring the

audiences of various media


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Whats an audience?

Audience a group of listeners or spectators. (Merriam-Websters dictionary)

In the media industry, an audience is number of people

who are exposed to the medium. Exposure: the opportunity to experience the medium(i.e. watch the program, listen to the disc jockey, read thepaper, etc.).


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Exposure Opportunity

For the advertising business, it measuresthe number of people who had anexposure opportunity to a ad message.

Audience Measurement services estimatethe number of people who had the

opportunity to experience a medium.


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MeasurementAn Exact Measurement?

No syndicated service conducts a census.

Sample survey measurements

Even if the entire population was included i.e., a census was conductedwould the measurements accurately count the media audiences?

Are personal interviews, diaries, meters entirely accurate in measuringwhat theyre designed to measure?


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How would you measure these media?

Newspapers

Online

Magazines

Outdoor (Out-of-Home -- billboards, etc.)

Radio Television


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Each Medium is Measured by DifferentMethodologies!!

Newspapers

Online

Magazines

Outdoor (Out-of-Home -- billboards, etc.)

Radio Television


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Just sit back and listen now.

Enjoy it

Consider it a very low budget documentary


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Brief History of AudienceMeasurement

Newspapers

Revenue = (Paid Circulation X Price) + Advertising Sales

A newspapers circulation determined itsvalue as an advertising medium and itsvalue to the owner or potential owner

1704 First Newspaper Ad


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Brief History of AudienceMeasurement

Magazines

Prior to 1880, only the wealthy could afford them

McClures and Munseys -- circulation wars of thelate 19th Century.

Dropped their prices and circulation soared.

A magazines circulation determined its value

as an advertising medium and its value to theowner or potential owner

Revenue = (Paid Circulation X Price) + Advertising Sales


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Circulation

Print medias audience measurement

standard for decades (centuries).

Audit Bureau of Circulation 1914More than two centuries after first paid newspaper ad!

Less than two decades prior to a major media challenge


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Radio

1885 Marconi sent the first radiotransmission

1920 KDKA Pittsburgh

1922 WEAF New York sells the firstcommercial air time
http://upload.wikimedia.org/wikipedia/commons/8/87/Warren_G_Harding_portrait_as_senator_June_1920.jpghttp://upload.wikimedia.org/wikipedia/en/3/3b/Marconi.jpg


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Radio

WEAF sells 10 minutes of commercialtime for $100

How did the advertiser determine if thecommercials were worth $100?

How did WEAF determine how toprice the commercials?


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Radio

How did they estimate the WEAFs radio

audience?

Who had the bigger need to measurethe radio audience?


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Radio Audience Measurement History

1929 Archibald Crossley conducted the firsttelephone media measurement survey measuredradio audience for Eastman Kodak


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1930s Radio
http://xroads.virginia.edu/~1930s/RADIO/audio_archive/charlie/charlie.ramhttp://xroads.virginia.edu/~1930s/RADIO/audio_archive/lone/lone.ramhttp://xroads.virginia.edu/~1930s/RADIO/audio_archive/burns/burns.movhttp://xroads.virginia.edu/~1930s/RADIO/audio_archive/benny/benny3.ramhttp://xroads.virginia.edu/~1930s/RADIO/audio_archive/amosandy/amosandy.mov


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1930s Radio


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The Crossley Ratings

Telephone calls were made 4 different times per day

The surveys primarily measured network radio programlistening across the country.

Respondents were asked to recall their radio listening forthe previous 3-6 hours.


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George Gallup

Young & Rubicam researcher

Telephone coincidental survey

What are you listening to now?


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Coincidental vs. Recall

Coincidental method reported less radiolistening than the recall method.

Coincidental method could not measure the out-

of-home radio audience.

Both methods only measured people who livedin home that had telephones.

More radio homes than telephone homes in the1930s.


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Todays Radio Measurement?

Is it Coincidental?

Is it Recall?


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Todays TV Measurement?

Is it Coincidental?

Is it Recall?


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Hooperatings

Claude Hooper and Montgomery Clarksaw an opportunity

Clark-Hooper formed in 1934

Syndicated radio ratings service in 16cities


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Hooperatings

To what program were you listening?

What station were you listening to?

What advertiser sponsors the program you

were listening to?

Were you listening to the radio just now?


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Crossley Ratings vs. Hooperatings

Crossley Telephone Recall

Hooper Telephone Coincidental

In the 1940s, Hooper purchased CAB (theCrossley Ratings)

Eventually, Hooper sold his company to A.C.

Nielsen.


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Personal Interviews

1920s and 30s, Daniel Starch conducted

personal interview surveys for variousclients including NBC and CBS radio.

Results were for internal information, notcurrency to buy and sell commercials.

1939 Sydney Rostow and PaulLagarsfeld began a service that measuredradio listening. The Pulse of New York.


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The Pulse of New York

Randomly selected New Yorkers

Roster Recall

Each given a roster of radio programs to aidin their memory. Asked to list the programslistened to in the past several hours.

The Pulse was local, while Hooper wasnational (spot radio vs. network radio)

Quick Class Summary


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Quick Class SummaryThrough the 1930s

Radio used telephone surveys and personal

interviews to measure their audiences

Newspapers and Magazines used circulationdata to measure their audiences

TV wasnt viable yet

What type of recording methodology wouldyou devise to measure radio (and TV)audiences if you were a broadcast pioneer?


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Meters 1929 Claude Robinson patented a device that recorded

what station a radio was tuned at different times. Claude sold the patent to RCA, who owned NBC radio.

1933-34 Robert Elder and Louis Woodruff invented theAudimeter

RCA had the patent rights to Robinsons similar device.

RCA gave Elder and Woodruff the approval to proceed.

1936 Audimeter field tested in Boston

Arthur Nielsen heard a speech by Elder and wasfascinated.

1938 Nielsen bought the device from Elder and Woodruff


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The Audimeter


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Arthur Nielsen

Arthur Nielsen


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Arthur Nielsen Engineering graduate from University of Wisconsin

Tested industrial equipment

1923 Developed a consumer purchase measurement based on a panel of storesA.C. Nielsen company counted store inventory at various intervals todetermine what products were selling

1942 Launched Nielsen Radio Index (NRI)

800 homes were equipped with the Audimeter

Technicians came periodically to retrieve the paper with the data and toinstall more paper

Technicians also inventoried the households food inventory

1950 Purchased Hoopers national ratings

1950 Nielsen Television Index (NTI) measured network TV

1955 Nielsen Station Index (NSI) measured local radio and TV

16mm file cartridge instead of paper (mailed by respondents to Nielsenheadquarters no more technicians).

1963 Ceased its radio Audimeter reports. Too many stations on the dial hadcompromised the devices accuracy.


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Mailable Audimeter


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Meters Today

Nielsen NTI uses people meters

What about the diary?

Nielsen NSI uses household meters (similar to the earlyAudimeters) in 31 markets

Nielsen uses Local People Meters currently in 25 markets

Arbitron uses Portable Personal Meters in 33 Markets.

comScore and Nielsen Net Ratings use recording devices onpersonal computers (similar to meters)


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Diaries

Meters measured household audiences

1950s Nielsen sent respondents in its

metered households diaries to write down

their TV viewing

Advertisers need people audiences

demographic targets.

Di i


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Diaries

Listening Table 1937 Garnet Garrison, University of

Michigan professor

A program roster accompanied the diary

A diary with a grid from 6am to 12 midnight, with quarterhour intervals

Respondents were asked to list the station, program,and number of listeners

Hooper added diaries to his telephone coincidental toreach rural households

The first TV audience measurements used diaries


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American Research Bureau (ARB) James Seilerresearch director at NBCs Washington TV station

May 11-18 1949; Ed Sullivans Sunday night Toast of the Townhad a 66.4rating.

Big proponent of diaries

Left NBC and started American Research Bureau

Survey data was included (respondent demos; response rates)Whats Wrong With this Rating?

Demographic information was reported

Measured every TV market at least twice a year

1951 Merged with Tele-Que, a research company that measured LosAngeles, San Diego, and San Francisco TV audiences

ARB tried to use meters that could send data over telephone lines butNielsen had a patent on almost every conceivable audience meter

1965 Nielsen quit the radio measurement business. ARB began to use

diaries to provide local radio reports.

1973 ARB changed its name to Arbitron still called ARB by many(especially older industry types)

November 1993 Arbitron abandoned its TV audience measurement service


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Two Left Standing Nielsen - Television

Arbitron - Radio
http://www.arbitron.com/home/content.stmhttp://www.nielsen.com/index.html


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Quick Class Summary IIRadio Audience Measurement Devices:

Telephone recall (Crossley 1930) to telephone coincidental (Hooper 1934)

to meters (Nielsen 1942) to diaries (ARB 1964) to meters (Arbitron 2007)

Television Audience Measurement Devices:

Diaries (ARB 1949) to Meters (Nielsen 1950) to Diaries (Nielsen 1955)

to Meters (Nielsen 2001)


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Terms and Definitions

Coverage - The % of a target audiencethat a media vehicle covers or reaches

= Vehicle Target Reach/Target Population


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Composition - The % of a media vehicle that aparticular demographic target composes

Demographic Vehicle Audience/Total Vehicle Audience


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Index - An indicator of the relative occurrence ofa media vehicles usage by a target

demographic group in relation to its occurrence

in the total population (or universe).= 100 x (% demo coverage/% universe coverage)= 100 x (% demo composition of vehicle/% democomposition of universe)The two equations always equal each other


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ABC Family Channels Adults 18+ Universe Coverage =

57,302 / 225,887 = 25.4%


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Terms and DefinitionsCoverage

ABC Family Channels Women 18-34 Coverage =

12,531 / 34,196 = 36.6%


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Terms and DefinitionsComposition

ABC Family Channels Women 18-34 Composition =

12,531 / 57,302 = 21.9%


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Terms and DefinitionsIndex

ABC Family Channels Women 18-34 Index =

(ABC Family Channels W18-34 Coverage / ABC Family Channels Universe Coverage) x 100

(36.6 / 25.4) x 100 = 144.5

T d D fi i i


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Terms and DefinitionsIndex

ABC Family Channels Women 18-34 Index =

(ABC Family Channels W18-34 Composition / Universes W18-34 Composition) x 100

(21.9/ 15.1) x 100 = 144.5

T d D fi iti


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RatingThe percentage of a targetaudience that is exposedto a medium. Expressedas a whole number ratherthan percentage

HUT orPVT

The percentage of a targetaudience that is watchingtelevision during a givenmeasurement interval.HUT stands forhouseholds usingtelevision; PVT stands for

persons viewing television

ShareThe stations target

audience divided bythe number oftarget people who

are watching TV atthe time. Its the

share of currentviewers tuned to astation


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News Programs

AudienceCompositionMale - Female


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Terms and DefinitionsNews Programs Audience

Composition Age


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MRI

Please sign-up to access the MRIdatabase through the Temple libraryportal.


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Next Weeks Class:

Syndicated Research Overview

MRI+

Have a Good Week

History of Ad Research

Documents

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